The French Style of Management Euro Disneyland - Case Study Example

Case Study Euro Disneyland Executive Summary The Walt Disney Company opened its fourth theme park Euro Disneyland in 1992 at Paris, in France. Unlike its previous experiences, Euro Disneyland turned out to be a financial disaster. Among the several significant reasons attributed for this failure of Euro Disneyland was the impact of cultural differences between the Americans and the French. Euro Disneyland attempted to portray American culture and the management of the business was organized in typical American style. To the French in spite of the might and economic power of America, American culture was considered inferior. In addition, the French style of management was different from the American style. The cross cultural dimensions of Hostfede and Troompenaars effectively demonstrate the cultural differences between American culture and French culture and the differences in the styles of managing businesses, which underpin the reasons for the failure of Euro Disneyland. The three significant mistakes of Walt Disney Company at Euro Disneyland were the lack of understanding of cultural hostility, French employee management and vacation patterns and habits of the French. The recommendations include using Hofstede’s and Troompenaars models of cultural dimensions for developing such an understanding of the cross cultural differences and through such an understanding undertaking appropriate steps to reduce the impact of cross cultural differences on the lack of attractiveness of Euro Disneyland for the French. Introduction The Walt Disney Company entered the theme park business activity in 1955 through its first park Disneyland in Anaheim California that turned out to be an instant success, with its comic characters adding to the exotic cultural experiences in the park. This success story was repeated through Disney World in Florida in 1970 and in Japan in 1983 through Tokyo Disneyland. The success in its first overseas venture in Japan causes the Walt Disney in 1986 to turns its eyes towards Paris in France, particularly because of the advantage of demographics and the subsidies offered by the French government. Euro Disneyland became a reality on April 12, 1992. By 1994 the fairy tale success stories experienced by Walt Disney thus far turned sour by the disaster that Euro Disneyland presented with accumulated losses of $2 billion. Many reasons have attributed to the failure of Euro Disneyland. Among the key issues is the failure of Walt Disney Company to appreciate the differences in cultural values of the French in comparison to the Americans and the impact of these differences, when doing business in foreign markets (Hill, 2000). This paper attempts to analyze the cultural issues that led to the failure of Euro Disneyland and suggests measures that could have been taken to reduce the impact of the cross cultural problems experienced at Euro Disneyland. For this purpose the case study of Euro Disneyland from Luthans & Doh. 2008, International Management: Culture, Strategy and Behavior, pp.229-238 has been used. Brief Summary France and Spain extended open invitations to the Walt Disney Company to locate the planned Euro Disney Land in their countries. The Walt Disney Company decided on Paris in France for two reasons. The first involved the attractive demographics that Paris presented, with the location being just a day’s drive away for thirty million potential customers in France and Europe. The second attractive incentive for the Walt Disney Company was the willingness of the French to spend on infrastructural development needs for the theme park and the reduction on VAT on entry fee. For the French Government the theme park appeared a boon in terms of the quantum of anticipated foreign direct investment and the large number of jobs for the French that the theme park would generate (Luthans & Loh, 2008). Even before the theme park came into existence there were a series of protests. Protests from intellectuals and the left stream of French politics were based on the cry that the theme park would stifle individualism and convert children into consumers. Rich farmland in the Marne-la-Valley region to the extent of 4,460 acres was acquired for the theme park from farmers, leading to protests for loss of rich cultivatable land. To offset the growing resentment to Euro Disneyland in France, the Walt Disney Company went on a public relation campaign that many of the French considered as attempts to seduce them. Euro Disney land was opened, but more problems were waiting. The strict dress code and working norms made the French employees unhappy. The cost of the tickets and over night accommodation were much more than the French were willing to pay. Alcoholic beverages including wine were not allowed in the theme park, while the French were proud of their wine heritage and freedom to drink it. Food was not made available at the times that the French like to eat the food was not what they wanted. The net result of all these culture related issues were that the French did not really take to Euro Disney Land, which turned into a financial disaster (Luthans & Loh, 2008). Analysis of Cross Cultural Differences that Impacted on Euro Disneyland The stereotype caricature of Americans in the eyes of the French was that they were optimistic, wealthy, informal and dynamic. Evaluation of the way the French perceived the Americans in 1970 showed that the French believed that irrespective of the power and economic strength that the Americans possessed, the French had a better style of living, lived better than the Americans and were more civilized than the Americans. The French school children were taught that the Americans were overtly materialistic and lived in a consumers’ paradise, which made them slaves of comfort and business centric. Furthermore, unlike the French the Americans had very little culture to be proud of. American society was given the colouring of being of being conformity