An Analysis Of The Culture Of An Organisation – L’Oreal Paris PDF

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An Analysis Of The Culture Of An Organisation – L’Oreal Paris...

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An Analysis Of The Culture Of An Organisation – L’Oreal Paris Introduction And Company Environment Organisational culture is defined by Hoftstede as the “collective programming of the mind that distinguishes the members of one organisation from others” (Geert-Hofstede, 2014). Schein mentions that Organisational culture consists of the” vision, values, norms, systems, symbols, language, assumptions, beliefs, and habits” (Schien, 2010). What these definitions and explanations of organisational culture help portray is the strength which employees of an organisation can potentially be affected by their surroundings, and the extent to which culture can run throughout an organisation. Marketing is defined by the Chartered Institute as “the management process responsible for identifying, anticipating and satisfying customer requirements profitably” (Baker, 2009). Advertisement however is the more specific sub-culture of marketing relevant in this study, and is defined as “a promotional tool consisting of paid, non-personal communication used by an identified sponsor to inform an audience about a product” (Ebert; Griffin, 2011). However, on an international scale, advertisement can be viewed as the most popular tool for worldwide cross-communication for companies who use it. These definitions allow for a better understanding of the impact and importance marketing and advertisement can have on society. L’Oreal L’Oreal Paris is the worlds most established cosmetics brand, coming in at #32 on the Forbes 2013 list of most valuable brands (Forbes, 2014). It was established in 1909, and has since formed into a worldwide popular brand and company, known for the quality and reliability of its products – which orientate largely around personal looks and aesthetics. The company currently operates 27 brands globally, and competes in 130 countries (Libby, 2014). Looking at L’Oreal’s market share figures for 2013, there is justification of why they are market leaders in the cosmetics department, with €22,977m worth of Sales around the world in 2013 and a brand value of just under $18 billion dollars (Statista, 2014). These figures show the scope at which L’Oreal operates, and assists in showing their strength and power as a brand. Company Environment The cosmetics industry is known for its highly competitive and innovative nature, and L’Oreal has pioneered growth and progress within it – with a current day example of this being seen in L’Oreal focused efforts in the developing market of China (L’Oreal, 2014). They are however followed closely in the industry by strong competitors such as Nivea, Proctor + Gamble and Gillette, who each haven’t quite enjoyed the level of success of L’Oreal in mass market cosmetics, but are however close competitors. Being a major multinational company, L’Oreal competes strongly on a global basis. Due to this however there is a much wider scope of potential influences that can affect the overall business environment compared to if it were a solely nationally competing businesses. This has a major effect on the how the business operates, and means for example that the areas such as, marketing and advertising for example, have to appeal to a wider audience, or at minimum be much more carefully considered to ensure success. This is just an example of one way, therefore, the influence of the organisational culture must be monitored and considered to a high level to ensure success for the business.

Introduction Into Purpose Of Report Although we now live in a much globalised world where one marketing campaign can translate into a worldwide compatible mode of communication for some companies - such as technology companies like Apple for example, with their advertising orientating around their core value of simplicity, which therefore makes it applicable to all cultures around the globe with minimal modification (DeMers, 2014) -, with L’Oreal and the beauty industry, it is not that simple. With beauty and aesthetics, there is a wide variation in needs and preferences culturally which have to be considered by the companies in order for them to enjoy success. Attitudes to beauty and what is deemed as beautiful vary with different countries, which means you cannot simply transfer the same advertisement in one country to another – even within the same continent – and expect to enjoy success. Recognising that cosmetics advertisement already require careful consideration by companies, there is even more pressure mounted on them as in the cosmetics industry, marketing and advertising are of great importance in determining the success a company will have (reference?). With the industry having low barriers to entry (reference?), there is a large amount of competition, which means that the strength of advertising is increased, especially for mass-market brands. Having now established the extent to which advertisement affects cosmetics brands in their worldwide achievement, with L’Oreal being established to the level it is today, and being the market leader in the industry whilst having worldwide recognised success in their advertisement, it will be interesting to gain an insight into the organisational culture the advertising department has, and the effects on its performance and operation that stem from this. Ultimately the focus of the study is to find out to what extent, if any, is the advertising department of L’Oreal and the performance and operation of it affected by its organisational culture.

