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L'Oreal Masters Multiculturalism

Presentation of International Management APU

Cindy Nguyen

on 15 February 2014

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Transcript of L'Oreal Masters Multiculturalism

12410168 NGUYEN Phuong Anh
12412132 DUONG Hoai Anh
12411224 DO Thi Giang
12412240 NGUYEN Thu Giang
L'Oreal Background
What are the benefits of multiculturalism?
Recognizing new-product opportunities
: very flexible perspective can lead to unexpected opportunities for product innovation
Integrating outsiders:
The presence of a multicultural member
can help prevent the stereotyping of
newcomer with different behaviors of
the teams staffed with people
who are not multicultural.
Preventing losses in translation:
as cross-cultural semantic differences
can cause confusion: the words
were the same, but their meaning
was not.
Mediating with bosses
: reduce potential
for conflicts between the multicultural
product-development teams and the
people they report to.
How has multiculturalism helped L'Oreal increase their competitive advantage?

—L’Oréal nurtures a pool of multicultural managers, placing them at the center of knowledge-based interactions among brands, regions, and functions.
FORMULA for diversity management:


Competitive advantage for L'Oreal
The energy and idea of its people from different parts of the world
Customer Value
Better Quality of Products
Improved performance and environment
L'Oreal Group integrates men and women belonging to different nationality, races, cultures and backgrounds.

Tension between global and local
Take Home Message
Multicultural managers can make a huge, positive difference to the success of global innovation. L’Oreal’s use of multicultural managers provides a blueprint on how International firms can gain a competitive advantage
Brief Summary
Masters Multiculturalism
Professor Ali Haidar
L'oréal Learning: Global Leadership
L’Oreal’s Background
Prides themselves on product innovation.
Tension between globe and local
Achieving economies of scale and scope demands some uniformity and integration of activities across markets
L’Oreal’s Multiculturalism and Benefits
L’Oreal decided to internationalize upper management to gain a wide range of ideas and expertise.
Multiculturalism promotes creativity, innovation, and growth.
Roles Multicultural Managers Play
Each manager plays a combination of different roles such as product developer, interpreter, integrator, and mediator. .
Implication for managers
How has multiculturalism helped L'Oreal increase their competitive advantage?
Since 2004: L’Oréal’s revenue has increased by half and its profits have almost doubled, with an increase in net profits of 17.6% in 2012 alone.
Founded in 1909

Built a portfolio of brands from many cultures (Ex: American - Maybelline, British - The Body Shop, Italian - Giorgio Armani, and Japanese - Shu Uemura…)
has offices in more than
130 countries
over half its sales came from new markets outside Europe and North America, mostly in emerging economies, sales grew in the Asia Pacific region by 18.4% and in Africa and the Middle East by 17.6% and has become world leader in skin care, makeup and hair.
Company Development

At the heart of every global business lies a tension that is never fully resolved:
Achieving economies of scale and scope
=> uniformity and integration of activities across markets: the adaptation, products, services, and business models to local conditions => Easy to get the balance wrong
: lobal integration <=> local responsiveness: high
When product development and marketing require complex knowledge – tacit and collective

Implication from L'oreal case
Multicultural managers
Company's international subsidiaries
have at least 5 years of experience in sales and marketing
Multicultural managers
Multicultural managers
Graduates of leading international business school
Other global companies

Bridging differences between subsidiaries and headquarters:
It’s an approach that can transfer easily to other industry and functional contexts in which complex knowledge from multiple cultures must be coordinated and shared.
Selection Criteria
- Experiences with cultures other than one's own
- Sensitivity to differences and nuances in cultures, politics , religion and ethics.
- Ability to solve problems within different frameworks and from different perspectives
Expatriates or locals
A local is a person selected to work for a firm of overseas ownership
- Familiarity with local language, culture and customs
- Extensive tactic knowledge
- Cut cost
-Difficult to find qualified human resource
- Equivalence issues
- Lack of understanding of international's culture
Headquarter orientation to subsidiaries
***Organization Design: Poly-centric
- Evaluation & control: Determined locally
- Rewards and punishment: Depend on subsidiary performance
- Communication: Little to and from HQs/little between subsidiaries
- Identification: Nationality by host country
- Recruiting: Develop people from local nationality for key positions in their own countries
- Complexity of organization: Varied and indepent
Related Theory Explanation
- Training is the acquisition of knowledge, skills, and competencies as a result of the teaching of vocational or practical skills and knowledge that relate to specific useful competencies.
- Training is the second major HR function .
- Unlearning, learning, relearning.
The more experienced managers
- after 2 or 3 years in global product development
Selection Criteria
as director, managing a brand or function
Explain Related Theories
-Recruiting and building teams around individual managers
-40 teams, each working in different concepts
-a team consists of 3-4 people, 2 of whom may be multicultural
=> Tacit knowledge functions best within national boundaries
Full transcript