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n the Disney is Asia case study (p. 273), many of the issues Disney had from the start related to cultural challenges expanding into China. Using the

Business Problem Solving Model

outlined this week in the course content and video, how would you make the following decisions?

Discover.

Identify the problem

: What were the main issues described in the case that were problematic?

Investigate.

Gather information to define the problem

: What were the cultural challenges posed by Disney’s expansion into Asia?

Brainstorm.

Produce Alternatives

: In your opinion, how could Disney have resolved these issues?

Implement.

Put the best solution into effect

: Of your alternatives, which one do you think would work out best? Why?

Review.

Assess the effects of the solution

: Based on Disney’s experience, what are the lessons the company should have learned about how to deal with cultural issues when expanding? Describe each.

Your well-written paper should meet the following requirements:

Be 5-6 pages in length, which does not include the title page, abstract, or required reference page, which are never a part of the content minimum requirements.

Use Saudi Electronic University academic writing standards and APA style guidelines.

Support your submission with course material concepts, principles and theories from the textbook and

at least two scholarly, peer-reviewed journal articles

.

Review the grading rubric to see how you will be graded for this assignment.

Required

Chapters 4 & 5 in

International Management: Culture, Strategy, and Behavior

Chapter 4 PowerPoint slides in

International Management: Culture, Strategy, and Behavior

“In-Depth Integrative Case Study 2.1a: Euro Disneyland” (p. 262) in

International Management: Culture, Strategy, and Behavior

Kotler, P., Manrai, L., Lascu, D., & Manrai, A. (2019).

Influence of country and company characteristics on international business decisions: A review, conceptual model, and propositions

.

International Business Review

,

28

(3), 482–498.

Sobol, K., Cleveland, M., & Laroche, M. (2018).

Globalization, national identity, biculturalism and consumer behavior: A longitudinal study of Dutch consumers

.

Journal of Business Research,

82

, 340–353.

Recommended

Botone, D., & Grama, B. (2018).

Cultural dimensions of openness as a personality factor

.

Cross-Cultural Management Journal

,

XX

(2), 139–145.

