Euro Disneyland - Hofstedes Four Cultural Dimensions - Case Study Example

On march 24 1987, the American and French president signed a contract for building a Disney theme park in France; this was the result of talks and negotiation that had lasted over a year (Krishna n.d., p.247). Initially, there were allegations that Euro Disney was an assault on French culture and an attempt to introduce and impose American imperialism and their cultural insensitivity to France. In fact, on the opening day many groups who were opposed to the institution attempted to stop its launching, some farmers for instance, blocked the entrance of the park with their tractors (Krishna n.d., p.249). American perception of the French is that they are of emotional, as well as impractically hierarchical, these can be attributed to aspects of French culture and preferences to which American do not ascribe. For instance, the French mostly prefer to eat in a formal setting, on silverware, conversely, the Americans disregard the formality and most people have their lunch out of boxes or paper plates. The Americans believe in hard work and that anyone can be successful if they take the opportunities offered to them; this has made them aggressive and opportunistic as well as optimistic, to the French this aggressiveness may be viewed negatively and this self-view of Americans is reflects on their naivety and lack of principles. This is just a few examples of different perceptions between Americans and French; while allowing that many of the stereotypes are just that, there is need to consider the impacts cultural perceptions can have on American businesses operated in France. The cultural separation can be seen in the fact that the Americans named the park “Euro-Disneyland”; to them, the name Euro represented exotic experiences, on the contrary, to the Europeans it implied business and work just like their currency. Hofstede’s four cultural dimensions According to Geert Hofstedes theory of cultural dimension, the values systems to which the members subscribe to and the relation of the values to behaviour often influence society’s culture (Longatan 2008). Despite criticisms on it effectiveness, it has being used worldwide as a paradigm for research on matters pertains to cultural interaction in business, management, sociology and cross-cultural communication. The theory’s four dimensions were Power Distance, Individualism, Masculinity and Uncertainty Avoidance, the cultural differences that contributed to the failure of Euro Disney can be attributed to cultural differences described in the theory. The power distance determines that extent to which the less powerful in a hierarchical society; expect and accept the inequality of power in institutions, in a way it defines inequality from the eyes of those at the bottom. The power distance index of the two countries is very different and significantly impacted Euro-Disney’s performance in France; the American power index is rated at 40, below the world average of 43, the French soars at 63. The nationals of the two countries had a problem coping with their differentiated view in matters of power; the French were willing to accept the gap between the bosses and their subordinates, as their hierarchical culture is comfortable with a power gap. Conversely, the Americas were loath to have such a system since they were used to a narrower gap between the different powers brackets, consequently, employees had problems coping with their colleague’s perception of the power gap. Both countries score above world average on individualism, America is ranked at 91 points while France stands at 71, the disparity between them also came to bear on the operation of the companies and the conflicts that emerged. Individualism can be described as a tendency to focus on their personal and immediate family benefit (Longatan 2008), this is a major characteristic of capitalism and was engendered by Americans; they expected the French to be the same way. Conversely, the French took a more communal view and tended to focus on how their actions influenced, not just themselves but the community, this might explain why many of the top management were from America. Disney was focused more on creating profit and employment for Americans than the benefiting their French hosts, this reflects Americans individualism and it led to mistakes made by the American managers with no experience in French culture. Euro Disney required that the dress code followed by the staff would include very short hair and absolutely no facial hair, this rules discouraged many talented French people who preferred to maintain their individuality to avoid working in the park. On a personal level, the French are more expressive of their individualism than Americans are and such displays are tolerated in France than in America, this made the “American” dress code controversial since it directly infringed on self-expression. . Uncertainty avoidance refers to the extents at which people feel threatened and uncomfortable with ambiguity and/or the absence of guaranteed results; the levels of uncertainty avoidance are relative in both and American culture. The French prefer to avoid the uncertain and control the future as much as possible, Americans, on the other hand, have low certainty avoidance and are more likely to take risks and gamble on success. This tendency has made them very entrepreneurial, in the case of Euro Disneyland, the differences between the two countries was evident in that; the Americans were willing to risk imposing their American concepts on the French (Thomson 2006). By so doing the gambled on the hope that the French would be accommodating, this risk however did not pay off as Euro-Disney was met with myriads of cultural problems they had not anticipated. The principle of masculinity according to Hofstede is reflected in a culture by the focus on individualism and materialism, the dominant values in a high masculinity society are money, success, and wealth (Longatan 2008). This is very apparent in American culture where the masculinity index is rated 63 well above the words average of 50, France on the other hand stands at 43, this is reflected in the French’s feminine culture, which is focused on caring for each other and improving the quality of life. In the case of Disney the Americans entered the world of low masculinity with their material culture intact, their focus on money led them to disregard the “softer” things that were more important to the French and this predominance on material