Impacts of HRM on the organizational performance of Walt Disney

Abstract:

Purpose: The purpose of this study is to examine the impacts of Human Resource Management (HRM) on the organizational performance of Walt Disney. Organizations are under pressure to devise a strategic business plan that not only stands them out from their competitors but also satisfies their employees. HRM can play a key role in this regard as it is integral for the success of strategic business plans. Since it’s secondary research, different papers are reviewed to understand the relationship between HRM and business achievements. A hypothesis is proposed and has been tested to check whether it complies with already conducted research. A critical review of the literature has shown that HRM has a positive correlation with an organization’s performance.  Different studies corroborate with hypotheses to show that fully-mediated HRM mediates the relationship of organizational performance with the workforce. Disney is an American-based entertainment company that had three successful businesses in California, Florida, and Japan before its venture to Europe. The comparison of Disneyland in America and Euro Disney helps identify the key HRM issues that cause the success of one project and the failure of others. Some key findings from the failure of Euro Disney are miscalculation of culture, habits of people -their eating habits, per capita spending, travelling habits, and management issues. By keeping these mistakes and weaknesses of Walt Disney in mind, a strategic plan has been devised that helps to achieve a strategic business plan and competitive advantage for Walt Disney based on Fayol’s management principles. The limitations and future recommendations of the study are also discussed.

Introduction:

Human resource is the knowledge, skills, and aptitude of the workforce at an organization. It also includes the attitude and approaches of individuals towards the organization’s affairs. Human Resource Management (HRM) has become an inherent part of management at organizations. The process of linking Human Resource Management with strategic goals and objectives to perform organizational business performance is known as strategic human resource management. Its focus is to achieve the objectives of organizations.

Different human resource management approaches evolve with time. The scientific management approach considered the man as an “Economic Man.” A human relation approach aims at having better relations with employees for better performance. Lastly, the human resource approach considers the man as a resource. To achieve the objectives of the Company, HRM undertakes various activities that contribute to the success of the Company. These include human resource planning, personnel recruitment, training and appraisal of employees, security and welfare of employees, and setting management policies for organizational relationships. A company’s HR just does not have a supporting role but is also strategic.

Walt Disney is one of the companies that have been working in the international arena. Being a multinational entertainment company, different people work in local and international studios. The Company is home to the largest human resource base. The Company faces challenges in managing such a large number of people, as well as knowing the fact that not all people have the same cultural background. So, the Company values its human resource, knowing the fact that how critical a role manpower is playing around the globe. The Company has put a lot of effort into management by designing standard business training programs, harassment prevention policies, and professional and personal programs. However, despite all these efforts, the Company has not been without HRM issues. Since the Company relies on a diverse workforce for customer satisfaction, the Company faces challenges and opportunities to manage its workforce.

Disney is a theme park located in America, Japan, and the third venture was Euro Disney in France. Walt Disney is an American-based entertainment company that comprises theme parks, resorts, films, and entertainment. Although the company gained recognition from its theme parks, now the media network has become the most profitable part of Disney.  The Company opened  its first theme park in California, followed by the opening of Disneyland in Florida and Japan. After one successful multinational experience, Company opened its theme park in Europe -France. The opening of Euro Disney in France was the biggest hit; however, the project failed because of HRM issues -lack of cultural knowledge about Europeans, management issues, and miscalculation of some crucial factors. Cultural differences between the United States and France caused the failure of the project. Shanghai Disney Resort is controversial but gets immense operational success.

