Based in France and operating in 140 countries, LOral is a global corporate giant. It employs more

Based in France and operating in 140 countries, L’Oréal is a global corporate giant. It employs more than 89,000 workers and owns brands such as Maybelline, Ralph Lauren, and Lancôme among its offerings. What makes a cosmetic product appealing in a particular geography varies greatly, requiring any company operating in multiple geographies to master cultural differences. In this arena, L’Oréal has important lessons to offer.

What makes the difference in the international success of L’Oréal is the deliberate efforts to infuse multiculturalism into its product development teams. The company brings experienced employees from subsidiaries, recruits from competitors, and new hires from top international business schools to its product development operations. Candidates receive a yearlong training in Rio de Janeiro, Singapore, Paris, or New York, then take part in a management development program before being placed in their teams in the Paris headquarters. After a while, these employees are placed back in its home-country operations as director-level employees.
Using this method, the company ensures that it develops a pool of talented and multicultural managers who are involved in product development and then take charge in subsidiary operations. This approach allows the company to develop future leaders who can create products that fit the local environment while embracing the company’s core values.
Despite all efforts to embrace multiculturalism, L’Oréal does not always adopt local norms. For example, the headquarters culture embraces the values of confrontation and disagreement, which is not a good fit in subsidiaries where harmony is valued. The company offers a program called “Managing Confrontation” to train employees. Even when it goes against employee instincts, the program underlines what the company values are and teaches employees the importance of effectively handling disagreements.

Case Discussion Questions 

1. Why is it important for L’Oréal to embrace multiculturalism? Which aspects of the company’s operations would benefit the most from multiculturalism?
2. How should an organization decide whether to follow the values of the headquarters or the subsidiary?
3. What are the advantages and downsides of L’Oréal’s approach to training local talent?