This document provides a comparative analysis of the cultural issues experienced by Walt Disney Company when expanding from the US to Japan and Hong Kong. It begins with an introduction and overview of Disney's expansion. It then analyzes cultural differences between the US, Japan, and Hong Kong using models like Hall's iceberg and onion models, and Hofstede's cultural dimensions. Key differences are in individualism, power distance, and long-term orientation. The Lewis model shows Japan and Hong Kong as reactive cultures versus the US linear-active culture. The analysis finds Disney was successful in Japan due to cultural adaptation but failed in Hong Kong by not understanding cultural differences, like being too American-centric. Understanding invisible cultural aspects is vital for international

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International Intercultural
Management
A comparative analysis of the cross-cultural
issues that the Walt Disney
Company experienced when expanding
from the USA to Japan
MOD004668
SID:
Submission Date:
Word Count:

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Table of Contents
List Of Figures.....................................................................................................................................2
1.0 Introduction ...................................................................................................................................3
2.0 Organizational And Cultural Rationale .........................................................................................3
3.0 Theoretical Comparison Of Cultures.............................................................................................4
3.1 GENERAL CULTURAL DIFFERENCE: THE ONION AND THE ICEBERG MODELS 4
3.2 A Comparison Of Cultural Dimensions: Hofstede’s Framework .................................................7
4.0 A Comparison Of Cultural Clusters: The Lewis Model..............................................................10
5.0 Organizational Analysis ..............................................................................................................11
5.1 CROSS CULTURALISSUES ANDADAPTATIONS 11
6.0 Cultural Intelligence ....................................................................................................................13
7.0 Conclusion...................................................................................................................................13
References .........................................................................................................................................15
List of Figures
Figure 1: An illustration of Hall's iceberg model ………………………………………………….5
Figure 2: Prominent Cultural Contrasts in Values …………………………………………………5
Figure 3: The Cultural Iceberg Model of Hong Kong …………………………………...………...6
Figure 4: How Japan and Hong Kong Compare with the United States in the Hofstede’s Cultural
Dimension Mode ………………………………………………………………………………….9
Figure 5: The Lewis Model Dimensions of Behavior …………………………………………….10
Figure 6: The Lewis Model of Cultural Types …………………………………………………….11

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1.0 Introduction
In the advent of globalization businesses all over the world realize the importance of
modeling themselves accordingly to serve an expanding market and customer base. In this reality a
majority of businesses have had to expand to other countries and regions. Such expansion
adventures have had to cope with the reality of cultural differences. While global expansion opens
new channels for businesses and offers the opportunity to increase profits and expand further, they
are also met with great cultural differences that can cripple such businesses if not handled well.
In deed there are several instances where successful businesses in one country have found a
rough going in another. Walmart, for instance, had to close shop in Germany after only a few years
because of cultural differences. In an article, titled ‘Walmart Finds that It’s Business Model
Doesn’t Fit Every Culture’, published on August 2nd in The New York Times by Mark Landler and
Michael Barbaro notes that by misunderstanding the German culture and attempting to impose the
American corporate culture on German employees, Walmart set itself up for failure (2006, p.1).
This exemplifies the importance of culture to the success of businesses abroad. Thus according to
Sunir Venaik and Paul Brewer “Many specific areas have caught the attention of researchers but
one of the most intriguing and popular of these are issues relating to national culture and its effects
on business processes and outcomes” (2008, p.3).
This paper will explore and examine the role culture has played in the success of Disney
World expansion in the Japan. It will take into account the cultural differences and how the
business model and marketing strategy of Disney World capitalized on these differences to become
successful. To audit these expansion success, the theoretical frameworks of Hostede and Lewis
Model will be used to assess how the company used cultural intelligence to navigate invisible
cultural characteristics and deal with opposing cultural dimensions. Beginning with a comparison
of the cultural difference of the United States and Japan will offer an effective platform to examine
how understanding the culture of a receiving nation plays an imperative role in the success of any
business that seeks to expand.
2.0 Organizational and Cultural Rationale
The Walt Disney Company is a diversified amusement company operating in more than a
dozen countries in the world. Opened in October 1923 in Burbank, U.S.A, as a joint venture
between Walt Disney and his brother, the company remained small in business and profit until the
release of its first widely popular cartoon character, Donald Duck, followed by Pinnochio and
Snow White between 1928 and 1937 (Patrick De Groote: 2008, p.23). Opening its first amusement
park in 1955 in Anuheim the company remained on a growing path for decades supported by its
story telling culture. By developing its own culture around that of its target market, the company

