The History of the Euro Disneyland Creation - Case Study Example

Euro Disneyland Case Study During the period when Disney Company scored a first in the following areas; Florida, Orlando and Tokyo, it underscored toget another fourth theme park after this historic success. Indeed, the company was inaugurated in France on 12 April 1992 but its journey was not so rosy so to speak. Forty nine percent of Euro Disneyland is owned by Disney Company and many other companies from Europe share the remaining 51 percent. By virtue of thinking that the Americans wanted to gain an unfavourable advantage by Americanizing their culture and imposing it on other people, the French unfortunately turned down the offer of the park (Aupperle and Karimalis, 2001). Consideration of cultural values of other nations forms a very strong background upon which the operations of any international business can be based which the Americans did not consider in the first instance. Basically, consumer behaviour in most cases is influenced by various factors such as perception, needs, motives and attitudes and these in most cases are either directly or indirectly influenced by the individual’s cultural background (Kotler, Brown, Adam, Burton and Armstrong 2007). Against this backdrop, the four main differences between the cultures in United States and France will be explored according to the various cultural dimensions propagated by Hofstede in view of Trompenaars’ study which will attempt to highlight the major differences between them for the sake of easier understanding. This analysis will as well attempt to bring to light especially three mistakes that are believed to have been made by Disney Company during its stint while at the helm of Euro Disneyland. The study will finally attempt to analyse the lessons that could have been learnt by Disney Company with regards to the aspect of the need to consider diversity in any such kind of a deal. Culture influences the attitude of the consumers which in turn influence their attitude towards something as aptly highlighted by Hofstede’s cultural dimensions which explicitly illustrate mainly four different dimensions between the cultures of United States and France (Kotler, Brown, Adam, Burton and Armstrong 2007). According to McShane and Travaglione, (2007), the degree to which people accept and believe that there is inequality of the distribution of power in their respective societies is referred to as power distance. Comparatively, the United States’ power distance is 40 points as shown in Table 1, which by any standard is lower at the world level (Thomas, 2003). Given a situation where the staff compliment has the power and authority to say their views and decisions, a country like America with an even lower power distance thrives on decentralisation through which its organisational structure depends on. Thus, according to Thomas, (2003), it can be noted that France has 68 points which is even higher than the United States in terms of power distance as well as the world average. It should be noted that countries with societies which have higher power distance ought to be centralised in nature and should have defined hierarchy structures that are characterised by power structures where those on top such as supervisors give orders to their subordinates in a descending order (Tian, 2009). The Disney Company created confusion among the French people when it outsourced the majority of supervisors with key positions from America at the Euro Disneyland which could have been avoided had the company decided to be transparent enough and hire local French nationals. On top of that, virtually all the people with managerial posts were neither fluent in French which was a cause of concern. Secondly, this case study also highlights the extent to which people can accept or tolerate things which are open to many interpretations. Thus, people from countries with higher power point distances in their countries would tend to prefer a situation where they would have properly outlined and direct rules to follow unlike in other countries with low scores where there may be unstructured rules to follow (Thomas, 2003). Table 1 and Chart 1 aptly show the results of this concept which are also accessible from Hofstede’s website. The Americans are seen as turbulent and can grab any risk and are regarded as tolerant America where they can enjoy the comfort brought about any unprecedented changes by virtue of their limited points only numbering to 46. Comparatively France has an uncertainty avoidance score of 86 points. The American managing the Disney Company failed to acknowledge France’s leading power distance which motivated them to establish a project in France. For instance, Marne-La-Valle is a farmland in France renowned for its production of Brie cheese as well as sugar beets and is located about twenty miles east of Paris and was carefully chosen by Disney Company. In this case, the Americans even tried to change the Euro Disneyland to meet the standards of Florida and California with little due regards of the cultural values that distinguish the French people. This however did not auger well with the people from France who thought that rather than being imposed a culture, should there be any need to experience the American Culture, they were always free to visit the Disneyland in America. More so, Euro Disneyland prohibited the sale or consumption of alcoholic beverages their restaurant which contravened with the French culture. Indeed, this was ridiculous to the French who were used to consume alcohol in accompaniment of their meals. Thirdly, individualism is another concept suggested by Hofstede in his cultural dimensions which posits to the effect that there are people who prefer to work as individuals in a society rather than a collective group. On the other hand, collectivism refers low individualism; for instance in a collectivist society, a child can learn to observe the dictates of the particular group which he apparently belongs to. People in these societies are guided by principles derived from their moral and cultural values which they believe would offer the protection in times of unprecedented threats such as this