HOW WELL DOES A COMPANY'S SERVICE CULTURE TRAVEL ?

Although there are tremendous opportunities for growth in international markets, many companies find significant challenges when they attempt to transport their services to other countries. Services depend on people, are often delivered by people, and involve the interaction between employees and customers. Differences in values, norms of behavior, language, and even the definition of service become evident quickly and have implications for training, hiring, and incentives that can ultimately affect the success of the international expansion. Companies with strong service cultures are faced with the question of whether to try to replicate their culture and values in other countries or to adapt significantly. A few examples illustrate different approaches.

MCDONALD'S APPROACH

McDonald's has been very successful in its international expansion. In some ways it has remained very "American" in everything it doespeople around the world want an Amen. can experience when they go to McDonald's. However, the company is sensitive to cultural differences as well. This subtle blending of the "McDonald's" way with adaptations to cultural nuances has resulted in great success. One way that McDonald's maintains its standards is through its HamburgerUniversity, which is required training for all McDonald's employees worldwide before they can become managers. Each year approximately 3,000 employees from nearly 100 countries enroll and attend the Advanced Operations Course at HU, located in Oak Brook, Illinois. The curriculum is 80 percent devoted to communications and human relations skills. The result is that all managers in all countries have the same "ketchup in their veins," and the restaurant's basic human resources and operating philosophies remain fairly stable from operation to operation. Certain adaptations in decor, menu, and other areas of cultural differences are then allowed.

UPS'S EXPERIENCE

UPS has a strong culture built on employee productivity, highly standardized service delivery processes, and structured training. Their brown trucks and uniforms are instantly recognizable in the United States. As it expanded into countries across Europe, UPS was surprised by some of the challenges of managing a global workforce. Here are some of the surprises: indignation in France, when drivers were told they couldn't have wine with lunch; protests in Britain, when drivers' dogs were banned from delivery trucks; and dismay in Spain, when it was found the brown UPS trucks resembled the local hearses.

DISNEY IN EUROPE

When Disney first expanded into Europe by opening EuroDisney near Paris, it also faced challenges and surprises. The highly structured, scripted, and customer-oriented approach that Disney used in the United States was not easily duplicated with European employees. In particular, the smiling, friendly, always customer-focused behaviors of Disney's U.S. workforce did not suit the experience and values of young French employees. In attempting to transport the Disney culture and experience to Europe, the company confronted clashing values and norms of behavior in the workplace that made the expansion difficult. Customers also needed to be "trained" in the Disney waynot all cultures are comfortable with waiting in long lines, for example. And not all cultures treat their children the same. For example, in the United States, families will spend lots of money at Disneyland on food, toys and other things that their children "must" have, Some European cultures view this behavior as highly indulgent, so families will visit the park without buying much beyond the ticket for admission.

A U.S. LAW FIRM GOES TO THE UNITED KINGDOM

The professions such as law and medicine have well-established and quite unique practices across cultures. Pay rates, work styles, and business models can be quite different. So what happens when a law firm seeks to expand its services to another country? Unlike many U.S. law firms that tend to populate their international offices with American lawyers, Well, Gotshal and Manges, a New York firm, opened its offices in London by hiring primarily British solicitors who would function as a "firm within a firm." One of the biggest challenges was how to blend the very different American and British legal cultures. First, the U.S. lawyers at Well, Gotshal and Manges tend to be workaholicscommonly billing 2,500 hours a year, while in London a partner would bill a respectable 1,500 hours. Pay differences were also obvious$650,000 on average for London partners, $900,000 for Americans. Conflict, rather than synergy, sometimes resulted from the deeply rooted cultural differences. Despite the challenges, Well, Gotshal says that its London operation broke even in 1998, its second year of operations, and predicted a profit in 1999.

Now answer the following questions:

Questions:

1: What do you understand by Service Culture of an Organization? In the context of the case "How Well Does a Company's Service Culture Travel?" (10 Marks)

2: How do you manage as an organization that you retain basic operating procedures but at the same time you also adapt it to the country in which you operate? (10 Marks)