Culture Clash at Euro Disney: Challenges and Solutions

QUESTION

Culture Clash at Euro Disney

The Walt Disney Company was founded in 1922 by 21 year-old Walt Disney and his older brother Roy. Walt Disney was the creative producer, Roy the ‘business brain’ behind the company (Ellwood, 1998). The partnership ended only with Walt Disney’s death in 1966. By the end of the 1990s, the Walt Disney Company had developed into a $23 billion media conglomerate, arguably the most influential force in the globalisation of Western culture (Ellwood, 1998).

The Walt Disney Company responded to difficult economic conditions after the Second World War by expanding into television and theme parks. It continued to diversify into every sector of entertainment, publishing, film, broadcasting, and information technology. By 1971, both brothers had died. The business then seriously under-performed, especially within the film division, and came close to being broken up.  In September 1984 a new management team was employed, led by Michael Eisner and Frank Wells, both former executives with other studios. By 1991 the Walt Disney Company had become a corporate power.

The development of theme parks transformed the Walt Disney Company into “a core business in American mass culture” (Gomery, 1994). Disneyland opened in California, Florida, Japan and France between 1955 and 1992. Promoting fantasy and well-being, coupled with high consumerism, they are under-pinned by a comprehensive, largely invisible surveillance and control system (Hannigan, 1998). Together with other leisure enterprises they accounted for about 17 per cent of the company’s revenue in 1997. Walt Disney World in Florida contains four theme parks and associated services, and attracts 30 million visitors a year. It employs 50,000 people, the largest number of workers located at one site in the USA, the majority in low-paid service jobs. The impact on the economy and development of Orland o and surrounding areas has been profound, with increasing disparity between affluence and poverty.

Employees are routinely assigned jobs according to age and appearance, a process officially known as “casting”. The most “presentable” get the most popular “front-line” jobs and shifts. “Old ladies sell the merchandise, old men work in security. Haitian women work in housekeeping, Puerto Rican young people work in food services and preparation, African-Americans work as cooks or stewards or in food preparation” (Ellwood, 1998). Animal Kingdom, opened in April 1998, employs 50 Africans on 12-month contracts “to lend authentic flavour”.

The rate of staff turnover is between 200 and 300 per cent a year. The Service Trade Council Union (STCU), a consortium of six unions, is the only workers’ organisation recognised by the Walt Disney Company. It represents about 22,000 full-time and 5000 part-time workers at Disney World. In addition to concerns about wage scales and other conditions of employment, the STCU has concerns about the company’s ‘benchmark’ monitoring system, based on maximising numbers using each attraction (Ellwood, 1998).

Japan

Disneyland in Japan is virtually an exact copy of the original Californian development but with some features ostensibly adapted for the Japanese market. For example, “Main Street USA”, a highly-idealised version of small-town America, is renamed “World Bazaar”. Yoshimoto (1994) argues that the opening in 1983 had symbolic value for a generation seeking to dissociate or ‘move on’ from the Second World War. Success also is attributed to ‘the absolute separation of leisure from work’. With maintenance and other utilitarian functions effectively invisible, Disneyland offers an almost unique opportunity for Japanese visitors to forget about everyday working life. Yoshimoto (1994) suggests that with its focus on order and minute attention to detail in management Disneyland ‘is arguably the most Japanese institution in the United States’. Equally, those same preoccupations make the Japanese market ideal for Disney: ‘the epitome of American popular culture’.

Euro Disney

Euro Disney opened in April 1992 in an agricultural area just outside Paris of which it was one fifth the size (Anthony et al., 1992). The French site was chosen over its main rival in Spain in the face of significant local opposition, despite the anticipated creation of 30,000 jobs. As in Florida, the French government agreed to substantial financial and tax incentives and to make major improvements to transport infrastructure. Ease of access for the populations of a number of European countries was seen as a major advantage, offsetting potential problems caused by inclement weather associated with a more northerly location. The success of Tokyo Disneyland was cited in support. More extensive European holiday entitlements and the enduring popularity of Paris were also relevant factors. However, early visitor attendance was significantly below projected levels leading to a trading deficit and substantial reduction in share value.

