______________________ A Thesis Presented to The Management Systems Department College of Business Ohio University

______________________ In Partial Fulfillment of the Requirements for Graduation with Honors in Management and Strategic Leadership


by Matthew Dominic Seymour June 2005

This thesis has been approved by the Management Systems Department of the College of Business.

______________________________ John Schermerhorn O’Bleness Professor of Management Management Systems Department

______________________________ Robert L. Holbrook, Jr. Assistant Professor Honors Coordinator Management Systems Department

______________________________ Glenn E. Corlett Dean College of Business

Table of Contents Chapter 1 – Introduction and Purpose.......................................................................1 Hard and Soft Technologies Corporate Culture and National Culture Interpretation of Practices Focus on Disney Organization of Thesis Chapter 2 – Semiotic Theory and National Culture Saussure’s Semiotic Theory Semiotic Theory in a Transcultural Context Hofstede’s Dimensions of National Culture Conclusion Chapter 3 – Walt Disney World Case Study Business Practices Conclusion Chapter 4 – Tokyo Disneyland Case Study Business Practices Conclusion Chapter 5 – Euro Disney Case Study Business Practices Conclusion Chapter 6 – Analysis and Conclusion Footnotes References Figures Appendixes


1 CHAPTER 1 Introduction and Purpose With the destruction of global barriers that for centuries have kept the world divided by its continents, the latter part of the 20th century and into the 21st have been times of accelerated global business expansion. Many firms have expanded internationally as a way of securing less expensive labor than that which can be found in the more industrialized countries. Cost driven expansion often relies on the international expansion of technologically driven physical processes (Brannen, 2004). Companies who participate in this type of expansion use the resources of the country into which they expand and adjust their business practices accordingly. While increasing profit margins are one reason for international expansion, other companies pursue expansion for other reasons. One such key reason for internationalization is the opportunity for expansion into new markets. Tyson (1997) says that this will become the major goal of international expansion in the 21st century. He argues that international growth strategies will replace the current strategy of internationalization as a way of cutting costs. The purpose of this thesis is to examine, through secondary sources, the transfer of corporate practices between national cultures as a result of market driven expansion. The theoretical background will be supplemented with the case of Disney’s expansion into foreign markets, and the interpretations of their corporate practices in different national cultures. Finally, it will offer an analysis and implications from the data that will offer transferable recommendations to any company that must transfer soft technologies during international expansion. It will answer the question “How do differing

2 interpretations of corporate practices by different national cultures affect how those practices will be accepted?” Hard and Soft Technologies Companies who are expanding internationally for market based purposes do not solely transfer physical processes from their home country to the destination country, but instead transfer their entire business structure to the international asset. Because of the non-concrete nature of people dependent, “soft” technologies (Hall, 1993), the transfer of cultural aspects can be subject to varied interpretations. They can also face issues regarding cultural understanding and acceptance, which are generally not a concern with “hard” technologies (Brannen, 2004). Understanding “hard” and “soft” technologies, and the way that they transfer between national cultures is essential in the comprehension of international expansion of organizations. Soft, people driven technologies are fundamental for market driven expansion. Industries such as hospitality and leisure expand internationally in order to move their market into new territories. An example can be seen in the hotel industry. When entering a new market, a hotel builds the same, basic room types. They also generally use the same business practices and guiding principles. In reality, they clone themselves in the new market, using their existing business structure. In contrast, hard technologies are often transferred in cost driven expansion. These technologies are used by companies which send physical processes abroad, such as those in manufacturing industries. These processes have few specific cultural implications. Figure 1.1 illustrates the differences in hard and soft technologies.

3 An example of the transfer of hard technology can be seen from a manufacturer off shoring production to China. The company produces widgets in the United States for $2 apiece. If they have their widgets produced in China, they can be produced for $.10 apiece. They therefore build a factory or subcontract to a company in China to offshore production of their widgets. They use their technology in the new Chinese factory, but the factory is run in a Chinese fashion. The technology that they transferred to China is hard technology (the machinery); the soft technology (the business practices and style) is not transferred. The example of Disney’s decision to open Tokyo Disneyland contains the transfer of both hard and soft technologies. The Oriental Land Company created an exact clone of the original Disneyland Park. All of the physical processes and amenities were replicated (the hard technologies), but in addition, the company sent its business structure. All of the policies and practices that make Disney a market leader and give it a competitive advantage in its American market were applied in the same way in Japan that they would have been applied in America. These policies and practices make up the company’s soft technologies. The transfer of a company’s soft technologies is essential for a business that is using international expansion as a way of expanding into a new market. While all companies will also be transferring some hard technologies, the success of many multinational enterprises (MNEs) is more dependent on the way that their business practices transfer between national cultures than their physical processes (Brannen, 2004). Corporate Culture and National Culture

4 One of the challenges for companies engaged in international growth strategies and soft technology transfer is developing an understanding of how their corporate practices will be interpreted by the national culture into which they expand. These practices fall under the broader umbrella of corporate culture, which, defined in its simplest form, is “The way we do things around here” (Blank, 2003). In order for effective internationalization of soft technologies, the perception of the soft technology in the corporate culture must be in synch with the perception of the soft technology in the national culture into which the company is expanding. National culture, is similar to the aforementioned definition of corporate culture, but takes place on a much broader scale. Geert Hofstede defined culture as “the collective programming of the human mind, obtained in the course of life, which is common to the members of one group as opposed to another.” By “one group as opposed to another” one can infer that this can analyze contrasting “collective programming” between a corporations culture and the culture of the market into which it is expanding. It is from this definition that the conflict between national and corporate culture begins to take shape. If the corporate practices are defined as part of a company’s corporate culture, and are in the context of one national culture, then as they are transferred they come to be translated into a definition relative to the context of the new national culture. In cases of highly differing cultures, two sets of distinct values may come into conflict with one another. Interpretation of Practices The idea of conflict becomes further illustrated by the study of semantics. Saussure (1916) explained that one word or symbol may hold different meanings in

5 different cultural contexts. Cultural contexts, therefore, lead different words to have differently interpreted meanings. This theory was then expanded to symbols, which is the study of semiotics. A further extension of that theory suggests that whole concepts could be understood and interpreted differently in different cultural contexts (Brannen, 2004). If this theory holds true in words, symbols, and concepts, one can infer that corporate practices could also be interpreted differently within different cultural contexts. One more magnification of the concept shows that not only could corporate practices be interpreted differently by the national culture into which they are transferred, but different interpretations could come from both the employee and the consumer in that national culture (Figure 1.2). Differing interpretations can furthermore lead to changes in corporate practices as they cross national borders. This yields the secondary research question for those companies which are looking to expand internationally: How are corporate practices changed due to differing interpretations as they are transferred between national cultures? Further examination of this theory also presents a model in which corporate practices are changed in order to meet the needs of the new national culture of which they are part. Then, these changes are repatriated to the culture of the parent company in the home country. This repatriating would be subject to the same spectrum of interpretations. In this way, the international expansion of businesses which rely heavily on their corporate practices being successfully transferred become subject to continuous chains of cultural conflict resulting from Hofstede’s definition of culture. While conflict is one result, another possibility could be the merging of international cultures through

6 this continuous feedback loop. This could fit Tyson’s (1997) hypothesis that expansion of international business in the 21st will lead to weakly defined cultural differences as the many cultures of the world begin to merge. To understand how business practices can be interpreted differently, it is important to understand the dimensions of culture that lead to differing interpretations. Hofstede (2001) defined five cultural dimensions that are important in helping to understand cross-cultural relationships. The dimensions are: power distance, individualism-collectivism, masculinity-femininity, uncertainty avoidance, and long-term orientation. Hofstede’s study was the first serious, empirical research into culture and was met with much resistance, especially his article in 1980, “Motivation, leadership, and organization: Do American theories apply abroad?” (Hofstede, 2004). His research is the basis for examining how interpretations affect business practices in different national contexts. Focus on Disney To exemplify the interpretations business practices take on in different contexts, it is essential to look at a company that is well known for its deep-seated corporate practices. The Walt Disney Company is a corporation which has innovated unique and powerful corporate practices which are key parts of its culture and competitive advantage. It has also had experience transferring both soft and hard technologies across national borders. The company is divided into five business units, one of which is “Parks and Resorts.” This business unit is in charge of Disney’s two American theme park resorts, as well a park in Marne-la-Vallée, France. It also guides the management of the Tokyo Disneyland resort in Tokyo, Japan, which is operated by the Oriental Land

7 Company. This business unit’s responsibilities also include the development of future Disney theme park resorts, including the Hong Kong Disneyland Resort, which is scheduled to open September 12, 2005. This division has had both unbridled success and indebted failure when it comes to the transfer of its business practices to Japan and France respectively (Blank, 2003). While Disney parks worldwide lead their geographical regions in attendance, this is not necessarily an indicator of success. Tokyo Disneyland had Disney’s most successful international opening and has been one of the most profitable parks in terms of net revenue for the park’s operating company, the Oriental Land Company. Spurred by its success in Japan, Disney decided to open a European park, Euro Disney. With the exception of this park, renamed Disneyland Paris, all of Disney’s previous theme parks have been unqualified successes (Goodman, 1999). The Euro Disney project was met with marked cultural resistance from the French due both to the company’s choices and practices (Lainsbury, 2000). While Euro Disney has had success in drawing attendance, it has consistently been operating at losses. The prevailing wisdom concerning the problem at Euro Disney was a breakdown in cross-cultural communication (Goodman, 1999). While the company had success in Tokyo, it failed to take into account many of the cultural aspects that made Tokyo Disneyland successful. By looking at Hofstede’s cultural dimensions in the contexts of these two distinctly different cultures, and their variation from the home culture of the Disney Company, it is possible to analyze the cultural communication issues that have created overwhelming dominance at home, success in Japan, and continued problems in France.

