Cross Cultural Management of Euro Disney - Case Study Example

Running Head: EURO DISNEY Euro Disney [Writer’s name] [Institution’s name] Euro Disney Introduction Completely understanding cross cultural management in a time where globalization is at it’s peak is extremely important. MNES tend to make the biggest blunders, when they do not take into consideration the culture of the market’s country which they are entering in. This paper shall analyze the Euro Disney case. In order to understand the cultural differences between the two countries (France and America), the paper shall also take under consideration Hofstede model and Fons Trompenaars theory. It shall also provide an overview of the problems which Disney might have faced and give solution to them. Analysis Hofstede's Cultural Dimensions Greet Hofstede (1983) in his cultural Dimensions model gave five dimensions: Small vs. large power distance, Individualism vs. collectivism, Masculinity vs. femininity, Weak vs. strong uncertainty avoidance, long vs. short term orientation. Individualism France is a country which believes in Individualism. They value their culture and language. They believe that it maintains their individuality. While America believes that employees have to adjust to the new culture. They do not regard Individualism as something important. Many French people who dealt with Disney considered the company an enclave of foreign arrogance, with the Disney concept of being happy and making everybody happy. While recruiting employees at the beginning, Disney had trouble. The new employees needed to have the right attitude to service - which is the legendary American service, --- and be bilingual in French and English as these are the official company languages. Power Distance America believes that foreign influences are something good in an organization as it provides an opportunity for growth. However in France, the national culture is extremely forceful in resisting foreign influences, especially language or customs which may dilute the French way of life. The French Government also forced Disney to employ French citizens, so that these posts would not be filled by the Dutch and Germans who were more suitable for Disney’s organizational culture as they are multi-lingual. The difference in national culture and corporate culture has an effect on any organization’s productivity, and thus, its success. Femininity In France, expectations are more about lifestyle, quality of living and intuition then it is about just making money. Euro Disney seemed to be seducing the people by fancy promotions like the Mickey Mouse birthday party. While Unite sates believes making lots of money out of their projects, regardless of the loss of their employee’s values. Uncertainty avoidance In private sphere, both people from France tend to think that what is different is dangerous. In professional context, there is an emotional need of written or oral regulations. Formalities and normality are perceived as essential key points. Where as in America something different is welcomed with open arms. Especially in the business world an innovative new idea is usually valued. Long vs. short term orientation France is a short term oriented society as it strongly believes in attitudes, values and believes of their culture. Whereas America is a long term orientation society, as it gives less value to such things. Fons Trompenaars theory Fons Trompenaars theory (1993).can also be used to explain Euro Disney management failure. His theory consisted of four categories Incubator, Guided Missile, Family and Eiffel Tower. The cultural difference between France and U.S.A is shown through the first dimensions universalism versus particularism i.e. the guided missile this applies rules and systems objectively, without consideration for individual circumstances. Whereas the particularistic approach, puts the first obligation on relationship and is more subjective (Deresky, 2002). This could have been an valid reason for the failure as US implemented rules and systems objectively, without consideration for individual circumstances in Euro Disney while French organizations usually value their believes and relations more thus they consider the individual circumstances more. Issues Communication challenges Gudykunst and Kim (1992) argue that although intercultural communication employs the same processes as communication within a culture, it poses several special problems. Cultural value differences including attitudes and behaviours create barriers. It is important for local staff/managers to know about these cultural differences so they can monitor their own perceptions and view diverse co-workers more accurately, as when verbalised or acted upon, these cultural barriers can cause discomfort and stress for the judged individual (Hearns, Devine & Baum, 2007). International managers need to be sensitive to the cultural nuances that may affect the working relationship of different migrants. Back to the case, in Euro Disney, the French co-workers thought they are happy with what they do and think everyone else should be. This type of evangelism is considerably gauche and culturally offensive to many French people. Human resource challenges This includes the hiring criteria and policies, language and training requirements which are required by a multicultural workforce. And the development training of international employers and integration can be particularly challenging. It was mentioned the recruitment has already had trouble. Then, training for workforce was also challenging. The language for instruction came first. Moreover, it was the requirement to educate native workforce to accept and assimilate with a multicultural staff (Fernandez, 1991). The French resist foreign influences, especially language or customs which may dilute the French way of life, while the Disney training includes all American cultural images and kind of promotes American style of life, which was not acceptable for most French. Analysis of Risk Factors Third, the company miscalculated the risk factors which led to its failure. For example, they failed to see the signs of approaching European recession. This recession caused the French real-estate to fall down and then it destroyed the hopes of Euro Disneyland to sell their assets. Solutions It’s not difficult to find out from the above case study that cultural conflict could have led to business failure of Euro Disney, and different cultural environments require different managerial behaviours which have to be acceptable and applicable in local environment. There were no universal management strategies, structures that could apply to all cultures. Some strategies that were appropriate in one culture setting could lead to failure of business in another. Cray and Mallory (1998) also agree that leadership will vary cross cultures, not only in the emphasis placed on leadership behaviours, but also in the basic idea of what leadership means. Those international managers in hospitality industry would have to figure out the challenges that they would face in the global environment, and deal with those challenges. Due to these challenges which international managers of Euro Disney faced, and the importance of culture differences in business management and investigate, the ability to interact effectively in multiple cultures is badly demanded for those who work in multinational corporations. This ability has been mentioned earlier as cultural intelligence (CQ). Cultural intelligence is the personal capability that allows individuals to adjust to diverse cultural circumstance and effectively adapt to different cultural settings (Earley & Ang, 2003). Euro Disney has to start managing their international leadership skills as this has increasingly drawn the attention on in the dynamic economic environment, and it has been suggested by many researchers (Earley & Ang, 2003; Alon & Higgins, 2005) that CQ can lead to develop the international leadership success. It was also suggested that Euro Disney should not only train their employees with the management skills, but also send them to international assignments to be exposed to other cultures. Apart from this they should carry out a detailed analysis of the country’s risk factors. A PESTEL analysis of the country should be carried out before entering the market. Conclusion In a world where organizations are spreading across more cultures and involving employees from different nationalities, there is greater pressure on managers to show leadership that will be applicable beyond their domestic operations (Cray & Mallory, 1998) Thus, to understand the differences between domestic and global management, it is necessary to understand the ways in which cultures vary. Thus, it would have been wise for Disney to first analyze the rigid culture of France before starting it’s project. They made big blunder by ignoring their values and believes. Ultimately, like any international business which ignores the country’s culture, it too led to failure. References Alon and J.M. Higgins (2005), Global leadership success through emotional and cultural intelligences, Business Horizons 48 (6) Cray, D, and Mallory, GR (1998), Making Sense of Managing Culture, London, Thomson Deresky Helen (2002), Global Management: Strategic and Interpersonal, State University of New York, Plattsburgh Devine, F. Baum, T. Hearns, N. Devine A. (2007), Cultural diversity in hospitality work: the Northern Ireland experience, Resource Management, Vol. 18, Issue 2 pp. 333 – 349 Earley, P.C. & Ang, S. (2003), Cultural Intelligence: An Analysis of Individual Interactions across Cultures. Palo Alto, CA: Stanford University Press Fernandez, John P (1991), Managing a Diverse Work Force. Lexington Books G. Hofstede (1983), "The Cultural Relativity of Organizational Practices and Theories," Journal of International Business Studies, 14 Gudykunst, W. B., and Kim, Y. Y. (1992), Communicating with Strangers: An Approach to Intercultural Communication, New York: McGraw-Hill. Trompenaars Fons (1993) Riding the waves of culture, London: Nicholas Brealey Publishing Read More