Euro Disneyland 1. This research is an excellent example to show how Hofstadter’s four cultural dimension work when Multinational Company decides to do business overseas. Using the Hofstede’s four cultural dimensions as a point of reference, some of the main cultural differences between the United States and France are strong French uncertainty avoidance, high individualism, centralized power structures and lower masculinity scores Uncertainty avoidance index shoes the degree to which people feel threatened by ambiguity.In 1992, Disney opened Euro Disneyland park in Marne-la-Vallee 20 miles east of Paris on what was previously French farmland best known for producing sugar beets and Brie cheese.
Euro Disneyland was designed to mirror the American Disney theme parks back in California and Florida with very few concessions to French culture. French people found this highly ambiguous, and only 29% of visitors to Euro Disneyland in its first year were from France. If the French want a U. S. style Disneyland experience, they will go to Disney parks in America. This shows the high uncertainty avoidance that French people posses.
Individualism is the cultural dimension that measures to what extent people look after themselves and their immediate family members only. American executives at Disney imposed a strict dress code at Euro Disneyland that required extremely short hair and banned beards and moustaches. Disney’s dress code was based on Walt Disney’s highly individualized, squeaky clean American family values.By imposing the Walt Disney appearance code, the Americans insulted French family traditions.
Many of the highly individualistic French refused to work at Euro Disneyland, including a 28-year-old Parisian trumpet player who insisted on keeping his pony tail hairstyle rather than join the closely cropped Disney brass band. Power distance index measures the extents to which less powerful members of organization and institutions accept unequal distribution of power. In addition, France score on power distance index is higher than the world’s average.Hence, higher power distance societies are more centralized with tall, hierarchal organization structure featuring a high proportion of supervisors who give orders at the lower levels. The French were confused when Disney appointed mostly American-born managers into the front-line supervisory positions at Euro Disneyland, many of whom were not fluent in the French language.
Last but not least, a country such as Frence, with a lower masculinity score places more emphasis on carrying for others and quality of life. Clearly, French culture was not a priority for Disney during the first year of Euro Disney.Back in America, Disney CEO Michael Eisner expressed America’s overriding focus on monetary success when he said “What we created in France is the biggest private investment in a foreign country by an American company ever. And it’s going to pay off”. Yet in its first six months of operation to September 1992, Euro Disneyland had lost over US$34 million. Like the other cultural dimensions in this analysis, Disney executives should have adapted to France’s need for low masculinity values like cooperation, friendly atmosphere, group decision making, more employee freedoms and environmental conservation.
. In Trompenaars’s research we were able to see multiple apparent differences between the United States and France. One of the cultural differences is how French people value their homeland, by not showing first year to the Disneyland, because Disney was constructed on previously French farmland best known for producing sugar beets and Brie cheese. Another very interesting cultural difference is when American executives imposed very strict dress code for Euro Disneyland, and how French people got offended in a sense.By imposing the Walt Disney appearance code, the Americans insulted French family traditions.
Furthermore, another big challenge for Disney was to break French ancient cultural aversions to smiling and being consistently polite to park guest. This in turn shows how different these two countries are. 3. One of the mistakes that company made in managing its Euro Disneyland is that plans were based on Disney’s experiences with the existing theme parks.In addition to that, Disney drew conclusions from the successful development of Disneyland Tokyo which was seen as a prove that the strictly American philosophy could be implemented without major changes in other cultural environment. Evidently, this was not the case for Euro Disneyland.
Another problem is quest awareness of high prices. Disney executives came up with the specific price to be charges for the guest, not taking many factors into considerations which in turn resulted in negative financial results.Another very obvious problem is culture, which is the key element to be considered when Multinational companies want to do business overseas. When it comes to Euro Disneyland, all of the above factors were not taken care for in the necessary extent in the planning concept.
In this sense Disney decided for a too optimistic scenario. 4. One of the lessons that the company should have learned about how to deal with diversity is not to pay too much attention to the past experiences, in a sense that not to draw conclusions based from the successful experiences from the past.For instance, Disney thought that because the Disneyland in Tokyo was so successful, Disneyland in Paris would be the same.
Moreover, it is essential for all companies who want to do business overseas to collect all the necessary information in order to provide the best basis to decide for the plan that promises best results. Another essential lesson is development of several alternative plans. Because of the future nature of planning there will not be complete information. Development of several alternative plans requires some estimation.Therefore, all plans include more or less elements of the uncertainty and risk.
Since planning is essentially about the future, the results and information from the past are only relevant as the basis form whi ch to forecast. In spite of the uncertainty of the future, planning offers the means to evaluate alternative proposals. This in turn should reduce uncertainty and risk, therefore; this is another lesson that Disney should have taken into consideration. At the end a major challenge of doing business internationally is to adapt effectively to different culture.Such adaptation requires an understanding of cultural diversity, perceptions, stereotypes, and values.
Doing business overseas has its challenges as well as it rewards. The problems faced by Multinational companies in coping with this process of globalization are accompanied by an increasing necessity to find cultural solutions to organizational problems in a world that has begun to resemble a global village. More specifically, there are some important differences across national boundaries on the nature of the managerial role. In fact, culture has an impact on the way people communicate and do business with each other.