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had become synonymous with American culture by the time it opened its first amusement park
abroad, in Tokyo Japan (Tokyo Disney Resort) in 1983 followed by others in Hong Kong and
Paris. “The Walt Disney’s Company success is an indicator of strategic alignment between the
corporate culture and the cultural traits of the target market, especially the United States. This link
between American culture and Disney’s organizational culture is a contributing factor to business
success in the United States and even in the international market” (Alex Williams: 2017, p.1).
However, the success of Walt Disney’s resorts and parks has not been uniform in all the
markets the company has tried to enter abroad. In Hong Kong, for instance, the parks were not as
successful as they were in Japan. A close look at how Disney world approached the Japanese and
Hong Kong markets, cultural intelligence clearly played a major role in both countries. While there
was certainly a ‘Japanization’ of the Disney World when it opened in Tokyo in 19831, the Hong
Kong Disney World was unable to localize the American culture of Walt Disney business
operations. Thus according to Michael Schuman “management glitches involving everything from
ticketing to employee relations have further tarnished the venture’s image. In a 2006 survey (the
article’s publication year) conducted by Hong Kong Polytechnic University, 70% of the locals
polled said they had a more negative opinion of Disneyland since it opened in Hong Kong” (2006,
p.2).
3.0 Theoretical Comparison of Cultures
3.1 General Cultural Difference: The Onion and the Iceberg Models
Departing from the point above, it is important to have a look how scholars define culture.
According to Hofstede (1994: p.5), “culture is the collective programming of the mind which
distinguishes the members of one group or category of people from another”. Matsumoto (1992),
on the other hands defined culture as “the set of attitudes, values, beliefs, and behaviors shared by a
group, but different from each individual, communicated from one generation to the next” (1992:
p.7). One of the more recent definitions of culture is articulated by Spencer-Oatey (2008) who
defines it as “a fuzzy set of basic assumptions and values, orientations of life, beliefs, policies,
procedures and behavioral conventions that are shared by a group of people, and that influence (but
do not determine) each member’s behavior and his/her interpretations of the ‘meaning’ of other
people’s behavior” (p.3).
From these definitions it seems that in their basic form cultures are like people; there are
certain values and characteristics that can be made out from how people look, walk, talk, eat, and
what music they listen to. However, unless a close interaction with a person, and for that matter a
culture, is undertaken, a detailed and total assessment of character or culture cannot be arrived at.

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This characteristic of culture is examined and analyzed closely using two model analogies: the
iceberg model by Edward T. Hall (1976) and the onion model. In the Iceberg analogy Hall (1976)
states that the culture of a society is similar to an iceberg in that while a small portion of the culture
is visible from the outside and is, therefore, easily recognizable, there are huge parts of it that are
invisible. According to Hall the only effective way of using the visible parts of culture to interact or
transact with members of a particular culture is to understand the invisible part.
Figure 1: An illustration of Hall's iceberg model: the internal part is invisible while the
external part is visible.
For a business like Disney World, therefore, entering the market in a new culture like Japan
or Hong Kong requires a deep understanding of the local culture if it is to avoid failure. A deep
understanding of the invisible part of culture – the underwater part of the iceberg or the deep layer
of the cultural onion – ensures that such a business does not misunderstand and miscommunicate
the visible parts of the culture. Below are some cultural contrasts in values among American,
Japanese, and Hong Kong Culture:
American Japan Hong Kong
Self-Reliance Collectiveness Collectiveness
Freedom Belonging Family harmony
Equality Age/Seniority Respect for hierarchy
Individualism Group Consensus Authority

