(TIỂU LUẬN) it was widely used by other MNCs such as starbucks, oreo and coca cola, who also emphasized localization as their focus on managing across cultures

The second issue is that L’Oréal Vietnam workers find it hard to adapt to new management practice that is the result of cultural differences between France and Vietnam.. Since France has

Table of Contents

Executive Summary 2

Introduction 3

Issues in cross cultural management 3

1 Cultural misunderstanding 3

1.1 Particularism and Universalism 3

1.2 Language barrier 4

2 Change in management and adaptation 4

2.1 Uncertainty avoidance 4

2.2 Individualism 5

Case studies 5

1 Cultural misunderstanding 5

1.1 Particularism and Universalism 5

1.2 Language barrier 6

2 Change in management and adaptation 7

2.1 Uncertainty avoidance 7

2.2 Individualism 9

Recommendations 10

1 Sense-making approach in local business 10

2 Change management adaptation process 11

Action plan 12

Conclusion 16

References 17

The second issue is that L’Oréal Vietnam workers find it hard to adapt to new management practice that is the result of cultural differences between France and Vietnam Since France has high uncertainty avoidance so structure and regulation are mandatory in work, which is contrary

to the low uncertainty avoidance in Vietnam

To fit the setting of the project with L’Oréal Vietnam’s commitment, the company should

investigate new understandings about cultural values through a sense-making approach In terms

of change management process, the role of leadership and cross-cultural adaptation process can encourage employees’ trust and cultural intelligence (CQ) including cognitive, motivational and behavioral competencies to be flexible with new organizational settings as well as avoid cultural shock

Overall, it is suggested that the company should localize the messages and campaigns that they received from the parent company as well as integrating Kotter’s eight-step model for

implementing changes for maximizing employees’ involvement in decision making The action plan, illustrated using the Gantt chart, promotes a new system of weekly training that provides employees with better understanding of new concepts under the scope of Vietnamese cultural context The solution reduces the difficulties caused by language barriers for future projects by offering employees more opportunities to improve their English proficiency

In conclusion, the solutions provided had a high chance of success as it was widely used by otherMNCs such as Starbucks, Oreo and Coca-Cola, who also emphasized localization as their focus

on managing across cultures

Introduction

National culture diversity refers to the diversity in a country group of birth among members with

a few or various differences of individual’s culture distinctions (Hambrick et al 1998) The characteristic of multinational enterprises (MNE) is described as the cultural diversity within the working environment, which plays a dominant role in enhancing employee's devotion and engagement towards the firm (Sawyer & Thoroughgood 2015; Nicola & Thomas 2004)

However, cultural diversity can become a source of intragroup conflicts which poses challenges within the organization such as cultural misunderstanding, language barriers, conflicts, and inefficiency of task performances (Balachandran, Wennberg & Uman 2017; Nguyen 2019) This paper aims to demonstrate the current issues that L’Oréal Vietnam is facing in a culture diversity workplace, along with theories and a case study for application Hence, viable recommendations will critically be provided for L’Oréal Vietnam for further development

L’Oréal was established in 1990 by Eugène Schueller - a chemist with entrepreneurial spirit who developed his first hair dyes and sold them to various hairdressers in Paris (L’Oréal n.d.)

Through strategic brand acquisition and innovative global expansion, the company has achieved

a strong reputation and built up into a multinational company In 2007, L’Oréal Vietnam was established, along with 12 cosmetics well-known brands including Lancôme, Yves Saint Laurent,and Maybelline New York (L’Oréal n.d.) Owning diverse and complementary brands from drugstores to luxuries to cover various needs of customers, enabling L’Oréal Vietnam to have competitive advantages over their competitors in the market (L’Oréal n.d.)

