Effective Management in International Business: Lessons from Four Seasons’ Expansion to France

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Table of Contents

Introduction
Conclusion
References

Introduction

Managing in an international business presents unique challenges due to differences in aspects such as culture and legislation among countries. For instance, a manager from a monochronic culture (e.g. North America) may find it challenging to work with employees from a polychronic culture (e.g. France) due to their different perceptions of time.

The monochronic-oriented manager would, for instance, focus on individual goals, sequentially, while the polychronic-oriented employees would be more comfortable working on multiple goals simultaneously (Hallowell, Bowen & Knoop 2003; Nardon & Steers 2009).

With respect to legislation, differences in legislation, for instance on labor and environment, may imply different operating costs for an entity. This report analyzes how Four Seasons managed such dynamics when it expanded its services to France, to operate the Four Seasons Hotel George V Paris as reported in the case study by Hallowell, Bowen and Knoop (2003).

Four Seasons has had a phenomenal history of operating luxury hotels and resorts as evidenced by its performance from 1996 through 2000. During this period, its revenues increased at a compound rate of 22.6% annually, with the operating margins increasing by approximately 9% (Hallowell, Bowen & Knoop 2003, p. 1).

The entity’s revenue per room was also higher than the industry average in the U.S. and Europe (Hallowell, Bowen & Knoop 2003). Such success was ensured by its effective management approach and well-informed principles that guided its international growth.

Despite this success, its entry into France was challenging; for instance, labor legislation in France lowered working hours for employees, while the French cultural-orientation differed significantly from cultures in the other regions in which Four Seasons had existing operations (Hallowell, Bowen & Knoop 2003).

This report assesses how four seasons overcame such challenges. Following the introduction, the report evaluates the appropriateness of management approach used to open the Parisian hotel, the core values demonstrated by various members of Four Seasons, and the impact of management approach on service delivery. The conclusion subsequently identifies the key aspects discussed throughout the report.

Four Seasons Approach when Opening Parisian Hotel

The appropriateness of the management approach used by Four Seasons to open its operations in France was evident from factors such as awareness of French culture, adaptation to such a culture, and the principles that conferred the hotel with the ability to drive change. These aspects are highlighted in subsequent sections.

Cultural awareness and adaptation

Differences in cultures among countries affects aspects such as negotiations, communication, trust, commitment and cooperation (Hurn 2007; Wendt, Euwema & van Emmerik 2009), hence may lead to unfavorable performance for an entity (Mullen & Copper 1994; Pillai & Williams 2004).

Following the realization that cultural distance influences business outcomes, the need for managers to have an awareness of cultures in countries in which they run business activities has necessitated such practices as cultural training to ease adjustment to foreign cultures (Waxin & Pannaccio 2005; Causin, Ayoun & Moreo 2011).

The awareness of Four Seasons management about cultural orientation of the French was primarily evident in the choice of the entry mode. For instance, by recognizing the opportunity that hotel George V presented, Four Seasons mnagement was able to avoid liabilities such as the label of a foreign entity that could influence its start-up performance. Such approach prevented an unsuccessful entry into the French market that had been a characteristic of other American entities such as Disney (Hallowell, Bowen & Knoop 2003).

Additionally, Four Seasons’ management cultural awareness was evident with their choice of a French interior designer to overcome the challenges imposed by the choice of George V. The George V opportunity presented a challenge of establishing the appropriate balance between maintaining George V’s reputation and rebuilding the premises to meet preferences of contemporary visitors (Hallowell, Bowen & Knoop 2003).

By choosing a designer familiar with the French people’s perception of aspects such as luxury, thus capable of capturing the symbolism attached to the old hotel while creating a new look that would better customer satisfaction, the entity was able to enhance the hotel’s reputation with contemporary visitors while and retain the reputation that hotel George V held (Hallowell, Bowen & Knoop 2003).

Other instances that indicate cultural awareness and adaptation were related to the entity’s adherence to employment legislation existing in France and its hiring of a non-Four Seasons executive chef (Hallowell, Bowen & Knoop 2003).

Whereas the chef had challenges meeting expectations of contemporary visitors (Hallowell, Bowen & Knoop 2003), hiring such an individual with experience in French cuisine helped to reinforce the perspective of Four Seasons being a French palace hotel.

Ability to drive change and Impact on Performance

Four seasons opening of their Parisian hotel faced various cultural challenges due to differences in culture between North America and France.