8 By applying a variation on Saussure’s semantic model to the expansion of Disney into both Japan and France, it can be shown how two similar international expansions, done in similar ways by the same company, could yield such different results. By selecting specific business practices, and showing them in the context of the United States, the home country, as well as in the context of Japan and France, it will be possible to understand the issues that a company must face when expanding its own cultural practices into various international markets. Organization of Thesis This thesis is organized as follows. First an analysis of theoretical background will provide the basis for the case study. The theory section of the thesis will focus on Saussure’s semantic model and its application to corporate business practices. It will also look at the cultural dimensions developed by Hofstede as a way of creating the context which will be applied into Saussure’s model. Following the theory section will be three sections, organized chronologically, detailing the business practices at Disney theme parks in America, Japan, and France, and applying these practices to the aforementioned model. The thesis will conclude with an analysis of the cases and transferable implications for businesses seeking to transfer soft technologies abroad. For the purpose of analysis, this thesis will focus on four of Disney’s most well known and unique corporate practices. These practices, which are well ingrained in their culture, will provide a basis for understanding the changes and effects on the business as they cross cultural borders. The practices are as follows: the training program, family orientation, fanatical attention to detail, and their customer service orientation. These

9 practices are part of the Disney corporate culture and have helped it to become a legendary company in America (Collins and Porras, 1994). It will analyze these four corporate practices and interpret them in the context of the American, Japanese, and French business. It will evaluate the changes that they underwent in order to allow them to be accepted by the country into which they were immigrating, and then analyze any changes that may also occur in the home country because of the internationalization. ADD A CONCLUSION TO THE INTRODUCTION

10 CHAPTER 2 Semiotic Theory and National Culture Various explanations have been made to account for the lack of fit as multinational enterprises transfer soft technologies across national borders. One such model is the semiotic model, which is based on the linguistic theories developed in the early 20th century by Ferdinand de Saussure. Saussure developed the concept that linguistics was made up of two distinct parts, langue and parole; language and speech respectively. Language, defined by Saussure, was the rules in which speech finds its context. Speech is what we do with language, putting it into a tangible form (Gordon, 1996). It is through this simple fact that one can derive the semiotic model of recontextualization. In examining the theory behind this model, I will first look explain the theory as it was written for linguistics, and then examine several expansions of the theory, most importantly Brannen’s (2004) application to business practices. I will then provide examples and expound upon the theory, by utilizing the cultural dimensions of Hofstede as the context (language) into which a series of business practices (speech) fit. Saussure’s Semiotic Theory Saussure saw the world as being made up of signs. In a technical sense, the word sign means that one thing stands for something else. For example, when driving, we see a red light which indicates that we should stop. The red light is not there to make us think of the color red, it represents to us the concept “stop.” In the same vein, a line on a graph is not meant to make us think of jagged lines, but instead represents the series of changes in a dependant variable relative to an independent variable (Gordon, 1996).

11 Saussure’s concept was that a sign was made up of two distinct parts. The first part is the physical image itself. This is called the signifier. In the above examples, the signifiers would be the red light and the graph. The second part is the signified. This is the concept which the signifier represents. The signified in the above examples are the idea “stop” and the changes in variables. Together the image and concept (signifier and signified respectively) make up the sign (Gordon, 1996). While this is an easy concept to illustrate with tangible objects, Saussure’s true breakthrough was in applying it to language. He said that language was made up of a series of signs, which could either be written or spoken. Written letters, according to Saussure, are signs that represent certain sounds that are part of a given language. In the case of written words, the set of letters which make up a word are the signifier for the concept which the word represents. In spoken language, Saussure said that the sounds were the signifiers for the concept. The concept can then be either the denotative or connotative definition, depending on the context. (Saussure, 1966). One item of particular importance is the arbitrary nature of signs. Saussure explained that the original choice of the signifier that represents a certain signified is completely arbitrary. He indicates this by using the example of two different languages. In French, Saussure’s native language, the word “mouton” means the same thing that “sheep” means in English. The two words are different signifiers, but they both represent the same signified. Arbitrarily, the English language decided to signify this animal with one word, while the French language chose to signify it with another (Saussure, 1966). Barthes (1967) expanded on the arbitrary nature of signs, saying that in some cases they are arbitrary, as when they are selected by unilateral decision, but more often

12 signs are motivated, meaning that the sign comes in some way from the world in which it finds its context. The example given by Barthes is those words which are onomatopoeic (a word representing or mimicking a sound.) He suggests that “ouch” is onomatopoeic for “it hurts,” where as ouch is motivated, and it hurts is arbitrary. But, he points out; sometimes even motivated signs can be partly arbitrary. Whereas “ouch” is motivated in English, the comparable motivated sign in French would be “aïe.” Semiotic Theory in a Transcultural Context Saussure’s semiotic theory puts all signs into the context of their own language, but the theory does not elaborate as to what would happen when one sign is put into the context of another language. A framework for transnational transfer can be developed using Saussure’s coin example. Coins are made of metal, usually copper, nickel, or silver. This metal is the signifier. An un-pressed coin has no value as legal tender. It is not until the coin has been minted that it has legal value. The impression by the mint is the signified. If the mint were to stamp another substance, other than the one deemed legal by the government, it would not be considered legal tender either. Therefore the sign, the completed coin, is the metal and the impression, the signifier and signified respectively (Saussure, 1916). Brannen (2004) suggests that a sign, when transferred to a different context (an expansion of Saussure’s idea of language), can have a different meaning. Thus the sign from the previous context becomes the signifier in the new context. The concept which it represents in the new context becomes the new signified, and the new sign is then created. The new sign is not arbitrary, but motivated by the old sign (Barthes, 1967).

13 An expansion of Saussure’s coin example shows the aforementioned concept of transfer between contexts. If one were to take the coin into an area deep in the jungle, that had never seen a coin before, they would have different view of the coin. To them the coin would become the new signifier. The meaning which they attach to it would become the new signified, and to them, the coin and its use will become the new sign. While that example is extreme, one can see a more toned down example when they take a currency from one country to another. Perhaps the sign’s value in one country would allow them to buy a candy bar. In another country’s context, the people will know that it is currency, but the value could be worth two candy bars, or in contrast, not even enough to purchase one candy bar. This example illustrates the concept pointed out Brannen (2004) that the more that communicators’ cultural worlds overlap, the more effective their communication will be. As languages are similar, their words (signs) can be similar to one another and more likely understood. In linguistics, this explains the existence of cognates, words that are very similar across different languages. English and French share many cognates such as “elephant” and “elephant.” These words can be understood across the two cultures, but the difference between the English word “elephant” and the Japanese word “象” (pronounced zō), meaning elephant, is significant. The Japanese version neither sounds nor looks nor sounds like the English word with which we are familiar. In reality, this is because the Japanese language system overlaps with the English language much less than the English and French languages overlap. Brannen (2004) took this concept and applied it to the Walt Disney case by interpreting three major aspects of the Disney Company’s culture as Saussure’s parole,

14 and took the national contexts and used them as the context, or langue. Broken down into products, practices, and ideologies, Brannen identified specific signifiers and matched them with the signified that they represented in different cultural contexts. Her comparisons showed very different signified meanings for the same signifier across cultures. Brannen (2004) also gave an example of the reflexive concept of transnational transfer. That is, when a sign’s signified is changed as it crosses cultures; a new sign is created, which could take on a new signified in the home culture. She provides the example of sushi to support this concept. In Japan the word for raw fish is sashimi, and the pickled rice in which it is stored is called sushi. When transferred to the west, the sign is the sushi and sashimi together, but has come to be known by the term sushi, with the underlying concept being the raw fish. Therefore in the United States, the word sushi means raw fish. This exemplifies a sign changing across cultures to better fit into its new culture. Further examination, according to Brannen, shows the following idea. In the United States, the California Roll is created, which is a type of American sushi with cooked crabmeat and avocado. The California Roll is then repatriated into the Japanese context and known as a sushi, even though that word originally meant a pickling agent for raw fish and the meal is now cooked crabmeat. What I have up to now presented is “how” changes in corporate practices take place according to semiotic theory. It is a process that fits into the mechanism described above. Because signs are made up of signifiers and their signified, and because different cultures apply different signified to the same signifier, corporate practices can be

15 interpreted differently in different cultures. What now must be explained is “why” these changes take place. To do this I will use Hofstede’s cultural dimensions. I will expand upon Brannen’s (2004) research by defining the three different national cultures in which Disney resides by way of Hofstede’s cultural dimensions. I will then take the corporate practices that are core competencies to Disney’s service based business model, specifically the training program, grooming policy, fanatical attention to detail, and their customer service orientation. Using this information, I will then, in the following chapters, apply the theory to the cases of Walt Disney World in America, Tokyo Disneyland in Japan, and Euro Disney in France. Hofstede’s Dimensions of National Culture When Geert Hofstede did his original research on international differences in work related values, his results indicated four spectrums across which different national cultures lie. These four spectrums were power distance, individualism-collectivism, uncertainty avoidance, and masculinity-femininity (Hofstede, 1984). This section will define Hofstede’s cultural dimensions, and explain his results as they relate to the three countries in which Disney theme parks reside. First is power distance; this is how society defines the fact that people are unequal. High power distance cultures accept the power distribution among leaders and subordinates as being unequal and therefore develop towering vertical hierarchies (Ohtsu, 2002). In Hofstede’s research, he asked the core question “How frequently, in your experience, does the following problem occur: employees being afraid to disagree with their managers?” Hofstede’s (1984) test for power distance found Japan to be very close to middle-of-the-road. On the scale of 1-100, Japan was given a score of 54, whereas, for

