(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

Table of Contents Executive Summary .2 Introduction Issues in cross cultural management Cultural misunderstanding 1.1 Particularism and Universalism 1.2 Language barrier Change in management and adaptation 2.1 Uncertainty avoidance 2.2 Individualism .5 Case studies Cultural misunderstanding 1.1 Particularism and Universalism 1.2 Language barrier Change in management and adaptation 2.1 Uncertainty avoidance 2.2 Individualism .9 Recommendations 10 Sense-making approach in local business 10 Change management adaptation process 11 Action plan 12 Conclusion 16 References 17 Executive Summary The objective of this report is to analyze several issues related to cross-cultural management faced by L’Oréal Vietnam by outlining the problems, providing application and recommendations based on the theory as well as introducing a Gantt chart for action plans The first dilemma of L’Oréal Vietnam comes from cultural misunderstanding due to national culture differences between Vietnam where high particularism is primarily focused, and France where high universalism is highly concentrated 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 other MNCs 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 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 how principles 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) 1.2 Language barrier One of these could cause communication issues is language barrier, to adapt into a multicultural workplace, where non-native speakers could interact with each other and simplify the communication between international teams, the ‘lingua franca’ was created for this purpose (Angouri 2013) Due to its presence and dominance in the global market, English was chosen as the ‘lingua franca’ due to its effectiveness of delivering messages and the popularity of English across the world Hence, it is required for employees to speak English when applying to MNEs Moreover non-native English speakers may struggle to comprehend advanced words or technical words in the business world, therefore misinterpreting the information could cause disruption with the workflow(Lai & Yang 2017) 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 over individuals 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 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 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 culture poses 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 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 workrelated 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 barriers that cannot capture the equivalence and consistency of original Italian words, leading to cultural misunderstanding between the two cultures Change in management and adaptation 2.1 Uncertainty avoidance The issue is that Vietnamese workers find applied management practice of L’Oréal corporation is unfeasible 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 approaching uncertainty 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) 2.2 Individualism L’Oréal Vietnam operation suffers conflict management which can be explained as Vietnamese workers embrace collectivism culture, while L’Oréal headquarter in Paris ties to the self-concept of individualism Thus, the cultural values create substantial influence on particular leadership styles and working structure, which in turn impact subordinates' reaction to work differently (Yang et al 2012) 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’s performance (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 lose direction 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 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 sensemaking 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 decisionmaking 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 10 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 11 Figure : Cross-cultural Competences (Reproduced from Bartel-Radic & Giannelloni 2017) Action plan As stated above, the primary agendas of the solutions are to integrate cultural context into communication as well as create a more approachable method to convey L’Oréal global message into Vietnamese context According to Livermore (2016), the best way to resolve cultural conflicts is to relate French culture to Vietnamese culture This perspective is referred to as “Localization” Particularly L’Oréal Vietnam will capture the core of its parent company and adjust accordingly to values, norms and preferences of domestic culture (Livermore 2016) Particularly, take L’Oréal current “Growth Mindset” project as an example In order to introduce the concept to Vietnamese workers, the company can localize it by integrating the definitions into daily life, making it more relatable to employees Furthermore, as Vietnam is a country with strong feminism characteristics, it is notable that the changes implement of localization must be built on compromise and negotiation, by which decision making must be achieved with empowerment and involvement between managers and employees (Hofstede Insight 2021; Gallego-alvarez, Martinez & Consuelo 2021) Thus, to maximize employee engagement in improvements, it is suggested that the solution will be developed based on Kotter’s eight steps for change management (figure 3) 12 Figure 3: Kotter 8-steps for change management model, reproduced from Kotter & Cohen (2012) Specifically, as presented in the Gantt chart (figure 4), the action plan is divided into eight phases with different purposes The main activities with significant impacts for L’Oréal are described as follows Firstly, the main criteria are to create the need to change by collecting feedback and analyzing issues that the company is having in order to convince all stakeholders that this change is necessary (Kotter & Cohen 2012) In the case of the company, it is crucial to host meetings, collect employees’ feedback and create new communication styles by overcoming brainstorming roadblocks According to Livermore (2016), brainstorming roadblocks are obstacles to convey information within a team, which are created by fears of criticism, being irrelevant and unable to speak up As Vietnam is a country with a high score of power distance dimension, there is a high chance that employees are afraid to give their honest feedback as they tend to perceive the leader as benevolent autocrat, which leads to an ineffective organization with difficulties to transcend information from L’Oréal Paris to Vietnam (Gallego-alvarez et al 2021) 13 Therefore, it is suggested that L’Oréal should launch anonymous feedback for employees as well as having a department that collects employee emails and resolves conflicts within the organization By redefining new communication styles, it is believed that there will be more innovative solutions, along with critical feedback that promotes better future organization Secondly, in order to improve the engagement of employees on new concepts and resolve language barriers issue, the solution will also promote a system of weekly meetings, by which the employees will have the opportunity to approach new concepts with Vietnamese cultural context and be explained on how these contexts will bring better performance for them There will also be a self-learning language program to enhance employees’ English proficiency, which will reduce language barriers and miscommunication for future campaigns Particularly, the solution suggests a plan for employees to have a paid account on Elsa – a self-learning English app that allows people to learn the language within their working field (Elsa 2021) In order to maintain the best efficiency, L’Oréal should have a limited number of accounts available for employees that will be distributed based on pre-registrations and have a policy of taking away the benefits if the employees not use their accounts for more than one week Hence, by implementing this solution, it is expected that the level of English among employees will be improved as they will have to utilize the opportunity given by the company Furthermore, as the plan promotes a more frequent, clearer, and more engaged system of introducing new concepts, it is expected that the risks of miscommunication as well as dissatisfaction within L’Oréal will be significantly reduced as employees are given more context and time to perceive and interpret new concepts 14 Figure 4: Gantt Chart for implementation 15 Conclusion In conclusion, under the supervision of the parent company in France, L’Oréal Vietnam has suffered many cultural problems that arise from the headquarters decision making In order to successfully tackle these problems, about culture differences, the higher ups of L’Oréal Paris should enhance their internal communication, research about Vietnamese culture, following the recommendations above, applying it with proper methods so that they can operate effectively The solutions provided had a high chance of success as 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 (Livermore 2016) References 16 Berry, WJ, Poortinga, HY, Pandey, J, Segall, HM & Kõtỗba, C 1997, Handbook of Crosscultural Psychology: Social behavior and applications, 2nd edn, Allyn and Bacon , United State of America , viewed September 2021, < https://bit.ly/3zNQDZX > Allen, J, 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Oreo and Coca- Cola, who also emphasized localization as their focus on managing across cultures (Livermore 2016) References 16 Berry, WJ, Poortinga, HY, Pandey, J, Segall, HM & Kõtỗba, C 1997, Handbook... recommendations above, applying it with proper methods so that they can operate effectively The solutions provided had a high chance of success as it was widely used by other MNCs such as Starbucks, Oreo