oriented, rootless and full of violence. Other French disapproval of American culture included lack of family togetherness and values and poor cuisine (Kuisel, 1997). It is against this backdrop of perceived wide disparity of culture and disapproval of the American way of life that Euro Disneyland sought to give the French and their immediate neighbours a taste of American culture. The cross cultural differences between France and America are better understood through the many dimensions of culture as put forward by Hofstede. In this theoretical framework cultural differences stem from the four dimensions of culture namely, Individualism-Collectivism, Power Distance, Uncertainty Avoidance and Masculinity-Femininity. Individualism-Collectivism stands for the extent to which there is domination of the personal interests of an individual over that of the group interests of the society. Power-Distance is the level of acceptance in the society to the unequal distribution of power, while Uncertainty Avoidance is inn relation to tolerance level of the unpredictable in the society. Masculinity-Femininity takes into consideration the relative dominance of masculine or feminine values in the society (Hofstede, 2001). Triandis 2004 suggests that among these dimensions put forward by Hofstede, it is the Individual-Collectivist dimension that is the most significant. The greater the affluence that a country develops, the more the society is prone to becoming individualistic, which is true in the case of America. France on the other hand is a country in which collectivism dominates in its society. According to Triandis 2004, p.90, “the perceptions and behaviour of people in collectivist societies are different from the perception and behaviour of people in individualist cultures” and this lies at the root of the cultural problems faced by Euro Disneyland. The Power Distance dimension has an impact on the type of individualism and collectivism present in the society in the form of vertical individualism and horizontal individualism. Vertical individualism is dominant in American with Americans liking to be the centre of attraction, while horizontal individualism is dominate in French society, causing the French to prefer being less conspicuous. Thus the brashness and ostentatious style of the Americans is hardly acceptable to the French. Uncertainty Avoidance determines how tight or loose rules and norms are within the society. Americans tend to be tight in their adherence to rules and norms in society, which was reflected in the strict dress code and work norms at Euro Disneyland. On the other hand the French are less strict on norms and rules, which led to the French employees being unhappy about the working conditions at Euro Disneyland (Triandis, 2004). Troompenaars & Wooliams, 2003, suggest that there are many models for cross cultural difference, but most of them are not well suited for understanding organizational difficulties in understanding their impact on business activities in new cultural environments. Troompenaars research on organizational culture thus assists in the analysis of the cultural issues at Euro Disneyland. According to Troompenaars, there are five dimensions of cross-cultural differences. The first of these dimensions is universalism versus particularism. In universalist societies rules and regulations have a strong moral impact, causing them to be followed, even when friends and colleagues may be involved in their breach. On the other hand in particularist societies the circumstances are more important than any rules, as the emphasis is more on relationships than on abstract rules. In his observation Troompenaars found American societies to be high on universalism at 93%, while the French were much lower down at 72%, implying that for the French relationships were more important, while for the Americans rules were important and the reason for the strict dress code and work norms at Euro Disneyland, which was at odds with the French employees (Troompenaars, 2006). The second dimension according to Troompenaars is individualism versus collectivism, which is on similar lines to this dimension of Hofstede. Troompenaars observations show the Americans to be high on individualism at 69%, while the French had a very low bend to individualism at 41%, demonstrating that the French would be less self-centred than the Americans and more oriented towards the social group. The consequence of this at Euro Disney land was that the cultural affront that was taken up by the intellectuals and the left stream was a reflection of the social perception in France. The third dimension according to Troompenaars is neutral versus affective. In neutral societies emotions would not be overtly demonstrated, while in affective societies there would be overt demonstration of emotion. Troompenaars observations show that Americans are higher on the neutral scale at 29%, while the French are way down at 14%. This demonstrates that French society is highly affective and emotions are not kept to themselves, but overtly demonstrated, which in the case Euro Disneyland was seen in the strong farmer protests and poor response to Euro Disneyland (Troompenaars, 2006). The fourth cultural dimension of Euro Disneyland is specific versus diffuse. In specific societies there is higher regard for long term relationships and loyalty to the relationships. The implication of this from an organizational perspective is that in specific cultures manager do not intermix official relationships and social relationships with their subordinates. In other words the subordinates are considered more equal and that any difference between the two comes from task responsibilities at work. From Troompenaars observations we find the French as a specific society at 87%, while the Americans were lower down as a specific society at 81%. The consequence of this cross cultural difference was the aggravation in the poor American manager and French employee relationships at Euro Disneyland. The final