16 comparison, the mean was 51 and the United States had a score of 40. France was the highest of the three, with a Power Distance Index score of 68. Hofstede also found that countries that had high Power Distance Index scores often agreed with the following statements: The average human has a dislike of work (McGregor’s Theory X), and employees lose respect for a consultative manager. These statements may help us to analyze the differences in acceptance of the same corporate practice across different national cultures. The next value is a scale which Hofstede titled individualism-collectivism. In a collectivist society, there are high bonds between individuals. The individualist society lacks those connections (Ohtsu, 2002). Hofstede (1984) compares the individualist society to the solitary nature of the tiger, and the collectivist society to the gregarious nature of packs of wolves. Collectivism is especially prevalent in cultures where “losing face” is an important facet of culture. This is true of Japan, in which the individuality index is relatively collectivist. They are, though, less collectivist than most other Asian nations that Hofstede studied, including Hong Kong, Singapore, and Thailand. For a point of reference the United States was the most individualistic country with a score of 91; Japan scored a 46, and the mean was 51. France lies about half way between the United States and Japan, with a score of 71 (Hofstede, 1984). This score is still representative of an individualistic society. Hofstede says that the amount of individualism in a society will affect the nature of the relationship between the person and the organization in which they belong. Particularly, it can affect the person’s reasons for complying with an organization’s requirements. Using Etzioni’s terminology, Hofstede suggests that in a collectivist

17 society there is a more “moral” involvement, and in an individualist society the involvement is more “calculative”. Moral involvement designates high intensity with a positive orientation. Calculative involvement can be of either positive or negative orientation but is always of low intensity (Etzioni, 1961). A third cultural value identified by Hofstede is the tendency to avoid ambiguous situations. He called this “uncertainty avoidance.” Societies with low uncertainty avoidance scores are more apt to take risks and less likely to feel the effects of anxiety associated with those risks (Ohtsu, 2002). On this scale, Japan and France were very similar, while the United States differed significantly. Japan had a very high uncertainty avoidance score of 94, only the fourth highest of those nations surveyed. France followed the Japanese closely as the sixth highest uncertainty avoidance score, an 86. These scores show a tendency against risk taking. The United States has an uncertainty avoidance score of 46, and the mean score for this value was 64 (Hofstede, 1984). To look at the idea of uncertainty in organizations, Hofstede uses the terms logical and non-logical as originally used by Pareto. Logical behavior is behavior that relies on data and facts, or even custom. They are “logically linked to an end, not only in respect to the person performing them, but also to those people who have more extensive knowledge” (Pareto, 1966). In contrast, non-logical behavior would be anything that does not fit into the aforementioned category (Pareto, 1966). Hofstede pointed out that what is logical behavior in one context might be considered non-logical behavior in a different context. Cultures that have high uncertainty avoidance often use ways of making the uncertain tolerable. Application of strict rules and regulations is one such way of doing

18 this. Rules, in order to help eliminate uncertainty must account for both logical and nonlogical actions of the group. Rituals are another way or reducing uncertainty. While a ritual serves a purpose to believers, unbelievers may find ritualistic actions non-logical, but that point is moot because in the context of the organization they are logical (Hofstede, 1984). In the context of Disney, we often find executives asking the question “What Would Walt Do?” The ritualistic question, referring to company founder Walt Disney, helps to deal with the uncertainty of the selecting possible options by putting themselves in the shoes of the founder (Blank, 2003). To an outsider, this may seem non-logical because Walt has been deceased for over 30 years and the business world has dramatically changed, but to a Disney Cast member, this ritual helps to guide the organization on its highly principled path. The fourth cultural value originally identified by Hofstede was a scale he called masculinity versus femininity. Masculine societies have distinct value differences between the roles of males and females in the society. At issue are sex roles (Ohtsu, 2002). In the study done by Hofstede (1984), Japan was by far the most masculine of the 39 countries. Its score was 95, and the next closest was Austria, with a score 16 points less! The United States scored a 62 and the mean was 51. France was well below the United States, with a score of 43. The stereotypical masculine and feminine values play an important part in the division of labor within societies. This could be particularly true for the Disney Corporation, which stresses many of both the stereotypically feminine and masculine values. Hofstede’s research showed that high masculinity countries have orientation

19 towards money and things, live to work, are decisive, and believe that big and fast are beautiful. In low masculinity countries (highly feminine) there is an orientation toward people, people work to live, decisions are more intuitive, and small and slow are considered beautiful (Hofstede, 1984). These distinct societal differences will help us to analyze the success of Disney’s corporate practices as they relate to both the employees of the amusement park, as well as the consumers. Conclusion These four cultural dimensions will become more and more important in assessing the transfer of corporate practices and appeal to international markets as the world continues to globalize in the 21st century. Tyson (1997) predicts that in the 21st century, the most important assets of a successful company will be information, intelligence, and the concept of perpetual strategy. In addition, he stresses the importance of global alliances through joint ventures. Hofstede’s cultural dimensions will affect all of these as companies seek to become more global. The four aforementioned cultural dimensions will be the context into which the following case studies will be examined. Each Disney theme park has had distinctly different results. A major part of the differing results can be seen as a function of how well key Disney business practices transferred into the culture of the nation in which the Disney park came to reside. We will examine how the business practices are perceived by that culture using Hofstede’s cultural dimensions. In most cases, the perception on the business practice will be the result of a combination of these dimensions. For the sake of clarity, when examining the practices, I will examine them each in the context of no more

20 than two interplaying dimensions. In reality, the perception of each practice involves all of the cultural dimensions, among other concepts. The following three case studies will examine each of the four previously mentioned corporate practices. This will be the signifier. We will then use the context of Hofstede to derive the signified meaning in the culture. This will provide the differences based on cultural dimensions which provide explanation for the differing successes of the three Disney parks.

21 CHAPTER 3 Walt Disney World Case Study Walt Disney World (WDW) may not have been the first amusement park developed by the Disney Company, but it is the most profitable, most visited, and largest amusement park in the world (Amusement Business, Dec 2004). With a property in central Florida that is as expansive as the city of San Francisco, the WDW resort holds four theme parks, nineteen resort hotels, a shopping area, and much more. The property runs much like any city, but without the residential areas. WDW is well known for its many unique business practices which make it the leader in its industry. Guests enter the Disney theme parks with high expectations, and those expectations are often met. This could be a result of The Disney Company’s core ideologies. These ideologies, which are the basis on which the practices to be evaluated have been formed, include: • • • • • fanatical attention to detail, continuous progress via creativity, dreams, and imagination, fanatical control and preservation of Disney’s “magic” image, no cynicism allowed, and “To bring happiness to millions” and to celebrate, nurture, and promulgate “wholesome American Values (Collins et al, 1994) These core ideologies are the guiding principles of Disney’s tightly-knit corporate culture. In that the company focuses on strong guest service before anything else, the corporate culture has often been called cult-like. Collins and Porras (1994) write that “when examining Disney, it can be hard to keep in mind that it is a corporation, not a social or religious movement.” They argue that this cult-like culture is a result of Walt

22 Disney’s relationship with his employees, in which he demanded total dedication and commitment to the company and its values. He saw his relationship with employees as a father-child relationship and he viewed the company as his family. This overzealous dedication to service and the company lead to what could be considered a hyper-normal culture to the American consumer (Brannen, 2004). A vacation at WDW is intended to be a magical experience that takes guests away from reality. Walt Disney World’s mission, vision, and brand essence (appendix 1) truly reflect this hyper-normal guest experience with statements such as “Here, we can wish upon a star, experience the impossible and bring our dreams to life,” and “In this magical world, fantasy is real and reality is fantastic (Disney, 2004).” The company presents the same image of magic, fantasy, and fun to its employees as it does to its guests. While the employees are not necessarily always as happy as they may seem, they are generally content because the company puts the same magical elements that it presents “onstage” (where the guests are) as it does “backstage” (where only cast members go). Backstage areas are vibrantly painted with Disney characters, bulletin boards sharing information are developed in ways that are uniquely Disney, awards programs are developed with the same magic that Disney uses in its stage shows, and cast member celebrations, discounts, and giveaways occur regularly. This can be seen even through the WDW guiding principles. Appendix one includes the DisneyMGM Studios vision, mission and brand essence, which are written with the same unique character that WDW writes its park guide maps, advertisements, and all other literature which has the guest as its end user.