Strategic human resource management (SHRM) practices at Walt Disney include attracting employees, developing the skill, and rewarding and retaining employees. These SHRM practices help to attain individual goals that would help to achieve the organizational goal in a broad spectrum. Staff recruitment and performance management are essential steps in SHRM because human capital is the one that generates revenue. The health and safety of employees and labour regulation are also crucial practices to retain employees within the organization. Lastly, compensation and benefits attract the employees and make them loyal to their job. Succession planning is the last but essential step of SHRM to get an advantage. In the year 2020, Disney has crowned a company admired for its HR. The Company has focused on anticipating its employees and supporting its people. Disney’s approach to HR has made the organization successful. Organization’s HR implement marketing strategies and let their managers come up with the best solutions in their respective fields. This not only gives them freedom along with their responsibilities but also recruits top-notch employees for the Company. The special session “Blue Sky,” where average employers come up with innovative ideas for future implementation, is a good initiative taken by Disney. This encourages the employees to brainstorm. The HR strategy of Disney is that employees must be clear of their jobs and responsibilities. They must be aware of their prime objectives so they work with a high productivity level. In short, Disney has let every employee work with freedom by focusing on the aims and objectives of the Company.

The teamwork and empowerment of employees foster loyalty and commitment. It also encourages the employees to speak up about what creative and innovative ideas they have. So, proper planning of creativity helps Disney to achieve remarkable success (Pandit).

Walt Disney has a quite peculiar approach to staff recruitment and selection. They get to know the candidate, focusing on what the candidate will do concerning the Company. Moreover, they ask the candidate to act out a scenario that helps to evaluate the potential. There’s no smoke and mirrors involved with Disney. They give a true picture to candidates about what their life will be like in the future. So, only passionate candidates would stay in. A clear description of the job statement helps the HR department in the recruitment process. Because specific job descriptions give a perfect mix of candidates. Employees’ alignment with the organization works well for their engagement and satisfaction. Disney is way ahead in it as it acknowledged the team effort and kept its employees engaged with exciting upcoming productions. The idea of “Knowledge Management” was adopted by Disney a long time before the world first adopted it in 2012. The collaborative culture enhances knowledge management that Disney companies adopt to create new ideas. Frequent feedback and training help organizations to maintain their quality. So, the incorporation of CalArts is a step to get skilled employees for the Company. These HRM steps were taken by the Company to give it an edge over the competitors by taking small things into account.

Some compensation and benefits offered by Disney to its employees include health insurance, weekly pay, retirement programs, wellness programs, paid days off, tuition assistance, and career development. These encourage the long-term commitment of employees to companies that helps to get strategic advantages (Bier, 2020).

Globalization has increased connectivity by making communication and travelling easy for everyone. Disney has used this globalization in its favour and expanded its business in other countries outside of the USA. However, diverse cultures and unfamiliar environments challenge Disney’s ability to succeed. The revenue of Disney from Asia in the year 2015 was only 7.5% of the total despite the opening of the Shanghai Disney Resort in China. This helps Disney to analyze that success in non-native markets comes with a strategic understanding of the content to meet the local demands. Therefore, success in an unfamiliar environment does not come with innovative id. Digitalization has affected Disney both positively and negatively. Disney has invested $1 billion in a project called MyMagic+ through which everything is available via a wristband. Disney is making extra money with these magic bands that have to personalize the attraction experience also. In  addition, to get benefits from digitalization, Disney also gets disrupted. Several digital streaming such as Netflix has changed the traditional landscape of TV. So, by changing HRM practices along with business strategies, Disney can challenge the industry with little magic of its digital content. Easy but by understanding the regional nuance (Mulligan, 2016).

The success of a project in one country is not the key to success for every other country. The Walt Disney Company, back in the year 1992, opened the Euro Disney in France with a capital of $5 billion. The project was considered as a milestone after the success of Disneyland in Japan. However, it didn’t get the desired level of appreciation from the French. Various HRM issues cause the loss of $2 billion in the year 1994.

Four performance management tools at Disney that back out the RQ3 are: Alignment, transparency and collaboration, recognition, and frequent feedback and Training. Recognition is an enhanced HRM tool to praise great work. Florida Disneyland boasts 189 different employee recognition programs. Disney did away with the concept of seniority and encouraged everyone to share their views and discoveries. The vision of each employee must align with the vision of the Company ,enhances alignment, as well as team effort contributes to engagement. Lastly, frequent feedback and training increase the quality and skill.