Issues in cross cultural management

1 Cultural misunderstanding

1.1 Particularism and Universalism

The two terms “universalism” and “particularism” are postulated in Trompenaars's model of national culture differences The author postulated a cultural dimension of : (1) universalism as the bias of rules where the same principles are utilized in both common and special situations, and (2) particularism as the bias of relationship where the specificity of situation determines howprinciples should be applied in practice (Harzing & Ruysseveldt 2014; Caloria 2019) The

differences between the two cultures can possibly raise conflicts between employees and

managers who come from different nations, which in turn directly affect employee's

performances (Long & Fox 1995; Bohorquez & Andres 2017)

2 Change in management and adaptation

2.1 Uncertainty avoidance

According to Hofstede (2021) & Snitker (2010), uncertainty avoidance reflects the extent to which members of a society attempt to cope with anxiety by minimizing uncertainty French cultures have high uncertainty avoidance, their work should be planned and structured into a model, while Vietnamese with low uncertainty avoidance prefers the flexibility in the workplace and their project not placed in a mold like French Therefore, different working cultures might have negative impacts such as uncomfortable feelings for Vietnamese workers due to strict regulations that decrease their innovation process As a result, employees will less present their ideas to the upper management (Stower 2013) Therefore, it will demotivate their contribution to business performance

2.2 Individualism

Individualism and collectivism describe that whereas at the individual or personality level it measures whether people prefer to work in groups or work individually (Bhawuk et al 2004) Through academic research, individualism has been a part of European culture since the early modern time (Berry et al 1997) While in East Asian cultures like Vietnam, they prioritize the value of collectivism following the path of Confucianism, where it prioritizes group interest overindividuals desire (Kim 1997) Difference in cultures leads to a conflict where one culture is dominated by another one, in this case high individualism could cause overwhelming stress for employees caused by high levels of competition, making employees hard to adapt with new changes

Case studies

1 Cultural misunderstanding

1.1 Particularism and Universalism

The first dilemma is cultural misunderstanding between L’Oréal Vietnam and its headquarter – L’Oréal Paris This issue arises from a culture dimension postulated in Trompenaars's model of national culture differences of the two terms “universalism” and “particularism” (Harzing & Ruysseveldt 2014)

In Vietnam, engagements between employees and managers are highly focused which attributes

to enhance devotion in the working environment (Xoan & Earl 2020; Rich, Lepine & Crawford 2010) At L’Oréal Vietnam, employees and managers work under strengthened relationships which create the flexibility over discipline for minor mistakes that can considerably be tolerance.The acceptance towards employee's blunders implies that individual circumstances can be more important than certain rules within the organization (Long & Fox 1995; Lindberg, Ojakangas & Prozorov 2016) This notion has illustrated the presence of high particularism in the Vietnamese context, which is against the norms and values of L’Oréal Paris where high universalism is highly concentrated

In fact, the working environment in France is more formal where appointments are frequently made for all business matters and people do not mix private and public spheres in workplace context (Touron 2011) Thereby, the culture is perceived as task orientation rather than social orientation (Touron 2011) Those contradictory patterns compared to Vietnam, have created reluctance to bypass mistakes occurring in the workplace Thereby, different levels of

forgiveness from top managers towards employees can create unfairness, which possibly trigger conflicts, bullying, discrimination, or psychological distress that detrimentally affects task

performances (Nguyen, Teo & Dinh 2020; Tuckey et al 2009) Consequently, contracting cultureposes challenges for L’Oréal Vietnam to transfer ideas from a global project to a domestic

project, as practices are applied differently between cultures of universalism and particularism

1.2 Language barrier

Language barrier occurs both in the organization itself and cross-culture business, which poses complex obstacles for the organization (Henderson 2005)

Within the organization, the employees seek information and instruction from the top managers

to provide clarification of work tasks (Madera, Dawson & Neal 2014) Previous studies from Mount & Back (1999) demonstrated that the manager believed their messages should be clearly and accurately conveyed by subordinates for proper process of task performance However, at L’Oréal Vietnam where members experience linguistic diversity, communication becomes more challenging as the manager concerns that the employees do not understand their messages or highly rely on other employees' translations