23 To understand this hyper-normal guest service culture, we will examine the business practices of WDW which help to create the magical guest experience. We will also look at how they fit or do not fit into the American cultural values as defined by Hofstede. Business Practices Business practices are part of a company’s corporate culture, which is distinctly different from the national culture in which it resides. In defining the two, Hofstede (2001) says that the two are entirely distinct from one another, but they can and should be complementary. This section will look at aspects of the Walt Disney World corporate culture, and examine how they are complimented by the national culture of the United States. Guest Service Orientation The culture at Walt Disney World revolves solely around the guest. Everyone has heard the saying “the customer is always right,” and at Disney, that statement is a way of life. When you are in “the business of fantasy” (Bryman, 1995) it is important that nothing interrupts the magical experience. Breaking the magic can be grounds for immediate termination as a Disney employee. An example of this cultural phenomenon of “keeping the magic” can be seen through Disney’s merchandise training course. In the cases of shoplifting or counterfeiting, cast members are instructed not to say anything to the suspect, but just to go about their normal business. After the guest/suspect has left the cast member is directed to go back stage to report the illegal activity to Disney security. Anything else

24 would ruin the magic for those around, and that would not be Disney’s style of customer service. The guest service aspect that I will focus on for this research is Disney’s policy of guest service recovery. This is the Disney policy which empowers all cast members to do whatever is in there power to make a guest’s experience more enjoyable. It can be in response to a problem a guest is having, or just a way to brighten the guest’s day. It involves going beyond the guest’s expectations. If a guest knocks their ice cream off of its cone and down their shirt, a cast member will offer the guest not only new ice cream, but a new shirt as well. A classic story of guest service came from Disney recruiter David Horvath (2004). As he recruits across the country, he tells the story that he fondly refers to as “The Yogurt Story.” His story tells of his childhood, when his family stayed at a Disney resort. His little brother had only eaten strawberry yogurt for breakfast all of his life. Finding that the resort did not have strawberry yogurt, the boy cried all morning through breakfast. The cast member working at the restaurant that morning asked the mother if they would be back there for breakfast the following morning. She nodded her head and said “Yes, we’ll be doing this all over again, all week.” The next morning, when his family arrived for breakfast, there was a fresh container of strawberry yogurt for the boy. Without even receiving a complaint, this employee knew that he should do something to make the Horvath family’s vacation a little bit more special. These types of activities happen all day, everyday. Turning a negative experience into a positive experience is what guest service recovery is about. If a cast member ever needs suggestions on what can be done to create a guest service recovery, they can just read the

25 Main Street Diary, Walt Disney World’s weekly newsletter written by Disney World’s Chief Operating Officer, Lee Cockerel. Brannen (2004) suggests that this service orientation is beyond the normal for most American businesses, and indeed this shows true through the research of Hofstede. The guest service culture can be linked to Hofstede’s values of power distance and uncertainty avoidance. From the viewpoint of power distance, the United States scored moderately, but in order to have such a strong guest service culture, it would be important to have, theoretically no power distance. The guest service culture at WDW gives front line cast members the same power as managers, or even executives, in addressing the needs of the guests. The power to meet these needs is dispersed through the organization, and cast members rely more on their personal experience than on formal rules or chains of command to meet these needs. Therefore, what is seen from this aspect of Disney’s culture is a representation of power distance that could be termed significantly lower than the American norm. Walt Disney World’s guest service recovery policy also defies the cultural norm on the uncertainty avoidance dimension. The United States is seen through Hofstede’s research as having a moderately weak uncertainty avoidance score. The guest service recovery policy can be seen by Disney as an attempt to eliminate uncertainty in its parks. Whereas in many American businesses a “you break it, you buy it” policy exists, Disney guests never have to worry about such things. They can be certain that they will not have to buy anything that they did not want, nor will they have to be disappointed by something that they break or lose. Therefore, the company’s policy eliminates the

26 uncertainty that is often found in the American society, creating a more pleasurable guest experience. Through the interplay of abnormally seen cultural dimensions, WDW has created a guest service policy that is highly regarded by the theme park’s guests. Internally, the policy breaks down power barriers to a greater level than which are usually seen in American companies. Outwardly, the company presents a feeling of safety and certainty that are also hard to find in a country that thrives on uncertainty. The interactions of these two dimensions create a positive experience in Disney’s American theme parks. Training Program Walt Disney World is also very well known for its training program that all cast members must attend. This training, called Traditions, is very much an indoctrination into Disney’s unique corporate culture. The course is taught by the faculty at “Disney University,” and is designed to introduce cast members to Disney’s “traditions, philosophies, organization, and the way we do business” (Collins et al.). The rooms in which Traditions takes place are often decorated with pictures of the Walt Disney, Disney characters, and Disney products. This training program deviates from the American norm of being a highly individualistic society. Hofstede’s research showed that the United States was the most individualistic society in his research. Where Americans have a desire to be treated as and act as individuals, the Disney Company is creating a highly collective group of employees which work for the common good of the organization, not for themselves. While Disney cast members are still very individualistic when they are off stage, on stage you could assume that they are all brothers and sisters.

27 Disney’s policy is to hire for personality and train for skill. This is an aspect that Hofstede defines as part of a collectivist culture. While Disney does not hire from an ingroup of relatives, as Hofstede defines it, it hires from an in-group of people with the same personality traits and family centered beliefs. This in-group is very much a group of individuals who share the same value system that Disney exemplifies. By going through the Traditions course, employees become part of another in- group, the Disney Cast Members. This group, which presents an outward appearance of being cult-like, has its own language (Disneyese, see appendix 2), symbols, and beliefs. This culture created by Disney’s training program creates a strong bond between employees, on a level that is seen only in the few American companies with comparable training programs. It creates a dedication and commitment to Walt Disney World and the ideals that are represented by it. This collectivist aspect is part of what allows Disney to have such a powerful and unmatchable corporate culture, which is vital to its success. Family Orientation Throughout the history of the Disney Company, there has always been a focus on the family. It is said that Walt Disney developed Disneyland as a place that he and his daughter could go to escape reality and just spend some quality time together. That dedication to the family can be seen in everything that the Disney Company continues to do. The park is full of attractions that are family oriented. The WDW parks are less about thrills and excitement than they are about fantasy, magic, and family fun. Disney theme parks continually have a focus on education. From the rides originally developed by Walt Disney such as the Carousel of Progress and the Hall of Presidents (formerly Great Moments with Mr. Lincoln), to the conservation theme of

28 Disney’s Animal Kingdom and the ever-changing Innoventions pavilion at Epcot (see appendix 3 for explanations of attractions). These rides, parks, and attractions are all designed so the family can learn together, in an atmosphere that stimulates creativity and innovation. If Disney theme parks were to abandon their roots as family based theme parks, they would be just like any other amusement park. This helps them to carve out their niche. But having this niche does not explain the overwhelming success of the park. In relation to Hofstede’s cultural dimensions, we can see how this family orientation reflects the United States’ position as a highly masculine country. When examining family values, Hofstede found that countries with higher masculinity ratings place more importance on the family, while those with lower masculinity ratings are more apt to place importance on friends and acquaintances. Also, with the aspect of family, Disney’s advertisements, culture, and themes are always indicative of the traditional family. Hofstede found that masculine cultures are more dependent on these traditional family concepts, while feminine cultures generally have more unmarried cohabitation1 and flexible family concepts. The high individuality of the United States also compliments the family oriented culture of WDW. As with masculinity, cultures with high individualism index scores more often have nuclear families. Also, the child tends to think more in terms of “I” (Hofstede, 2001). The ways that these aspects are reflected in society help to make Disney successful. The nuclear family is the market segment to which Disney is oriented, and it the sales of its product are aimed at making children happy. This is in response to the children’s understanding of “I.”

29 The relationship that can be seen is a link between the values of the culture and the values of the organization. The success of Disney’s culture in being family oriented is a reflection of the importance the culture places on the family. When I examine this concept further in chapter six, I will show one aspect of how the internationalization of Disney theme parks has detracted from that family oriented culture through the Disney alcohol policy. Fanatical Attention to Detail Since the beginning, Walt Disney’s theme parks have been known for their attention to detail. When walking through the park, a guest rarely finds a piece of trash on the ground; all cast members are trained to pick up anything that they see. Nightly, crews touch up paint that has been chipped or scuffed during the day. The attention to detail is done on levels that guests can both recognize, and that they cannot. For example, in The Hall of Presidents, each animatronics president’s clothing is made using the common stitches of the time period. Cinderella’s Golden Carousel is not covered with gold paint, but adorned with 24 karat gold leaf (Connellan, 1997). In addition to their attention to detail on the physical structures of the park, Disney pays fanatical attention to detail concerning their employees. The Disney Look, as it is called, is the policy consisting of strict guidelines which establish the standards of appearance for all Disney employees. It regulates things such as hair color and style, length of fingernails, makeup, jewelry, earring sizes, cleanliness, smell, sunglasses, and more (Poisant, 2002). Horvath (2004) tells the fictional story of the girl with green hair who worked outside Disney’s Alien Encounter attraction. He argues that the guests who went in and watched Alien Encounter would still be thinking about the green hair of their

30 host instead of their visit to the attraction. Poisant (2002) explains that, while there was much opposition to his strict dress code (which Walt, himself, did not follow: He had a mustache, which until the 1990’s was against the policy), Walt fought for it, and it is a major part of Disney’s current corporate culture. Even cast members who do not work in the view of guests must conform to the policy. The attention to detail which permeates the company’s culture shows how a sign (the policy) can be viewed differently by the consumer than by the employee. To the employees, the policy is highly controlling and often unpleasant. One Disney employee with whom I spoke said that half way through a shift his manager directed him to return to the cast locker rooms to shave. He had already shaved once that morning, but a long shift left him at work with a 5 o’clock shadow. In low uncertainty avoidance cultures, like that in the United States, employees, if necessary will try to break the rules (Hofstede, 2000). Disney’s strict rules are often secretly broken, with cast members hiding tongue piercing and wearing dirty uniforms. This can create a highly noticeable conflict between cast members and management, although this conflict is often secretive. This policy also goes against the highly individualistic personalities that are typical of American employees at WDW. From the perspective of the consumer, the grooming policy is perceived as an attempt at perfection and adds to the overall experience at WDW. Often guests comment that Disney employees have a certain look about them (Poisant, 2002). The positive experience caused by the Disney grooming policy can be correlated to Hofstede’s power distance index. His research found that in low power distance countries like the United States, subordinates and superiors have the understanding that they are alike one another.

