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With a stride forward to the 21st century, the economy in the world is developing in an unprecedented way, which has been bringing about a tremendous of opportunities for the development of the multinational economy. However, cultural diversity is an indispensable while usually being overlooked factor in the activities involved in the cutthroat competition worldwide, which has been recognizing as an intangible barrier in the international trade. As a result, the analysis of the influence that cultural diversity exerts on the multinational management so as to effectively avoid the cultural barrier, decrease the uncertainty in the cross-cultural surroundings is demanding.
This paper aims to work out the effect of cultural diversity on multinational management via the case study of Disney in Tokyo and Paris. Meanwhile, it proposes some recommendations and suggestions for how to undertake the market research, manage the multinational corporation and obtain the competitive advantage.
Cultural diversity and cross-cultural management
2.1 Cultural diversity and its pros and cons for the individual and organization
Cultural diversity exits in every corner of a society, and different country, region or ethnic has its own cultural diversity, which has been reflecting in the value, ethnic customs, politics and legislations, religion and belief, language and way of thinking, and regulations and norms. All factors of which could be the substantial trap for the multinational corporations that are not sensitive to the crucial influence of cultural diversity. There is an old saying that every coin has two sides, and cultural diversity has no exceptions, it has both advantage and disadvantage for the individual and the organization. For one thing, working with people with different cultural background would broaden the scope of knowledge and develop the individual’s attitude toward other cultures, bring about more opportunities for business, and to accomplish the individual workplace task so as to solve personal problems. For another, people from different cultures work together could increase the quality and quantity of the worker for the organization, and it could be a drive for innovating products in an effort to serve for the diverse customer, and the sales, market share and export opportunities might be improved as well, in addition, the expectation of the community, political objective and legal requirement of the authority could be satisfied. However, cultural diversity could do harm to the individual and the organization. On the one hand, it would increase the incident of inter-personal and intra-organizational conflicts, the training cost, the opportunity for mismanagement which may lead to the dissatisfaction of the employees, lower productivity and job performance, and so on. As a result, to deal with the problems involved in the cultural diversity is very important since it could exert great influence on the consumption mode and method of people (Julia, 1992: 78-87) In the economical activities of the international trade, it is wise to know the information on the consumption mode and method of the target people before launching the products into the market. However, cultural diversity sometimes may be superficial, and two divergent cultures could be assimilated after a certain period of time of exchange, leading to the cultural fusion at last.
2.2 Cross-cultural management
Cross-cultural managementrefers to the management of people, issues, and articles with different cultural background, and it is a process of how to tackle the problems caused by different cultures, and in accordance of which, creating the special corporation culture that is suitable for the management of the corporation (Walter, 2003:80-84) The purpose of cross-cultural management is to harmonize different ethnics, different cultures in different developing phases to form a new culture of the corporation by adopting a accommodating strategy, the core of which is to solve the problems of cultural conflicts within the principle of creating a pleasant workplace for the staff from different cultures, so as to explore the maximization of the profits and potentials for the corporation.
3. Influence of culture diversity on cross-cultural management
3.1 Cross-cultural management of Disney
Disney is a worldwide famous cartoon company that was set up by Walter Disney in 1923 in the United States. It has built up the first theme park in California in 1953, which named “Dream World”, it was a big success of the company. Then in Florida, Paris, Tokyo, Hongkong and other places, Disney theme parks have been set up and welcomed by both the young and the adult. So far, it has about 60-year experience of operating multinationally (Philip, 2005: 545-550)
3.1.1 Successful cross-cultural management of Disney in Tokyo
The successful operation of Disney land in America has driven the managers of the corporation to extend the business overseas, and it has been a way of transmitting the American culture to the outside world. In 1982, there was an agreement signed by Disney and the Oriental real estate in Japan, permitting Disney to operate the Disney land theme park. To adapt to the concrete situations in Japan, all the guide and street board in the park
Success of Disney were printed in Japanese, meanwhile, it has adjust the layout of the park in accordance to the street of Japan, for instance, “Disney castle mystery tour” has been dyed the localized color according to the popular story of “Haunted house” in Japan at that time. The most obvious adjustment was the favor of the food, the park has not only opened a restaurant to satisfy the appetite of the local people, but the picnic was permitted as well. Then, the Tokyo Disney land has become one of the most attractive parks in Japan that has been inducing a large number of visitors. However, the Japanese culture is the typical oriental culture, and it is divergent to that of the United States, why Disney company could achieve such success in Japan? (Harvey & Allard, 2005:36-37) Firstly, Japanese culture recognized and accepted American culture after the WWII. Most Japanese people were fond of American culture that could be represented by Disney land, under this circumstance, the acceptance of American culture by the Japanese people is understandable and well-reasoned. Secondly, Japanese culture advocates collectivism. The collective activities in Disney land were just what Japanese people pursuit, which has intangibly promoted the consumption, bringing about a tremendous of profits. Thirdly, Tokyo was the first place where Disney set up the theme park overseas. The alien culture has strong attractions and appeals on the Japanese market, and it was the basis upon which Disney has successfully developed its cross-cultural operation.
