Cultural Diversity and Globalization - Case Study Example

Case Study Introduction Cultural diversity is something which the business world is tackling with over the years. Globalization has made it necessary for business to look into this diversity of traditions and values. Not only the workplace but clientele is also becoming diverse and it is very important to understand the dynamics of this cultural diversity if success is to be achieved. The case of Euro Disneyland is very important in order to understand the implications of cultural diversity. The company experienced major problems in operating in France due to cultural problems. Disney erred in identifying differences in the culture of its target audience and suffered badly. This shows that how important it is to keep in mind the culture of the customers. The company started the Euro Disneyland thinking that the same old American Disneyland will work but it didn’t. It was actually a major setback for the company. In this case study analysis cultural differences will be discussed between France and United States of America. The operational mistakes made by the company in managing Euro Disneyland will also be discussed. The lessons the company should have learned from its past experiences will also be a point in discussion. Cultural Differences between France and USA Hofstede’s cultural dimensions can be used to explain the cultural differences between the two countries. These differences are very important as they are the main cause why Euro Disneyland failed despite of its huge name and publicity. The dimensions of culture are very well known in organizational behavior and sociology. They include power distance, collectivism, uncertainty avoidance and masculinity (Kwintessential, 2010). The first dimension is power distance. It is defined as the extent of belief in the inequality or equality of distribution of power in the society. The countries that have high power distance exhibit acceptance with regards to the inequalities of people. In these countries people conform to the powerful and follow orders. Countries like China, Mexico and India. In these countries we can witness disparity in incomes and power. The countries that have low power distance exhibit equality. In these countries power is equally distributed in the society. United States of America, Austria and Norway have low power distance. We can see less disparity of incomes and power in these countries. France has a relatively high power distance then United States of America. This means that people of France accept, to a certain extent, inequality of power. For this reason Euro Disneyland should have special rights for people in France and ‘rules are for all’ strategy is not appropriate for France. The second dimension is individualism. Countries that have high individualism, people there care about themselves and family only. Low individualistic or collectivist countries have people that care about the extended family and the whole clan. These countries lack personal initiative and people are dependent on family. United States of America is a highly individualistic country. Personal values of the people are strong. France is relatively less individualistic and people still care about their families. The degree of individualism is less in France then in United States of America where people have relatively strong family values. The third dimension is uncertainty avoidance. High uncertainty avoidance countries are risk averse and need security. These countries play with the rule. Greece, Russia and France are examples of such countries. Countries with low uncertainty avoidance are risk taking and people there have low need of security Singapore and China are such examples. United States also have low uncertainty avoidance value. This shows a great difference between France and United States. In France people play by the book and they have little appetite for unconventional ideas. They like to take less risk and they prefer security over uncertainty. The French want to know about their standing unlike other Europeans countries (Yates, M. 2010). In United States culture people are risk takers and out of the box thinking is appreciated. The fourth dimension of culture is masculinity. Highly masculine countries have greater job stress and wealth is an important determinant in these countries. Low Masculinity countries focus on care, quality of life and have low job related stress. These countries include Norway and France. United States has a high level of masculinity while France has relatively low level of masculinity. In France people care more for friendly atmosphere and cooperation than in America where people rate each other with respect to their income and wealth. This is an important difference between the two countries. Tompenaar’s Research and USA France Cultural Difference Tompenaar’s Research on cultural dimensions can also be used to explain the cultural differences between France and United States. Tompenaar suggested that there are seven dimensions of culture. The first dimension is Universalism versus Particularism. Universalism means universality of rules. Countries that have high universalism value adhere to their business contracts and value rules. Countries with high particularism think that different situations require different rules and modify their contracts frequently. United States of America is values universalism as the country is not known for joint ventures abroad and