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Figure 2: Prominent Cultural Contrasts in Values
To clearly analyze the cross-cultural contrasts that influenced and impacted the different outcomes
of Walt Disney’s Disney World in Japan and Hong Kong, it is also important to factor in the cross
cultural differences between the two Asian countries with the United States upon which the Walt
Disney business culture is based.
Figure 3: The Cultural Iceberg Model of Hong Kong (Ogbuigwe: 2013, p.41)
From the cultural iceberg models above it is evident that there are several cross-cultural
differences that might be misunderstood or miscommunicated in either of the countries if the
invisible aspects are not studied and understood. The onion model goes further than the iceberg model
in examining these differences as illustrated by the diagram below
Visible aspects
Invisible
aspects

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As the figures above demonstrate, both countries differ in major ways when it comes to
individualism, mannerisms, adherence to seniority, and even rituals. However, these differences
arise when the invisible aspects of culture are examined in detail because in some instances the
visible aspects in both countries might appear similar, for example the respect for seniors and
traditional robes. Using both models to highlight these discrepancies and the importance of
understanding the invisible elements is paramount for international business. According to
Hofstede (1994) these differences in cultural values need to be managed effectively for
international business activity to succeed (Hofstede: 1994, p.8).
3.2 A Comparison of Cultural Dimensions: Hofstede’s Framework
Hofstede (1976) noted that although popular belief posits that culture plays a peripheral role
in the success of international business, culture in most instances erects the most barriers to
business in the international stage (Edward Hall & Mildred Hall: 1976). Thus it is important to
analyze culture in detail. While values, behaviors, attitudes, and other aspects, as exemplified
above by the model illustrations, are the easiest and readily available means of understanding

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culture, cultural dimensions provide the most useful analysis for businesses. The two main cultural
dimension models: Hofstede and Trompenaars, offer a wide platform to classify and quantify
cultural dimensions. Additionally, they allow us to draw out the implications of organizations
operating in different cultures. Although it has been criticized before by different scholars on its
rigidity and presumption of standardized behavior within cultures (Thomas:2008, p.14), Hofstade’s
model still offers the best framework for analyzing how cultures differ between key cultural
differences.
Cultural Dimension Japan Hong Kong USA
Power
Distance;
Score 54,
This means that
Japan is very
hierarchical.
Score 68,
Hong Kong
has a high PD score,
indicating a society
that
believes that
inequalities
amongst people are
acceptable.
Score: 40
Americans do not
believe that the
inequalities in
society are
acceptable.
Individualism; Score: 46
In Japan the group is
more important than
the individual.
Score: 25
Hong Kong
is a collectivist
culture
where people act in
the
interests of the group
and not themselves.
Score: 91
People should look
out for themselves
and immediate
family.
Masculinity; Score: 95
Japan is one of the
most Masculine
societies in the
world.
Score: 57
Hong Kong is a
somewhat Masculine
society –success
oriented and driven.
Score: 62
High masculinity
manifested in
individual
competition
Uncertainty Score: 92 Score: 29 Score: 46

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Avoidance; Due to natural
calamities, Japanese
culture tends to be
more prepared for
any eventuality.
Adherence to laws
and rules may be
flexible to suit the
actual situation and
pragmatism is a fact
of life.
Terror has made
America embrace
preparedness thus
the relatively low
score here
Long Term
Orientation;
Score: 88
Japan is a very Long
Term Orientation
oriented society.
The high score of 61
shows that Hong
Kong’s culture is
definitely pragmatic.
Score: 26
American
businesses and
employees measure
their progress in
short terms periods
which leads to both
organizational and
individual strife for
short term success
Indulgence; Score: 42
Although Japan
score a little higher
than Hong Kong in
this dimension,
Japanese people
have a culture of
restraint
Score: 17
Hong Kong’s score
indicates a very
restraint society
Score: 68
While there is a
high score in
masculinity, there
level of indulgence
is also high.
Figure 4: Table to Show How Japan and Hong Kong Compare with the United States in the
Hofstede’s Cultural Dimension Model. Data Adapted from www.Hofstede-insights.com.
There some key differences in the cultural dimensions of the three countries compared above.
Yet the similarities between Hong Kong and Japan, particularly in the aspects within the first and
second layers of the Onion Model are striking. For instance, Hong Kong’s score of 68 in Power
Distance is not too far from Japans 54. Meaning that both countries are quite hierarchical and