Multilingualism, which means the co-existence of more than one language in the organization, can lead to misconceive messages, since interaction is primarily orientated towards the members

of one group, thereby little information is exchanged across linguistic boundaries (Tange & Lauring 2009) Furthermore, language barrier also creates ambiguity involving uncertain work-related expectations which leads to subordinates' failure of task's responsibility (Eatough et al 2011)

Regarding cross-cultural business, language barrier causes delay for the working process when the headquarter – L’Oréal Paris assigns a global project to L’Oréal Vietnam The translating process of transferring ideas to be appropriate in the Vietnamese context may require a rigorous and systematic multistep method (Kiing, Rajgor & Toh 2016) Hence, it is frustrating to ensure the translation is equivalent, consistent and meaningful in Vietnamese language, as inaccurate translation can cause conflicts among the organization and crisis for the brand.

Dolce & Gabbana, an Italian luxury fashion brand, confronted its crisis in China when they created a controversial promotional video of a woman using chopsticks to eat pizza and pasta (Tyler 2020) The content involves a male voice asking for “sensitive" sentences, or the way the brand intentionally chose the model with “narrowed eyes” that represent the hallmark of racial stereotypes towards the Chinese (Ban & Lovari 2021) The criticism later led to a boycott from the Chinese and threatened D&G’s bottom-line as Alibaba and Jingdong excluded D&G from their online platform, attributing to the loss of 98% of market share (Shih 2018; Stevenson 2020) As cultural misunderstanding is unacceptable for the Chinese to bypass the brand's

mistake (Ban & Lovari 2021) Hence, the use of “sensitive" words arising from language barriersthat cannot capture the equivalence and consistency of original Italian words, leading to cultural misunderstanding between the two cultures

2 Change in management and adaptation

2.1 Uncertainty avoidance

The issue is that Vietnamese workers find applied management practice of L’Oréal corporation isunfeasible to adapt in local operation Because it shows that each company has a particular organizational culture which could be difficult for someone with a completely different

background to assimilate (Trindade 2015) As a result, lack of consensus is posed to the new management practice, which is the result of cultural differences proven in Hofstede dimension (Schein & Scheiner 2006) The presence of issue illustrates L’Oréal Vietnam and L’Oréal in French headquarters have different values of uncertainty avoidance and individualism(Figure 1)

L’Oréal Vietnam employees have a culture of low uncertainty avoidance that encounters a

receptive attitude of adventurousness, synthetic thinking and openness (Nguyen & Aoyama 2013) These workers tend to enjoy flexible working styles and emphasis on the importance of experience and practices through ambiguity (Phan n.d) As unforeseen events will be perceived

as opportunities for low uncertainty workers to self-improvement (Guss et al 2012) Together with the flexible preference and comfortable feeling in an ambiguous environment, people are highly creative in the workplace

In France, a high uncertainty avoidance society, people prefer consistency and avoid approachinguncertainty situations because they feel more stressful to handle with ambiguity that could affect their job performance and security (Stower 2013) In the workplace, managers reduce risks and maintain stability by working based on structures and strict regulations Meanwhile, L’Oréal Vietnam employees have to follow the orders and less likely present alternative plans to the supervisors since there is a fear of breaking their expectations Consequently, staff with limited self-decision rights might decrease management innovation, corporate creative system and adaptive ability (Shane 1995) Therefore, if L’Oréal wants to fully utilize the talents brought by new workers, its management should be adjusted to the structure of the local firm (Trindade 2015)

Figure 1: Country Comparison between France and Vietnam (Hofstede Insight n.d)

For collectivism, L’Oréal Vietnam prioritizes the interdependence and harmony among group members where the corporation puts efforts on promoting employee’s corporation in achieving organization-wide objectives They believe that collaboration and group support can avoid conflicts to maintain a comfortable workplace and enhance the tendency of self-improvement (Nguyen & Nguyen 2012; Goncalo & Staw 2006) Moreover, collectivism culture reflects the supportive leader behavior where employees receive and respond with such as extra role

behavior, honesty and loyalty (Kececi 2017) Overall, collectivism transfers supportive

management which in turn allows subordinates to promote the group's interest and organization’sperformance (Graham 1989)