For instance, the managers faced challenges in the process of performance evaluation since the French culture did not favor a direct and explicit approach to discussing employees’ weaknesses, an approach that would be easy to apply in their North American establishments (Hallowell, Bowen & Knoop 2003).

Similarly, whereas front-line and middle managers in North America assumed more responsibility and accountability for their roles, such managers in France tended to refer accountability for their decisions and policies to their superiors (Hallowell, Bowen & Knoop 2003).

Other conflicting cultural aspects included the differences in perception of time and the French emotional way of doing tasks, which could, on the negative, result into the French temper lashing out (Hallowell, Bowen & Knoop 2003).

Such differences implied that whereas Four Seasons management needed to adjust to some aspects of the French culture, in other aspects they would need to implement strategies that would help in cultural transmission to help the entity meet its principle of providing services based on globally uniform standards.

The approach taken by the management in opening the French hotel indicated the ability of Four Seasons to drive change. The entity for instance had established a strategy that enhanced cultural transformation to meet its established standards.

The entity’s strategy for instance encouraged the development of the right attitude to work by promoting employees who remained committed to the appropriate culture and attitude (Hallowell, Bowen & Knoop 2003).

Eventually, such employees would form a critical mass that would form force required to achieve a cultural transformation for the whole entity.

To achieve such a cultural-transforming effect in France, Four seasons hired individuals with prior experience working in North America; such individuals helped to demystify negative perception of the North-American aspects of culture that Four seasons intended to introduce at hotel George V (Hallowell, Bowen & Knoop 2003).

Similarly, the managers hired had experience in other Four Seasons operations thus could help in training the employees on the expected standards of service (Hallowell, Bowen & Knoop 2003).

The cultural transformation was also aided by the direct involvement of top management as exemplified by the general managers (Le Calvez) encouraging the use of first names, an aspect that was rare in the French culture (Hallowell, Bowen & Knoop 2003).

The ability of the Four Seasons management to drive change was evident with changes in quality rating reported following second audit of quality of service at the hotel. In the first audit, various drawbacks to quality service included: staff’s inappropriate attitude, inability to sell the entity’s services and preoccupation with rules and policy to guide their actions (Hallowell, Bowen & Knoop 2003).

During the second audit, such aspects had given way to exemplary service that led to a quality rating comparable to other Four Seasons establishments (Hallowell, Bowen & Knoop 2003). Additionally, such an effect was notable in the high staff satisfaction with their job at Four Seasons as revealed via an Employee Opinion Survey (Hallowell, Bowen & Knoop 2003).

Core Values Instilled in Four Seasons Team

The successful opening and favorable performance of Four Seasons establishment in France resulted from various core values the entity entrenched in its staff. Among these values is the human resources’ “Golden Rule” that stipulates that staff ought to treat each other as they would wish to be treated (Hallowell, Bowen & Knoop 2003).

The top management demonstrates this principle for instance by inviting employees and their families to an open door event at the hotel for about three times a year (Hallowell, Bowen & Knoop 2003). Additionally, the human resource approach that rewarded employees based only on meritocracy evidenced the application of this rule.

Further, such a value was evident in Le Calvez’s approach of encouraging the use of first name to create a more-relaxed environment that ensured effective communication among employees at different levels of the organization’s hierarchy (Hallowell, Bowen & Knoop 2003).

Four Seasons favorable performance was also a factor of the entity insisting on each employee rendering professional service to the clients. Such is evident, for instance, with the stipulation that there should not have been a reason to offer below-par service to the customer (Hallowell, Bowen & Knoop 2003).

For instance, managers in Four Seasons were noted to routinely help in clearing the restaurant tables in passing (Hallowell, Bowen & Knoop 2003). Such an act avoided cases where staff shortage would result into a lower level of service thus lowering customer satisfaction with the entity’s service.

The performance of four seasons was further aided by the strong allegiance of employees to the entity. For instance, Four Seasons had a low staff turnover with some employees staying with the firm for a period extending over 25 years (Hallowell, Bowen & Knoop 2003).

The general manager appointed to head the entity’s operations in France had been with Four Seasons for such a lengthy period having been an employee at The Pierre in New York, a hotel operated by Four Seasons, for 11 years (Hallowell, Bowen & Knoop 2003).

Finally, Four Seasons performance derived from its promotion of diverse cultures but maintaining uniform standards. Such diversity in cultures was, for instance, evident in the observation that the entity’s top managers were comfortable in various international settings (Hallowell, Bowen & Knoop 2003).

Through such knowledge, the managers could help employees learn about different cultures thus alleviating the challenges associated with cultural adjustment in foreign operations.

