Cross-cultural understanding is essential for successful implementation of global Human Resource and business strategies (Thomas, D.C 2008). Euro Disney case will be taken as an example. This essay will be discussing about the business difficulties in their internationalization process due to cross-cultural differences. Hofstede’s five dimension model will be used to analyse and discuss about the mistakes made by Euro Disney followed by the solutions. The Beginning
On 12th April 1992, the Walt Disney Company’s fourth theme park, Euro Disneyland opened its doors to the public. Being situated in Marne-la-Vallee, France and just 20 miles to its west, its site is one-fifth the size of Paris (Hartley, R.F 2005). Euro Disney was just like any other Disney theme parks with large amount of rides, hotels, attractions, restaurants and other facilities (Price, A 2000). However, the introduction of Disney to Europe was not really accepted by the locals. The ministry of culture announced that he would refrain EuroDisney from opening, claiming that it is an unwelcoming symbol of American cliché and a consumer society. The attendance rate did not meet their expectations at all as the French locals protest their fear that their culture will be damaged by Euro Disney. Another major external issue that placed Euro Disney into difficulty was the European recession. It occurred in the late 1992, causing massive interest payments on the startup loans taken out by Euro Disney, forcing the company to face financial crisis. As a result, by the end of 1994, Euro Disney declared that they had a cumulative loss of $2 billion which caused its shares to drop by 31% since the opening of the park (John, T 2003).
Comparing French and American culture using Hofstede’s 5D model
Obtained from Hofstede, 2012 Individualism
Minkov, M 2011 stated that individualism pertains to societies in which the ties between the individuals are loose; looking after themselves and their immediate family. From the given chart above, France scores high on the individualistic index. The cast members of the theme park believed that the requirement of “American look” have interfered with their individualism (Michalina, C.V 1961). Being an individualistic country, America failed to respect their individualism and the privacy of the French by giving strict rules for their attires. At the end of year 1994, Euro Disney was taken to the court regarding Walt Disney Company’s strict dress code, which violated the French labour law. Later, Euro Disney made changes in their dress code and coordinated it with the French dress code. The lack of strategic HR
Human resource management is involved in choosing the best site for business and is responsible for many of the aspects considered in International expansion. These include evaluation of the site, employee selection, training and etc. This might lead to the company’s failure when not carefully analyzed (Burgoyne, L1995). One of the biggest mistakes that Disney did wrong in the planning for Euro Disney was that the whole project was initiated due to the success of the three previous Disneyland; California, Japan and Florida. However, the Disney’s HR management still lacked awareness for the recognition of cultural diversity, and that they should differentiate this project from the previous ones.
Global staffing: From Ethnocentric to Polycentric
At first when Euro Disney first operated, they used the ethnocentric staffing approach. Ethnocentric management is where the home country management style is imposed on the host country (Mujtaba, B.G 2007). Euro Disney’s ethnocentric recruiting practice was another mistake which involves sending one of the organization’s “own” abroad to manage. The employees who are from their home country will then be given preference. Euro Disney occupied all important positions with American employees. The chairman of Euro Disney was also an...
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