Analysis based on two papers: "L’Oréal Masters Multiculturalism“ “The Perils of Partnering in Developing Markets"

1. Managing Cultural
Differences
„L’Oréal Masters Multiculturalism“
Hae-Jung & Doz 2013
“The Perils of Partnering in Developing Markets“
Thompson 2012
Minh-Thi, Alexandru, Raphael, Katharina, Silje

2. „L‘Oreal Masters
Multiculturalism“
Written by Hae-Jung & Doz
• published in 2013 in „Harvard Business Review“

3. Company Background
• Founded in 1909
• Since 2004: revenue has increased by half & net profit
almost doubled
• Offices in over 130 countries
• 2012: half of its sales from emerging markets
↑18,4 % in Asia-Pacific region
↑17,6 % in Africa & Middle East
• World leader in skin care, make up & hair color

4. Portfolio of brands
France
USA
Great Britain
Italy
Japan

5. Global businesses
Tensions between :
Global integration
Economies of scale & scope
• Product development and marketing: TENSION HIGH
o Consumer-products division most critical
 Product innovation of 20 % each year
 3,5 % of revenues in R&D
 Internationalization of management team
Local responsiveness
Adaption of local preferences

6. What kind of tension do
companies face when doing
global businesses that is
never fully resolved?
Between global interventions
and local ratification
A. B.
Between global interpretation
and local analysis
C. D.
There is no tension
Between global integration
and local responsiveness

7. International Talent
• Late 1990´s began to hire executives from mixed
cultural backgrounds
• Developing a new product takes a year of knowledge
exchange
• Réunion Internationale

8. International Talent
• Multicultural managers:
o International subsidiaries
o Other global companies
o Graduates
• Increasing multiculturals in senior management

9. Advantages
• Differences in communication
• Recognizing New-Product Opportunities
• Analogies between cultural groups

10. At which event does the
development team have to
present their concept?
Réunion Internationale Congrès du Paris
A. B.
Paris Interchange León Conference
C. D.

11. Preventing losses in translation
• Stereotyping of new members
• Multiculturals can help integrate
newcomers
• Confusion caused by cross-cultural
semantic differences
• Change in meaning after
translation
Integrating outsiders

12. Mediating with Bosses
”My French boss never starts meetings on
time. So whenever we have a meeting
planned with him, we can get frustrated if
we are not flexible.”
Bridging Differences between
Subsidiaries and HQ
• ”We will do our best” = ”yes” or ”no”?
• Multicultural managers’ knowledge from different
cultures help avoid open conflicts

13. Recommendations
• For a global company to deploy multiculturals strategically,
HR should appoint a manager to lead a program for
developing and nurturing them.
• Need to learn how to learn from their peripheries
• L’Oréal’s strategic use of multicultural managers provides a
shortcut

14. For a company to become
successful globally, it should
move away from the:
Polycentric approach Ethnocentric approach
A. B.
Geocentric approach Regiocentric approach
C. D.

15. „The Perils of Partnering
in Developing Markets“
Written by Steven J. Thompson
CEO and Founder of Johns Hopkins Medicine
International

16. The Market Entry
• A new state-of-the-art medical center
• Success depends on the executives
• Managers must be Turkish by law
• Qualified Turkish executives non-existent
- „How could we manage a large, complexe project in a country whose laws
prevented us from hiring the right people for key leadership roles?“ -

17. Approaching the problem
• Not expected problems
• Reality in today‘s global markets
• Developing economies seek for Joint Ventures
• JP Morgan/Union Bank of India, Googel/UOL Busca
• Partneships eases entry into market
• Failures and challenges
• Highly flexible model

18. Filling the Local Talent Gap
• Quality problems needed better management
• CEO must be turkish
• Top managers can be non-citizens
• Often local partners insist on it
• Solving the problem
• Technical compliance with law
• HR-Perspective
• Expatriate-assignments are difficult
• Two-pronged solution

19. Which type of alliance
implemented “JHI” with
“Anadolu” in Turkey?
Joint Venture Equity Strategic Alliance
A. B.
C. Non-Equity Alliance
D.
Partnership resulting in a
friendly takeover

20. When Best Practices
Collide with Culture
• Midlevel providers avoid
challenging decisions of senior
physicians
• Need to tackle the culture?
• Goal accomplishment within the cultural constraints
• Extreme situations => no compromise

21. Mitigating Risk
• Choosing the right partner: learning to read signs from
the first meeting
• Being aware of signs about defaulting on duties
• RESULT:
o No project fully under way has been terminated
o JHI providing quality local managers for Government
health ministries

22. With whom does Hopkins
normally develop its projects?
An internationally active
partner
A. B.
C. D.
A partner which is seeking
high financial returns
A partner that focuses on
multiculturalism
A partner that focuses on
sustainable quality