For an organization with a cross-culture, such as Walt Disney, the understanding of culture helps to come up with an innovative solution that ensures compatibility with all cultures. It’s important to consider the culture to get an advantage over competitors because culture affects the management of an organization by affecting the power of decision-making, loyalty, and procedures (Douglas, 2019).

Fayol’s business management theory, which focuses on accounting and managerial operation, helps in achieving management and strategic goals. The management within an organization is further divided into planning, organizing, commanding, controlling, and coordinating. Every successful international business -McDonald, KFC, and Adidas- has followed the basic principles of Fayol, whether it’s a principle of equity, discipline, tenure of employees, or division of work. Furthermore, government organizations also stick to the Principle of the Scalar Chain. Implementation of Fayol’s principle relevant to the modern workplace of Disney would help to increase efficiency and strategic goals (Chimezie Uzuegbu, 2015).

Motivational theories can be traced as far back as to reach Greek philosophers Socrates, Aristotle, and Plato: who were accustomed to challenging what principles induce individuals to increase levels of productivity (Pakdel, 2013). The relevance of such theories opened a pathway of understanding when it came to acknowledging what strategies managers could adopt to best utilise their workforce to gain competitive advantages. Both Plato and Aristotle believed that factors including opportunities for growth, physical comforts such as food and emotional alternating emotional needs were a necessity in addressing motivation – all of which can be viewed through the present psychological interpretation of Maslow’s hierarchy of needs; a management theory adopted by global businesses to supplement employee morale in the workplace.

Source: Maslow’s Hierarchy of Needs (McLeod, 2018).

Maslow’s hierarchy of needs can be viewed as a tool that enables managers to assess the conditions and circumstances offered to current participating employees. The five-tier model identifies the several factors that can generate the strongest impact on workplace motivation and, as a result, transforms into an assessment criterion akin to representing direct weaknesses companies could improve upon in order to directly alter staff responses and productivity.

To understand HRM practices and competitive advantage, a comparative study of Walt Disney in two countries –America and France- is required.

The management principles of Walt Disney contributed to the success of the Company. Since there’s no typical boss-employee relation in an organization, rather everyone is considered as an imaginer. So the slogan “Make Everyone’s Dream Come True” encourages participation and decreases turnover rate as compared to competitors. The innovative managerial and leadership skills would help to achieve the objectives of the organization by understanding the core values and beliefs of the Company. Since the objective of the Company is crystal clear to everyone, it becomes easy to devise a strategic plan for the Company to achieve its goals.

The objective of the present study is to assess the effectiveness of the Walt Disney Company. Moreover, the study aims to focus on the organization’s ability to utilize Human resource management to get strategic advantages. Devising a management plan helps companies have an edge over competitors. So, the aim is to devise a management plan for Walt Disney Theme parks and resorts that focuses on achieving success through proper Human resource planning and management.

Objectives of the study:

1.        To investigate the HRM practices at Walt Disney and examine its relationship with multiculturism, habits of employees, and involvement of locals in management

2.        To evaluate the potential of HRM practices to gain strategic advantage over competitors

3.        Present study investigates the relationship of the above-mentioned parameters with HRM by comparing Walt Disney America and Euro Disney.

Literature review:

Proper human resource management brings positive results. Several studies have shown a positive correlation between Human Resource Management (HRM) and overall business performance. HRM influences employees’ well-being, productivity, individual performance, and the climate of the organization. This will ultimately affect the firm performance. The findings of (Wahshi, 2016) have shown that firm performance has a positive relationship with a high-performance HRM system. Since HRM systems are closely linked with business strategies, it affects business performance also.

Furthermore, HRM is important to achieve competitiveness in the market.  Competitiveness is essential for long-term business excellence. HRM affects differently is differently performance of the Company in different environments (geographical location, competitors, and market). As the influence of the HRM system depends upon various factors, it’s not always certain how HRM would affect the business to achieve its target advantages.

