The implication for the failure of the European Disney From the aspect of organization's value creation model As learning from the class, business value may be created by Labor practice improvements, Human Rights initiatives, and Environmental improvements. For the European Disney, it does not satisfy these three things. In the Labor practice improvements, because of influence for the traditional mindset of Disney, the appearance of employees should observe the rules by the company strictly. For example, the men's hair needs to be cut shorter which cannot touch the ear.Besides, the males are forbidden to have beard and their tattoo cannot be shown.
Females can only use the minimal makeup and not allow their hair dye. In addition, Disney only offers the 50 lounge for drivers and more than 2000 of them need to rest. All of these above worsen the labor practice, which lower the motivation for the employees leading the value of Disney decreasing. For the human right, Disney makes a big mistake.
Without doing the research, they consider culture of the European as they thought and do not offer the breakfast and alcohol drink which irate the French.These details in reducing the human right weaken the value of Disney gradually. Another important factor to increase the business value is to improve the environment and Disney fail to do this neither. When building the Disney, they explore the farmer's land and pollute the environment. Thus, it is not good for them to gain the reputation in public and lose their business value. Overall, the reason Disney cannot increase its business value to attract more customers is that they do not adapt their corporation culture to the Europe and make adjustment according to it.
They only repeat their style like in the Japan and USA in Europe. Although this decision can lower the investment risk, it does not create enough profit to cover the cost. Another important reason is the governance. Before building up the Europe Disney, some employees point out that there exits some culture conflicts between the Europe and US which hindering the success of it.
But the directors do not pay attention to it and use the inaccuracy prediction to prove it reasonably. Because the broad of directors lack the clear objective of choosing the site which is whether to ran profit or Just enter in the Europe market.This lead to an unclear task appoint to the management and implement. Lacking of valuating risk, the direction of strategies make it hard to enhance competitiveness resulting in harming the value of Disney and failing to survive in the Europe market. From the failure of the Europe Disney, we can learn from it to avoid the same situation happen again.
The implications are present in the follow: Firstly, multinational operation must pay attention to culture management. When facing the new problems and culture, we cannot be arrogance ND followed the old rules.As we know, French are sensible and the directors of Disney are imperious and prodigal. The director of Disney's opinionated attitude makes people disgusted which hinder implementing the plan and operation. Hence, effective cross-cultural management is the key to the success of enterprise competition in the international market. Disney's transnational operation process highlights that understanding culture differences, to overcome cultural conflict and conducting effective cross-cultural management are important in transnational operation of enterprises.
In transnational operation, if the enterprise lacks of cross- cultural communication, management knowledge and skills, cultural conflicts will affect their work efficiency, and increase the enterprise internal friction. We can see it clear from the graph below: Secondly, entering the new market, the directors of company should make appropriate price and deal with relationship for different companies in different areas to avoid them compete with each other. At that time, there are few theme parks so Disney is in monopoly position.Hence they think that the price for the customers is lack of flexibility and they set up a high price to make more profit in US.
Unfortunately, they come across the economic crisis so the European is not as rich as before and they cannot offer such a high price and take many measures to avoid the higher price or go to the other place. Furthermore because of the lower price in US Disney and the weak currency in US dollar, it makes European cheaper to visit the US Disney which leads many European visitors to go to the US instead of traveling to the Paris Disney.Thirdly, it is important to do the research before entering the new market to avoid the mistake of the competitiveness strategy. This is because after conducting a detailed research, we can fully realize the distinction among the different areas and make the adjustment according to them in order to increase the acceptation in the public.
In addition, after master host country's politics, economy, culture, law on the basis of environmental information, the company can analyze the advantages and disadvantages in the organizational culture and demand of customer.Moreover, through to compare the cultural differences, the company can identify the culture of the local market preference helping to enhance the enterprise the market strain capacity and to meet the needs of the consumers. Fourth, companies should build up a scientific and effective Governance System. As we analyze above, the Management in Disney seem to be overpowered by their reputation for success with no skepticism about the European market.The attitude of Disney management is confidently dismissive making them appear out of touch with the cultural differences. Besides, Disney's regulations have tightened, leading to more compliance oriented approaches, which are costly and have largely failed to generate significant improvement.
Governance can be seen as a strategic coordinating mechanism in that it serves to align structures, systems, policies, and cultures during decision-making processes.Therefore, the company should set up Preventive Controls that eliminate potential error and Detective Controls to identify can correct exist errors. After building up effective governance and observing the CRAFTED Renville in governance, it can ensure the board listen to the opinions from others to make better decisions. Last but not least, a successful company should have cross- cultural management and make full use of cultural differences to obtain competitive advantage.
Building the "two-way" cross-cultural communication channels can adapt to the culture of the host country environment and value. For example, using of cultural diversity, ideas improves the efficiency of transnational operation. The company should also adapt to the host country culture management strategy, and usuriously promote the enterprise organizational culture, enable it to get the acceptance of all kinds of related interest subjects such as host country's local government, local partners, and customers.Another advantage to use cultural differences helps the fusion of culture and can also be used for multinational enterprise management to build a harmonious internal and external cultural environment, thus for enterprise to win a higher production efficiency and greater global competition.