In-Depth Integrative Case 2.1b
Disney in Asia
After its success with Tokyo Disneyland in the 1980s,
Disney began to realize the vast potential of the Asian
market. The theme park industry throughout Asia has
been very successful in recent years, with a range of
regional and international companies all trying to enter
the market. Disney has been one of the major participants,
opening Hong Kong Disneyland in 2005 and Shanghai
Disney Resort in 2016, and discussing future operations
in other Asian cities.
Disney’s Push into China
After Disney’s success in Tokyo, China became a serious
option for its next theme park venture in light of the country’s impressive population and economic growth throughout the 1990s and 2000s. Successful sales associated with
the Disney movie The Lion King, in 1996, also convinced
Disney officials that China was a promising location.
However, consumer enthusiasm for theme parks in China
was at a low in the late 1990s. “Between 1993 and 1998,
more than 2,000 theme parks had been opened in China,”
and “many projects were swamped by excessive competition, poor market projections, high costs, and relentless
interference from local officials,” forcing several hundred
to be closed.1 Nevertheless, Disney continued to pursue
plans for two parks in China, focusing efforts on both
Hong Kong and Shanghai.
Hong Kong Disneyland
Plans in Hong Kong, which culminated in the opening of
Hong Kong Disneyland in September 2005, began after
the 1997–1998 Asian financial crisis. Despite the poor
economic condition of Hong Kong in the late 1990s, Disney was still optimistic about prospects for a theme park
in the “city of life.” Hong Kong, already an international
tourist destination, would draw Disneyland patrons primarily from China, Taiwan, and Southeast Asia.
The official park plans were announced in November
1999 as a joint venture between the Walt Disney Company
and the Hong Kong SAR Government. Unlike its experience in Tokyo, where Disney handed the reins over completely to a foreign company (the Oriental Land Company),
Disney decided to take more direct control over this new
park. The park was built on Lantau Island at Penny’s Bay,
within the six-mile stretch separating the international
­airport and downtown. Hong Kong ­Disneyland was estimated to create 18,000 jobs upon opening and ultimately
36,000 jobs. The first phase of the park was to include a
10-million-annual-visitor Disneyland-based theme park;
2,100 hotel rooms; and a 300,000-square-foot retail, d­ ining,
and entertainment complex.2
In order to make the park “culturally sensitive,” Jay
Rasulo, president of Walt Disney Parks & Resorts,
announced that Hong Kong Disneyland would be trilingual with English, Cantonese, and Mandarin. The park
would also include a fantasy garden for taking pictures
with the Disney characters (popular among Asian tourists), as well as more covered and rainproof spaces to
accommodate the “drizzly” climate.3
Unfortunately, Disney soon realized that its attempts at
cultural sensitivity had not gone far enough. For instance,
the decision to serve shark fin soup, a local favorite,
greatly angered environmentalists. The park ultimately
had to remove the dish from its menus. Park executives
also failed to plan for the large influx of visitors around
the Chinese New Year in early 2006, forcing them to turn
away numerous patrons who had valid tickets. Unsurprisingly, this led to customer outrage and negative media
coverage of the relatively new theme park.
Other criticisms of the park have included its small
scale and slow pace of expansion. Hong Kong Disneyland
opened with only 16 attractions and “one classic Disney
thrill ride, Space Mountain, compared to 52 at Disneyland
Resort Paris [formerly Euro Disneyland].”4 However, the
government has made plans to increase the size of the
park by acquiring land adjacent to the existing facilities.
Likely due to its small size and fewer attractions, Hong
Kong Disneyland pulled in only 5.2 million guests during
its first 12 months, less than the estimated 5.6 million.5 In
the years since, additional attractions have been added
into the existing park, helping to increase attendance;
however, the park is still facing financial pressure. In
2015, the park posted a US$19 million loss.6
Battle over Hong Kong Park Expansion
Expanding the size of the theme park in Hong Kong by
about a third has always been a part of Disney’s long-term
plan. In 2007, Disney began the process of trying to obtain
the local government’s financial support for these plans.
At that time, however, the park had been performing well
below its projected sales number, and the government,
which is 57 percent stockholder in this business, expressed
serious doubts in the need to fund the further expansion.
Hong Kong Disneyland attracted about 15 ­million visitors
273
274
Part 2 The Role of Culture
total in its first three and a half years, or about 4.3 million
a year. That figure fell short of the original projection of
more than 5 million a year.7 Although Disney did not
release financial figures to the public, Euromonitor estimated the park had an operating loss of $46 million in its
first year, and lost $162 million the following year.8
By 2008, Disney’s officials were publicly stressing the
importance of park expansion for the overall viability of
the project. At that time, the park occupied 126 hectares
and had only four “lands”—Fantasyland, Tomorrowland,
Adventureland, and Main Street USA—and two hotels.
Hong Kong Disneyland Managing Director Andrew Kam
emphasized that expansion would be vital to the park’s
success. In a September 2008 release, Kam said the park
had plenty of room to grow because it was only using half
of the land available: “Expansion is part of the strategy
to make this park work for Hong Kong,”9 At the time, an
expansion was estimated to cost as much as 3 billion
Hong Kong dollars, or US$387 million. In December
2008, the Sing Tao Daily newspaper in Hong Kong
reported that Disney, in what was deemed an unusual concession, might give the government a greater share in the
project in repayment of a cash loan of nearly $800 million
that the city had extended previously to the theme park.10
In 2009, unable to come to agreement with the Hong
Kong government, Disney put on hold its long-awaited