Five indicators are used in HRM and performance research of employees. These indicators are Training and development, teamwork, job satisfaction, performance-related pay, and autonomy. However, Training and development and performance-related pay are most frequently used in research. Literature after the year 2000 has focused on AMO (Ability, Motivation, and Opportunity) that must practice by HRM. It increases the employee’s performance by building requisite abilities and skills in employees, motivating them, and providing them with opportunities. Five indicators of HRM can be covered by AMO. 

Human Resource Management Practices for Organizational Innovation:

The research conducted by (Stavrou 2005) suggested that the Training and development of employees affected organizational productivity and enhanced the skills of workers. Another study conducted by (Muhammad Hamid, 2017) has found the strategic role of HRM. The results have shown that HRM has a positive impact on organizational and financial performance.  (Sanjay Singh, 2016) Surveyed 165 banks in the United Arab Emirates and concluded that HRM enhanced the organizational innovation, strategic innovation, and overall performance of the organization. Excellent HRM in organizations enhances the capability of firms to learn and improve business strategy outcomes (Isabel Ruiz-Mallén, 2015). The data obtained from 6 Danish companies have elaborated that employees who are rewarded for their hard work tend to share more knowledge. Thus, management of knowledge-sharing (HRM) motivates employees and, in return, enhances productivity. A survey of companies from the Australian business register was conducted by (Corral de Zubielqui, 2019). The results of the study have shown that modern HRM practices are of moderate importance when it comes to the innovation and performance of organizations.

But an opposite trend has also been found. The findings of (L.Ferugson, 2007) concluded that HR input has no relationship with the overall performance of the business. (Mika Vanhala, 2016) argued that there’s no positive correlation between HRM and a company’s performance. Moreover, (Gelade 2003) found that there’s partial relation between HRM, organizational climate, and business performance. The main variables of HRM are staffing, overworking, and the professional development of employees.

Based on various studies, it has been concluded that HRM practices positively influence the overall performance of the organization. Furthermore, HRM systems are imperative when it comes to employee’s position (job security and satisfaction). Efficient HRM practices are good for the healthy relationship among employees, especially in a multinational company like Disney (Mihalj Bakator, 2019).

The competitive advantage of a firm/organization lies in the ability of management to identify and combine technologies and employees’ skills into competencies that would strengthen the business. For gaining competitive advantage, response barriers, infrastructure requirements, and general management planning should take into account. Companies can gain a competitive advantage through strategic targets and thrusts. Four targets can help to achieve a competitive advantage over others. These include self, customer, distribution services, and supplier.

In the same way, there are two strategic thrusts. One is cost-efficiency thrust, while the other is differentiation thrust. McDonald’s, Honda, and Unifi assist in HRM practices to ensure a competitive advantage by keeping the cost down. Thus, enduring the customers, distributors, and suppliers. Similarly, the differentiation thrust is in practice to get an edge over the competitors. IBM differentiates itself from its competitor by providing programming training for customer employees. PepsiCo provides merchandising Training and store management training. Hence, it becomes able to differentiate itself from its competitor (Randall S. Schuler, 1984). Disney also believes that competitive advantage can gain through a high-quality workforce and distinctive culture of the organization (UKEssays, 2015).

Disney has the power to attract emotions through storytelling. The power of narrative has created a whole world of characters that draw emotions similar to common people around the world. Product differentiation is the general strategy of Disney that gives it a competitive advantage. The strength of unique content generates profit over competitors through advertising.

Disney’s human resource management plays a key role by supplying competitive intelligence and also taking part in the strategy formulation process. This enables the HRM team to analyze the strengths and weaknesses of the organization, which would help in devising new strategies to have the edge over competitors.

But the barriers to competitive response are also present within the organizations, including needs-matching challenges, lack of commitment, and consistency. These factors can influence the performance of a business and can become a hurdle in the way of progress (Randall S. Schuler, 1984). Disney’s strategic human resource management would make it stand out among competitors because the game lies in management’s ability to respond to competitors’ moves and customer needs.