the reason is its adherence to rules. The second dimension is Individualism versus Communitarianism. United States is highly individualistic and in its culture people care about them only. France is not as individualistic as USA. The management styles of French Manager also differ because of these moderately individualistic values (Miroshnik, 2002). The third dimension is neutral versus emotional. United States is a highly neutral country where emotions are controlled and calmness is practiced. France can also be characterized as a neutral value country as their culture is also neutral. The fourth dimension is specific versus diffuse. United States has a very specific culture as people separate their personal lives from work life. Culture of United States is very extrovert in nature. On the other hand France has a much diffused culture where both the public and private life of the people is separated. The fifth dimension is known as achievement versus ascription. United States has a very achievement oriented culture. People are known for their own work in United States and not by their status. France has a similar culture. The sixth dimension is sequential versus synchronous. United States has a sequential culture where people do one job at a time while France has a synchronous culture where many tasks are performed at the same time. The seventh dimension is related to environment. United States people believe that they are in control of their feelings but French people believe that environment play a role in defining their actions. Mistakes in managing Euro Disneyland The main mistake was that the company failed to recognize the different cultural needs and requirements of its customers. They thought that they can create an American culture in France and this is where they went wrong. The first mistake they made was to ban wine in the Euro Disneyland. The management should have taken into account that French people love wine and it is a part and parcel of their culture. This ban was later lifted but the damage had been done till then. Culture should always be kept in mind when communicating anything to consumers (Kale, 1995), and by banning wine they gave a bad message to the consumers. The second mistake was that the company tried to maintain a strict employee code which is not part of the French culture. They found it very difficult to train the employees and employees could also not deliver according to the expectations. Employees also rebelled and this gave a bad name to Euro Disneyland. Leadership could have played a better role in this case as leadership can solve all sorts of problems but due to cultural differences this issue was not resolved (Scandura & Williams, 1999). The third mistake the company made was that they did not care about French idea of personal space. French people did not like to wait in lines and for this reason they opted not to queue. This was a grave mistake in understanding a different culture and they should have thought about it. Three Lessons the Company should have learnt First lesson that the company should have learnt from the Tokyo Disneyland was the lesson of cultural differences. Even there things didn’t go well and this was a lesson for the company. There is a strong relationship between culture and international business and that was not understood by the company (Leung, et.al. 2005). The second lesson that the company should have learnt was from the employee strike in America. They should have known that the strictness they want to implement was not possible on such a large pool of employees. Power is not always enough to make employees work (Yukl & Tracey, 1992) and this is a lesson the company should have learnt. The third lesson they should have learned is related to marketing. Marketing is done differently in different cultures (Graham, 1985) and this is a lesson the company should have learned from its past experiences. Conclusion Culture is an important aspect in a successful business in today’s corporate world. No company how big it is can ignore cultural diversity in its operations. Euro Disneyland failed because of the fact that the company did not properly cater to the French culture and tired to impose the American culture on the consumers which was rejected immediately. The operational mistakes committed by the management of Euro Disneyland tell us the importance of cultural identification in performing business overseas. References Graham, L. (1985). Cross-cultural marketing negotiations: a laboratory experiment. Marketing Science 4, 2, 130–146. Kwintessential. (2010). Hofstede's Intercultural Dimensions. Retrieved from http://www.kwintessential.co.uk/intercultural/dimensions.html Leung, et al. (2005). Culture and international business: recent advances and their implications for future research. Journal of International Business Studies, 36, 357–378. Miroshnik, V. (2002). Culture and international management: A review. Journal of Management Development, 21, 7. 521-544. Pillai, R., Scandura, T. A., & Williams. (1999). Leadership and organizational justice: Similarities and differences across cultures. Journal of International Business Studies, 30, 4, 763-779. Yates, M. (2010). Cultural differences. Leader Values. Retrieved from http://www.leader-values.com/Content/detail.asp?ContentDetailID=72 Yukl, G., & Tracey, B. (1992). Consequences of influence tactics used with subordinates, peers, and the boss. Journal of Applied Psychology, 77, 4, 525-535. Read More