31 Disney’s policy reflects this, treating each the same. As viewed from the customer’s perspective, this creates a constructed similarity between the guest and the cast member that plays on the low power distance of the American culture. The typical cast member looks like what Walt Disney felt the “typical American” should look like. By creating this policy, it further breaks down the distance between employee and guest, improving the overall guest experience. The example of Disney’s grooming policy provides an opportunity to look at the corporate practices in the context of Saussure’s semantic theory. The sign, in this case, is the Disney grooming policy and its effect on the employee. The signifier is the physical grooming policy, while the signified is the cast member’s internal stress, but outward appearance. This outward appearance becomes the signifier for the guest. The understanding of attention to detail and the breaking down of power distance are what is signified by the outward appearance of the cast member. This is the second sign, but is defined the same as the first sign. Figure 3.1 illustrates this concept. Conclusion In the context of the American national culture, Disney’s corporate culture is complimented by the cultural dimensions of the national culture in which is lays. This helps to create a product that is appreciated by both customers and employees. While not all is perfect as may seem from the external appearance, the negative effects of the interplay between national and corporate culture are much less than the positive effects. Disney’s corporate culture is unique in that it is strongly exemplified in the parks. If this were not the case, it is likely that the consumers would not be as likely to be effected by it.

32 In the following chapters, I will examine the same business practices in the contexts of the Japanese and French national cultures. By continuing to examine these practices in the context of Hofstede’s cultural dimensions, and by adding the dynamics of Saussure’s semiotic theory, I will identify the clash in cultures that lead to the success in Tokyo Disneyland and the “cultural Chernobyl” of Euro Disneyland.

33 CHAPTER 4 Tokyo Disneyland Case Study The Oriental Land Company was developed as a partnership between Mitsui Real Estate Development and the Keisei Electric Railway. In the 1960’s the company asked the government for the rights to fill in part of Tokyo Bay for developing the land for housing use. The company granted them the right to use the land (in the case that they could persuade fishermen to give up the fishing rights), but they could not use the land for housing. Instead, it was decided that the land must be used for a major recreational facility. Oriental Land was not too happy that this was the case, but they chose to go ahead with the filling. They decided the most profitable recreational facility that they could produce would be a theme park (Koren, 1990). Over the next eight years (1966 – 1974), the Oriental Land Company traveled the world in search of the best theme park experience. They decided upon the idea of modeling a Disneyland park for their property. In 1974, Oriental Land approached the Walt Disney Company with their proposal, but at the same time, Mitsubishi proposed a Disney Park near Mount Fuji. Mitsubishi soon dropped out of negotiations; speculation was that they were pressured by the government in a “you’ll get your turn” fashion (Koren, 1990). The eventual agreement by Oriental Land and Disney gave licensing rights to the Disneyland name to Oriental Land. In exchange, Disney would receive 10% of admissions profits and 5% of food and souvenir sales (Koren, 1990). According to Pete Blank (2003), teacher at Disney University, this small cut of the profits for Disney, which served as a management fee, was one of the company’s biggest blunders in its history. There was early speculation that the Japanese would not be able to hold the park to

34 Disney’s high standards. In other words, they thought that there may be problems transferring the company’s soft technologies. This was proven false. The Japanese attention to detail was superb at keeping the squeaky-clean Disney image (Koren, 1990). Amusement Business Magazine (2004) consistently ranks Tokyo Disneyland as one of the most attended amusement parks in the world, and the top amusement park in Asia. The success spurned the opening of a second gate, Tokyo DisneySea, in September 2001. This park has been just a successful as Tokyo Disneyland. In addition it operates under the same licensing agreement as the Tokyo Disneyland Park. The goal of the Tokyo Disneyland Resort is to present the image of a vacation to America, while still actually being in Japan. While the Walt Disney Company would have liked to include more traditional Japanese lands, this was not the goal of the Oriental Land Company (Tobin, 1992). The park was, therefore, developed to be a nearly exact replica of Walt Disney’s original Disneyland Park. There were, however a few changes made in the hard technologies of Disney in creating Tokyo Disneyland. The entrance to the park, which in the American parks is called Main Street USA, has been replaced by a covered area called the World Bazaar. A glass covering was added to the area in an attempt to deal with the climate driven issues of opening a park in Tokyo harbor. Frontierland was renamed Westernland as a way of further appealing to the Japanese people (Tobin, 1992). Outside of these changes, much of Tokyo Disneyland was run the same as Walt Disney World. We will, therefore, look at the same business practices that were analyzed in the previous case study, but see how they fit into the cultural context of Japan. By

35 using semiotic theory, the differing interpretations of the business practices will be analyzed in their different contexts. Business Practices Brannen (2004) suggests that the more two countries national cultures overlap, the less likely it becomes that there will be changing interpretations as business practices cross cultures. Thus, one could hypothesize that the cultural differences between the United States and Japan would cause misinterpretation of the business practices. In fact, this section will present evidence that Disney’s business practices are easily understood by the Oriental Land Company, employees, and consumers in Japan. The is a result of the fact that Disney’s business practices fit better into Japan’s national culture than in America’s. Guest Service Orientation The Tokyo Disneyland culture focuses on guest satisfaction in the same way that Walt Disney World does, through service and magic. They hear the same stories that are heard at Disney parks around the world, of children dropping their box of popcorn, and a cast member refilling it for them. But there are differences in the ways that the strong guest service culture is perceived by the different national cultures. Brannen (2004) suggests that while the strong orientation toward guest service may be considered hypernormal in the United States, it is more of a cultural norm in Japan. This can be seen in the stories of Tokyo Disneyland employees as well. In fact, evidence is presented by Raz (1999) that guest service is generally more important in Japanese culture than it is at Disney. The example that follows shows an occasion when keeping the magic was more important than meeting the needs of the guest.

36 The example cited by a Tokyo Disneyland cast member dealt with park safety. The cast member indicated that he was told not to tell guests that the park has a parkwide public address system, because it was only to be used in the case of an emergency. Excessive use would destroy the magic, so even when a mother is missing her child, it is not appropriate to use the system. The cast member suggested that bottom line is “the atmosphere is more important than actually helping people” (Raz, 1999) Other Tokyo Disneyland cast members point out that Disney’s stories of guest service always revolve around children. Rarely is the story told of a cast member refilling the popcorn box of an adult who has dropped it. This suggests that the Disney idea of guest service is motivated by creating magic rather than a genuine interest in serving the guest. Another example in which Disney’s policies in guest service are questioned by the Japanese deals with their policy following personal accidents. Cast members are instructed first to call their supervisor, then to call first aid, then to write down any admissions of self-carelessness by the guest (Raz, 1999). The aforementioned examples show the differences in the way the policies of Disney are interpreted differently in the two different cultures. Both Walt Disney World and Tokyo Disneyland have the same guest service policies in place, but in the former they are considered as going above and beyond what is necessary, while in the latter, they are merely adequate. To analyze this change in interpretation between the two cultures, we will again use Hofstede’s cultural dimensions. In Japan Hofstede’s dimension of power distance is higher than it was in the United States, but they are both relatively close. Disney, a mentioned earlier, creates a culture where everyone is on the same level, where power

37 distance is minimized. Therefore, there is a contradiction, between the somewhat higher power distance of Japan and the low power distance of Disney (Hofstede, 2001). From a guest service perspective, they see higher power distances between themselves and the guest, and therefore it is their duty to serve the guest in the best way that they can. From an internal organization perspective, the higher power distance

culture says that cast members follow the rules of the organization, even though they may feel that they are not in the best interest of the guest. Formal rules are important in this culture and subordinates are expected to be told what to do, and to do what they are told. This is also reflective of the country’s relatively collective culture. The combined effects of this create a successful business. Cast members do as they are told, but are empowered to do more. They follow the rules of the organization; in so much as it helps the guests. While they feel that they could go further with service, they organizations rules send them just far enough, which keeps the guests happy. In summary, the business model of Disney is slightly below par with guest service ideals of the Japanese culture, but is interpreted at a level which keeps guests satisfied none-theless (Brannen, 2004). Also, we suggested that Disney’s guest service orientation is a function of the uncertainty avoidance index. In the United States we inferred that the customer was appreciative of the low level of uncertainty associated with Walt Disney World’s policy of guest service recovery. While the United States is associated with weak uncertainty avoidance, Japan ranks very high on the uncertainty avoidance index (Hofstede, 2001). By looking at this, we can suggest that Disney’s guest service policy is more in line with the Japanese cultural dimensions than the American cultural values. The difference that

38 causes the hypernormal perception by WDW guests is virtually eliminated. In short, such a guest service policy fits perfectly into the high uncertainty avoidance culture in which Tokyo Disneyland resides. The interplay of the higher power distance and stronger uncertainty avoidance allow for a different interpretation of Disney’s guest service policies at Tokyo Disneyland than at Walt Disney World. What is considered an excellent policy at WDW fits perfectly into the Japanese culture as an acceptable policy. Training Program Tokyo Disneyland’s training and orientation programs are not unlike those at Walt Disney World. The training consists of two parts, the first being an orientation similar to the aforementioned “Traditions” which indoctrinates the new cast member into the ways of the Disney Company. The second day part is training in the new hire’s line of business, such as merchandise, food and beverage, or attractions. The cast members are also instructed to read the Tokyo Disneyland manual entitled “Tips on Magic,” which is a direct translation of the original Disneyland manual. (Raz, 1999). The training program promotes and understanding and dedication to the Disney company and its brand. Raz (1999) suggests that this indoctrination into such a strong culture is “not that out-of-the-ordinary in Japanese terms.” Whereas in the American culture it could be considered hypernormal (Brannen, 2004) for employees to go through a preliminary interview in which they are explained the culture of the organization and judged for fit, in Japan employees already have an understanding of and are used to strict cultures, such as that of Disney (Raz, 1999).