3.1.2 Failure in Waterloo
The great success of Disney land in Tokyo has promoted the construction of another theme park in Paris. This European Disney was started to grow since the beginning of the 20th century, however, it was in front of a lot of unprecedented problems, for instance, the arrivals of visitors is much less than expectations, no to mention the profits from the visitor. Some negative report on the management and the wear of Disney land has discredited to the company. By 1995, the Paris Disney has lost 25 billion dollars while the reason of which lies in the lack of localization in terms of the operation strategy, of improper arrangement of the human resources, and the over-optimistic anticipation of the situation. For instance, the fact that the French have a strong national pride and sense of superiority, and they regarded the extension of Disney land is a cultural invasion (Nicole, 2005: 13). Consequently, they have boycotted the Disney land. It could be seen that culture has a crucial role in the multinational management, and being unaware of this importance, there must be some negative influence on the development of the company. Disney has realized the importance of cultural diversity and has begun to make changes after being failed in Paris. Since the beginning of the 21st century, it has been adjusting the operation strategy via transformation of name of the park into “Disneyland Paris”, hiring the French as the general manager, and restructured the company in accordance with the French management mode, increasing the number of European workers. By 2002, Paris Disney has earned profits for the first time.
Enlightenment of the cross-cultural management of Disney
It could be seen from the analysis and comparison of the multinational operation of Disney in Tokyo and Paris, that an effective cross-cultural management is very significant in the international market. It has succeeded in forming a stove where cultures of different countries have been fused and assimilated so as to serve for the operation of the corporation. The success of Disney could be categorized as four aspects.
4.1 Cross-cultural operation should focus on management
An effective cross-cultural management is the core factor for the corporation to success in the international competition. The success of Disney land had proved that emphasizing on the cultural diversity and eliminating the cultural conflicts are of great value in the transnational business. In the multinational business, if the enterprise lack the knowledge and skill of the cross-boundary management, the cultural conflicts may occur, including the tough personal relationship, failed communication, and misunderstanding between the manager and the worker, and so on, which would reduce the work efficiency and increase the internal loss, since the cultural diversity would directly lead to the cultural conflicts, serious relationship between the staff, failed communications between that staff and the lower job performance and lower work efficiency. On the contrary, if the enterprise could manage well in the cross-boundary business, then, the complicated problems that are related to cultural diversity could not bring about any loss, instead, it could grant some competitive advantage to the corporation and improve the workforce of the enterprise.
4.2 Emphasis on the market research of the target market
Doing the market research before entering into the target market is very important, and the market research includes the information on the politics, economy, culture, law and the environment, and based upon which, analysing and comparing the advantages and disadvantages of the foreign culture and the native culture, in order to find out the preference of the customer so as to satisfy them.
4.3 Efficient cross-cultural management
The undertaking of efficient cross-cultural management has three procedures. The first step is to recognize the cultural diversity. The management should first distinguish the difference between cultures could the effective measures be taken since most cultural conflicts have been caused by cultural diversity. Secondly, enterprises should have a sensitive nose to the cultural diversity, while this ability could be obtained by training, which could, to a large extent, increase the mutual understanding and communication in that staff could adapt to situations involved in different cultures. Last but not the least, building up the common value and culture within the corporation, which is helpful with respect to the decrease of the cultural conflicts, and it could facilitate every single worker to behave in accordance with the the operation strategy, then to tightly connect the parent company and subsidiaries, at the same time, to capture the reputation in the international market and strengthen the adaptation to the changing environment.
4.4 Seize competitive advantage via cultural diversity
An enterprise that is skilled at the cross-cultural management is bound to be good at utilizing cultural diversity at the most and best to seize competitive advantage, including building up a communication channel for mutual understanding, doing like Romans do while in Rome, i.e. adating its operation strategy in accordance with the cultural environment of the target market. Not only make good use of the management strategy of the target market, but also pay much attention to publicity of the culture and value of the enterprise, with an effort to gain the acceptance and support from the local government, counterpart, customers and relevant unities concerned in the target market. Effectively use the cultural diversity, on the one hand, could eliminate misunderstanding between people from different cultures, on the other, it could create a harmonious internal environment for the cross-boundary operation, additionally, win higher work efficiency and stronger competitiveness in the multinational business arena.
To sum up, cultural diversity is an objective existence that has been forming since ancient times, which could not be absolutely voided and eliminated by any single corporation, and there is no culture that are superior to any others. Moreover, cultural diversity could be seen from different angles, the discussion above is only a tiny part. In the cutthroat competition and ever fierce market, a comprehensive understanding of the function of culture diversity, and its pros and cons for both individuals and organizations are of great importance, in that from which, corporations could know what are dos and don’ts in the cross-cultural management.
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