However, in France, people tend to have high individualism which prioritizes the fulfillment of individual desire over teamwork The empowerment of doing work individually allows intensive innovation within the organization because innovation is the outcome of a free flow of ideas generated by dissent rather than society consensus (Gacolo & Staw 2006) Meanwhile, L’Oréal Vietnam workers will suffer from frustration because lacking a group support causes them to losedirection and be isolated from organization (Manetje 2009) Moreover, high individualism is examined to have impacts on conflict management, as disengaged collaboration and

overwhelming competition (Purohit & Simmers 2006)

The same situation happened to Dolce & Gabbana Group launching a misleading advertising campaign in China The failure of advertising is the result of businesses making personal

decisions of using third person perception to analyze the market (Tyler 2020) Thus, cultural misunderstanding is obvious from the brand’s lack of collaboration with local employees for marketing content feedback (Gogan et al 2014) As a result, personal decisions are characterized

by the individualist culture of Dolce & Gabbana, which is not integrated well in the Chinese collectivism environment, leading to low quality decision making (LeFebvre & Franke 2013)

Recommendations

1 Sense-making approach in local business

Vietnam culture is considered as high particularism which attaches special importance to

relationships and trust To reshape “global message” fitting with the practices of the Vietnam community, L’Oréal should build strong networks with not only local managers and employees but also local communities to investigate new understandings about cultural norms, values and practices in order to make sense of organizational settings in context of local business

The business can apply a cultural sensemaking process to figure out common interpretations between the conflicts of different perceptions due to cultural differences and improve project performance in the local community (Torkkeli & Ivanova-Gongne 2020) Collective sense-making approach can be applied through three stages: scanning which gather information by specific research methods, theoretical assumptions and communication practices; interpretation involves the act of individuals (eg employees) construct and combine their interpretations about novel situations in complex cultures; and lastly responding to local commitment by decision-making stances based on cognitive frames (Fellows & Liu 2016)

The process of cultural sensemaking can be supported by the conversational practices (eg

argumentation, metaphorical communications ) with local employees through the use of

material practices and artefacts (eg metaphors, prototypes) Therefore, this can also build the project's commitment to transform the global values to be appropriate with the local community Besides, the process can build more trust and avoid stereotypes that are causing the conflicts between employees and crisis for the brand

2 Change management adaptation process

In terms of change management practice, multinational corporations like L’Oréal should create trust and specific guidelines through different approaches to encourage employee’s adaptation to organizational changes Some researchers found that organizations dealing with high uncertainty avoidance tend to invest in employee’s training programs rather than ones in low uncertainty avoidance contexts (Peretz & Rosenblatt 2011) Employees are able to easily adapt to the change

in management practices by the construction of a multicultural leader with an open mindset and have cognitive knowledge about different roles they have to play during the change management process (Feng 2014) The role of trust plays an important role in the context of organizational change since employees who trust new management are willing to manage types of vulnerable uncertainties during change (Allen et al 2007)

Cross-cultural adaptation process, especially cross-cultural training, supports multinational companies to establish common values and rules that create the synergy between various

cultures More specifically, cross-cultural training allows managers and employees to reach intercultural learning to develop cognitive, affective, and behavioral competencies needed for understanding about managerial processes (Dalluay & Jalagat 2016; Zakaria 2000)

Employees’ cultural intelligence (CQ) which involves cognitive, motivational and behavioral components could be enhanced through that training to easily adapt unfamiliar circumstances due to new cultural settings as well as increase the awareness of flexibility to organizational change (Figure 2; Thomas & Inkson 2004) Therefore, they can promote their self-confidence in individuals and teams by empowering the control over the difficult challenges in cultural shock and practices to avoid the barriers of prejudices, stereotypes that restrict their understanding of the solution