Inter-cultural Management: Case L'Oreal

Thèmes abordés

L'oreal, intercultural management, management interculturel, management de la diversité, carrière

Résumé du document

L'Oreal is a family company founded in 1909 by Eugene Schueller. At the time, it was known as ‘Societe Française des Teintures Inoffensives pour Cheveux'. Schueller gradually convinced the Parisian hairdressers to buy his products, with the help of some sales representatives.

Keeping its spirit of innovation, the group likes to highlight this pioneer image (research of new products with equal emphasis on client satisfaction), allowing L'Oreal to retain its leadership even after many decades. In 1954, after three years of marketing study, L'Oreal introduced in America its hair products, as recorded by Cosmair.

Today, the group owns more than 25 brands around the world. It allows them to develop its products under various names and concentrating on various positioning according to the different brands. This brand diversity gives L'Oreal the power of being present on all the markets segments. The group can sell its products worldwide managing diversity.

L'Oreal gives a strong place to sustainable development in its organization. This may be one of the reasons why its sales keep going up at an average rate of 6% a year despite the financial crisis. The graph on the right (taken from L'Oreal's website) shows its sales evolution.

Now, how does the group succeed in managing such a worldwide company with that many employees in so many countries? How does L'Oreal manage the diversity and how does the group deal with it? Is it a threat or a strength? What is L'Oreal's management?

In the first section, I am going to introduce the company along with the relevant figures, its business units and a global overview of the company with a PESTEL and SWOT analysis.
I will then talk of L'Oreal's corporate culture before talking of its management and how it integrates the cultural diversity.

Like any other brand, L'Oreal has its strengths and weaknesses, opportunities and threats. It takes advantage of its leader position but has to stay focused in order to retain it. Though the brands benefit from the French image in the world of Beauty and Luxury, the rising demand from emerging markets may change the demand type and L'Oreal has to be aware of this threat.

On the other side, L'Oreal has an advantage that few companies have: its Corporate Culture. Indeed, L'Oreal is a strongly diversity oriented company. It has a Worldwide Diversity department whose senior executive recently2 explained in an interview that since the group was founded, the company has set this value among the core values, albeit regarding team building or products.

The company's mission is to promote an approach to beauty that is fun, affordable, fulfilling, genuine and generous while meeting all stakeholders' expectations by providing a portfolio of deeply diversified range of products. (L'Oreal Group 2007).

The group is a compound of 18 international brands including Lancome, Maybelline New York, or Giorgio Armani. The diversity and the number of different brands testify L'Oreal's desire to offer a various range of products for countries around the world.

Tags: L'Oreal management strategy, intercultural management, Maslow Hierarchy Pyramid

Extraits

[...] Its Opportunities and threats. It takes advantage of its leader position but has to stay focus in order to keep it. Even the brands benefits of the French image in the world of Beauty and Luxury, the arising demand from emerging markets may change the demand type and L'Oreal has to be aware of this threat. On the other side, L'Oreal has an advantage that few companies have: Its Corporate Culture. Indeed, L'oreal is a strongly diversity oriented company. They have a diversity Worldwide Senior executive. [...]

[...] In those courses, they learn 4 main values : Fostering awareness and acceptance of individual differences. Helping participants understand their own feelings and attitudes about people who are different. Exploring how differences might be tapped as assets in the workplace. Enhancing work relations between people who are different from each other. CONCLUSION L'Oreal operates in over 130 countries around the world. This confronts the company on daily basis to the intercultural management issue. But L'Oreal doesn't see it as an issue. In fact, they seek diversity. [...]

[...] What is L'Oreal management? In a first part, I am going to introduce the company with the figures, its business units and then give a global overview of the company thanks to a PESTEL and a SWOT analysis. I will then talk of L'Oreal's corporate culture before talking of its management and how it integrates the cultural diversity. Company presentation Figures1 A century of experience in cosmetics 5 different industries: Hair care, Hair coloration, Skincare, Make- up and Perfume. 23 international brands Global sales : 17,5 billion Euros in 2008 Net Result : 2.7 billion of Euros in 2008 Operating in 130 pays employees 628 licenses in 2008 R&D employees of 60 different nationality 581 millions of Euros spent on the R&D 18 research center and 13 test center around the world. [...]

[...] Let's take an example of a comparison between two cultures and what it implies. We can use the Geert Hoftede dimension, using its 5 most common criteria : the Power Distance Index The Individualism Masculinity Uncertainty Avoidance Index Long-Term Orientation (LTO). The USA has a lower PDI, which means the hierarchic distance isn't a real communication barrier. Employees can easily access and talk to the top manager if they meet them randomly, while it's not the case in India. An employee who would go and talk to a senior executive in India would act inappropriate. [...]

[...] Because it is an incredible source of creativity and therefore of innovation. The company values include a passion for adventure, an enrichment through diversity, and an interest for individual talent. This is part of the sustainable development L'Oreal is leading since it was founded. The company also focus on the cultural dimensions that can be fences when managing the diversity. Training are offered to managers and the cultural dimension is at the center of the company's preoccupations. Bibliography 1. L'Oreal Website : http://www.loreal.fr/_fr/_fr/html/groupe/histoire-de- l-oreal.aspx 2. http://www.loreal.fr/_fr/_fr/html/groupe/interview-du-directeur- mondial-de-la-diversite.aspx 3. [...]