39 This can be seen in terms of Hofstede’s individualism/collectivism dimension. Japan is a much more collectivist than the United States (although it is the most individualistic of the Asian nations (Hofstede, 2001)). Whereas in the United States the collectivist culture of Disney is an anomaly, in Japanese culture, it is the standard. Therefore, the Disney training is not perceived as hypernormal, but is instead perceived as normal. This is a perfect example of the Saussure’s semiotic model of signs at work. The Disney Company has the same policy as the Oriental Land Company, and the policy is exemplified through the same training programs (signifier). But, the programs are perceived differently (signified) in the two contextually different cultures. In this case, both signified meanings still promote the success of the company instead of countering it. Family Orientation While Tokyo Disneyland is not technically owned or run by the Walt Disney Company, it is guided by the Company’s core beliefs and values (by both tradition and a strict contract). One of those beliefs is that Disney should be a family friendly place. In Japan, Disney is more than just a children’s world, it makes magic for parents and children alike. The Japanese Mickey Kids television station shows many of Disney’s original television shows, which were hosted by Walt himself. In regards to Tokyo Disneyland’s alcohol policy, an aspect of its family friendly culture, the park had no alcohol. When the park opened in 1983, the only Disney theme park which allowed alcohol was EPCOT Center, which had opened a year earlier. In that case, alcohol was allowed because it was an important part of the World Showcase

40 theme. Currently, alcohol is not allowed at Tokyo Disneyland, but is allowed at Tokyo DisneySea, the second park on the property (Mishma, 2005). The cultural dimension of lower individualism also plays well toward the Japanese audience. Having a family orientation in a collectivist culture such as Japan fits well with many of the key points Hofstede (2001) found with collectivist family values. In collectivist cultures, a marriage is not complete without children. Families are larger because they are generally more extended, and responsibility of children to their parents is important. But there are also negative effects of the collectivist culture. In such cultures happiness is discouraged. Also, the focus on “we” in a collectivist culture can be seen as a positive or a negative. While children may be less demanding of the souvenirs purchased for them, there is more of an emphasis on giving and sharing (Raz, 1999). Japan, being a collectivist society, proves as an adequate match to Disney’s family oriented culture. While the Japanese may be known for their saké, they understand that alcohol does not belong at a place with such a family orientation. The masculine traits of the culture lead it to be a very successful place for Disney’s focus on the family. Being only slightly collectivist, the country’s culture has some aspects the clash and some that match with the Disney ideal of being a location for the whole family to enjoy. Fanatical Attention to Detail Disney’s attention to detail, exemplified by its Disney Look policy, is not something new to the Japanese. The Japanese term “midashinami” refers to appearance management, a concept that the Japanese are very familiar with. As early as elementary school, Japanese children are taught to follow appearance management regulations. An

41 example of this policy follows: All hair should be uniformly cut, straight, and for boys, should not touch the ears, eyebrows, or back collar. If a student’s hair is naturally curly, they must inform the school and carry around a certificate showing such. When asked about the strictness of Disney’s grooming policy, a Tokyo Disneyland employee responded that it is “not that strict” (Raz, 1999). Once again, this is an example of how Disney’s policies are interpreted by the more collectivist Japanese culture. In the context of the worker, whereas in the United States the grooming policy could be seen as an affront to one’s individual identity, in Japan it is seen as highly accepted, if not expected. Identity is based on the social system as opposed to the individual, which in this context would be the company. Also, in the United States individualism is important; in Japan individualistic is not an important personality trait (Hofstede, 2001). The grooming policy, when examined from the guest perspective, deals with the trait of uncertainty avoidance. By implementing this policy, Disney play to the idea that guests come to Disney theme parks expecting a certain experience, and the attention to detail that Disney exudes makes sure that the guests’ expectations are met. Japan’s high uncertainty avoidance makes Disney fit well into that nation’s culture. In the United States, the uncertainty eliminated by Disney’s attention to detail was an added benefit, in Japan it is part of typical Japanese business practices (Hofstede, 2001). Conclusion Tokyo Disneyland, Disney’s first attempt expanding to an international market proved to be a success for cultural reasons. Disney’s business practices transferred well into the Japanese national culture because the Disney culture and the Japanese culture

42 had natural fit with one another. Based on Hofstede’s cultural dimensions, the practices of the Disney Company were actually more suited for business in Japan than for business in the United States. In the context of Tokyo Disneyland the idea is often expressed that there was a “Japanization” of Disneyland. While this may be partly true, it seems to only have had a prevalent effect on Disney’s hard technologies, such as the renaming of certain areas, and changing of the main shopping area as earlier mentioned. In reality, Disney’s soft technologies, such as the aforementioned business practices, went through very minor changes in their transfer across the Pacific Ocean. As Brannen (2004) mentioned, the closer two countries’ cultures are, the less reinterpretation the business practices will have as they cross cultures. In this case, the Disney practices transferred well because the business cultures of Japan and the United States are similar. But more importantly, the practices transferred well because they were more representative of the Japanese business culture than American business culture.

43 CHAPTER 5 Disneyland Paris Case Study On the coattails of the success of Tokyo Disneyland, The Walt Disney Company turned its focus to Europe. Determined not to make the mistake that it did with Tokyo Disneyland, Disney took a much greater stake in the development of its European park. Throughout the 1980’s, the company negotiated with both the French and Spanish governments, trying to decide between a site in Marne-la-Vallée, just outside of Paris, and a site on the Mediterranean coast just outside of Barcelona. The Spanish site had the advantage of a more amiable climate, but the relatively central location and government incentives offered by the French eventually led to the selection of the 5,000 acre site in the French countryside (Lovelock, 1996). As with the Tokyo Disneyland resort, many of the hard technologies were changed slightly. Tomorrowland was re-themed Discoveryland in an attempt to appeal to the European tradition of looking discovery and innovation (Lainsbury, 2000). Along the same vein, the Space Mountain rollercoaster, which is themed as a space transport system at the Walt Disney World result, was reinterpreted and merged with the storyline of Jules Verne’s classic From the Earth to the Moon. Also, The Walt Disney Company, returned Sleeping Beauty’s Castle to its French name, Le Château de la Belle au Bois Dormant, and developed it into a more fantasy based attraction than those which are found in the other parks. This was in attempt to appeal to the Europeans, who are used to seeing magnificent, real castles. The park opened on April 12, 1992 and reviews were scathing. Euro Disney had attendance rates lower than expected and a considerable debt due to Disney CEO Michael Eisner’s disregard for the soaring costs of the project. One journalist called the park a

44 “cultural Chernobyl” and an Economist writer said that “Investors in Euro Disney might as well have climbed aboard Indiana Jones and the Temple of Peril. Jitters about the theme park’s popularity are giving them a ride every bit as stomach-churning as Euro Disney’s famous roller-coaster.” This unsuccessful start led to a change of strategy (Lainsbury, 2000). In September of 1994 the park was renamed Disneyland Paris. As explained by Michael Eisner, the word “Euro” may have sounded glamorous to Americans, but to the European market, the word was associated with business, currency, and commerce. This changed the marketing plan of the park, associating it more with Disney’s original vision, and differentiated the park from its first two years of bad press (Lainsbury, 2000). To examine Disneyland Paris is to examine the failures that can occur in cross cultural communications. By examination of Disney business practices in the context of Hofstede’s cultural dimensions and in the context of Saussure’s semiotic theory, I will show the different outcomes that can occur from the different signified meanings of these business practices in the French cultures. Whereas in the American cultural context these practices led to a hypernormal success, and in the Japanese context the result was a business that fit well within the cultural norms, the French example will show significant cultural discrepancies that lead the Disney business culture to not fit well within the French national culture. Business Practices Upon the opening of Euro Disney, it was apparent that the French were not going to warm to the American management style being offered by the parent company and by Robert Fitzpatrick, the American executive in charge of Euro Disney who spoke French

45 and was married to a French woman. In April 1993, Philippe Bourguignon took the reigns of the park with the specific goal of trying to make the park more European, but still holding onto its American roots (Lovelock, 1996). This section will analyze the business practices that Disney brought to France in its creation of Euro Disney, and the way that these policies were interpreted by their French recipients. In addition, this section will address changes made by Bourguignon which helped to eliminate the dissonance between American and French perceptions of these business practices. Guest Service Orientation Brannen (2004) suggests that the service orientation of Disney is contrary to French cultural norms. The idea of greeting each guest with a smile is something that is abnormal and unfamiliar to French culture. In describing the French, Brown (2004) suggests that their personalities can be compared to a coconut, hard on the outside but sweet on the inside. Disney’s management philosophy was to present an outward appearance of friendliness, something unfamiliar to the French. Because of this cultural difference, both the Euro Disney cast member and guest clashed with the guest service policy. To the French guest, the policy was considered intrusive and annoying, to the employee it was uncomfortable and uncalled-for. While at Disney’s American parks, this dissonance was considered a competitive advantage of the park; at Euro Disney it was considered a weakness. In the context of Saussure’s semantic theory, the sign is the guest service orientation and what it means to the employee or guest. The signifier is constant; the policy is enacted in the same way both at Walt Disney World as at Euro Disney. What is changed is the signified. In the American culture the strong guest service orientation

