Organizational Behavior Indept Comapny Analysis - Coursework Example

?Euro Disney Table of contents page ……………………………………………………………………………….. i Table of contents ……………………………………………………………………….. ii Introduction …………………………………………………………………………….. 3 Company history ………………………………………………………………………... 3-4 Culture …………………………………………………………………………………... 4-9 Leadership ………………………………………………………………………………. 9-10 Reality check …………………………………………………………………………….. 10-12 Recommendations and conclusion ……………………………………………………….. 12-13 Reference list ……………………………………………………………………………… 14 Introduction In organizations, management is a crucial part. This is because effective management contributes greatly to the success of any business irrespective of the nature of the business. The most critical functions of management are controlling, planning, leading and organizing. These functions are performed by all the managers at all levels of management and irrespective of the nature of the business. Organizations upgrade their management system with an aim of gaining competitive advantage over other organizations in the industry. Success or failure of an organization is directly connected to the effectiveness of the management team. For an organization or business entity to gain a competitive advantage over others, it has to strategically manage its affairs. Strategic management is aimed at improved returns, maintain operations and contain the prevailing competition in the market place. Basically, strategic management is aiming at adequately responding to the uncertainties, changes and adapting to the market demands. Therefore, when an organization strategically manages its affairs, it may gain a competitive advantage over other companies. Competitive advantage is gained only if the strategies developed by a company are expensive for or cannot be adopted by other companies in the market. An organization that strategically manages its affairs may gain and maintain competitive advantage which is essential for the survival of a business despite the market changes (Smith, and Conners, 2009, pp 34-78). Company history For instance, Euro Disney is of American origin but considered one of the largest companies in Europe. The company was initially formed in the United States but after successful operation for several years, it opted to grow to other regions in Europe. This led to the company growing from a domestic to international company. It is an international company hence operates several business entities in the region among them the Disneyland resort Paris. The site comprises of several components such as the discovery land, fantasyland, adventure land, frontier land and main street USA. The company also encompasses of a 27-hole golf course, Disney village, 68 restaurants, seven hotels, two convention centers and 52 boutiques. The company opened for operation in the late march 1992 for the employees. The presses were later formally invited to the company on April 11th 1992 and on April 12th 1992 for the visitors. The company enjoyed enormous profits but later incurred losses. Cultural differences Though Euro Disney operates in the European countries, it has encountered cultural differences in some countries. This is because the company was formed in the United States and had an American business setting. Therefore, the company operated with adoption of American business aspects. Since there are cultural differences between America and France, the company had to adjust to the cultural difference so as to suit into the French market. These cultural differences greatly affected the speculated returns by the company’s management. The company experienced the highest cultural difference mainly in France upon the setting up of the Paris Euro Disney. According to Hofstede there are several dimensions that can lead to cultural differences in the work place. For this reason, Hofstede developed an understanding of the workplace values globally. There are several dimensions of cultural diversity among them; building connection between people, structuring projects, motivating people, developing a strategy among others. These diversities arise due to the fact that what works in one location may or may not work somewhere else. The dimensions developed by Dr. Geert Hefstede are a globally recognized standard. He developed the standard from research from employees from different countries but working for the same organization (Kreither, and Kinincki, 2009, pp 56-89). Using the Hefstede cultural dimension with reference to France and the United States, there are several cultural differences. This is in consideration to the Euro Disneyland Company. The dimension comprises of five culture among them; power/distance (PD), individualism (IDV), masculinity (MAS), uncertainty/avoidance index (UAI) and long-term orientation (LTO) (Smith, and Conners, 2009, pp 85-123). Power/distance; this dimension is concerned with the degree of prevailing inequality. It can be said to be low or high. It is acceptable among people with or without power. A high PD prevails when the score reveals that people understand their places in the society and accepts the unequal distribution of power. On the other hand, a low PD is said to prevail when the score shows that equality exists among the members of the society. With reference to the United States and France and the euro Disney company, it is evident that high PD prevails in the French environment while a low PD