Ali Mogbel Alharbi 3084057

UNIVERSITY OF NEWCASTLE

GSBS6484 Cross Cultural Negotiation and Management Dr. David Collins

Case study Report Ali Mogbel Alharbi 3084057

Ali Mogbel Alharbi 3084057

Introduction:
Understanding cultures is important for successful implementation of global HR and business strategies (Higgs, 1994). Euro Disney case is an example of this scenario where it failed to understand the culture of France. This report compares the cultures of France and America using Hofstedes five dimension model and Trompenaars model. The report then continues to analyse and discuss the mistakes of Disney followed by the lessons that could be learnt from this case. Comparing French and American Cultures using Hofstedes 5D Model:

Obtained from Hofstede, 2011 The dimensions can be explained using the figure above. Power Distance: This is a measure of the extent to which power is believed to be distributed equally in a culture or an organisation (Luthans &Doh, 2008). From the diagram, France has high power distance than United States. The acceptance of the strict dress code by thousands of employees even when it is criticised by labour organisations without protest is an example for this high power distance.
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Individualism: This measures the extent to which individuals are associated with the surrounding society and also look after themselves and their immediate family (Luthans &Doh, 2008). The strict dress code implemented is viewed as a breach of privacy and individualism by the French. French guests were also very uncomfortable when pushed against each other without private space. From the figure, Americans are more individualistic than French. Uncertainty Avoidance: This dimension measures how much people are willing to face uncertainty, ambiguity and create beliefs to avoid such scenarios. The uncertainty index of the French is very high compared to the Americans. The people took the waning of France-Soir and didnt risk facing busy and congested roads which imply that they are risk avoiding. Masculinity: This is a measure of the dominant values in society i.e. masculine if the values are success, money and things; feminine if the values are caring for others and quality of life. According to the five dimension model, US are more masculine. The ambition to grow, succeed and maximise profits motivated Walt Disney Company to venture into Europe in search of new opportunities to expand. It was found that masculine i.e. dominance and coherence culture are essential qualities of successful companies (Trigg & Trigg, 1995). Long-term Orientation: This is a measure of the orientation of the culture towards future and its visionary goals. Long term orientation cultures are quick and determined whereas short term oriented cultures are based on tradition and fulfilling social obligations. The investment of $2.5 billion by Disney demonstrates its long term orientation whereas adhering to the traditions suggests a short term orientation is favourable for France Comparing French and American Cultures using Trompenaars dimensions: Universalism vs Particularism:

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Universalistic culture is the one which believes that the rules, regulations and policies are universal and can be applied anywhere without modification. Particularistic, on the other hand perceives that rules and regulations are distinct for the culture (Luthans &Doh, 2008). Motivated by the success of its three theme parks, Disney did not realise that French were a part of a distinct culture and its methods may not work there. Nuetral vs Emotional: Neutral is where people do not exhibit emotions while Emotional is where emotions are clearly expressed. Both the countries in this case are emotional. This is demonstrated by the egg throwing at the CEO of Disney at the inauguration to express the dissatisfaction by the French. Specific vs Diffuse: Specific culture is where people guard their private space strongly and accept anyone into their public spaces. In a diffuse culture both public space and private space are guarded. The French couldnt let anyone close within their arms length when standing in the queue for the rides at Euro Disney. Achievement vs Ascription This dimension measures the method through which social status is accorded to a person. Achievement culture is one in which status is obtained by achievement and in ascription cultures, it is achieved based on whom you know (Luthans &Doh, 2008). U.S. is certainly an achievement culture where a person is regarded based on his achievement. Example: Walt Disney. The environment: Inner directed vs Outer directed This measures if the people believe that the outcomes are a result of their own actions or if they flow with the course of actions. U.S. is the country where a maximum people are inner directed. The motto of Euro Disneys employs was we do the work, guests enjoy. They perceived that guests enjoy as a result of the employees actions (Forman, 1998). The THREE mistakes made by the Walt Disney Company:

Ali Mogbel Alharbi 3084057 1. The land that has been used for cultivating sugar beets and Brie cheese which

was profitable to the local farmers and been a part of the culture has been expropriated from them and been sold to Disney without profit which upset the farmers. French farmers respect themselves as contributing to the quality ingredients of French food. The French place much emphasis on how and what of food (Packman & Casmir, 1999). Being an Individualistic country by itself, USA failed to respect the individualism and privacy of the French by providing strict guidelines for appearance and dress code. The European habits of vacations are quite different from USA. In France, people look for holiday for a day or two and a show to spend the evening unlike Americans who spend 3-4 weeks holidays. French are also not keen spenders when it comes to finances (King, 1993). Hence, the attendance was low at Euro Disney.
2. Negative infiltration strategy and lack of cultural sensitivity used by Euro