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people without so much power tend to believe be okay with the unequal arrangement. The United
States, on the other hand, scores relatively low on this dimension. As explained in the figure this
corresponds with philosophy of ‘liberty and justice for all’ as well as the very high score in
masculinity and individualism. In contrast, Japan has low score on individualism which tones down
its high score on masculinity. Here is a prominent example of how deeper research, through
interaction with a culture unveils the ‘why’ behind what is visible. Without understanding the
collectivist nature of the Japanese culture one might misjudge its masculinity as something else.
These are important elements of culture to understand for businesses before they set up shop in
either of these countries. In the case of Disney World for instance, understanding that Japanese
people do not rush for short term success as American employees might tend to, allows them to
strategize differently.
4.0 A Comparison of Cultural Clusters: The Lewis Model
The tripartite Lewis model, developed by Richard Lewis in the 1990s, is based on Hall’s
monochromic and polychromic time categories and consists of linear, multi-active, and reactive
categories of people and cultures. Unlike Hofstede’s model which basically analyzes culture,
Lewis’ model goes further to describe how the model can be applied to specific business situations.
By organizing people from different regions according to behavior, the model seeks to offer
businesses a prototype to use when interacting with target customers, employees, and even partners
from different cultures.
Figure 5: The Lewis Model Dimensions of Behavior

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Understanding the dimensions of behavior as illustrated in Figure 5 above ensures that
businesses that expand abroad are prepared for the cross-cultural differences and have an effective
strategy for the cross-cultural communication required.
Figure 6: The Lewis Model of Cultural Types, Demonstrating both Hong Kong and Japan as
Reactive Countries and the U.S.A as a Linear Active
Figure 6 above implies that Disney World being a United States company, consequently
falling within the Linear-Active cultural type, expanded successfully into a country in the Reactive
cultural type, in this case Japan, but failed in another in the same cultural type, in this case Hong
Kong. The following section explores the cross-cultural issues and adaptation problems that led to
the Disney World’s trouble in Hong Kong in the midst of great success in Japan.
5.0 Organizational Analysis
5.1 Cross Cultural Issues and Adaptations
Most cultures in the world have many underlying similarities. Nonetheless major differences
still abide. Lewis (2013) states that there are not two cultures in the world that have the same way
of seeing or perceiving things. Thus when Disneyland opened in Tokyo in 1983 it had tremendous
success from the word go. However, carrying the same experience into France several years later,

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the company’s management found it difficult to replicate what they had done in Japan. In his paper
‘Disneyfication and Localization: The Cultural Globalization Process of Hong Kong Disneyland’,
Kimburley Choi (2009) states that Disney World did not take into account the cultural dimensions
of the Hong Kong Community (2009: p.5). Perhaps mistaken by the cultural clusters, e.g. the one
presented by GLOBE, Disney World thought they could take the Tokyo experience and best
practices into the new venture in Hong Kong. According to Choi, “appropriating Lefebvre's
conceptual triad of space, these stories show that Disney brought Hong Kong a physical park, non-
transparent values and related management practices. These same stories also demonstrate that
HKDL workers and visitors work and consume the park in a local way that Disneyland
management finds difficult to control; local people produce and circulate the changed meanings of
'Disney' and change certain Disney management policies” (2009: p.1). Moreover, when Hong Kong
residents perceived the forceful nature of the American business, the media carried extensive
negative stories of the newly built Disney World Hong Kong.
Cross-cultural issues and adaptations of The Walt Disney Company
Japan Hong Kong
“The fact is that ultimately the Japanese not
Americans have defined what Tokyo
Disneyland is. That is to say, it is the
importation of the artifact rather than its
exportation which bogs to be analyzed”
(Mary Yoko; 1992, p.4).
While there was a hired local designer to
ensure that Disneyland Hong Kong was
built according to local traditions and
culture, there might not have been full
ownership of the project by the hired
designers.
“Much of the exotic Disneyland is already
familiar to the Japanese. Disney movies and
Disney paraphernalia have boon a part of
the Japanese childhood experience since the
late nineteen forties” (Mary Yoko1992;
p.5).
Disney films have not been common in
Hong Kong homes. Thus Disney’s entrance
into Hong Kong was a totally new venture
that required different communication
strategy from that of Japan in order to carter
for the cross-cultural contrasts
Owned by a local firm, Disneyland Tokyo
had no problems or misunderstandings with
when introducing cultural elements.
In Hong Kong, the business experiences
extensive conflicts with local press and
citizens as they tried to introduce cultural
elements into the park.
Japan has a long history of interaction with the American culture. Whilst the country has a
distinct culture, in the area of animation and amusement parks it has interacted with the American,
and for that matter the Disney World culture for a long period. Hong Kong, however, has not hd