Justification Of Theory The study will focus largely on the internal analysis of the advertising department of L’Oreal. Schein’s organisational culture model is a framework that allows for the breakdown of organisational culture into a separation of three different levels. It is a versatile theory, and can be applied to a specific subcultures to assist in their internal organisation culture analysis. An alternative framework that could have been used to analyse the marketing and advertising subculture to a strong extent was the GLOBE theory. The theory has the capability to analyse organisational practices and values to a strong extent, through the use of national determinants analysis being analysed in relation to the organisational culture. These determinants are similar to those in the Hofstede and Trompernaars national culture theories. With the analysis focusing on the sub-culture of an advertising department, the aim of the theory is to break down the department in order to analyse the organisational cultures effect on it. Schien’s model is a better fit in this instance as separates the department into three different levels/stages which in-turn allow for a stronger analysis (expand?). The GLOBE analysis on the other hand is primarily a theory used for national culture analysis. Even if the analysis being was carried out and related to whole of the organisational culture, it would likely result in national culture intensive analysis due to the influence of the framework and how orientated it is around the national aspect.

In terms of being able to analyse the effect the organisational culture has on the international advertisement of L’Oreal – which is key in the analysis of the department - the GLOBE theory would perhaps give us a better understanding of the national cultures influence from within the organisational culture, again however, analysis of the organisational culture as a whole would not be covered to as strong an extent as Schein’s theory enables.

Explanation Of Framework First published in 1985 (reference), Schein’s model of Organisational Culture And Leadership (Schein, 2010) attempts to analyse a business internally through three different levels of examination, these being; - Artefacts - Values - Assumed Values Combined, these lead to an investigation of an organisation – metaphorically – from top to bottom, and provide a detailed insight into the type of culture an organisation has, and can assist in analysing the extent to which the culture effects the business. Artefacts The ‘Artefacts’ level of the theory analysis the more obvious indicators of an organisations culture. These can be seen in the behaviours and outward manifestations of culture, and can be physical or verbal aspects. An example of the employee behaviour indicating this level of culture could be seen through their office jokes, and an example of the physical environment indicating organisational culture can be seen through the work floor layout. These help to understand the culture on a base level, and identify the culture as it appears without touching on the deeper state of the employees. Values The second level of Schein’s theory, ‘Values’, is the deeper analysis of the employees’ mental state on many aspects, such as their personal ideals, goals, values and aspirations. Ideologies and rationalisations are also analysed at this level. These values effectively influence the behaviour of the employees, and help to identify to what level the proposed business values differs with those of the organisational culture itself. Basic Underlying Assumptions The last level of ‘Underlying Assumptions’ is the analysis of the employees’ subconscious behaviours and values that comprise and contribute to the culture. This is the deepest stage of analysis, and analyse the assumptions that originally grew from the values to become second nature to such a degree that the employees’ are no longer aware of them.

Validity Scheins theory of organisational culture is a recognised and tested theory, used by many in analysing their corporate cultures throughout the world (reference). The theory has gained recognition to the extent of it being analysed in itself by others in great detail to gauge its effectiveness. Interestingly, many leading researchers have found that the values layer of Schien’s theory is where managers will have strong success in influencing their organisation to develop an organisational culture they desire

(Hogan; Coote, 2013). Also interestingly relevant to the case being discussed in this study is the concept of ‘organisational development’. Schien’s theory will help in analysing the advertising department of L’Oreal to gauge whether (keep? Expand?) (add one more point of research) (relate to this case)