plans to expand the park. In a statement from Disney’s
Burbank (Calif.) office, the company said it was laying
off employees in Hong Kong after failing to reach an
agreement with the Hong Kong government to fund a
much-needed expansion. According to Disney, “The
uncertainty of the outcome requires us to immediately
suspend all creative and design work on the project.”
Thirty Hong Kong–based Disney “Imagineers,” who
helped to plan and design new parks, would be losing
their jobs.11 Business news sources at the time noted
that one reason Disney might be willing to end negotiations with the Hong Kong government was the company’s progress in negotiations with Shanghai officials
to open a theme park there that would be much larger
and an arguably more exciting China project. A Shanghai park would be easier for many Chinese families to
visit. However, the possible shift of mainland Chinese
visitors away from Hong Kong in favor of Shanghai
could mean a drop of as much as 60 percent in visitor
numbers to the Hong Kong park, according to Euromonitor’s estimates.12
In June of 2009 Disney and Hong Kong’s government
finally reached a deal to modestly expand the territories of
the Disneyland theme park at a cost of about $465 million.
Under terms of the deal, the entertainment giant contributed all the necessary new capital for construction as well
as sustaining the park’s operation during the building
phases. It also converted about $350 million in loans into
equity to help with funding, and agreed to keep open a
credit facility of about US$40 million. Hong Kong, which
shouldered much of the $3.5 billion original construction
cost, did not add any new capital. “Disney is making a
substantial investment in this important project,” Leslie
Goodman, a Disney vice president, said in a statement.13 Groundbreaking on three new “lands” for the park
commenced later that year, with “Toy Story Land”
­opening in 2011, “Grizzly Gulch” opening in 2012, and
“Mystic Point” opening in 2013. The three new lands
increased the overall size of Hong Kong Disneyland by
25 percent, and there are now more than 100 attractions
within the park.14 If these expansions will be enough to
bring profitability to Hong Kong Disneyland remains yet
to be seen, as future expansion at the park beyond these
three new lands remains uncertain.
Uncertainty in Mainland China
Shanghai, known as the “Paris of the Orient,” was an
attractive site for a second Chinese park to Disney officials because of its growing commercialization and industrialization and its already extant transportation access. A
Disney theme park in Shanghai would be mutually beneficial for the company and the nation of China. From
Disney’s perspective, it would gain access to one of the
world’s largest potential markets (and also compete with
Universal Studios’ new theme park). From the perspective
of Chinese government officials, Disney’s mainland
Shanghai park would be a long-awaited mark of international success for a communist nation.15
Initially planners hoped to have a Disneyland operating
in Shanghai prior to the World Expo in 2010. However,
a series of delays plagued the Shanghai park’s progress.
The Chinese government, fearing that a Shanghai park
would damper the success of the newly opened Hong
Kong park, intentionally delayed the park’s construction
in the mid 2000s.16 Additionally, in the wake of a corruption scandal within the Communist Party in Beijing in
2005, the necessary government approvals for the project
stalled to a halt. For a time, it appeared as though the
plans for the Shanghai park would not come to fruition,
leaving Disney to consider other options for the construction of its new park.17
Disney Gets Green Light for Shanghai Park
After a few years, Walt Disney Co. revisited its plans to
build a park in Shanghai, China. In January 2009, Disney
presented a $3.59 billion proposal to the Chinese central
government, outlining plans for a jointly owned park,
hotel, and shopping development.18 The timing could not
have been better for Disney to seek approval; in the wake
of the global economic crisis, the prospective creation of
50,000 new jobs amid a cooling Chinese economy was
especially attractive to the Chinese government.19
In-Depth Integrative Case 2.1b Disney in Asia
The preliminary agreement was signed in January
2009. According to the proposal, Disney would take a
43 percent equity stake in Shanghai Disneyland, with 57
percent owned by the Shanghai government, forming a
joint-venture company.20 The preliminary agreement outlined a six-year construction period for the first phase,
with the projected opening of the park scheduled for 2014.
Disney would pay $300 million to $600 million in capital
expenses for the park in exchange for 5 percent of the
ticket sales and 10 percent of the concessions.21 According
to the preliminary agreement, Shanghai Disneyland, the
first park at the resort, would incorporate Chinese cultural
features as well as attractions built around traditional
­Disney characters and themes. Additionally, the ownership
structure would contain some aspects of Disney’s Hong
Kong joint venture agreement. According to The Wall
Street Journal, a newly formed Shanghai company named
Shendi would hold the local government’s interest in the
park. Shendi is owned by two business entities under district governments in Shanghai, as well as a third company
owned by the municipal government’s propaganda
bureau.22 After almost a year of negotiation, in November
2009, Disney finally received an approval from the ­Chinese
government to proceed with its Shanghai park plan.23
Disney acted quickly to gather all other necessary
approvals and documents that were needed for the park
construction. In April 2010, the land needed for the
park was approved. In 2010, over 2,000 households and
nearly 300 companies were relocated to clear the way
for the first phase of construction. In an effort to keep
the public informed, the head of Pudong New District,
where the park is sited, announced that the first phase
of the project will span four square kilometers, with the
theme park itself covering a square kilometer. 24 Construction on the first phase, which includes the Shanghai Disneyland Park and two hotels, broke ground in
2011.25 Despite the initial difficulties that Disney faced