dimension of Troompenaars is achievement versus ascription. In any society certain individuals are given status based on achievement or based on virtue of age, class, gender, education and the like. When status is given on the basis of achievement it is considered an achievement oriented society and in the other case, it is an ascribed society. Troompenaars observations show us that Americans belong to an achievement oriented society at 69%, while the French are an ascribed society, low on achievement orientation at 25%. The consequence of this is that the status given by the Americans to individuals at Euro Disneyland would be based on their achievement levels, which would run contrary to the French viewing of status based on the other elements of an individual. This would aggravate the interaction between the French employees and the American staff at Euro Disneyland, leading to low motivation in the French employees (Troompenaars, 2006). Three Mistakes of Walt Disney Company at Euro Disneyland The first important mistake that the company made was assuming that the success of Tokyo Disneyland could be replicated in Euro Disneyland, with just a few cosmetic changes that would appear to soothe the cultural tastes of the French (THE KINGDOM INSIDE A REPUBLIC). In other words there was less emphasis on understanding the implications of French Culture and greater belief in that just as the Japanese accepted Tokyo Disneyland, the French would accept Euro Disneyland (Raz, 1999). The second mistake was the lack of sensitivity of French culture and history and its strong influence on the French people. This can be seen in the banning of wine in the park grounds and the poor food service provided at the theme park. The consequence was that the French demonstrated much less enthusiasm and appreciation for Euro Disneyland than the Japanese displayed for Tokyo Disneyland (Van Maanen, 1992). The third significant mistake of Walt Disney Company was in not giving sufficient attention to the vacation habits of Europeans and relying on its vacation habits of Americans in assessing the potential spending of the Europeans at Euro Disneyland. Unlike the American tendency for short vacations of two days or so, suited for a visit to Disneyland, the Europeans tended to take longer vacations of almost two weeks, which meant that the money available had to be spread over two weeks. The expensive accommodation of Euro Disneyland was not suited to the money available with Europeans on long vacations and so they avoided it (Spencer, 1995). Recommendations Three factors that stand out in the analysis of the mistakes made at Euro Disneyland were the lack of understanding of cultural hostility, employee management and vacation patterns and habits of the Europeans, with particular emphasis on the French (Spencer, 1995). To reduce cultural hostility, Euro Disneyland would have to develop a better understanding of the cross cultural differences between the Americans and the French and take steps to ensure that Euro Disneyland demonstrates more sensitivity to French cultural requirements. Hofstede’s and Troompenaars models of cultural dimensions are suitable frameworks for developing such an understanding. Having understood the cross cultural differences, Euro Disneyland would have to take steps to lessen its impact on the lack of attractiveness of the theme park to the French. Some steps in this direction would include the lifting of ban on wine at the theme park; offering suitable members of the families of farmers, who had lost arable land to Euro Disney, appropriate jobs at Euro Disneyland and altering the themes within the theme park to appeal to the French people. Euro Disneyland would have to change its management style at Euro Disneyland. Steps in this direction recommended include removal of strict dress code norms and working conditions; discussions with the French worker unions on the suitable working conditions for the French employees and appointing of French managers and supervisors to run the day to day operations at the theme park. It would be difficult for Euro Disneyland to change the vacation patterns and habits of the French. However, steps could be taken to reduce the impact of these patterns and habits on attractiveness of the theme park to the vacationers. These steps would include creating less expensive accommodation and working in collaboration with travel and tour operators to make Euro Disneyland a segment in the longer vacation travels undertaken by the French. Literary References Hill, Charles, W. L. 2000, ‘Disney in France’, in International Business, Competing in the Global Market Place, ed. Charles, W.L. Hill, Irwin McGraw Hill, Columbus, Ohio, pp.106-107. Hofstede, G. 2001, Cultures Consequence: Comparing Values, Behaviours, Institutions, and Organizations Across Nations, Second Edition, Sage Publications, Thousand Oaks, California. Kuisel, R. 1997, Seducing the French: The Dilemma of Americanization, University of California Press, Berkeley, U.S.A. Luthans, F. & Doh, J. P. 2008, International Management: Culture, Strategy, and Behavior, 7th Edition, McGraw Hill: New York, pp.229-238. Raz, A. E. 1999, ‘The Hybrdization of Organizational Culture in Tokyo Disneyland’, Studies in Cultures, Organizations & Societies, vol.5, no.2, pp.235-264. Spencer, E. P. 1995, ‘Educator Insights: Euro Disney – What Happened What Next’, vol.3, no.3, pp.103-114. Triandis, H. C. 2004, ‘The many dimensions of culture’, Academy of Management Executive, vol.18, no.1, pp.88-93. ‘THE KINGDOM INSIDE A REPUBLIC’, 1996, Economist, vol.339, no.7961, pp.66-67. Troompenaars, F. 1996, ‘Resolving international conflict: Culture and Business Strategy’, Business Strategy Review, vol.96, no.3, pp.51-68. Troompenaars, F. & Wooliams. P. 2003, ‘A new framework for managing change across cultures’, Journal of Change Management, vol.3, no.4, pp.361-375. Van Maanen, J.1992. ‘Displacing Disney: Some Notes on the Flow of Culture’, Qualitative Sociology, vol.15, no.1, p.5-35. Read More