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Deva Raju-1202003
Navya Siddarth-1202007 Ramu-1202010 Vamsi krishna-1202016 Praveen-1202023

L'Oral Masters Multiculturalism

A JUDGE GAVE AN ORDER TO A POLICEMAN REGARDING A THIEF: HANG HIM NOT LEAVE HIM What do you interpret from the above sentence? Two things we can interpret from the above sentence i.e. 1. HANG HIM NOT, LEAVE HIM. 2. HANG HIM, NOT LEAVE HIM. This mis-prediction is due to different perceptions among different people following different cultures. The same thing happened in L'Oral Masters case. The case is as follows: At the heart of every global business lies a tension that is never fully resolved. Achieving economic scale and scope of demands some uniformity and integration of activities across markets. However serving regional and national markets requires adaptation of products, services and business models to local conditions. As U.S and European companies increasingly look for customers in emerging economies both the advantages of global scale and the need for local differentiation will also increase. The tension between global integration and local responsiveness is especially high when product development and marketing require complex knowledge. The kind of knowledge-usually tactic and collective, revealed only in action and interaction-is often the mainspring of a companys competitive advantage. The trouble is that tactic knowledge functions best within national boundaries, where workers share a language and cultural and institutional norms and can draw a strong inter personal networks. Without close, face-to-face interaction between knowledge creators and users, an understanding of how bits of information fit together may be lost and the knowledge may become unusable. Further, when tacit knowledge must cross borders, it is often reduced to

information that moves easily but may then fall prey to local misinterpretations that are difficult to detect from afar. The French cosmetic giant Loreal has many branches in different countries. Its remarkable global success was built largely by a management team stongly routed in its home culture .Traditionally employees become part of management over many years, weaving a dense network of relationships through which knowledge about products, culture ,and how to work together was internationalized. It has only five CEOs (including the founder),all but one with long tenures and all promoted from within. Only a few foreigners have become senior executives. As its global local tensions have mounted, Loreal has managed them by deploying professionals with multicultural backgrounds in new product development ,the companys most critical source of competitive advantage. The company has transformed itself from a very French beauty products business to a global leader ,multicultural executives have come to play a critical role in product development not just in Paris but also in New York , Tokyo , Shanghai , Rio and Mumbai. Traditional approaches to internationalization probably would not have resolved Loreals global-local tensions. Structural solutions, such as setting up largely autonomous subsidiaries and regional entities or global business units would not have worked for most Loreal products, given their need for both local and global integrations. The only alternative to internationalizing the structure was to internationalize the management team. That is what Loreal did, but with a twist. Loreal has dealt with these by recruiting and building teams around individual managers, who by virtue of their upbringing and experience have gained familiarity with the norms and behaviors of multiple cultures and can switch easily among them. INTERNATIONA TEAMS: The multicultural managers are drawn from three poles. The most season come from the companys international subsidiaries and have at least five

years of experience in sales and marketing. A few are recruited from other global companies. The third and youngest group consists of graduates of leading international business schools. The recruits undergo a 12 month training program in Paris, New York, Singapore, or Rio, followed by management development programs at Cedep, an executive education consortium in France. After spending two or three years in global product development at headquarters, the more experienced managers usually return to their home reasons as directors. Most of those recruited from business schools remain for another few years in product development at headquarters. After the second tour they too usually go to a regional office at the director level, though some remain in Paris. Their promotional aspects, like those of all employees, depend on performance. PROBLEMS WITH MULTICULTURALISM WITH REFERRENCE TO INDIA: Head office (France) ordered the branch in India to find a rare local plant that would provide a key ingredient in development of a new product .To this Indian managers of L'Oral replied WELL DO OUR BEST but sat on the request. They also said they needed confirmation that this ingredient would really please customers. At this point, the team leader (at France) understood that the initial Well do our best (which the French interpreted as a clear YES) was actually a polite way of saying that they wouldnt do anything. The We need Confirmation follow up signaled that the request was too difficult but the Indians didnt want to come out and say that and thus fail to honor a commitment. What really went wrong: Lack of proper communication and variations in cultural aspects and their implementing.

Core problem: The core problem include Bridging differences between Subsidiaries and Headquarters i.e. Enough Collaboration or Social Interaction between the Two teams to allow them to decode each others Expressions of Expectations Corrective steps: For a global company to deploy multi-culturals strategically, HR should appoint a manager to lead a program for developing and nurturing them. This manager should obviously be knowledgeable about the competence and skills of these individuals and how they differ from those of other employees. Because of considerable variation among multi-culturals themselves, the manager needs to tailor a training system to each one. Training the managers in India according to the environment is required. Trained managers are sent back to the head office and ask them to reveal their experience in India by relating it with head office and if any differences occurs regarding their cultures then that has to be considered and resolved.