The project was promoted and defended by senior company managers in America, but other analysts questioned whether the Disney ethos would be compatible with French culture. While incorporating many standard Disney theme park features, some adjustments were made in response to these criticisms. Links were made with European literature and mythology. As in Tokyo Disneyland, renaming was used as a marketing device, resulting in Euro Disney reflecting European interest in the history of western United States. Unlike Tokyo, an international cuisine was provided, served in accordance with European social and eating patterns. However, the non-availability of alcohol proved controversial. Faced with charges of cultural imperialism the corporation had to reassure the government that French was technically the first language in the complex. However, employees also were expected to be fluent in English and signs were bilingual (Anthony et al., 1992). These dilutions of the Disney image led to the counter claim that the corporation was trying to be “all things to all people” and would be less successful as a result.

As at its other complexes, Euro Disney placed particular emphasis on rigorous training, orienting employees to the global corporate philosophy. As early as 1961 the company had created the Disney University for this purpose, located at individual sites and also addressing issues of specific local relevance. The Euro Disney division opened in September 1991. The aim was to recruit 10,000 people in six months with nationalities to reflect anticipated visitor profiles. However, when the development opened 70 per cent of employees were French compared to the target of 45 per cent. A total of 270 managers had been trained in service delivery standards operating in the other three centres. An additional 200 experienced Disney managers were relocated to the French site. From the outset Euro Disney was criticised for elements of its selection process and human resources management. In particular stringent requirements regarding personal appearance were compared unfavourably with the approach of other employers. In addition, some 4000 employees were unable to find suitable, affordable accommodation in the vicinity.

Retention also proved to be a problem. Within the first nine weeks, 1000 of those appointed left, about 50 per cent voluntarily. Doubts were raised about whether people familiar with European work expectations would be able to adapt to the regimented enthusiastic service-driven ethos required by Disney. Unreasonable working conditions, poor communication and lack of cultural awareness among managers were the main reasons given for the staff turnover (Anthony et al., 1992). See Walt Disney Company’s Euro Disneyland Venture: A study in corporate foreign expansion by Lyn Burgoyne for more details.

Branded merchandise

The Walt Disney Company has promoted branded merchandise since 1930 and has contracts with about 3000 factories worldwide (MacAdam, 1998). The National Labor Committee, an American human rights advocacy group, has highlighted the position of 2000 Disney workers in Haiti, the poorest country in the Caribbean. Unemployment is about 70 per cent and subcontracting a vital source of income. The National Labor Committee attempted to persuade the Walt Disney Company to allow independent monitoring of terms and conditions in their four Haitian plants. At first Disney claimed that it had no employees in Haiti and no responsibility for subcontractors. It then sent its own representatives but refused requests for independent monitors. The company’s chief executive, Michael Eisner, received over $185 million in pay and share options in 1996. MacAdam (1998) points out that one hour’s remuneration for Eisner was the equivalent of 156 years work for a Haitian machine operator producing Disney clothing.

More recently, the Walt Disney Company has focused attention on the lucrative Chinese market. The familiar story of low-cost production emerges again (Hong Kong Christian Industrial Committee, 1999). In 1996, the company launched a Chinese-language radio station broadcasting from Hong Kong. Chinese state television uses the Disney network for 50 per cent of programming on its specialist sports channel. The company’s 1998 animated film Mulan is based on a Chinese legend and represents a “strategic incursion” into the Chinese film market (Maio, 1998). There are plans for a Chinese Disneyland.

Copyright © 2000 Alan Price All rights reserved. This is an evolving case study (ie it will change). Educationalists may use and reproduce the case for their classes without needing further permission provided the source and full backing references are acknowledged.