gain coursed Euro Disney to lose over 34 million dollars in the long run. How Trompenaars’ research helped to explain these cultural differences between the United States and France According to Fons Trompenaars, a Dutch culturist, the differences in culture can be understood by means of the four diversity cultures the model, it can be centralized or decentralized, the former is based on major personal dimensions of individuals versus the task at hand. The latter is based on egalitarian principles, according to Trompenaars, both of them are common in cultural studies and can be determined with ease. In studying American and French culture, the four models can be used to bring out the distinctions between the two and explain in part reasons for the disconnect that resulted in the failure of Euro Disney. The family culture emphasizes personal hierarchy in an organization, the Eiffel Tower Culture involves focus on the existing hierarchy and the task, the Guided Missile Culture, entails emphasis on equality in the work place while incubator culture is focused on equality and personal fulfilment. The family culture is characterized by emphasis on an individual’s hierarchical position and orientation in relation to a structured organization or society: French people value teamwork and employees even after succeeding will rarely stand out from their team for individual recognition, this would be considered rude demeaning to the rest of the team. Americans on the other hand treat individual attention in a radically different manner, albeit emphasizing on the roles and importance of teamwork, American employers and employees celebrate individual achievements, success, and those who excel stand out among from the rest. However, there are similarities that can be observed; for instance, despite the varying takes on individual achievements, both American and French managers encourage joint goal setting, and recognize the values of teamwork in achieving their targets. The egalitarianism philosophy that exists in the United States business practice can be classified under guided missile culture; it is epitomized by formal organizations that promote support and orientations to them to those in a working environment (Thomson 2006). For instance, management makes decisions based on what is best for the greatest number of people in the particular circumstances, this contrasted with the Eiffiel culture that is embodied in Northwest Europe. In France, matters are subdued and the French take a more traditional approach to management, there are elements of bureaucracy that can be found in the French systems that have been eliminated or reduced in the American versions. According to Trompenaars cultural factors, the idea of Universalism vs particular; under universalism; the belief that ideas and practices can be applied everywhere in the world without modification, is examined, this explains the Americans attempt to transplant Disneyland into France. The levels of universalism in a country determines how business people deal, the more of it there is the more likely that contracts are closely followed and business is formal America is an example of such a county. The French lean more toward particularism; they are less formal and can negotiate a deal outside the boarders of formality in a more personalized setting than their American counterparts can. French bosses deal with their staff via bend rules, these are based on the egalitarian relations in society, and conversely Americans apply the universal obligation and are unlikely to soften or bend rules based on circumstances. Furthermore, Americans are predisposed to making legalistic judgments that contrast with the French’s holistic ones based on the context; these differences may have contributed to managerial problems in Euro-Disney. Americans were likely to stick to the rules, notwithstanding different contexts, which explain their imposing an American dress code to Euro-Disney, the French were on the other hand willing to make some adjustments, but they expected the Americans to respond in kind, which was rarely done. Three mistakes made in managing Euro-Disneyland The cultural operational error is of the mistakes made by Euro Disney in France, by not taking time to understand French culture; they expected to entertain and amuse the French, yet they had not learnt what was acceptable and normal to them. This resulted in attempts to impose American cultural habits and experiences concerning drinking; dressing food and other cultural issues, one of the main issues was the French drinking habits. Americans frown upon serving alcohol in children theme parks and Disney continued with their policy of not serving alcohol in theirs, while it may have been lauded in other parts of the worked such as Japan the effects were disastrous in France. In French culture, a meal is not considered complete without wine, thus the misunderstanding of French drinking habits resulted in many visitors feeling offended and not desiring to spend much time in the park (Karadjova-Stoev and Mujtaba 2009, p.73). Disney’s ignorance of cultural norms also committed another blunder in relation to meals, they misconceived the eating habits of the French by believing the latter would prefer to snack and eat fast foods like Americans. As a result, they downsized their restaurants; however, they soon realized that this was wrong decision; the French wanted to seat down and eat complete meals not carrying around hamburgers and hotdogs like Americans. For breakfast, the French were not content with eating croissants and drinking coffee, some expected to have options like bacon and eggs in a full course breakfast, a factor the Americans at Disneyworld had not considered (Karadjova-Stoev and Mujtaba 2009, p.73). Human Resource logistics and per capita spending Due to insufficient market research, Disney miscalculated the per capita spending in the park making projections based on the American and Japanese Disney parks; their estimates proved to be misguided resulting lower than expected sales food and souvenirs. Unlike the Americans and Japanese who often spent more money buying and rarely left the park empty handed, the European visitors were more interested in enjoying the experience but not shopping, this resulted in 12% less spending than expected. The Disney managers had invested more in car parking areas than bus and bicycle since they assumed most people would come by train boat or walk, it turned out that most came by bus and bicycles. They were later forced to reduce