Analysis Of Framework In Application Artefacts The artefacts level is the first of the levels of Schien’s analysis, based on analysing the visual aspects of the department. These are the structures and processes of the department, aswell as the architecture and clothing culture for example, which again are visual. This however in the case of an outsider’s analysis is hard to acquire information due to the lack of access to inside the marketing department itself, therefore what is analysed in this section will be based on assumption and speculation. L’Oreal’s Employment Process One point to make on the advertising department is that it has an established process in its employment selection process. This consists of employing people with a set criteria? (find relevant information) Schwartz is the managing director of L’Oreal for the UK and Ireland and mentions in his interview that “You can progress up the organisation when you understand how it works” (Charles, 2013). From Schwartz’s statement, it is easy to understand that the department will have a leadership structure based on knowledge and experience, and is indicative of the base level of organisational cultural, of how experience equals respect. (expand?) In any marketing department, it is essential that the employees are creative, and at L’Oreal, this is taken extremely seriously. It is considered to the extent that graduate employees are …, which gives an insight firstly, into the minds of the employees at a higher level and what they deem essential in their employees, and secondly shows….

Espoused Values And Beliefs (Brief Introduction?). Employee Creativity L’Oreal prides itself on its staff being creative, quoting on its official website that ‘L’Oréal has creativity in its DNA’ (L’Oreal, 2014? Find reference). This statement can be supported to an extent, as L’Oreal’s marketing campaigns are considered to be some of the most successful, and most thoughtful. What can be seen is how there is a belief that creativity equals success in advertisement within L’Oreal. This has proven successful in the past for the advertising department, which plays a key role according to Schien in becoming an established belief or value (Schien, Page 26). He states ‘ if sales begin to decline in a young business, a manager may say “We must increase advertising” because of their belief that advertising always increases sales’ (Schien, 2010). This can be applied to L’Oreal, except in this case it is the creativity being believed to increase desirability. It therefore now taken place as a core value both for and within the company.

Importantly for L’Oreal, the cosmetics industry relies heavily on strong advertising promotions - as mentioned previously – to establish competitors from one another, and so the creativity is a positive espoused belief for the company to have, assisting in the success of its marketing and advertising. Skin Tone Controversy One example of the espoused values and beliefs of the department leading to controversy that has happened internationally can be seen in the 2011 case of how L’Oreal was accused of lightening Frieda Pinto’s skin colour in an advert (Smitha, 2011). Whether this was actually a case of her skin being lightened or not, it highlights an important point within the organisational culture that has affected beauty marketing in the past. L’Oreal were also accused of whitewashing Beyonce in 2008 (Rajan, 2008, find reference). According to Schien’s model, this clearly exemplifies the espoused beliefs and values level of culture, through how the advertising department has taken the belief of the society that lighter skin is more desirable, and then transferred this into their advertisement. (expand or finish) Emphasis On Looks Schien mentions when discussing Basic Assuptions that ‘in an occupation such as engineering, it is inconceivable to design something that isn’t safe’ (Schien, 2010). In the case of the advertising department, this would be advertising a product that doesn’t do as it says. (finish)

Assumed Values Otherwise known as ‘dominant value orientations’, they are one way to gauge the deepest subconscious values of the marketing and advertisement department is to analyse the statements that are made by senior employees within it. (How their advertisements have to show the effects of the product? Alike engineers and safe products). Default Advertisement To Feature White Model What is evident not only in L’Oreal, but in many advertising firms across the West and Europe is the default assumption that unless special consideration is needed, the models used will need to represent the Caucasian race in some way. This is the default attitude, with those working within the department from ethnic backgrounds also pushed – due to the organisational culture – to think the same way. This is due to the origins of the company and its majority white audience (reference?). This aspect has fallen under a substantial amount of criticism, largely for the influence that it has given L’Oreal’s international status – being seen example in India, and how the idealised image is one of white colour, with the author suggesting this is due to the influence of multinational cosmetics companies such as this (Habib, 2009) – with suggestions that L’Oreal need to operate more ethically correct in the future and incorporating all races and colours into their marketing. Celebrity Advertisement Through the large majority of L’Oreal’s advertisements – with the exception of a few specially considered advertising campaigns (reference?) – Celebrities are used to promote the products. What this shows is that it is automatically assumed by L’Oreal that celebrities are the best way to market a product to gain the most appeal, but deeper than this, shows that the marketing department consider celebrities? Attractiveness