Business strategies for HRM for strategic advantage of the Company:

The mission of Disney is to become the world’s leading entertainment and information-providing company. To become innovative, creative, and profitable, the Company should be strategizing its business plans and human resource management. The above-mentioned literature review has shown that HRM practices can help in innovation (that is the prime requirement of entertainment-related parks and resorts) and organizational performance. Since Disney believes in getting a competitive advantage through human resources, therefore humans and their workforce can play a key role in achieving the advantage of the organization. Some common business strategies for HRM to get an advantage through workforce include: identifying the strengths and weaknesses of the present workforce, reallocation of staff (if required), and identifying the Company’s labour demand. In addition to it, continuous filling for staffing needs and plan implementation for staffing also include in the strategies of HRM at Disney. Being a globally operated business, Walt Disney faces competition from Six Flags theme parks and paramount parks, etc. So, the challenge faced by HRM is to find and afford competitive human resources. Environmental factors that influence human resource management depend upon the business objectives and strategy of organizations.

HRM advantages and issues at Walt Disney:

Some efforts made by the HRM department of Walt Disney to ensure quality include hiring the right person and developing the skills required for quality work, retaining the best people, and providing the support needed to employees. Despite the efforts, Walt Disney is not without HRM issues. Issues range from region to region and affect employees. Some common HRM issues at Disney are Disney animators strike, workers representation, political affiliation, and handling of different cultures. Moreover, dealing with challenges of the globalizing world -the failure of Euro Disney- and staff recruitment challenges are also common HRM issues.

Strategic Human resource management is also involved in determining the appropriate site for international business expansion. After the successful venture of Disney in Japan, the Company targeted Europe (Paris). The previous three projects of Walt Disney -California, Florida, and Japan- attract a large audience. So, the development of the fourth theme park was believed to be a gold mine. But the differences of cultures made Euro Disney a failure. Not considering or having a little understanding of employees’ culture and their contribution to initial planning cause a big loss. Therefore, the ethnocentric approach of Disney’s HRM led to the wrong selection that expanded the magnitude of the problem (Guergana Karadjova-Stoev, 2011).  Being an American company, Walt Disney’s HRM exercises the same ethnocentric approach in France as it did for the previous three projects. As compared to Florida, the Euro Disney project was not much appraised because France has its unique culture. Although America has the flavour of every culture, Americans knew little about culture beyond their comfort zone. So, the inability of management to involve employees in planning by not understanding their cultural values made the blunder of the biggest entertainment in the world in France.

Human Resource Management affects organizational performance as it’s closely linked with business strategies. Since HRM is affected by the geographical location of the organization, it’s not certain the results will always come similarly. HRM practices in an organization include employee recruitment, retaining talent, job satisfaction, and many more. Different companies around the world use different HRM practices to get an edge over their competitors. Disney has also used its unique content that grabs the emotional attention of visitors. However, certain HRM practices at Walt Disney -results from previous flop projects in France and China- have shown that the Company needs much to enhance its productivity.

Research Questions:

1. Does providing employees with a highly immersive business culture and environment do enough to encourage long-term commitment? (‘RQ1’)

Aim: To assess how the influence of the business environment can impact employee levels of satisfaction and productivity – effectively contributing towards a competitive edge.

2.         How has globalization challenged Disney’s ability to succeed in unfamiliar environments and cultures? (‘RQ2’)

Aim: To assess how effectively Disney was able to adapt its HRM to help overcome international cultural differences in a global environment.

3.         How has adapting management styles across Disney enabled or promoted expansion and growth? (‘RQ2’)

Aim: To explore Disney’s evolution of management and identify if HRM specifically has significantly improved the Company’s opportunities for growth and expansion throughout the years.

Research Hypothesis:

Better HRM practices improve employees’ skills and abilities. Moreover, it enhances the productivity of the organization, thus helps to sustain the competitive advantage of the organization.

Methodology:

The methodology for the development of a strategic HRM plan for advantage over the competitors would help in analyzing the shortcomings of the HR department. Moreover, it’ll provide an optimistic approach to get an advantage through best HRM practices.