46 represents a hypernormal service policy that is in the best interest of the guests. In contrast, the French see the policy as intrusive and uncomfortable. The same policy is being interpreted differently as a result of differences in culture. Figure 5.1 shows this concept in Saussure’s semantic model. To examine the reason for this dissonance between the American and French signified meanings for this sign, we will once again refer to Hofstede’s cultural dimensions. In our previous two examples, we examined the acceptance of the guest service culture in the context of power distance and uncertainty avoidance. To keep the analysis constant, we will use these same cultural dimensions. France’s power distance score is significantly higher than either Japan or the United States. This indicates a stronger tendency towards a work culture that focuses on higher authority and a more tiered hierarchy. The French power distance dimension would also focus on a centralized decision making structure with expressed formal rules (Hofstede, 2000). The reality is that the Disney guest service policies do not fit this cultural dimension at all. As earlier mentioned, the policy of guest service recovery (in which the cast member is empowered to fix the problem) is really an example of low power distance. At Tokyo Disneyland, because the power distance was only moderate, it was able to reinforce the Disney corporate culture. At Euro Disney, the difference in power distances between Disney and France are significant and therefore create a dissonance that makes Disney’s service culture seem abnormal. This is an example of Brannen’s (2004) suggestion that the closer cultures are, the more easily their policies will mesh. In this case, the difference between the American and French culture is greater than the

47 difference between the American and Japanese. It is due to that that we see greater dissonance. In regards to the dimension of uncertainty avoidance, French culture lies between Japan and the United States, but is closer to the Japanese score than the American. It would appear, therefore, that the guest service polices, which eliminate uncertainty, would fit well into the French culture as the do in the Japanese culture. In fact, the interplay of both of these two cultural dimensions is very similar to the scores given to the Japanese. Yet, the results and interpretation are very different. The deeper analysis of the uncertainty avoidance dimension provides a reason for this intuitive dissonance. Hofstede found that the French agreed with the uncertainty avoidance statement “I only follow the instructions of superiors when my reason is convinced.” This indicates that the French must be convinced to follow the procedures of the company, and it is clear that the French are not convinced that high levels of service are what the guests or cast members want. Lovelock (1996) cites one Euro Disney executive as saying that “the French are not known for their hospitality. But Disney is.” This creates a dissonance that is an important manifestation of the aforementioned uncertainty avoidance statement. Therefore, there is an animosity toward the policies, even though they eliminate uncertainty avoidance. Figure 5.2 shows this concept in the context of Saussure’s semantic theory. While Hofstede’s values of power distance and uncertainty avoidance are similar in Japan and France, the transfer of corporate policies between the national cultures yields significantly different results. Deeper analysis shows that the nuances of these

48 cultural dimensions seem to project the reasoning for such distinct differences in interpretation of the signified meanings of the guest service polices in Japan and France. Training Program According to Brannen (2004), the training policies of The Disney Company, which include such courses as “traditions,” are viewed as totalitarian in the context of French national culture. The Disney Company did little to soften that image during the development of Euro Disney, and in fact, seemed to cultivate the feeling with its American attitude. In the 1990 Annual Report the company made it “a leading priority to indoctrinate all employees into the Disney service philosophy, in addition to training them in operational policies and procedures” (Lovelock, 1996). Those who were suggesting a Disney cultural imperialism seem to be vindicated by Disney’s policy statements and goals. Looking at this policy of indoctrination from the perspective of Hofstede’s individualism and collectivism spectrum, we can see differences that lead to the signified meaning (totalitarian) of Disney’s training policies. On this scale, France falls about half way between the highly individual American culture and slightly collective Japanese culture. In the context of the American culture, we suggested that the training program was hypernormal because it lay outside the norm in a positive way. In France, it is apparent that the policy is not considered positive. Hofstede (2001) explains this as an example of the interplay between France’s high individuality and large power distance. He calls this dependent individualism. He suggests that the French (as well as other cultures that fit into this group) have a need for authority, but they reject the collectivity of the company.

49 To exemplify this concept we look can look at the idea of Disney’s “traditions” course. The French have a moderately large power distance rating. This allows them to understand and ultimately thrive on the importance of such programs as the training program offered by Disney. While they understand the importance, they are in conflict because Disney’s training indoctrinates them into a highly collective organization. The signifier in this model is the training course itself. The signified is the feeling of totalitarian leadership, which is a result of the dependent individualism. This, as Hofstede (2001) explains is an intrinsically contradictory attitude. This creates the negative attitude toward the policies. Family Orientation To look at family orientation at Euro Disney, we see that some concepts of family orientation are different than in the United States, creating one of the most prevalent and detailed examples of Saussure’s concept of recontextualization. First we will examine the effects of Hofstede’s cultural values in the acceptance of the family oriented business practices, then we will look at Disney’s alcohol policy and the reason that it did not transfer into the French culture. First, we analyzed the family orientation of Walt Disney World in the context of masculinity. The French culture values femininity more than masculinity, according to Hofstede (2001), though not by much. Therefore, we still see an acceptance and cohesiveness of the family orientation aspect of Disney with the masculinity-femininity index. Where Euro Disney did not mesh was with the sales of souvenirs. I look at this in terms of family orientation because souvenirs, according to the American paradigm,

50 represent the memory of the vacation and are often mementos for children (Brannen, 2004). Euro Disney’s sales of souvenirs were significantly lower than anticipated in its early financial projections (Hartley, 1997). Because the French are less individualistic than Americans, children are less subject to the idea of “I” (Hofstede, 2001). This caused reduced sales to the customers, while still showing an acceptance of the family oriented culture. In the example of Disney’s alcohol policy, a more detailed analysis is needed. In the terms of American culture, we analyzed the Disney policy banning alcohol from its park as a reflection of its family orientation. The reason that Walt Disney banned alcohol from Disneyland was “to create a safe, family haven, free of drunken, boisterous behavior” (Lainsbury, 2000). At Euro Disney, that analysis does not hold true. The French consume alcoholic beverages such as wine on a daily basis, and to remove it from their daily regimen can be seen as stepping on their personal liberties (Lainsbury, 2000). In June 1993, Euro Disney changed its alcohol policy, allowing the sale of wine and beer at four of its restaurants (Lovelock, 1996). Some analysts say that this decision showed deference to French and European culture over the typical American attitude of Euro Disney (Lainsbury, 2000). Applying Saussure’s semantic theory, we see a distinct change in the policy as it crosses national borders. The sign at Walt Disney World was the concept of being family oriented, represented by the prohibition on alcohol. The signifier was the prohibition on alcohol, and the signified was the family atmosphere. When transferred to France the sign needed to be changed because it clashed with French culture. The signifier to the

51 French was the prohibition on alcohol. This signified an out-of-touch company, not family orientation. Therefore at Euro Disney, a policy shift reconciled this difference. Further, since the opening of Euro Disney, all new Disney parks have been built with policies that allow the sale of alcohol. This represents the reciprocal model provided by Brannen (2004). Figure 5.4 shows the reciprocal model as it relates to Disney’s alcohol policy. Note that while The Disney Company has changed their alcohol policy to allow alcohol at their new parks, they have not lost their family orientation. The concept of being family oriented is a function of numerous policies, not this one alone, therefore the company can change this and still be seen as family oriented. Disney’s family orientation shows that in some cases the cultural transfer of business practices is hard to predict because it can rely on both cultural practices and cultural dimensions. While Euro Disney supports a family oriented philosophy (which is in step with its cultural dimensions), its standard cultural practices show that a family oriented philosophy is represented by different signifying practices. Understanding this difference has caused Disney to change its policy not only at Euro Disney, but at its new parks around the world. Fanatical Attention to Detail As earlier identified, The Disney Company is known for its attention to detail. It is an important part in the guest experience. Euro Disney is no exception to this concept. The “Euro Disney Look” manual says that “Euro Disney is a show… an immense, threedimensional show in which our guests are the audience… and in which our cast members are the actors” (Lainsbury, 2000). This statement exemplifies the concept that Disney

52 takes an ordinary activity such as shopping, and turns it into an event through its attention to detail. “The Euro Disney Look” is the policy guidebook that sets the guidelines for personal grooming at Euro Disney. It is comparable to the policies mentioned earlier at Walt Disney World and Tokyo Disneyland. Whereas in the United States and Japan the “Disney Look” is accepted, it met stiff resistance at Euro Disneyland. A representative from one of France’s largest unions attacked the policy saying that it impeded upon the employee’s personal liberties. It was understood the companies may need to impose guidelines to strengthen the image of their firm, but it was seen that Disney took those guidelines too far. Regulations were imposed on such things as fingernail length and skirt length, and makeup such as eyeliner and lipstick were banned (Lainsbury, 2000). As with other Disney policies, what was strong at Walt Disney World and Tokyo Disneyland was considered problematic at Euro Disney. The French saw the personnel management detail issues as invasive into the private nature of the individual (Brannen, 2004). This dissatisfaction with the grooming policy can be seen as a reflection of Hofstede’s (2001) individualism dynamic. France, as mentioned earlier, places a high level of emphasis on the individual over the collective. In fact, it is rated in Hofstede’s top ten individualistic countries. As with the Walt Disney World case study, we see that Euro Disney cast members feel that the policy can be thoroughly annoying. Whereas the American customer seems to appreciate the attention to detail shown by the Disney Look (refer to Figure 3.1), the more collective nature of the French in relation to America gives them the “we” consciousness (Hofstede, 2001) that causes the union leaders and society in general to feel for the plight of the Euro Disney cast member.