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this kind of exposure. According to Chao (2009) “the issue in Hong Kong seems to be the product
concept (and how it relates to the local culture) rather than an execution issue. People in Hong
Kong don’t get the Disney magic. They don’t have the Disney fairytale stories lodged deeply into
their collective unconscious, the way westerners do (and the Japanese acquired after WWII)”
(Chao; 2009, 387).
6.0 Cultural Intelligence
Cultural intelligence is an integral part of running a business especially when expanding into
a market with a population of another culture. According to Van Dyne et al. (2010) cultural
intelligence (CQ) primarily comprises of a leader’s ability to work effectively with people and
situations of a totally different culture (2010). Accordingly, the success of a business, e.g. in the
case of Disney World, to expand and operate in another culture depends on the business leader’s
ability to lead in a myriad of cultural contexts (Van Dyne et al.; 2010, p.).
Disney World’s leadership showed very high cultural intelligence when entering the Japanese
market in 1983. Understanding the Japanese culture allowed Disney’s leadership to avoid forcing
their own ideas on the Japanese. They showed great metacognitive cultural intelligence when
crossing into the Japanese culture; hence they strategized ensured that the American economic and
business might did not interfere with Disney’s desire to expand into Japan. However, moving on
into 2005 when Disney was expanding into Hong Kong the cultural intelligence displayed in Japan
seems to have faded. This is not unlikely. According to Dyne et al. (2012) cultures evolve on a
continuous basis and cultural intelligence is an acquiescent capability that requires continuous
education, exposure, and experience to retain (2012; p.297). Following the several cultural mishaps
experienced by Disney in Hong Kong since launching in 2005, it appears that the management was
not motivated enough to adapt to the culture they were seeking to expand into.
Furthermore, the company did not hold continuous cultural intelligence audits to ensure that
its top management was up to the task of spearheading an important expansion campaign in Asia.
7.0 Conclusion
Globalization is shifting the mode of operation for international business particularly when it
comes to expansion operations. From this paradigm shift new ideas such as ‘glocalization’ have
been born to help business conceptualize their products along the lines of local tastes and choices
as determined by local culture. Hall’s definitions of culture combined with Hofstede’s cultural
dimensions offer businesses the platform to create cultural strategies that allow them expand into
new countries effectively. Richard Lewis takes this further by creating the Lewis model that places

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cultures in categories based on behavior making it easier for business leaders to strategize
efficiently when preparing to expand.
Even using the Lewis Model, it is clear that business cannot afford to look at countries as
similar cultures even in cases where such countries are in the same cultural behavior dimension as
exemplified by the case of Disney World in Japan and Hong Kong. While expansion into Japan
was a huge success, a similar expansion into Hong Kong became difficult. The initial failures in
cultural intelligence occasioned by a lack of motivation to adapt to a new culture on the side of
Disney leadership failed the expansion operation. In a nutshell, the emerging reality in the age of
globalization is that cultural intelligence will play a major role in international business. The failure
of Disney World in Hong Kong and France and Walmart in Germany is evidence of the importance
of CQ for companies that want to remain competitive in the international market.

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