Research philosophy:

Current research is interpretative that is trying to build opinion -utilization of HRM to get strategic management- on already built studies to assess whether it fits in the case of Walt Disney company or not. Since the research is based upon a critical review of literature, reviews help to define what role HRM performs to get organizational advantages and how the same can use to get an edge over the competitors through effective practices. Research might use past studies to produce fresh remarks on the issue and devise a strategy to overcome those issues.

Research Methodology:

Walt Disney Company generated total revenue of 16.5 billion USD with its parks and resorts in the year 2020. Parks and resorts produce 2nd largest revenue for Walt Disney after the media network. So, the aim is to analyze the weakness of HRM strategy in Walt Disney parks and resorts.

For comparison of HRM practices in Walt Disney Florida and Euro Disney, three parameters are taken into account: culture, habits of people, and involvement of local people in management (UKEssays, 2017). After comparison, a strategic plan would make by taking the weaknesses of HRM into account. A complete analysis of the organization would help to plan a strategy that gives a competitive advantage to the Company in excessive globalize and the digital world. Weak points of HRM at Walt Disney are:

Some weakness of HRM strategy at Walt Disney includes:

1.        Less retention rate of employees

2.        Losing subscribers

3.        High cost of business

4.        Risk at the box office

5.        Emerging entertainment industries in digital worlds, including Netflix, Warner Bros

6.        Small entertainment parks

By keeping these weaknesses into account, a hypothetical strategic plan has been made to address the issues. Furthermore, the aim is to overcome these weaknesses to achieve Walt Disney’s organizational business goals (The Walt Disney Company).

Strategic Business Plan:

The first step is to identify and analyze present HR capabilities as well as identify future needs at Walt Disney. The next step is to identify gaps between the present capabilities of HRM and future needs. Next is to formulate a gap strategy and, lastly, implement the strategy and monitor it as well. At a more specific level -Human resources and workforce- assess the current situation of staffing and skills required to keep the organization up-to-date. Knowing what competitors are doing would help to recruit and retain the talent within the organization. A mechanism of evaluation is a good step in planning to check whether the organization (Walt Disney) is on track to achieving HRM goals. Comparison of HRM practices at successful and failed projects -in the USA and France, respectively- would also help to identify which factors cause a particular event to happen.

Fayol’s Management Principles:

Taking Fayol’s management rules into account while devising a management plan could keep the organization on track. All of the rules can be utilized within the Walt Disney case; some of them are shortlisted depending upon the weak points of HRM practices at Disney. These rule 3: Discipline, rule 4 Unity of command, rule 5 Unity of direction, rule 6 Subordination of individual interest, rule 11 Equity, and rule 13 Initiative. These rules are aligned with the mission statement of Walt Disney also. So, they could help to achieve the mission of the Company along with management strategy for HRM.

Walt Disney’s Strategy for Competitive Advantage:

Although the Company has achieved its main goal, there are still some weaknesses that befall Walt Disney. These are some steps that would help in better planning.

1. Intradepartmental strategic planning

Intradepartmental strategic planning is a good way for functional alignment. As the HRM department is integral to the success of the strategic plan, it’s necessary to align the HR function with every other aspect of the strategic plan.

• Monitoring workforce composition (age, current economic condition, and globalization)

Globalization helps Walt Disney to increase its market size, but it has some negative impacts on the Company also. With globalization, competition increase with more global competitors, so monitoring workforce composition helps HRM to devise a better strategic plan (UKEssays, 2015).

• SWOT analysis

Strengths, weaknesses, opportunities, and threats analysis is a framework used by organizations to evaluate the competitive position of the Company. Furthermore, it helps the Company to develop strategic planning by assessing current and future planning. SWOT analysis of Walt Disney enables the Company to understand where it stands and how far it has to go to achieve its objectives.

• External environmental scan to review competitors

External environmental scans help to analyze the trends in the market, customers and their demands, and competitors. Tracing what the competitors are doing helps a long way to improve the strategic plan.

• Envision the future

The HR team should consider the ideal future from an organizational perspective after strategic planning.

The three mistakes made by Euro Disney are: Do not take into account the cultural difference rather consider the financial condition and population, Do not take into account the habits of people, There was no combination of French Culture to the local staff management (UKEssays, 2017).