throughout the early 2000s in gaining approval for the
Shanghai park, the five-year construction phase proceeded relatively smoothly.
As the 2016 opening neared, public excitement for the
park grew. More than five million people flooded the
park’s official website following its March 2016 launch.
Tickets for the park’s opening two weeks sold out months
in advance, and, on a single weekend in May, more than
100,000 people traveled to the still-unopened park just
to peer through the gates and shop at stores on the
perimeter.26 The park officially opened to the public on
June 16, 2016.
Analysts see the move as an important step forward
for Disney and other Western media firms to make
inroads into the vast and untapped Chinese media and
entertainment market. “They’ve been laying the groundwork for a park for many years by exposing the population to Disney properties, film, TV and merchandising,”
275
said Christopher Marangi, senior analyst with Gabelli
and Co. in New York.27
Disney has implemented unique approaches to ticket
pricing at its Shanghai park in an effort to maximize
attendance and profit. Unlike other theme parks, where
the cost of entry remains the same regardless of the day,
Shanghai Disneyland features “demand pricing.” On
days that are more crowded, such as weekends and during the summer, “peak” prices are enacted. Though
ticket prices start much lower at the Shanghai park than
at the Hong Kong park, the peak pricing structure
results in admission price increases of over 25 percent
on certain days.28
There are certain public concerns that the new
Shanghai park, which is Disney’s sixth, will inevitably
affect the Hong Kong park. The main concern is that
the Hong Kong park’s revenue may be cannibalized,
worsening the financial perspectives of the alreadyunderperforming Hong Kong park.29 However, Disney
thinks that both parks will complement each other rather
than be competitors. Disney’s main points are that
Shanghai is close to a number of other major cities
within easy driving distance, including Nanjing, Suzhou,
and Hangzhou, and that Shanghai’s own population of
around 19 million, combined with tens of millions more
within a three-hour driving radius, would provide a
more-than-ample base of local users for the park. There
are analysts, like Paul Tang, chief economist at Bank of
East Asia, who share this optimism, projecting that
“visitors from Guangdong and southern China will still
find Hong Kong more convenient, while Shanghai will
attract visitors from northern and eastern
China.”30 Indeed, Disney reported a 36 percent increase
in profit at its Hong Kong park in early 2015.31
The critics of the Shanghai park, on the other hand,
are convinced that this project is a bigger threat to the
Hong Kong park than anybody can imagine. According
to Parita Chitakasem, research manager at Euromonitor
International in Singapore, who specializes in theme
parks, “Disneyland Shanghai will have two big features
which will make it more attractive than its Hong Kong
counterpart: Although it is still early days, Disneyland in
Shanghai will probably offer a much better experience for
your money than Disneyland in Hong Kong—Shanghai’s
Disneyland is three times bigger than Hong Kong Disneyland. Also, for visitors from mainland China, it will be
much easier to travel to Disneyland in Shanghai, as there
are no visa/cross border concerns to take care of.”32
Though only one phase of Shanghai Disneyland has
opened, its true impact on Hong Kong Disneyland will
not be known for several years; stagnant growth in attendance at the Hong Kong park validates the concerns that
many have expressed; in 2015, a year before Shanghai
Disneyland even opened, the Hong Kong park only saw
a one percent increase in attendance.33
276
Part 2 The Role of Culture
Other Asian Ventures
The Walt Disney Company has also looked into building
other theme parks and resorts in Asia. Based on its successful operation of two theme parks in the United States
(at Anaheim and Orlando), Disney believes that it can
have more than one park per region. Another strategically
located park in Asia, officials agreed, would not compete
with Tokyo Disneyland, Hong Kong Disneyland, or
Shanghai Disneyland, but rather bring in a new set of
customers.
One such strategic location is the state of Johor in
Malaysia. Malaysian officials wanted to develop Johor in
order to rival its neighbor, Singapore, as a tourist attraction. (Two large casinos were built in Singapore in 2006.)
However, Disney claimed to have no existing plans or
discussions for building a park in Malaysia. Alannah
Goss, a spokeswoman for Disney’s Asian operations
based in Hong Kong, said, “We are constantly evaluating
strategic markets in the world to grow our park and resort
business and the Disney brand. We continue to evaluate
markets but at this time, we have no plans to announce
regarding a park in Malaysia.”34
Singapore, in its effort to expand its tourism industry,
had also expressed interest in being host to the next Disneyland theme park. Although rumors of a Singapore
Disneyland were quickly dismissed, some reports suggested there were exploratory discussions of locations at
either Marina East or Seletar. Residents of Singapore
expressed concern that the park would not be competitive,
even against the smaller-scale Hong Kong Disneyland.
Their primary fears included limited attractions (based on
size and local regulations), hot weather, and high ticket
prices.
Disney’s Future in Asia
Although Disney is wise to enter the Asian market with
its new theme parks, it still faces many obstacles. One is
finding the right location. Lee Hoon, professor of tourism
management at Yanyang University in Seoul, noted,
“Often, more important than content is whether a venue
is located in a metropolis, whether it’s easily accessible
by public transportation.” Often tied to issues of location
is the additional threat of competition, both from local
attractions and from those of other international corporations. It seems that Asian travelers are loyal to their local
attractions, evidenced by the success of South Korea’s
Everland theme park and Hong Kong’s own Ocean Park
(which brought in more visitors than Hong Kong Disneyland in 2006).35 The stiff competition of the theme park
