L’Oréal Multiculturalism

Case Q&As

Q-1. How would you define L’Oréal’s staffing policy?

L’Oréal’s staffing policy can be identified as ethnocentric at senior executive or top managerial

level. The case study suggests that only a few foreigners have become senior executive. Case

suggests infusion of foreign executives would disrupt the tightly knit community of senior

managers which is considered critical to L’Oréal’s success.

However, at the middle and lower level of management, post 1990, the staffing policy can be

classified as geocentric. As competition and global-local tension intensifies, with the global

expansion of L’Oréal, L’Oréal has adopted geocentric staffing policy. This has allowed L’Oréal

to emerge from a pure French company to a truly global company.

The case study suggested that L’Oréal had experience of polycentric approach wherein

culturally diverse teams often experience the so-called Tower of Babel syndrome: their

members talk past one another and teamwork breaks down. Company realise knowledge is

not well shared.

L’Oréal has dealt with these shortcoming by recruiting and building teams around individual

mangers who by virtue of their upbringing and experience have gained familiarity with norms

and behaviour of multiple cultures and can switch easily among them. Employing multi-cultural

talented people in essence can be associated with geo-centric approach for staffing because

the best the best people are sought for key jobs throughout the organization. However, the

catch is that nationality/ethnicity matters in the case of L’Oréal.

Q-2 What is the company HR approach for new-product development?

HR approach can be explained with the help of employing expat managers who have been

with the company for at least 5 years in the sales and marketing department. These are most

seasoned managers who lead the team. These expats return to their region upon completion

of project.

Multicultural managers are drawn from three pools. The other two includes managers hired

from other global companies and young graduates (1/3rd of the team). The young graduate

gets training while working as interns with other managers and they after working on two

projects (i.e. another 2-3 years in product development at HQ) are transferred regional offices

at the director level.

The other aspect of HR policy lies in training and development. The case study suggests that

the HR involved in new product development are provided training at company’s centres at

Paris, New York, Singapore and Rio. The final follow-up happens at the MDP at Cedep, exec

consortium in France.

Q-3 Which strategic archetype, according to the Bartlett and Ghosal’s Integration-

Responsiveness (IR) Model, has been adopted by L’Oréal? How its multiculturalism HR

strategy informs L’Oréal’s strategic archetype and competitive advantage?

Strategic archetype of L’Oréal is Transnational. The case study, in the third paragraph,

suggests that L’Oréal is facing high pressures on both dimensions: global integration and local

responsiveness and therefore it can be concluded that the Transnational Strategies.

The case further illustrates several examples how L’Oréal cope up with global-local challenges

with the help of it multiculturalism HR strategy. Multicultural employees help the company in

developing new products that are suitable to local needs in one country but can also be

suitable in another.
Multicultural employees can cope up with cultural barriers due to their ability to switch. This

facilitates knowledge exchange/knowledge transfer. They can think as if they were French,

American or Chinese and all of these together at once.

Wider knowledge of multicultural employees helps in innovation, e.g. French-Irish-

Cambodians manager identified that many tinted face creams in Asia had a lifting effect, which

minimizes wrinkles. They can bridge differences between subsidiaries and HQ. They can

mediate with bosses and integrate outsiders.

Finally, this case clearly shows that HR is not just a managerial function but it contributes to

the organization’s strategy to compete by building competitive advantages.