case. In a society dominated by individualism, a child is exposed at an early age to learn to think and reason for himself. The belief is that at one time or another, this child has to be self reliant even in time of need without seeking help from outside (Thomas, 2003). Table 1 illustrates this assertion, where the United States is 91 points on individualism which apparently is the world’s highest score. In France for instance, the score for individualism is 71 points, which comparatively is higher than the world average. Whilst both countries may have higher individualism scores, their differences are going to be shown in this case study. The American executives in Euro Disneyland apparently suggested a strict code of appearance where men are prohibited to don moustaches and beards at work and are required to keep only short hair. In terms of women, they are expected to use minimal make up and should maintain one colour of their hair. A good example can be drawn from Stephen Baudet who was a Parisian trumpet player and refused to be employed by Euro Disneyland since they had demanded that he cut his ponytail. The Americans upset the French by their unprecedented demands of dress code. According to Tian, (2009), masculinity is defined as a situation where money and other like things dominate the value system of the society and is the fourth difference in this case study. On the other hand, the opposite of masculinity is known as femininity. Table 1 shows that America scores highly for masculinity with 62, while France only scores 43, which is below the average of the world. In this case study for instance, the culture of France was not precedence for Euro Disneyland. Chart 1 Chart 2 PDI   Power Distance Index IDV   Individualism MAS   Masculinity UAI   Uncertainty Avoidance Index LTO   Long-Term Orientation According to Trompenaars’ results on studies of multicultural managers, there are basically two notable different dimensions between the United States and France. These are commonly referred to as universalism versus particularism and individualism versus communitarianism. It should be noted as point of departure that universalistic cultures particularly focus on rules that are characterised by one simple truth or reality. On the other hand, Universalists take cognisance of all these particular cases in the same manner. A distinct feature in particular is that particularistic cultures especially tend to focus on relationships where there are various applied perspectives on real issues. Furthermore, particularists diagnose cases as they are and attempt to view them by keeping their special merits in mind and creating a unique understanding. For instance, the French people are renowned for their particularistic firm position to demonstrate in a time of conflict. The management in France maintain close relationship with their co work mates and these in turn affect their decisions. America boasts of leading in a front position culturally and its score is by contrast different from France which makes them behave as if they are universally right by any obligation. The French people respect the rules while the Americans view themselves as universal judges devoid of any wrong doing which attracts criticism which is a rather disturbing feature of the American culture. Secondly, it can be seen that the negotiator is vested with the power to make decisions with regards to individualistic cultures. The decision makers have the prerogative to make their own personal assessments and the results obtained by the individualists are mainly a result of their direct input. Contrary to individualism, in communitarian cultures somebody who is entrusted with negotiating is expected to consult other members of the group before making any final decision. Such a decision would be communally shared and would form the basis of the cultural values of that particular society upon which the members of the society would be morally and socially bound. France for instance has a communitarian culture, where all the employees are seen as collective groups compared to the American managers who are predominantly individualistic (French, Zeiss and Scherer, 2001). The Disneyland Company management in this particular case made especially three mistakes that negatively impacted on Euro Disneyland. By virtue of failing ton understand the French law and French Culture, the company made a grave mistake that jeopardised their intended purpose of building a business empire in France that would be a force to reckon with. One mistake is that the American dominated management assumed that the French were simply going to nod to the dictates brought about by the Euro Disneyland and readily accept everything like what the Japanese did but that was not to be the case. As shown in figure 2, the Japanese culture is very different from Americans but these differences did not affect the success of Disney Company’s success in Tokyo. This was because of the simple reason that America is seen as an epitome of success and opulence and is regarded as a role model of wealthy countries. Against this background, Disney in Tokyo Japan was regarded as a sign of high class and status which was not the case in France. The French people on their own are very proud of their culture and could not be hoodwinked by America’s ploy to invade their cultural sphere with their own values. It can be seen from the above mentioned scenario that it is very important for the human resources managers to seriously take into consideration the cultural values of other nations when they decide to go global as a way of ensuring their survival as failure to do that will result in negative results (Stoev and Mujtaba, 2009). The second mistake was related to poor forecast in terms of weather which resulted in the company recording lower attendances. The Americans for instance did not take into consideration the bad weather in Paris especially in winter which is characterised by rain between March and November where on average it would be raining for about fifteen days a month. As a result of the cold weather, the French shunned visiting the Euro Disneyland particularly those with young children which was an