prevails in the American environment. The French embraced the centralization system of the affairs of the company and strong hierarchies. The French system greatly acknowledged the leaders’ power and preferred getting information or responses from the top management. On the other hand, the united states labor culture embraced team work and involving of as many people as possible in the decision making process. The supervisors and the workers are considered almost equal in the work place. It improves the relation among the employees both the junior and the seniors. Euro Disney being an American company had an American setting; therefore, the management had to adapt to the French culture for the sake of the company’s survival in France (Kreither, and Kinincki, 2009, pp 12-45). Individualism; this culture is mainly concerned with the ties the indigenous people have with others in the community. The score can be rated as low or high. When the score is high, it reflects loose connection hence lack of interpersonal connection and responsibility sharing. If the score is rated low, it reflects strong cohesion and hence loyalty and respect among all the members. There prevailed a high IDV in France, because they enjoyed challenges and expected rewards for hard work. They also had respect for privacy and had a high evaluation on time and need for freedom. The French could not even queue and discriminated against the workers who could not speak and understand French. On the other hand, the analysis showed that low score prevails in the American states due to several reasons. The employees worked for intrinsic rewards, and they valued harmony more than honesty. The Americans highly emphasized on skill building and becoming masters of an art. They embraced the slow introduction of change in the labor system. It is through an effective strategic management plan that the company’s top management could adjust to the individualism prevailing in France to enable the survival of the company in the French economic environment (Smith, and Conners, 2009, pp 12-26). Masculinity; the culture is mainly concerned with the traditional roles of both male and female in the labor market. The masculine is high in countries where men are perceived to be the providers and assertive hence does not share the same professions with female. On the other hand, masculine is low in countries where male and female roles are blurred that is they work equally across many professions. The two countries did not have differences on this dimension as they both given equal roles to male and female. Both the American and French labor markets were gender sensitive on employment basis hence the company had no difficulty (Kreither, and Kinincki, 2009, pp56-97). Uncertainty/avoidance index; the dimension is mainly concerned with the anxiety degree in the society when the members are uncertain. There existed a high score UAI in France than the United States. For instance in 1992, the company designed to copy the American theme park in California and Florida but with few concessions to the French culture the French people found this ambiguous. There were only 29% of French visitors recorded that year. To curb this, the management had to adopt the French system in setting up the premises at Paris; this was to increase the number of visitors to the company. Euro Disney being a service delivery business, its returns was mainly determined by the number of customers visits to the premise (Smith, and Conners, 2009, pp 106-119). Long-term orientation; the dimension is greatly concerned with how much the society values long term, as opposed to short-standing values and traditions. The people in the United States have low LTO score since they promote equality and sought self-actualization. On the other hand, France has high-LTO score because they have a strong work ethic and places high value on education and training. This dimension had to be understood by the management so as to adjust to the employment and hiring patterns in France. The top management was basically based in the United States, but the authority had to be delegated to the managers in France to operate with accordance to the customers’ expectations in France (Kreither, and Kinincki, 2009, pp 456-509). Euro Disney was expanding its operations to other countries in Europe with an aim of increasing the level of returns. There are several strategic management models that a company can use for the purpose of competitive advantage. Since strategic management is a process, there are several models that have been developed by management scholars to assist managers in the process. Among them are; the business ecosystem developed by Moore and James F, the ten roles of management developed by Mintzberg, five forces developed by Porter and the seven culture dimension developed by Trompenaars, Hampden-Tuner among others. The culture dimension assists management in understanding of the different cultures in different countries hence prepare for the challenges (Kreither, and Kinincki, 2009, pp 56-106). Trompenaars also developed cultural dimensions but were mainly concerned with centralization and decentralization of organizations systems. The dimensions are common measures hence can be easily determined. These dimensions aim at the cross-cultural differences among states. The research describes the differences between cultures especially the national groups (Smith, and Conners, 