L’Oréal - Masters Multiculturalism

Masters Multiculturalism

Group 10 Aayushi Singh Abhinav Singh Ankit Kumar Anurag Verma Deeptiman Dasgupta Gagandeep Chawla

L’Oréal - Masters Multiculturalism Every Global business needs to achieve economies of scale and requires uniformity. But requires the adaptation of products, services and business models to local conditions

A British air-conditioner needs different specs than an Ethiopian one

Balance of global integration and local responsiveness crucial – especially in complex knowledge is required in product development and marketing

Tacit or implied knowledge is unsatisfactory during research and face-to-face interactions is needed for better understanding of local needs

L’Oréal has mastered this art of multiculturalism. A peek into their growth in new emerging markets (from 33% of Overall Sales in 2009 to 50% of Overall Sales in 2012) is a proof.

L’Oréal follows primarily the structure of a global management team and a multicultural product development team. Keeping roots in the home French culture and spreading branches in product development to the local countries.

Achieving Global-Local Balance  Achieving balance most critical in L’Oŕeal Paris brand  L’Oŕeal Paris – sold in mass markets worldwide and accounts for half of the sales of the consumer products division Consumer-products categories highly sensitive to global economies of scale and scope

To win customers, need for being responsive to local preferences A Global Brand attentive to Local Trends

Achieving Global-Local Balance

Outspends all competitors

Global Symbols

New Products

Invests 3.5% of its revenues in R&D

Appealing to idealized self-image of customers Responsiveness and technical innovation to cater to local tastes, not to undermine the brand

Infusion of foreign executives would have disrupted the senior management Management Team

Products global symbols of fashion and sophistication Internationalizing

Maintains a steady stream of new products

Need for both local responsiveness and global integration

Global team reliance equally difficult – little knowledge is shared L’Oŕeal has recruited and built teams around individual managers

Managers familiar with norms and behaviors of multiple cultures and can switch easily among cultures

International “Talent” • 1990s: L’Oreal started to recruit internationally • L’Oreal paris: placed executives from mixed cultural backgrounds into new product development (most critical activity) • 40 product development teams • Team: total of 4 people out of whom 2 may be multicultural

• Developing a new product takes atleast a year of knowledge exchange among product development teams • Multicultural managers drawn from three pools • Most seasoned: international subsidiaries + 5yrs of exp atleast in sales & marketing • A few from other global companies • Youngest: MBA grads of leading international business schools

Product development team

Multicultural managers

After recruitment

12 month training in Paris, NY, Singapore or Rio

After 2 years, experienced managers return to their home regions as directors

After 4/5 years, MBA grads return to their home regions as directors L’Oreal nurtures a pool of multicultural managers, placing them at the centre of knowledge based interactions among brands, regions and functions

The Advantages of using Multicultural Managers by L’Oreal Balance company’s global and local imperatives by learning cultural differences • Eg: Case of conflict between Indian and French teams while working project to develop organic shampoo for European market

Integrating knowledge from many locations to develop new products

Better sharing of ideas and their implementation amongst geographies

Preventing Losses in Translation

WHO interprets WHAT??

Integrating Outsiders

DIFFERENCES in culture

Mediating with BOSSES Cultural BUFFER – Tolerance Towards Other Culture

Need of Multiculturalism • Business Development: • Today’s business can not flourish without the creative value afforded by high performing global team. • Diverse marketing and product development teams that represent target group is needed.

Multi Cultural Employees have • Cognitive Integration: • Ability to hold and apply several culturally different schemas. • Think as a member of one culture or another depending on need and context. • To think simultaneously as member of several cultures.

Two Main Advantages • Mediating the relationship between global teams • Tolerance and harmony • Bringing differences between subsidiaries and headquarters.

• Innovation and Creativity: • Diverse workforce enhances creativity and understanding of customers. • Different people approach similar problems in different ways. • Flexible perspective can lead to opportunities for product innovation.