the car parking area an extend the facilities for parking buses and bicycles, at the end of the day, this resulted in extra expenses that had not been foreseen making the project even more expensive than it already was. Out of touch management; Before Euro Disney, all the other Disney theme parks were locally owned and managed; in America; the Walt Disney company ran the parks, in Japan the Oriental land company owned majority shares and operated the park. However in Europe, the Walt Disney Company despite owning 49 percentage of the shares were in charge of operations for 70% of the profits; major decisions were made by Americans many who had no undertaking of the local context (Thompson 2006). The hiring of expatriate managers in positions that would have best been filled by local mangers was one of the many human resource errors made by the Walt Disney Company; they assumed that since both France and America were western nations, their cultures would be similar. This went against common sense in global business “act local think global” and it severely impaired the ability of Disney to understand the European market or respond in time to the concerns of their European stakeholders. The park suffered a myriad of problems that were as a result of ignorance in local norms and labour laws, had they hired enough local people; they would have saved money and avoided many potentially damaging challenges. The lessons that Disney should have learnt from the experience in dealing with diversity include: Cultural education is invaluable for any business that intends to set up branches in a new cultural environment; this is done to foster good relationships between managers and the local employees as well as the customers. Ergo, they should have ensured to train their employees sufficiently so they could cope with the new culture, furthermore, there is need to understand the cultural practices and expectations of the customers and make the necessary adjustments. For instance, if Euro-Disney had done enough research, they would have realized the French were not likely to enjoy the fast foods Americans liked, and put up measures to accommodate the new palates, not try to impose new taste on their clients. The Disney managers could enhance cultural adaptation; they could promote the Euro Disney by use of French language, and theatres plays and music that are best adapted to local realities (Krishna n.d., p.250). The strict dress code imposed by Disney restricted the self-expression of talented French people who would have contributed to the parks authentication; imposing American practices on the French was counterproductive since the audience was predominantly European (Krishna n.d., p.252). In future, they should ensure that they vary their rules of dress and conduct based on the cultural affiliations of the clients since unlike the Japanese who had wanted the American experience, the French wanted, a French experience. For example, on the issue of food, Disney should ensure they provide the French with the kind of diet they are used to by allowing, say a more intense breakfast with eggs and bacon as well as full course meals during lunch and dinner. Despite American cultural convection that alcohol should not be served I children themed venues, Disney should follow convections in France and serve wine since the clients were French not American. Disney should ensure that before embarking on a future venture such as Euro Disney, they should carry out market research to learn the preferences of the perspective customers and their spending habits. They had assumed that Europeans would spend as much as the Japanese and American did in the parks, they also assumed that the visitors would come by train and boat as opposed to buses and bicycles, these proved to be a costly assumption. Thus, instead of basing their projections on the activities of retrospective markets, Disney should carry out market research in the new market, and use the data to strategize, saving them from costly assumptions. In order to facilitate for hands on operations, Disney should hire local help who can manage and understand the cultural situation, as opposed to imposing expatriate managers, who were out of touch with local realities. They should also hire form diverse ethnicities, considering that many people in Europe visited the Disney park in France, they were form different ethical and cultural backgrounds and to cater for the diverse clientele (Karadjova-Stoev and Mujtaba 2009, p.75). In conclusion, it evident that the American company got off to a bad start in France, as discussed, the cultural difference between the two countries weighed heavily on the fate of the company and greatly contributed to its depreciation. Cultural conflict was one of the major problems the firm faced, as it had not anticipated the French customs and habits concerning feeding dress and management, this displeased many customers and employees who were forced to adapt to a foreign lifestyle (Thompson 2006). Application of the Trompenaar’s four demonstrated that the French and Americans were quite different in their cultural appreciation and what worked for one group was not practical for the other. Because of neglecting the social cultural constructs and factors at play, the Disney made several costly mistakes and ended up incurring phenomenal losses, which could have been avoided if they had paid attention to cultural differences. In conclusion, one cannot fail to notice the lesson that is derived from the misfortunes of Disney world in Europe, business in business, disregarding culture for material gain is an extreme risky idea. Finally, a firm’s reputation and past success, notwithstanding it can only as good as its ability to connect with the needs of its present customers and meet their expectations. References Longatan, N. 2008. Hofstedes Five Dimensions of Culture. [Online] Available at http://suite101.com/article/hofstedes-five-dimensions-of-culture-a86385 [Accessed Feb. 25, 2013] Karadjova-Stoev, G. and Mujtaba, B. G. 2009. “Strategic Human Resource Management And Global Expansion Lessons From The Euro Disney Challenges In France” International Business & Economics Research Journal. Vol. 8, No. 1.: pp 69-79. Thompson, Kevin. 2006. “Euro Disneyland: Disneys Attempt at Foreign Corporate Expansion” Yahoo Voices. [Online] Available at http://voices.yahoo.com/Euro-disneyland-disneys-attempt-foreign-corporate-141030.html?cat=23 [Accessed Feb. 25, 2013] Krishna, S. n.d. “Euro Disneyland” In Depth Intergrative case.2b Read More