2009, pp 87-98). The research greatly helps in understanding the cultural dimensions between countries and organizations. The cross-cultural program was mainly developed to help in the development and understanding of the cultural profiles and hence foster their understanding. It also helped in the comparison of different countries culture profiles and hence enables people from different cultures to work together due to a better understanding of each others cultures (Kreither, and Kinincki, 2009, pp 23-87). With reference to the entry of Euro Disney Company to the French market, these dimensions could be used by managers to evaluate the cross-cultural differences between the two states. Trompenaars developed seven dimensions almost same to the Hofstede’s dimensions that is they are identical in nature but offered different perspectives. They include; human-nature relationship, human-time relationship, neutral versus emotional, achievement versus ascription, universalism versus particularism and communitarians versus individualism. Of the seven dimensions, two reflect closely to the dimensions developed by Hofstede, however, others consider other factors. Therefore, the other dimensions can help in the evaluation of the factors that were not addressed by the Hofstede’s dimensions. The dimensions focus more on the effects of the value dimensions that are underlying. Therefore, the dimensions seem to be standard as it is related to other dimensions developed by other scholars. The dimensions are not only related to the Hofstede’s dimensions but also to Hall’s polychromic and Strodbeck and Kluckhohn’s dimensions. It gives more clearly cross-cultural differences between France and the United States. Therefore, managers who are well informed of these cultural research developed by scholars, may develop a good and effective strategic management plan that can boost the survival and returns (Smith, and Conners, 2009, pp76-102). Leadership The Euro Disney management started well off and realized enormous profits. Later the company went bankrupt despite the profits they had earned in the previous financial years; this was due to the loops in the management of the company. There are some management related mistakes that the company made hence leading to heavy losses (Kreither, and Kinincki, 2009, pp 504-523). The company had bad results due to three major reasons. The company made numerous errors regarding the overall operations. For instance, the company made assumptions on the light days with regards to the American experience. They perceived Monday to be a light day for guests while Friday the heavy one hence allocated staff for the days. However, this was not the case in France. Furthermore, the employees also had a difference in the acceptance of the employment conditions. This mainly occurred in the early years of operation of the company. It greatly contributed to the losses incurred by the company in the successive years of operations. This management lapse is associated to improper strategic management plan, lack of flexibility in the company’s plans among others (Kreither, and Kinincki, 2009, pp 123-156). Secondly, the company’s executives estimated the labor cost before commencing operations hence underestimated the cost. They estimated it to be 13% of their revenues but turned out to be 24%. This was realized later in 1992 and later increased to 40% in 1993. The increase in the labor cost percentage greatly increased the company’s debt. Though the company had an expansion strategy, it seemed ineffective due to high expectations. The top management may have not estimated the returns incase of expansion to other markets. The top management made assumption decisions, which were harmful to the survival of the company (Smith, and Conners, 2009, pp 200-208). Lastly, the company made wrong self-assessment and hence making wrong management decisions. This was evident in the operation of the Walt Disney Company in the US, and later the same problem or mistake was developed in the operation of Euro Disneyland Paris. This might resulted due to proper controlling of the company’s affairs (Kreither, and Kinincki, 2009, pp143-159). Reality aware check With regards to the venture of Walt Disney Company into France, companies can learn various lessons from this experience. When a company is entering a new market, it has to recognize, understand and avoid their mistakes and hence increase the opportunity to succeed in a foreign market. With reference to the site research investigation to the present operation of the company, there are three lessons that can be learned, they are; marketing changes, choosing of location and risk management (Smith, and Conners, 2009, pp 143-148). Marketing changes; a company has to posses a good and experienced marketing team hence respond to the marketing changes in each environment the company opt to operate. For the survival of any company either profit oriented or nonprofits, it has to posses a good marketing team. It through marketing that organization informs both the potential and existed customers of their goods and services. A company informs the general public of new products, changes or improvements on products and services offered how to use a product or any other relevant information concerning their goods or products. This enables the company to avoid unnecessary losses and or improve or increase sales. It is through marketing that a company