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

Masters Multiculturalism

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

Consumer-products categories highly sensitive to global economies of scale and scope

To win customers, need for being responsive to local preferences

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

A Global Brand attentive to Local Trends

Achieving Global-Local Balance

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s Maintains a steady stream of new products

Invests 3.5% of its revenues in R&D

Outspends all competitors

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Products global symbols of fashion and sophistication

Appealing to idealized self-image of customers

Responsiveness and technical innovation to cater to local tastes, not to undermine the brand

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Infusion of foreign executives would have disrupted the senior management

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

Need for both local responsiveness and global integration

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