53 The sign for this policy was that the Disney grooming guidelines, which were a function of attention to detail, and how they were interpreted by the culture. The signifier therefore was the grooming policy itself, and it signified an attack on individualism. The original concept would have been for the signified to be “attention to detail to present the best guest experience.” Because of the way the policy was signified in France, external forces such as the union leader earlier mentioned attempted to defend the rights of the individual. The urgings of these external forces (who due to all of the previous problems, were already at odds with Disney) led the changing of this policy to make it more in tune with the French national culture. The “Euro Disney Look” was changed because “what is considered classic beauty in Europe was not considered classic beauty in America” and vice-versa (Lovelock, 1996). Included in these policy changes were the allowance of red lipstick and pink and red hued nail polishes. Further, in a similar way as the change in alcohol policy ultimately resulted in a company-wide policy change, the same result can be seen in the case of the “Disney Look.” Currently at the Walt Disney World resort, the grooming policy has been changed to indicate an acceptance of lipsticks and colored fingernail polishes. More recent changes have allowed corn-row hairstyles and hoop-earrings (Disney, 2005). Therefore, we see that there is an overall change in policy as a result of the dissonance between the intended signified and the actual signified related to the grooming policy in France. Conclusion

54 The differences between the cultures of France and Japan lead to the differences in the way that the Disney corporate practices were interpreted in each case. Whereas Disney’s practices transferred well into Japan, they had much less success transferring to France. This is because of the interplay of Hofstede’s cultural dimensions. While intuitively, many of the aspects of French culture appear to be similar to American culture leading on to assume that the practices would be transferred similarly, Deeper analysis shows that there are key differences in the individual cultural dimensions, and the way that they interact with one another, that caused the relative failure of Euro Disney in its early years. I would be remiss if I did not also point out that anti-American sentiment played a role in its early failures. While this chapter suggests that Hofstede’s cultural dimensions are essential in determining the success of the transfer of business practices, in the case of France, the negative sentiment toward the Disney Company caused a spotlight to be put on those differences, accenting them to a greater extent. In addition to the idea that we must fully analyze the data to get past the intuitive, this chapter also showed the reflexive concept of reinterpretation of signs. With the alcohol and grooming guideline examples, we showed that the modifications in a policy for the improvement of that policy’s acceptance in one culture can lead to a change in the parent company’s policy. This is something of which companies with a centralized decision making process should be aware. In making regional, cultural decisions, they may, in the long term, be setting strategic policy decisions. Overall, Euro Disney had its problems due to a clash between the Disney culture and the French culture. While the park had problems in its first few years, the company

55 took the steps necessary to reconcile many of the differences between the intended signified meanings of their policies, and the actual signified meanings of their policies. This, along with the renaming of the park Disneyland Paris, has helped the park remain the top amusement park in Europe.

56 CHAPTER 6 Analysis and Conclusion The example of The Walt Disney Company provides model from which we can see how business practices are transferred across cultures. The Disney Company has a strong corporate culture that it has developed over the past fifty years of theme park operation. This culture is highly effective in creating a sustainable business in the United States, the nation in which it was founded. When transferred to the foreign cultures of Japan and France, the business practices which are imbedded in this culture produce variably different results. Using Saussure’s (1966) semiotic theory, and the further expansions on it by Barthes (1967) and Brannen (2004), we are able to view business practices as a system of signs, in the same way that words and objects can be seen a signs. These signs maintain the same signifier across cultures, but can have numerous different signified meanings. Just as words have meanings in different contexts; the business practices can have different meanings in different cultural contexts. In order to understand how different cultures will interpret the business practices, it is essential to have a way of distinguishing differences in cultural norms. This can be done by establishing various degrees of foreignness from the culture in which the business practices were formed. Greater degrees of foreignness create greater likelihood that the practices will not be accepted by the new culture (Brannen, 2004). The most accepted and widespread research on cultural differences is the work done by Hofstede (1984) in which he identified four spectrums2 of cultural dimensions. This is the system that I used in identifying the differences between the American, Japanese, and French cultures, in which Disney theme parks reside. By using these four

57 original dimensions, it is possible to see the reasons that Disney had problems transferring their business practices from Walt Disney World to Euro Disney, and success transferring those same practices to Tokyo Disneyland. In reality, more than one gauge is needed to fully examine the degree of foreignness. For this research, I used no more than two of Hofstede’s cultural dimensions to analyze the foreignness, except in the case of Euro Disney, in which I took into consideration some established cultural norms. Therefore, future research into the examination of business practice transfer by way of semiotics should examine each practice in terms of all five of Hofstede’s dimensions, as well as cultural norms and other aspects of the country’s national cultures. This would provide for a more detailed insight into the reasons for the changes in signified as signifiers cross international cultural boundaries. This concept could be used further to predict the acceptance of soft technologies as they cross national borders. Companies which are considering international expansion can use this model to analyze the culture of the company into which they would like to expand. By applying a detailed analysis to the semiotic model, they can analyze the future acceptance of their business practices and use this as one of the criterion on which they base their decision to internationalize. The case of Disney shows the need for such a detailed analysis. Had Disney examined the culture into which it moved, they would have found several items of great interest. In regards to Tokyo Disneyland, they would have found that, while externally it appears that Walt Disney World and Japanese culture have little in common, internally, the company’s business practices are very similar to standard cultural practices in Japan.

58 In fact, there is little foreignness between the Walt Disney World corporate culture and the culture of Japan. Knowing this may have convinced Disney to increase their investment in the original development of Tokyo Disneyland, and therefore reaped the financial rewards of having the most successful park in the Pacific Rim (Amusement Business, 2004). In the case of Euro Disney, using this examination would have shown that there were significant differences between implementing the company’s soft technologies in Japan and in France. Whereas the business practices fit well into Japan’s national culture, they created a serious dissonance with the French culture. This caused the French not to accept policies such as the Disney look. Further, it is important to note that by using more measures of foreignness, better results can be provided. France and Japan had some cultural dimensions that were very similar to one another, but further examination showed cultural differences which, when taken into consideration showed that there was a likelihood that the two cultures would have different signified meanings of the business practices. Additionally, we see that when a signified clashes with a country’s culture, an improvement in employee or customer acceptance can be made by changing the signifier to one that has a more desirable signified. This can be seen by the case of the Disney Look. The Disney Look policy in France was seen as overbearing and an attack on individuality. This signified showed that the signifier had a negative connotation within the French culture. To alleviate this problem, Disney edited its personnel grooming policy to create one that was more acceptable to the French. By analyzing the acceptance of a certain signifier, particularly in the context of Hofstede’s cultural dynamics and other

59 measures of foreignness, an organization can best tailor their policies to be accepted by the culture of the country into which they are entering. One interesting phenomenon that was identified was the ability for one of the aforementioned changes to penetrate the whole organization. For example, the change in the Disney Look policy that was made for the Euro Disney is now standard Disney Look policy at Walt Disney World. Also, the company’s policy on allowing alcohol at Euro Disney seems to be common policy at Disney parks. All parks opened since then now have locations to purchase alcohol. Therefore, it appears that as Tyson (1997) indicates, international expansion may lead to loosely defined cultural differences in the 21st century. If the trend indicated in this thesis is true on a large scale, as companies expand internationally, they will take their soft technologies with them, and as needed, these technologies will adapt first locally, then disseminate into the organization at large. Hong Kong Disneyland In September 2005, the Walt Disney Company will open Hong Kong Disneyland as its flagship park in China. It will take an ownership stake similar to Euro Disney than to Tokyo Disneyland. Thus far, the company seems to be imitating their expansion into France by directly replicating the company’s soft technologies. Disney is currently issuing on-the-job training for 500 Hong Kong Disneyland employees at the Walt Disney World Resort. This opportunity to learn about the culture of Disney is important, but some of the Chinese feel that cultural differences will be lost on the people in their home country.

60 My recommendation to a company such as Disney, who is continuing to pursue international expansion, is not to take a one-size-fits-all view of the corporate business practices, but instead to look at the culture of the country into which you are moving, and develop a compromise between corporate culture and national culture. That is what has made Disney a success in the United States and Japan. In the United States, cultural differences between the business and nation create a better than average company. In Japan, the compromise creates a uniquely American experience, while still meeting the needs of employees and customers. In France, the failure to compromise early created an impression of arrogance and the lower-than-anticipated attendance that punctuated the first two years of the park’s existence. In conclusion, the success of the transfer of a company’s business practices as the company expands internationally is best understood by how that practice will be interpreted by the employees and customers who will be affected by the practice. Using Saussure’s semiotic theory as the mechanism for analyzing this, and measures of foreignness such as Hofstede’s cultural dimensions as the context, a company can better predict the acceptance that their soft technologies will have in the new national culture.



In regards to cohabitation, Hofstede’s research shows that cohabitation in low masculinity cultures is often a long term commitment which involves the decision not to marry. This is different than the cohabitation that is taking place in the United States, where couples are more often moving in together as a sign of commitment or for convenience, with the ultimate goal of being married. 2 Hofstede and Bond later collaborated to develop the “Confucian Dynamic” later called long-term orientation, a value that was not used in this research due to the complexity and restraints of adding this fifth value.

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