Results and Discussion:

Humans play the most important role in business. The function of HR is to manage human resources in a constantly evolving world. HRM plays a key role in the development of employees by increasing productivity and boosting sales. Thus, keep the companies ahead in business competition. Thus, the study concluded that good HRM practices could help a company to take advantage of business, as Walt Disney did in the case of America. A study conducted by (Peter Boxall, 2008) corroborates with a present study by showing the positive influences of HRM on businesses.

Source: Impact of human resource management on business performance: A review of literature

From the quantitative review carried out by (Karina Van De Voorde, 2011), it’s concluded that HRM positively influences the productivity of employees. However, HRM does not tame the health and well-being of employees into account.

As a result of this study, it has been found a positive correlation between HRM practices (planning, recruitment, selection, training, and performance evaluation) and the culture of the organization (status, enhancement, and socioeconomic support). Globalization has increased the mobility of labour leading to multiculturism. Cross-border merging of employees requires organizations to manage HR. According to (sotshangane, 2002), culture can be controlled by the environment. So, in a strict environment where employees lose their cultural identity, great responsibility lies on HRM to ensure the identity of employees.

Much of personal interaction is guided by cultural values and attitudes. However, some cultural values have the potential to create conflicts and poor performance, which leads to individual ineffectiveness and, ultimately, organizational failure. Such problems influence HRM practices in many firms, as in the case of Euro Disney. The culture was the biggest challenge for Euro Disney as the Company didn’t investigate and evaluate the cultural values of local people.

Recognizing cultural differences is the main step of a multinational company’s HRM department. Since executives were determined to adhere to American culture and philosophies, they didn’t investigate the culture of the European environment while planning Euro Disney. Moreover, the physical and financial environment of the chosen site -Paris- add to the failure of the project.

The first theme park Disney in California, with the theme song “It’s a small world after all”, depicts the idealized picture of America with a glimpse of exotic culture. The success of the second and third ventures in Florida and Japan allows the Company to open its way towards Europe. However, Euro Disneyland was considered a Cultural Chornobyl by experts. There were operational errors in a mega project worth $5 billion. A study conducted by experts shows that European fended off the Americans to protect their own culture so did by French.

Some Western cultural orientation outlined by Professor Gert Hofstede is as follows:

Source: Strategic Human Resource Management and Global Expansion Lesson from the Euro Disney Challenges in France

The cultural habits of people caused the failure of the Walt Disney project in France as compared to America. A study conducted by (Guergana Karadjova-Stoev, 2011) explains that in America, the serving of alcohol in parks and resorts was not allowed, and the same was done for Euro Disneyland also. But in France, a glass of wine with lunch is a usual practice. Secondly, people had their breakfasts properly, but the HR didn’t do in-depth research on the culture and habits of people, so they failed to entertain them. Thirdly, people had their lunch at a fixed time, which makes it a problem for management. Within the nine weeks of operation of Euro Disneyland, 1000 employees left because of lunch hour issues and other small yet powerful reasons. So, poor HRM causes a decrease in Employee retention because Europeans does not think and act in the same way as Americans do.

European regard theme parks as day excursions, but Americans visit the theme parks frequently. So, at the end of two years, Euro Disneyland had a cumulative loss of $2 billion (MBA Knowledge base); Misunderstanding of vacation habits was also responsible for the drawback of Walt Disney in France. Americans frequently took their children to theme parks in mid-summer session vacations, while the French were reluctant to do so. So, Walt Disney failed to Americanize European habits (Burgoyne, 1995).

Miscalculation of rides from resorts and theme parks also contributes to the loss of the Company. American usually does not tend to walk even if it’s a walking distance, but the French has the opposite behaviour. Walt Disney invested in vehicles around parks in the same way as they did in America. But it was a FAIL.