References

Anthony, R., Lovemann, G., and Schlesinger, L. (1992) Euro Disney: The First 100 Days Harvard Business School case 9-693-013.
Ellwood, W. (1998) ‘Inside the Disney Dream Machine’, New Internationalist, No 308, December.
Gomery, D. (1994) ‘Disney’s Business History: A Reinterpretation’ in Smoodin. E. (ed) Disney Discourse: Producing the Magic Kingdom, Routledge.
Hannigan, J. (1998) ‘Fantasy Cities’, New Internationalist, No 308, December.
Hong Kong Christian Industrial Committee (1999) ‘ Working Conditions in Chinese Factories Making Disney Products’, Global Exchange.
MacAdam, M. (1998) ‘Working for the Rat’, New Internationalist, No 308, December 1998.
Maio, K. (1998) ‘Disney’s dolls’, New Internationalist, No 308, December.
Wilson, A. (1994) ‘The Betrayal of the Future: Walt Disney’s EPCOT Center’ in Smoodin. E. (ed) Disney Discourse: Producing the Magic Kingdom, Routledge.
Yoshimoto, M. (1994) ‘Images of Empire: Tokyo Disneyland and Japanese Cultural Imperialism’ in Smoodin. E. (ed) Disney Discourse: Producing the Magic Kingdom, Routledge.

Questions

1: What are the main problems/issues in this case? 

2: Which change theories/concepts and/or models are relevant and assist in understanding the case and why? 

3: What solutions would you suggest for resolving the problems in the case? 

ANSWER

 Culture Clash at Euro Disney: Challenges and Solutions

Introduction

The case of Euro Disney, now known as Disneyland Paris, highlights the cultural challenges faced by The Walt Disney Company when expanding its theme parks to international markets. This essay examines the main problems and issues encountered by Euro Disney, explores relevant change theories and concepts, and proposes solutions to address these challenges.

Main Problems/Issues

Cultural Incompatibility: Euro Disney faced resistance from French culture, leading to lower than expected attendance and financial losses. The attempt to transplant an Americanized theme park into a European context raised concerns about cultural imperialism and authenticity.

Human Resources Management: Euro Disney struggled with employee turnover, mainly due to rigid selection criteria, unreasonable working conditions, and lack of cultural awareness among managers. The company’s “casting” process based on age and appearance resulted in inequalities and raised ethical questions.

Labor Practices: The use of subcontractors in countries like Haiti and China raised concerns about exploitative labor practices, low wages, and poor working conditions, contradicting Disney’s family-friendly image.

Relevant Change Theories/Concepts

Hofstede’s Cultural Dimensions: Hofstede’s model helps understand the cultural differences between American and French societies, revealing the challenges Euro Disney faced due to diverging values, power distance, and individualism.

Lewin’s Three-Step Change Model: Euro Disney’s cultural challenges necessitated a change process. Lewin’s model, comprising unfreezing, change, and refreezing stages, explains the need to address the company’s cultural assumptions and practices.

Organizational Culture Theory: Schein’s theory emphasizes the need for Euro Disney to address cultural clashes and redefine its corporate culture to align with the host country’s values while preserving Disney’s identity.

Stakeholder Theory: Euro Disney should consider the interests and concerns of various stakeholders, including employees, local communities, and consumers, to build a sustainable and responsible business model.

Proposed Solutions

Cultural Adaptation: Euro Disney should conduct in-depth cultural analyses of its target markets and tailor its theme parks to suit local sensibilities. Integrating European literature, mythology, and history into attractions can enhance the park’s appeal and authenticity.

Human Resources Reforms: Implement fair and inclusive hiring practices, eliminating age and appearance-based casting. Offer cultural sensitivity training to managers and create opportunities for upward mobility for all employees, promoting diversity and inclusion.

Ethical Labor Practices: Strengthen labor monitoring and accountability to ensure fair wages, safe working conditions, and respect for human rights in all global operations. Establish partnerships with reputable organizations to ensure compliance with ethical standards.

Stakeholder Engagement: Foster transparent communication with stakeholders, addressing concerns and feedback openly. Consider local communities’ needs, support social initiatives, and invest in sustainable practices to enhance the company’s reputation.

Conclusion

The Euro Disney case exemplifies the complexities of cultural clashes when expanding a business internationally. By embracing relevant change theories and concepts, such as Hofstede’s dimensions and Lewin’s model, The Walt Disney Company can navigate cultural challenges successfully. Implementing proposed solutions, including cultural adaptation, HR reforms, ethical labor practices, and stakeholder engagement, will enable Euro Disney to build a harmonious and sustainable presence in global markets while maintaining its core identity. By understanding and embracing diverse cultures, Disney can truly become a symbol of universal joy and wonder, resonating with audiences worldwide.