reaches the target groups hence need to be effective (Kreither, and Kinincki, 2009, pp 234-256). Choosing of location; before a company sets up a business it has to carry out market research hence determine if the location favors the nature of the business. It should be located where the operation costs are reasonable that is transportation and the cost of other support services. Before commencing operations in a given location, it is essential to carry out analysis. The management has to carry out the market research before setting up. An organization has to be aware of the competitors in the market, the level of competition, expected returns, and the purchasing power of the consumers among others. This will assist management in determining or estimating the expected returns among others. The business should not be located in inaccessible, insecure among other factors that may hinder its survival (Smith, and Conners, 2009, pp123-132). Risk management; when a business is incorporated, it is bound to loss or profit. International companies usually have an expansion plan in place hence always venture into new markets. Due to the prevailing cultural differences, what is acceptable in one environment may not be acceptable in another. Due to thirst for profit increase, an organization may opt to try out new things irrespective of the business environment. The strategy may fail or succeed. Failure of the strategy definitely leads to loss while success may lead to increased profit levels and grant a company a competitive advantage over other firms in the market. Therefore, a company should effectively have an effective risk management plan. This will allow the business to have a competitive advantage over other companies and hence increase their level of income. Therefore, due to the presence of uncertainties in the market, organizations ought to establish and maintain an effective risk management plan (Kreither, and Kinincki, 2009, pp 234-302). Recommendations and conclusion For the survival of an organization, it has to strategically manage its affairs. The company has to consistently review its marketing strategies so as to suit the market changes and demands. This is only possible when the company carry out self analysis and that of other relevant companies and competitors. A company may use the Strength, Weakness, Opportunity and Threat analysis (SWOT) or the Political, Economical, Social and Technological analysis (PEST) (Smith, and Conners, 2009, pp 245-245). For instance, the SWOT analysis may be helpful in the strategic management because it concentrates on potential issues that impact an organization the most. This analysis is also useful in addressing strategic situations that are complex in nature incase time is limited. It also allows an organization to understand their position in the market (Kreither, and Kinincki, 2009, pp 345-370). On the other hand, the Political, Economical, Social and Technological (PEST) analysis, analyses the macro-environment affected firms. These factors are external, and firms have no direct influence over them hence may turn out to be threats to firms. Since the management has no influence over these factors, they may pose to be threats since the business has to operate despite their changes. Since expected changes in these factors are difficult determine, organizations has to monitor them and prioritize those that affect or influence their operations. Therefore, firms ought to strategically plan to deal with these uncertainties (Kreither, and Kinincki, 2009, pp 456-497). The management also has to analyze the competitors. The business has to know the capabilities and the weaknesses of the competitors hence work on gaining competitive advantage over through their weakness points while majoring on the strengths of the organization. This will help them obtain information concerning close competitors and hence use the information to predict the behaviors of the competitors. This analysis helps an organization to understand; competitors plans and objectives, reaction of competitors towards their actions, how to influence the behavior of the competitor to the advantage of the firm and close competitors. The analysis should also assist the firm determine the strategies, objectives, capabilities and assumptions of the competitors (Smith, and Conners, 2009, pp 223-240). For the effectiveness of any strategy developed by an organization, it has to be planned for. For this reason, the strategic planning process becomes essential for the effectiveness of any strategy. There are several strategic planning processes but most organizations adopt the top-down formalized process. Under this process, the top management is charged with the responsibility of strategy formulation and the lower managers and employees are basically charged with strategy formulation (Kreither, and Kinincki, 2009, pp 523-545). This strategic management process is most appropriate at the business of an organization. This is because it is continuous and dynamic. The entire strategic system may change due change in one component hence the process has to be continuous to adapt to the environmental changes. Therefore, strategic management forms the most important basis of the management process. References Kreither, R and Kinincki, A. (2009). Organizational Behavior. New York: McGraw-Hill. Smith, T and Conners, R. (2009). How did that happen? New York: Portfolio. Read More