industry in Asia will center on not only which park can
create a surge of interest in its first year but also which
can build a loyal base of repeat customers.
Despite its already large size, the Asian theme park
industry is still developing. Disney officials will need to
be innovative and strategic in order to maintain sales.
Existing theme parks in the region have proven that a
carefully crafted strategy can lead to increased sales; after
a 20 percent drop in attendance in the early 2000s, Universal Studios in Japan was able to rebound to record
growth in 2015 by introducing new innovative attractions,
including a Harry Potter-themed area within the park and
a multiple-month-long Anime event.36
In spite of underperformance of some theme parks,
Asia is still viewed by many as the most attractive region
for the entertainment industry. Attendance may be stagnating in some parts of the world, but a growing middle
class with disposable incomes to match is making the
Asia-Pacific region a prime target for investors and theme
park owners. “China will lead the way,” said Kelven Tan,
Southeast Asia’s representative for the International Association of Amusement Parks and Attractions, an industry
group. “The critical mass really came about with the
resurgence of China. You need a good source of people;
you also need labor and you need cheap land.”37
That’s what the people behind the Universal Studios in
Singapore are betting. Developers aim to tap the wallets
of Singapore’s 4.6 million residents and 9.7 million tourists a year and its proximity to populous areas of Indonesia and southern Malaysia. Opening in spring of 2010, it
became the island nation’s first bona fide amusement
park. Outside this and other foreign brands like Legoland,
which opened parks in Johor, Malaysia, in 2012 and in
Dubai, UAE, in 2016, home-grown companies like
Genting in Malaysia and OTC Enterprise Corp. in China
are aggressively looking to take advantage of the burgeoning market in their backyards.38
Overall spending on entertainment and media in Asia
Pacific is set to increase to over US$700 billion by 2019,
doubling the amount spent just ten years earlier, according
to a 2015 report by McKinsey. By 2019, Asia Pacific will
account for over 40 percent of global spending on entertainment and media.39 “It’s an up-and-coming market, and
growing quite fast,” said Christian Aaen, Hong Kong–
based regional director for AECOM Economics, a consulting firm that specializes in the entertainment and
leisure industries. MGM Studios and Paramount, too, are
scouting around Asia for future projects.
In light of these optimistic projections, it is reasonable
to assume that Disney may consider expansion to other
Asian countries such as Malaysia, South Korea, or Singapore, where Disney appeared to have seriously considered
a park. Given that the Hong Kong and Shanghai park
future expansions are on track, Disney now has the experience and motivation to further penetrate the Asian region.
In this regard, Disney has opened English language learning centers across China.40 This could constitute a broader
push by Disney to establish a strong Asian presence across
its businesses and brands, a move that would undoubtedly
involve the theme park operations as a central component.
In-Depth Integrative Case 2.1b Disney in Asia
Questions for Review
1. What cultural challenges are posed by Disney’s
expansion into Asia? How are these different from
those in Europe?
2. How do cultural variables influence the location
choice of theme parks around the world?
3. Why was Disney’s Shanghai theme park so controversial? What are the risks and benefits of this
277
project? What do you think is the likelihood that it
will “cannibalize” the Hong Kong park?
4. What location would you recommend for Disney’s
next theme park in Asia? Why?
Source: This case was prepared by Courtney Asher under the supervision of Professor
Jonathan Doh of Villanova University as the basis for class discussion. Additional
research assistance was provided by Benjamin Littell. It is not intended to illustrate
either effective or ineffective managerial capability or administrative responsibility.
ENDNOTES
1. Raymond H. Lopez, “Disney in Asia, Again?”
March 2002, http://appserv.pace.edu/emplibrary/
FINAL.Asiacasestudy.doc.
2. Ibid.
3. Thomas Crampton, “Disney’s New Hong Kong Park
to Be ‘Culturally Sensitive’: Mickey Mouse Learns
Chinese,” International Herald Tribune, January 13,
2003, www.iht.com/articles/2003/01/13/disney_
ed3__0.php.
4. Michael Schuman, “Disney’s Hong Kong Headache,” Time, May 8, 2006, www.time.com/time/magazine/article/0,9171,501060515-1191881,00.html.
5. Kim Soyoung and George Chen, “Hollywood
Chases Asia Theme Park Rainbow,” Reuters BusinessNews, May 23, 2007, www.reuters.com/article/
businesspro-hollywood-studios-asia-dc-idUSSEO35257720070523.
6. Chuan Xu and Nicole Liu, “Hong Kong Disneyland
Reports Loss for 2015 as Number of Visitors
Drops,” Los Angeles Times, February 16,
2016, www.latimes.com/entertainment/envelope/
cotown/la-et-ct-hong-kong-disneyland-loss20160216-story.html.
7. “Cuts Cloud Hong Kong Disneyland Expansion,”
Financial Times, March 17, 2009, https://www.ft.
com/content/c59c5a72-12bb-11de-98480000779fd2ac.
8. “Hong Kong Disneyland’s Future Is in Danger,” BusinessWeek, March 17, 2009, http://www.
bloomberg.com/news/articles/2009-03-17/hongkong-disneylands-future-is-in-danger.
9. Ibid.
10. “Disney Puts Hong Kong Expansion on
Hold,” Reuters, March 16, 2009, www.reuters.com/
article/industryNews/idUSTRE52G0I120090317.
11. “Hong Kong Disneyland’s Future Is in Danger.”
12. Ibid.
13. “Disney, Hong Kong Reach $465m Expansion
Deal,” China Daily, June 30, 2009, www.chinadaily.
com.cn/china/2009–06/30/content_8338445.htm.
14. Ricky Brigante, “Mystic Point Grand Opening Celebrated at Hong Kong Disneyland with Debut of
Groundbreaking Mystic Manor Dark Ride,” Inside
the Magic, May 16, 2013, www.insidethemagic.
net/2013/05/mystic-point-grand-opening-celebratedat-hong-kong-disneyland-with-debut-of-groundbreaking-mystic-manor-dark-ride/.
15. Lopez, “Disney in Asia, Again?”
16. Tammy Tam, “China’s Two Disneylands: Competitors or Complementary Attractions?” South China
Morning Post, January 31, 2016, www.scmp.com/
news/hong-kong/economy/article/1907607/chinastwo-disneylands-competitors-or-complementary.