unanticipated negative development that hampered the hopes of success of the company. Compared to America, the vacations in Europe are longer that in the United States which prompts the visitors to operate on a minimal budget. European families often consider only spending a single day in Euro Disneyland as a result of the exorbitant entrance fees which are 20 percent higher than in America. Those Europeans who would decide to go for a vacation at Disney would rather go to Florida or Orlando which are renowned for their beautiful and sunny beaches. One other aspect is that European parents are not like Americans parents towards the education of their children. Whilst Americans can take their children to visit Disneyland even during schools days; the Europeans are quite different because they are strict towards education for their children. The third mistake that was made by Disney Company was that of wrongfully assuming that success was guaranteed under whatever condition that prevailed which was not the case as it proved that the risks that were overlooked proved to be real and ended up threatening the organisation’s viability. In actual fact, they overlooked their financial position as well as other financial risks. A good example is the situation where they built large numbers of hotels on the assumption that visitors would stay longer thereby contributing to the revenue generated but that was not to be the case as the visitors only stayed for shorter periods than anticipated (Spencer, 1995). It can be noted that Disney Company ought to have discovered three most important things that led to its shortfalls in its quest to establish is trademark globally especially in other equally developed countries like France where it overlooked some of the very important things that determine the destiny of the organisation. It is very important for the organisation to train and reorientate its human resources management to be accommodative to the cultural values of the host country since these values are responsible for determining the success or failure of any foreign company. Any company that does not recognise the cultural values of the host country is doomed to fail and it should also be noted that success in one respective country does not warrantee the same situation in other countries. Each country is characterised by its own norms and values that form the moral fabric of its citizens. Anything that contravenes their moral values would be shunned by the locals which would contribute to the company’s downfall. Last but not least, Disney Company realized from Disneyland the importance of property ownership particularly the land surrounding its parks. Its experience in Japan acted as an eye opener to the organisation on the need to own a park. The company later realised that France has many big parks and these meant more risks (Spencer, 1995). After realising its mistakes, the numbers of Euro Disneyland’s visitors was 12.5 million in 1999 (Aupperle and Karimalis, 2001) which was greater compared to the visits to Eiffel Tower (Packman and Casmir 1999). Over and above, it can be noted that the case study of Euro Disneyland is very insightful which heralds its failure in the beginning but later ended up as a success story. To a greater extent, Disney Company was helped by adopting Hofstede’s cultural dimensions of power distance. For instance, the Disney Company was greatly helped by understanding the concepts of individualism and masculinity that characterised the main differences between cultures in America and France. Of notable importance is Trompenaars’ research which is very influential especially in explaining the two most important dimensions which are known as Universalism versus Particularism, and Individualism versus Communitarianism. The details of each culture which show the society’s features are explored by these dimensions. Even though Disney Company did not perform well as a result of its shortcomings such as poor projections on the attendance numbers as well as financial positions, ill advised human resources management structure, the organisation however, learned from its mistakes. For instance, it underscored to develop its human resources management in such a way that the employees were reoriented in order to be able to deal with people from diverse cultural backgrounds. It can be seen by all and sundry from this case study that Euro Disneyland is a very good example to other companies that may intend to venture into global business. References: Aupperle, K. E. and Karimalis, G. N. (2001) Using metaphors to facilitate cooperation and resolve conflict: Examining the case of Disneyland Paris, Journal of Change Management, 2, 1, pp. 23-32. French, W., Zeiss, H. and Scherer, A. G. (2001) Intercultural Discourse Ethics: Testing Tromenaars’ and Hampden-Turner’s Conclusions about Americans and French, Journal of Business Ethics, 34, 3-4, pp. 145-159. Itim International, Geert Hofstede™ Cultural Dimensions, viewed 1 June 2009, http://www.geerthofstede.com/hofstede_dimensions.php?culture1=95&culture2=33#compare http://www.geerthofstede.com/hofstede_dimensions.php?culture1=95&culture2=50#compare Kotler, P., Brown, L., Adam, S., Burton, S. and Armstrong, G. (2007) Marketing, 7th Edn, a division of Pearson Australia Group Pty Ltd, French Forest. McShane, S. and Travaglione, T. (2007) Organisational Behaviour on the Pacific Rim, 2nd Edn, McGraw-Hill Ltd, North Ryde. Packman, H. M. and Casmir, F. L (1999) Learning from the Euro Disney Experience: A case Study in International/Intercultural Communication, International Communication Gazette, 61, 6, pp. 473-489. Spencer, E. P. (1995) Euro Disney: What Happened? What Next? Journal of International Marketing, 3, 3, pp. 103-114. Stoev, G. K. and Mujtaba, B. G. (2009) Strategic Human Resource Management And Global Expansion Lessons From The Euro Disney Challenges In France, International Business and Economics Research Journal, 8, 1, pp. 69-78. Thomas, D. C. (2003) Reading and Cases in International Management A Cross-Cultural Perspective, 1st Edn, Sage Ltd, London. Tian, F. (2009) GSBS6483 Cross Culture Negotiation and Management, 1st Edn, McGraw-Hill Ltd, North Ryde. Read More