Impact of Management Approach on Service Delivery

The Four Seasons’ management approach enhances the service delivery within its establishments since it offers the motivation that employees need to remain committed to organizational goals. Such an effect is evident with the improvement in quality rating during the second audit of Four Seasons’ Parisian hotel (Hallowell, Bowen & Knoop 2003).

For instance, allowing middle and front-line managers to become accountable and responsible for decisions at their points of work (Hallowell, Bowen & Knoop 2003), empowers them to develop innovative approaches that better business outcomes (Cohen 2004; Burke et al., 2006).

The management approach also supported the goals and principles of Four Seasons in a variety of ways. By instituting a cultural transformation, the management for instance sought to establish the attitude and behaviors that would result into a globally uniform service, irrespective of the location of the establishment.

Such an approach reflected on Four Seasons’ notion of establishing service based on globally uniform standards, irrespective of the location of the establishment (Hallowell, Bowen & Knoop 2003).

Additionally, by basing employee promotion and rewards on meritocracy, the management practiced the human resources’ golden rule which stipulated that each employee was to treat others according to the treatment that one would expect from them (Hallowell, Bowen & Knoop 2003).

Four Seasons’ approach to improve communication among employees at various levels of the organization, through such ways as employees’ meetings with the general manager, improved the capacity of the entity to deliver intelligent, anticipatory and enthusiastic service as envisioned in the entity’s principles (Hallowell, Bowen & Knoop 2003).

For instance, the improved communication helps in identifying potential risks that could lower the service provision at the entity, thus help in initiating timely corrective actions.

Conclusion

Wide cultural and legislative differences between the home and host country present a barrier to the establishment of effective management practices in the host country. This report evaluates how Four Seasons, a company with roots in North America, was able to manage such challenges in its operations in France.

Factors such as management’s cultural awareness, adaptation and capacity to institute change, helped Four Seasons to open and run its operations in France successfully. The management’s cultural awareness was for instance noted in incorporating features of the French culture during the renovations and hiring of French individuals such as a chef to enhance cultural learning.

Nevertheless, due to conflicting aspects between the French culture and Four Seasons established norms, the entity’s ability to institute change was the core determinant of success. Such change was established through ways such as hiring individuals with experience working in North America, who would act as the foundation for the transformation other employees’ attitudes.

The management experience and skills were also critical in ensuring success of Four Seasons in France. Managerial aspects that enhanced Four Seasons outcomes included empowering middle and front-line managers to make decisions at their place of work, establishing effective communication channels at all levels of the organization’s hierarchy and sharing the commitment to the principles envisaged in the entity’s goals.

Through such aspects, the entity’s quality rating had improved to levels comparable with existing establishment by the time the second quality audit was performed.

References

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Causin, GF, Ayoun, B & Moreo, P 2011, ‘Expatriation in the hotel industry: an exploratory study of management skills and cultural training’, International Journal of Contemporary Hospitality Management, vol. 23, no. 7

Cohen, AR 2004 ‘Building a company of leaders’, Leader to Leader, vol. 34, pp.16-20. Web.

Hallowell, R, Bowen, D & Knoop, CI 2003, ‘Four Seasons goes to Paris: “53 properties, 24 countries, 1 philosophy”’, Harvard Business Review, Case 9-803-069.

Hurn, BJ 2007, ‘The influence of culture on international business negotiations’, Industrial and Commercial Training, vol. 39, no. 7, pp. 354-360.

Mullen, B & Copper, C 1994, ‘The relationship between group cohesiveness and performance: An integration’, Psychological Bulletin, Vol. 115, no. 2, pp. 210-227.

Nardon, L & Steers, RM 2009, ‘The culture theory jungle: divergence and convergence in models of national culture’, Cultural Foundations (part 1) in Cambridge handbook of culture, organizations, and work, eds RS Bhagat & RM Steers, Cambridge University Press, Cambridge, pp. 3-23. Web.

Pillai, R & Williams, EA 2004, ‘Transformational leadership, self-efficacy, group cohesiveness, commitment and performance’, Journal of Organization Change, vol. 17, no. 2, pp. 144-159.

Waxin, MF & Panaccio, A 2005, ‘Cross-cultural training to facilitate expatriate adjustment: it works! Personnel Review, vol. 34, no. 1, pp. 51-67.

Wendt, H, Euwema, MC & van Emmerick, IJH 2009, ‘Leadership and team cohesiveness across cultures’, The Leadership Quarterly, vol. 20, no. 3, pp. 358-370.

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