Insufficient marketing research also causes miscalculations of per-capita spending in theme parks. People spend a lot of money in Disneyland of America and Japan. So, a 12% decrease in expected outcome was observed in Europe (Lessons from Euro Disney challenges in France)

Strategic advantages:

Disney uses differentiation as its general strategy for competitive advantage. Disney launches unique products of high quality that mark it as BEST. The Walt Disney Imagineering Research and Development Team is dedicated to ensuring uniqueness in the entertainment products of theme parks and resorts. The Company’s intensive strategy for growth includes product development, market penetration, market development, and diversification. The Company generates new products by focusing on the target audience and producing revenue. This strategy is also linked with differentiation that brings uniqueness to products. Market penetration enables growth, and Disney has achieved growth through it. SWOT analysis also contributes to this growth strategy. Next lies the market development that is less frequently used by the Walt Disney Company. Diversification is a supporting strategy for growth. By establishing Company’s Cruise Line, the Company grew its line of tourism and hospitality. Thus, HRM experts use common management principles to gain strategic advantage. Self-analysis to improve itself continuously also help to get a strategic advantage. Disney’s “Low ride out policy” is to make the user experience better at theme parks. So, small but powerful practices help to get a competitive advantage.

Four performance management tools at Disney that back out the RQ3 are: Alignment, transparency and collaboration, recognition, and frequent feedback and Training. Recognition is an enhanced HRM tool to praise great work. Florida Disneyland boasts 189 different employee recognition programs. Disney did away with the concept of seniority and encouraged everyone to share their views and discoveries. The vision of each employee must align with the vision of the Company ,enhances alignment, as well as ream effort contributes to engagement. Lastly, frequent feedback and training increase the quality and skill.

Generally, all business organizations are similar in their management functions. So, Fayol’s 14 principles are meant to guide the HRM team of Disney to design a strategic plan for the Company. It has been concluded from the critical literature review that Fayol’s principle of management can utilize in a multicultural environment with some modification according to the requirements of individuals. (chimezie, 2015) analyze the modifications in Fayol’s management principles in the context of libraries, which can be done for a multinational company like Disney also. Subordination of individual interest to the organization’s interest help to achieve objective and hence grows together. Furthermore, Remuneration, centralization, scalar chain, and equity are of prime importance to retain the talent and achieve business goals. Lastly, stability of personal tenure help employees to become carefree from their job, and they perform their job efficiently without the fear of being fired. In a nutshell, the falls principle helps Walt Disney to achieve a competitive advantage over others through advanced management practices according to the needs and requirements of the Company.

However, poor HRM practices are not always a single cause of failure. There were also management issues that did not make the project successful. So, giving prime importance to HRM and neglecting other business strategies might bring other disasters.

Future Recommendations/Lesson from the Previous Failure:

1. Multinational companies must have a geocentric approach rather than ethnocentric to manage global operations.

2. Try to give high management positions to natives that have cultural awareness to get the same performance success in different countries.

3. For the success of any global firm, they must follow “Think Globally, Act Locally.”

4. Try to differentiate rather than standardize to maintain competition.

5. HRM practices must be on the same page with the Company’s strategic plan.

Conclusion:

Human resource management plays a key role in moderating an organization’s performance. Different studies corporates with present study to show how HRM practices can effectively utilize at organizations to get a strategic advantage over competitors. Various multinational companies – PepsiCo, IBM, and McDonald’s- use different business strategies to stand out from competitors. However, inefficient management practices could lead a whole project to failure. The idea of the research is to assess the effectiveness of the Walt Disney Company. Furthermore, the study aims at examining the ability of a Company to utilize HRM to get a strategic advantage over competitors. Three research questions are employed to check the alignment of research with the proposed hypothesis. This study critically examines the literature to find reasons for Euro Disney’s inefficiency. Inefficient HRM at Euro Disney causes the failure of the Walt Disney project in France despite three successful ventures in California, Florida, and Japan. Lack of cultural understanding, miscalculations about the habits of consumers and the workforce, and miscalculated management -per-capita spending, vacation habits, and eating practices- were some key issues that led to failure. Results have put great stress on the fact that Human capital is the most important asset for a company whose management can bring a competitive advantage for businesses.

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