Case study Cirque du Soleils Global Human Resource Management Practices Source : Helen deresky - International management book 10th edition Montreal-based entertainment company Cirque du Soleil (Cirque), which started in 1984 as a small group of young street performers, went on to become a worldwide entertainment giant with more than 4,000 employees. These included 1,300 performers from 50 different countries. Cirques big-budget, animal-free circuses included a narrative framework, opera, and theater, with lavish costumes, huge sets, original music, and high-tech special effects. No spoken language was used in its shows, and so they were able to reach diverse audiences. Close to 150 million spectators in nearly 300 cities worldwide were reported to have seen a Cirque show since 1984 and about 15 million people watched its show in 2014. Through its strong culture of risk taking and creativity, Cirque became a leader in artistic entertainment. It offered a creative work environment where artists were free to express their thoughts and grow both professionally and personally. The culture was open and family oriented. Artists were offered a competitive salary, a safe work environment, and support for their health and well-being. Other benefits included group insurance, a pension plan, travel and health benefits, and paid holidays. Cirque also encouraged artistic creativity among its employees in the workplace. According to a former employee, I had the great honour of working for this world respected company. It was hard work of training and pushing yourself to your physical and mental abilities. My management and co-workers were encouraging and inspiring to work with. The greatest reward every night was seeing the audience leaving with a smile.3 Cirque ensured that it functioned as a unified whole, bonded by a common set of workforce principles and practices, despite the cultural diversity of its employees. It remained accessible and adaptable as an employer. However, analysts felt that one of the challenges that Cirque could face going forward, would be to preserve its creative culture and family atmosphere. Another challenge for the company was to retain its artists who were talented, rare to find, and difficult to replace. A major concern for Cirque was addressing its global HR practices. Cirque had a decentralized HR management system wherein artists of touring shows were governed by the rules and policies of the countries in which they were performing at a particular point of time. Moreover, Cirque adopted a global recruitment policy that was driven by a geocentric approach of hiring talent from all over the world. According to industry observers, the challenge for Cirque would be to effectively manage its global employee base and the effect of its actions on the companys culture. Talking about Cirques strategy, Marie-Jose Guilbault (Guilbault), vice president of organization and culture at Cirque, said, We cant be hierarchical or corporate; it wont work for the type of business that we are. Were very careful to be natural. Were very big, so we cant be fully organic, but we know we need to be flexible.4 Since 2008, Cirque had been struggling with problems such as declining profits, a spate of poorly received shows, and growing competition. Its net worth reportedly dropped from US$2.7 billion in 2008 to about US$2.2 billion in 2013.5 In 2013, Cirque laid off 400 employees at its Montreal headquarters, citing the high production costs of its shows and a weak economy. Some analysts also reported that Cirque planned to refocus its business away from circus shows and on to other ventures. Commenting on whether the sun had set for Cirque, Howard Sherman, an arts management consultant, said, Unless they are overwhelmed by hubris, mismanagement or both, Cirque should to be around for a long time, and reports of their doom are not merely exaggerated but unfounded [. . . .] Cirque du Soleil is not too big to fail, but the company is too inventive and successful to quickly start counting out, like so many clowns in a car.6 Background Note Cirques journey began in the early 1980s in Baie-SaintPaul, Canada. Les chassiers de Baie-Saint-Paul, a theater troupe founded by Gilles Ste-Croix, entertained the people of the city by walking on stilts, juggling, dancing, breathing fire, and playing music. Guy Lalibert (Lalibert) who started out as a street performer in Quebec, was a part of the troupe. The troupe went on to found Le Club des Talons Hauts (the High Heels Club), and then, in 1982, organized La Fte Foraine de Baie-Saint-Paul, a cultural event in which street performers from all over performed and exchanged ideas. In 1984, Quebec City was celebrating the 450th anniversary of Canadas discovery by Jacques Cartier, and the Quebec government needed a show that would carry the festivities out across the province. Lalibert presented a proposal for a show called Cirque du Soleil (Circus of the Sun), and succeeded in convincing the government to provide them with a grant of C$1.5 million.7 The show was a visual treat with incredibleartistic skills. Thus Cirque was born with the assistance of the Quebec government. Lalibert chose the name Cirque du Soleil for his company as he saw the sun as a symbol of youth, energy, power, and light. The companys mission was to invoke the imagination, provoke the senses, and evoke the emotions of people around the world.8 Cirque was not a traditional circus as no animals were used for the acts. Its shows were spectacular with live performances, opera, and theater, with lavish costumes, huge sets, original music, and special effects. In 1984, Cirque reported sales of US$1.7 million and it employed about 73 people.9 Cirques first production, Le Grand Tour, debuted in the small Quebec town of Gasp, and was then performed in 10 other cities across Quebec. The positive response from the audience encouraged Lalibert to expand Cirques operations outside Quebec. In 1985, the troupe performed outside Quebec for the first time when it held a show in Ontario. This was followed by shows in Ottawa, Toronto, and Niagara Falls. The following year, Cirque organized shows across Canada and put up several performances at the Childrens Film Festival in British Columbia and at a world fair in Vancouver. By this time, Cirque had a seating capacity of 1500. However, in late 1985, as a result of a series of flop shows, Cirque went deep into debt, to the tune of US$750,000. But the company did not go bankrupt as Cirques financial institution, the Desjardins Group, postponed the companys debt payment of US$200,000. The Quebec government also granted sufficient funds to the company so that it could sustain itself for another year. And in 1987, the status of Cirque was changed from non-profit to a for-profit entity. That year, the troupe was invited to the Los Angeles Arts Festival. Although the company was facing financial problems, Lalibert decided to take a chance and his troupe staged the show We Reinvent the Circus at the festival. The show was a huge success and marked Cirques entry into the US. In 1990, Cirque debuted in Europe, staging shows in London and Paris. By 1990, Cirques seating capacity was 2,500 and the tickets were selling for as high as US $33.5.10 In 1992, Cirque entered into a year-long agreement with Mirage, a Las Vegas hotel, to perform a show Nouvelle Experience. Following its huge success, it launched another production called Mystere, which was also staged at Mirage. The following year, Cirque entered into a tenyear contract with Mirage for the production. Steve Wynn (Wynn), owner of Mirage, also built a permanent facility for Cirque at a cost of US$20 million at his new resort, Treasure Island, which opened in 1994. Cirques sales increased from US$30 million in 1994 to US$110 million in 1996. This growth was attributed to the success of the show Mystere. In 1997, Wynn constructed a US$60 million theater for Cirque at Bellagio, Las Vegas. Walt Disney also constructed a permanent theater to house Cirque at Walt Disney World in California. The same year, a US$22 million facility for rehearsals and costume designing activities called Creation Studio was created by Cirque in Montreal. This also served as the companys headquarters. All of Cirques shows were created and produced here.

Case Questions 1. Discuss the global human resource management practices of Cirque. Discuss the challenges faced by Cirque in managing its global employee base. 2. Critically analyze the culture at Cirque. How, according to you, has the culture fostered creativity and teamwork in the company? 3. People from five continents and more than 50 nationalities are represented within Cirque. How does the company manage such culturally diverse talent to gain competitive advantage? 4. What steps should Cirque take to retain its employees and preserve its culture?