17. “Disney’s Shanghai Park Plan in Doubt: Company
Mulls Move to Another Location in China,” NBCNews.com, December 11, 2006, www.nbcnews.com/
id/16153207/ns/business-world_business/t/disneysshanghai-park-plan-doubt/#.WDJZb-YrKUk.
18. J. T. Areddy and P. Sanders, “Disney’s Shanghai
Park Plan Advances,” The Wall Street Journal, January 12, 2009, p. A1.
19. Ibid.
20. “The Speculation Ends—Shanghai Disney Ready to
Roll,” January 13, 2009, CN News, www.china.org.
cn/business/news/2009-01/13/content_17101032.htm.
21. “Walt Disney, Shanghai Propose New Theme Park
in China (Update 1),” Bloomberg, January 9,
2009, www.bloomberg.com/apps/news?pid=2060108
0&sid=atGa2ymXAMM8&refer=asia.
22. Areddy and Sanders, “Disney’s Shanghai Park Plan
Advances.”
23. Samuel Shen and Sue Zeidler, “Disney Takes China
Stride as Shanghai Park Gets Nod,” Reuters,
November 4, 2009, www.reuters.com/article/
idUSTRE5A31TC20091104.
24. “Shanghai Disney to Get Approved Land in
July,” China Daily, April 4, 2010, www.chinadaily.
com.cn/china/2010–04/14/content_9730662.htm.
25. Thomas Smith, “Shanghai Disney Resort Groundbreaking Ceremony Marks Historic Day,” Disney,
278
26.
27.
28.
29.
30.
31.
32.
Part 2 The Role of Culture
April 8, 2011, https://disneyparks.disney.go.com/
blog/2011/04/shanghai-disney-resort-groundbreaking-ceremony-marks-historic-day/.
David Barboza and Brooks Barnes, “How China
Won the Keys to Disney’s Magic Kingdom,” New
York Times, June 14, 2016, www.nytimes.com/2016/
06/15/business/international/china-disney.html.
Shen and Zeidler, “Disney Takes China Stride as
Shanghai Park Gets Nod.”
Mandy Zuo and Nikki Sun, “How Shanghai Disneyland’s Tickets Will Cost More (and Less) Than
Hong Kong’s,” South China Morning Post, February 3, 2016, www.scmp.com/news/china/moneywealth/article/1908881/how-shanghai-disneylandstickets-will-cost-more-and-less.
Tam, “China’s Two Disneylands.”
Shen and Zeidler, “Disney Takes China Stride as
Shanghai Park Gets Nod.”
Timmy Sung, “Hong Kong Disneyland Profits Up
36pc Despite Slowdown in Visitor Growth,” South
China Morning Post, February 10, 2015, www.
scmp.com/news/hong-kong/article/1708237/hongkong-disneyland-profits-36pc-despite-slowdown-visitor-number.
Frederik Balfour, “Disney Shanghai: Good for
China, Bad for Hong Kong,” BusinessWeek,
November 5, 2009.
33. Sung, “Hong Kong Disneyland Profits Up 36pc
Despite Slowdown in Visitor Growth.”
34. “Malaysia Discussing Building Disney Park: Would
Be First Such Attraction in Southeast Asia,” Associated Press, May 30, 2006, www.msnbc.msn.com/
id/13045465/.
35. Soyoung and Chen, “Hollywood Chases Asia
Theme Park Rainbow.”
36. “Visitors Hit Record at USJ, Fall at Tokyo Disney
Resort,” Japan Times, October 1, 2015, www.
japantimes.co.jp/news/2015/10/01/business/
corporate-business/visitors-hit-record-usj-fall-tokyodisney-resort/#.VtIJ8_krLRY.
37. Hana R. Alberts, “Tokyo Disneyland? Asia’s Top
12 Amusement Parks,” February 13, 2010,
www.ctvnews.ca/tokyo-disneyland-asia-s-top12-amusement-parks-1.483175.
38. Ibid.
39. McKinsey, Global Media Report 2015 (December
2015).
40. “FAQ,” Disney English, http://disneyenglish.
disneycareers.com/en/faq/general/.
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Chapter 4
The Meanings and Dimensions
of Culture
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Learning Objectives
• Define the term culture, and discuss some of
the comparative ways of differentiating
cultures
• Describe the concept of cultural values, and
relate some of the international differences,
similarities, and changes occurring in terms of
both work and managerial values
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Learning Objectives (continued)
• Identify the major dimensions of culture
relevant to work settings, and discuss their
effects on behavior in an international
environment
• Discuss the value of country cluster analysis
and relational orientations in developing
effective international management practices
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Culture
• Acquired knowledge that people use to
interpret experience and generate social
behavior
– Forms values
– Creates attitudes
– Influences behavior
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Characteristics of Culture
•
•
•
•
•
•
Learned
Shared
Transgenerational
Symbolic
Patterned
Adaptive
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Areas Affected by Culture
•
•
•
•
•
Technology transfer
Managerial attitudes
Managerial ideology
Business-government relations
Human thinking and behavior
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Priorities of Cultural Values
United States
Japan
Arab Countries
Freedom
Belonging
Family security
Independence
Group harmony
Family harmony
Self-reliance
Collectiveness
Parental guidance
Equality
Age/seniority
Age
Individuality
Group consensus
Authority
Competition
Cooperation
Compromise
Efficiency
Quality
Devotion
Time
Patience
Patience
Directness
Indirectness
Indirectness
Openness
Go-between
Hospitality
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Cultural Impact on International Management:
Centralized versus Decentralized Decision Making
• Centralized – Top managers make all important
organizational decisions
• Decentralized – Decisions are diffused
throughout the enterprise
– Middle- and lower-level managers actively
participate in and make key decisions
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Cultural Impact on International
Management: Safety versus Risk
• Organizational decision makers are risk-averse
and have great difficulty with conditions of
uncertainty in some societies
• Some societies encourage risk taking and
decision making under uncertainty is common
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Cultural Impact on International Management:
Individual versus Group Rewards
• Individual rewards – Given to personnel who
do outstanding work in the form of bonuses
and commissions
• Group rewards – Required by cultural norms,
and individual rewards are frowned upon
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Cultural Impact on International Management:
Informal versus Formal Procedures
• Informal societies – Much is accomplished
through informal means
• Formal societies – Formal procedures are set
forth and followed rigidly