Again, similar to the previous Assumed Values point, the majority of advertisements made by L’Oreal are promoted by people of better aesthetic pleasing proportions than the average person. What this again makes evident is that within the organisational culture it is accepted that this is the best way to advertise, and that this will attract the most people. without having an even more specific target audience like some advertisements might (example?). Age What is also apparent is that although L’Oreal products are not aimed at a specific audience, the majority of advertising campaigns are promoted with youthful models. What this shows is that within the organisational culture of L’Oreal, youth is considered extremely important in beauty. Schein talks about basic assumptions as being ‘nonconfrontable’ and ‘nondebatable’ (Schein, 28) and the age factor falls perfectly into this. It is clear - through previous advertising history - that throughout the advertising department there is the basic assumption that youth is the best way to attract customers. (expand?) Default mode of marketing? The marketing of the 21st century is becoming increasingly

Conclusion Through Schien’s analysis, it was clear in the finding that there is a strong organisational culture influence of the advertisement and marketing that L’Oreal produce. The artefacts level of the analysis… The next level, the espoused values and beliefs assist in providing a better insight into… Lastly, the deepest level of analysis, the assumed values provided a detailed insight into what exactly drives the advertisements of L’Oreal to be exactly the way they are, and show the extent to which the organisational culture has an influence on them, which in this case is substantial, although it is found that the most influential factor are still however the target audience and market, which take precedence. In this deepest part of the theory, it was also found that many of the basic assumptions stemmed from the national origins of the company. (Majority of assumed values are self-evident) What is however apparent from the analysis is that Schein’s model definitely has its limitations in being able to fully analyse the organisational cultures influence on the marketing and advertisement and its operations. This is evident through how it is clearly not possible to gain as detailed an insight into the three levels of culture through an outsider analysis compared to an insider analysis. This does however go to show how effective and detailed Schien’s model could prove to be if used from a suitable perspective. To answer the primary focus of the study of whether L’Oreal’s marketing department and its performance is in fact influenced by the organisational culture of L’Oreal, it can be deduced that there is a reasonable amount of influence… Hatch states that ‘the most unified understanding of organisational culture comes from the idea that organisations are manifestations of larger cultural systems’ (Hatch, 1997). This is particularly true of L’Oreal as, analysing deeper into the department with Schien’s model allows us to see the extent to which the organisational culture is of similarity to the national culture.

(mention it could be flawed due to just being an analysis of the Loreal and not its

subbrands)

References Actual References: Baker, M. (2009). Marketing Responsibly - Addressing the ethical challenges. London, England: IBE Publications. Charles, G. (2013, March 19). L'Oréal to insist on marketers becoming 'more commercially adept. Retrieved 09 November 2014, from http://www.marketingmagazine.co.uk/article/1175015/lorealinsist-marketers-becoming-more-commercially-adept. DeMers, J. (2014, October 7). Here's The Simple Secret To Apple's Marketing Success. Retrieved December 5, 2014, from http://www.forbes.com/sites/jaysondemers/2014/07/08/heres-the-simplesecret-to-apples-marketing-success. Ebert, R. J., & Griffin, R. W. (2011). Business Essentials. New Jersey, United States Of America: Pearson. Forbes. L'Oréal Group. Retrieved December 9th, 2014, from http://www.forbes.com/companies/loreal-group/ Giang, C. (...