Disney has resulted in a loss of reputation, money and time. It is argued that the main reason for Disneys failure is that it failed to realise that organisations are not separate, distinct entities capable of functioning outside their cultural, social and physical environments. Disney perceived that the surrounding environment is competitive and operated separately from it (Packman and Casmir, 1999). This separation from the French prevented it from reaching out to them. The use of English for advertisements is a major drawback to communicate with local businesses. Occupying most of the managerial level jobs with people who strive to achieve the squeaky clean image with strict rules are another major constraint that gave critics and media to protest the corporate image of Disney (Forman, 1998).
3. Disney has failed to capitalise on the internal opportunities inherent in the

project and to maximise their returns. For example, Tokyo Disneyland paid royalty payments every year even at the time of recession. For 11 years Disney earned, $2 billion from Tokyo which was all lost in this mistake at Paris. Poor management and high prices when compared to the other parks to recoup the investments have affected the attendance (Trigg et al, 1995; Curwen, 1995). Management relied too heavily on Disneys prior success and image (Spencer, 1995). The geographical and cultural differences were not paid attention to. Many French believed that Disney is happy and they want everyone else to be happy about it (Trigg et al, 1995).
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The lessons the company should have learned about to how to deal with diversity are: Accepted international marketing practices should be embraced by

organisations to strategically enter into overseas markets (Spencer, 1995). Products must be adapted and integrated according to the needs and customs of the overseas clients. Disney should modify their rules and policies, behaviour on the operations of Euro Disney. Americans pursued French as drunkards for drinking wine with the meal whereas French pursued that drinking coke with meal if thought to be exotic (Spencer, 1995). Proper research into the customs and practices of the host culture must be done to avoid such disasters. The media constantly argued that Disney made minor adjustments according to the French culture. It is found that a combination of managers involving both expatriates and host managers where knowledge transfer occurs is found successful (Harvey and Novicevic, 2000). Care must be taken when employing staff overseas so that incidents like the Howdy does not happen. The HR strategy must be aligned with the global strategy (Higgs, 1994). The case clearly suggests Disney tried to administer all the aspects of Euro Disney and failed to form strategic alliances with the local businesses. The failed alliance with the construction company to finish work on time is an example. To combat these strategic alliances must be encouraged. If research was done into the holiday habits of the Europeans and averted the building of hotels, would have saved time and money (Spencer, 1995). A simple strategic alliance with established firms would have been profitable without affecting the parks performance. Disney believing in their unrivalled success failed to realise that it is the customer who is ultimately paying the bills. Disney invested with a projection of 11 million guests every year, but failed to anticipate the effect on cash flow if the attendance is less (Curwen, 1995). More thought into the climatic conditions was required that effect consumers were required (Spencer, 1995). Euro Disney was claimed to be a victim of cultural snobbery. It is also important to note that the U.S Dollar had no control over the Franc, which moved against sterling (Curwen, 1995). As globalisation is growing, it is necessary to pay attention to all these conditions related to finances is required.

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The analysis of Euro Disney suggests that the operation costs, employee costs, consumer behaviour, strategic HR management, cultural differences, norms and practices must be calculated perfectly for a company to be successful overseas.

Conclusion:
The above discussion illustrates the importance of understanding cultural differences between the expatriate country and the host country. It is important to research well in to the culture, the rules and regulations, the customer attitudes and behaviours, geographical data and opportunities before entering a foreign market. The mistakes committed by Disney are analysed and the lessons learnt from this case are discussed briefly. No matter how successful a company is, understanding culture from all aspects is highlighted.

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References:
Curwen, P. (1995) EuroDisney: The mouse that roared (not!), European Business Review, 95, 5, 15-21 Forman, J. (1998) Corporate Image and the Establishment of Euro Disney: Mickey Mouse and the French Press, Technical Communication Quarterly, 7, 3, 247-258 Harvey, M., Novicevic, M.M. (2000), Staffing Global Marketing Positions: What We Dont Know Can Make A Difference, Journal of World Business, 35, 1, 80-95 Higgs, M.J. (1994) Global HR management and cross cultural issues, Cross cultural management: an international journal, 1, 3, 23-28 Hofstede, 2011, Geert-Hofstede Cultural Dimensions, Retrieved from,

http://www.geert-hofstede.com/ King, T.R. (1993) Euro Disney third quarter loss to spur study of woes by U.S.Concern, 9th July , Wall street Journal Luthans, F. & Doh. (2009) International Management: Culture, Strategy, and Behaviour, 7th Ed, New York: McGraw Hill. 229-238 Packman, M.H & Casmir, F.L. (1999), Learning from the Euro Disney Experience : A Casestudy in international/intercultural communication, International Communication Gazette,61, 6, 473-489 61: 473 Spencer, E.P. (1995) Euro Disney: What Happened? What Next?, Journal of International Marketing, 3, 3, 103-114 Trigg, M.C & Trigg, D. (1995) Disney's European theme park adventure: a clash of cultures, Cross Cultural Management: An International Journal, 2, 2, 13-22