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Cultural Impact on International Management:
High versus Low Organizational Loyalty
• High loyalty – People identify very strongly
with their organization or employer
• Low loyalty – People identify with their
occupational group
– Such as engineer or mechanic
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Cultural Impact on International Management:
Cooperation versus Competition
• Some societies encourage cooperation
between their people
• Others societies encourage competition
between their people
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Cultural Impact on International Management:
Short-term versus Long-term Horizons
• Some cultures focus most heavily on shortterm horizons
– Such as short-range goals of profit and efficiency
• Some cultures are more interested in longrange goals
– Such as market share and technological
developments
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Cultural Impact on International
Management: Stability versus Innovation
• Culture of some countries encourages stability
and resistance to change
• Culture of others puts high value on
innovation and change
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Figure 4.1 – Model of Culture
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Figure 4.2 – Comparing Cultures as
Overlapping Normal Distributions
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Figure 4.3 – Stereotyping from
Cultural Extremes
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Values
• Basic convictions that people have about:
– Right and wrong
– Good and bad
– Important and unimportant
• Learned from the culture in which an
individual is reared
• Differences in cultural values may result in
varying management practices
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Hofstede’s Cultural Dimensions
•
•
•
•
•
•
Power distance
Uncertainty avoidance
Individualism and collectivism
Masculinity and femininity
Time orientation
Indulgence versus restraint
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Power Distance
• Extent to which less powerful members accept
that power is distributed unequally
– High-power-distance countries
• People blindly obey superiors
• Centralized with tall organizational structures
• Examples – Mexico, South Korea, and India
– Low-power-distance countries
• Decentralized with flatter organizational structures
• Have smaller ratio of supervisor to employee
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Uncertainty Avoidance
• Extent to which people feel threatened by
ambiguous situations and have created beliefs
and institutions that try to avoid these
– High-uncertainty-avoidance countries
• High need for security and strong belief in experts and
their knowledge
• Highly structured organizational activities, more written
rules, and less managerial risk taking
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Uncertainty Avoidance (continued)
– Low-uncertainty-avoidance countries
• Less structured organizational activities, fewer written
rules, more managerial risk taking, higher labor
turnover, and more ambitious employees
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Individualism and Collectivism
• Individualism: Tendency of people to look
after themselves and immediate family only
– Highly individualistic countries – Wealthier,
support the Protestant work ethic, have greater
individual initiative, and promote based on market
value
• Collectivism: Tendency of people to belong to
groups and to look after each other in
exchange for loyalty
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Masculinity and Femininity
• Masculinity: Dominant social values are
success, money, and things
• Femininity: Dominant social values are caring
for others and quality of life
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Time Orientation
• Defined as dealing with society’s search for
virtue
– Long-term-oriented societies – Focus on the future
and on achieving long-term results, are able to
adapt traditions when conditions change, and
tend to save and invest
– Short-term-oriented societies – Focus on quick
results, do not tend to save, believe in absolutes,
and value stability and leisure
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Indulgence versus Restraint
• Indulgent societies encourage instant
gratification of natural human needs
– Perceived happiness, life in control, positive
emotions, and satisfaction of basic needs
• Restrained cultures regulate and control
behavior based on social norms
– Less happiness, sense of helplessness, less likely
to remember positive emotions, and unmet basic
needs
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Trompenaars’s Cultural Dimensions
•
•
•
•
•
•
•
Universalism versus particularism
Individualism versus communitarianism
Neutral versus emotional
Specific versus diffuse
Achievement versus ascription
Time
Environment
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Universalism versus Particularism
• Universalism: Belief that ideas and practices
can be applied everywhere without
modification
– Countries with high universalism – Formal rules
and close adherence to business contracts
• U.S., UK, Germany, Sweden, and Australia
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Universalism versus Particularism
(continued)
• Particularism: Belief that circumstances
dictate how ideas and practices should be
applied
– Countries with high particularism – Legal contracts
are modified and the way deals are executed
change as people get to know each other
• China, Indonesia, and Venezuela
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Individualism versus
Communitarianism
• Individualism – People regard themselves as
individuals
– Stress personal and individual matters and assume
personal responsibility
• Communitarianism: People regard
themselves as part of a group
– Value group-related issues, achieve in groups, and
assume joint responsibility
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Neutral Culture versus Emotional
Culture
• Neutral: Emotions are held in check
– High-neutral cultures – People act stoically and
maintain composure
• Emotional: Emotions are expressed openly
and naturally
– High-emotional cultures – People smile a lot, talk
loudly, and greet each other with enthusiasm
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Specific versus Diffuse
• Specific culture
– Large public space is shared with others and small
private space is guarded closely and shared with
only close friends
– People are open and extroverted and have a
strong separation of work and personal life
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Specific versus Diffuse (continued)
• Diffuse culture
– Public and private spaces are similar in size
– Public space is guarded because entry into public
space affords entry into private space
– People are indirect and introverted and work and
private life are closely linked
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Achievement versus Ascription
• Achievement culture: People are accorded
status based on how well they perform their
functions
– High status is given to high achievers
• Ascription culture: Status is attributed based
on who or what a person is
– Status is based on age, gender, or social
connections
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Time Orientation
• Sequential – Only one activity at a time,
appointments are kept strictly, and plans are
followed as laid out
• Synchronous – Multitasking, appointments
are approximate and easily changed, and
schedules are subordinate to relationships
• Cultures can be past- or present-oriented or
future-oriented
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Dealing with Environment
• Inner-directed – People believe in controlling
outcomes
– Dominant attitude toward environment
• Outer-directed – People believe in letting
things take their own course
– Flexible attitude, characterized by a willingness to
compromise and maintain harmony with nature
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GLOBE Project
• GLOBE – Global Leadership and Organizational
Behavior Effectiveness
• Extends and integrates previous analyses of
cultural attributes and variables
• Evaluates nine different cultural attributes
using middle managers from different
organizations in many countries
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Phases of GLOBE Project
• First two phases – Evaluate nine different
cultural attributes using middle managers
from different organizations in many countries
– Scholars surveyed managers in financial services,
food processing, and telecommunications
industries
• Third phase – Examines the interactions of
culture and leadership in upper-level
management positions
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
GLOBE’s Cultural Dimensions
•
•
•
•
•
•
•
Uncertainty avoidance
Power distance
Collectivism I: Societal collectivism
Collectivism II: In-group collectivism
Gender egalitarianism
Assertiveness
Future, performance, and humane
orientations
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
GLOBE Country Analysis
• Corresponds with those of Hofstede and
Trompenaars
– Variations – Variable definitions and methodology
• GLOBE provides a current comprehensive
overview of general stereotypes that can be
analyzed for greater insight
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Be the Management Consultant
• As a consultant looking for opportunities in
Africa, how would you gauge the prospects of
moving a business into South Africa?
• What are your immediate concerns about this
move? What are the pros and cons of
opportunities in South Africa?
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Be the Management Consultant
(continued)
• How does the fact that traditional South
African companies are increasing their
presence in other African countries factor into
your decision?
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Review and Discuss
1. What is meant by the term culture?
– In what way can measuring attitudes about the
following help differentiate between cultures:
centralized or decentralized decision making,
safety or risk, individual or group rewards, high or
low organizational loyalty, cooperation or
competition?
• Use these attitudes to compare the United States,
Germany, and Japan, and based on your comparisons,
what conclusions can you draw regarding the impact of
culture on behavior?
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Review and Discuss (continued 1)
2. What is meant by the term value?
– Are cultural values the same worldwide, or are
there marked differences?
– Are these values changing over time, or are they
fairly constant?
– How does your answer relate to the role of values
in a culture?
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Review and Discuss (continued 2)
3. What are the four major dimensions of
culture studied by Geert Hofstede?
– Identify and describe each
– What is the cultural profile of the United States?
Of Asian countries? Of Latin American countries?
Of Latin European countries?
• Based on your comparisons of these four profiles, what
conclusions can you draw regarding cultural challenges
facing individuals in one group when they interact with
individuals in one of the other groups?
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Review and Discuss (continued 3)
• Why do you think Hofstede added the fifth dimension
of time orientation and the sixth dimension related to
indulgence versus restraint?
4. As people engage in more international travel
and become more familiar with other
countries, will cultural differences decline as
a roadblock to international understanding,
or will they continue to be a major barrier?
– Defend your answer
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Review and Discuss (continued 4)
5. What are the characteristics of each of the
following pairs of cultural characteristics
derived from Trompenaars’s research:
universalism vs. particularism, neutral vs.
emotional, specific vs. diffuse, achievement
vs. ascription?
– Compare and contrast each pair
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document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Review and Discuss (continued 5)
6. How did project GLOBE build on and extend
Hofstede’s analysis? What unique
contributions are associated with project
GLOBE?
7. In what way is time a cultural factor? In what
way is the need to control the environment a
cultural factor?
– Give an example for each
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