Business_Assessment_of_Opening_a_Wholly

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Marielle Dunavant & Kiani Lane Dr. Elloy International Management April 11, 2017 France Audrey Arden Photography 1

Table of Contents Company Description……………………………………………………………………………………..…… 3 Mission………………………………………………………………….…………………………………………… 3 Planned Entry Strategy………………………………………….……………………………………………. 3 Environmental Description Business……………………………..………………………………...….. 5 Environmental Description Political………………………………………………………………… .... 5 Environmental Description Legal………………………………………………………………….… ..... 6 Environmental Description Economic…………………………………………………………….…... 7 Cultural Profile……………………………………………………………………...………………………….. 7 Organizational Chart………………………………………………………..……………………………….. 12 Staffing Policy…………………………………………………………………………………….…………….. 14 Leadership Style…………………………………………………….…………………………………..…….. 16 Motivation Style……………………………………………………………………………………………….. 16 Communication Style ………………………………………………………………………………...…….. 17 Potential Communication Problems …………………………………………………...…………….. 18 Control Issues ………………………………………………………………………………………….…….. 18 Works Sited………………………………………………………………………………...………………….. 20 2

Company Description Audrey Arden Photography was founded in 1985 by world acclaimed fashion photographer, Audrey Arden. In the early 1980's Audrey realized that demand for her services among top designers in the fashion industry was too high to fulfill all shooting requests. Because of this, Audrey decided to create Audrey Arden Photography and opened up headquarters in Manhattan. Audrey's business operates similar to a staffing agency as Audrey employs other top photographers and assigns them to fashion photography jobs/contracts with Audrey Arden Photography clients. In 1995, ten years after opening business, Audrey opened a second location in Los Angeles. Due to high demand and success, in addition to market maturation experienced in New York and Los Angeles, Audrey Arden Photography is ready for expansion into another fashion capital. Naturally, the next move is to open operations in Paris, France. As Audrey Arden Photography has a well-established name and brand recognition in the United States, this strong reputation should follow the brand to Paris. Furthermore, Audrey’s work is known to Paris designers as she completed several fashion shoots for Parisian based fashion designers such as Prada, Yves Saint Laurent, Chanel, and Celine prior to opening launching her company. Consequently, Audrey already has eight signed contracts with high-end luxury designers and contacts with 15 top photographers who are based in Paris. Mission Provide a photography service that facilitates the connection between industry fashion leaders with top notch photographers in New York, Los Angeles, and Paris in order to produce high quality photographs. We strive to capture and convey the designer's intended vision and emotion of each creation. As a company we work to inspire and connect with our clients to put their best selves forward every day in an ethical and socially responsible manner. Planned Entry Strategy Audrey Arden Photography is going to expand internationally into Paris, France. Audrey Arden has chosen to enter Paris because it is the fashion capital in the world. Moreover, it is one of the niche markets that has a demand for this photographer- designer staffing service. She has chosen to enter now because both the New York and Los Angeles offices are saturated. Also Audrey believes the small business model contributes to their success, so she doesn’t want any of her offices to become too large. The intimate environment assures quality and devoted personal relationships that make both the designers and photographers feel valued. However, she still wants to build her brand and grow as a company so Paris is the natural next step. Moreover, many designers in Paris have expressed a desire to use their services. So Paris has the market and the demand Audrey is looking for, and this market is currently very receptive. In terms of timing Audrey Arden is going to use a waterfall approach. It is best for the company to enter one new market and just open one office at a time. It would take too much time, energy, and resources to enter multiple international markets, 3

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like Tokyo and London, all at once. This allows the company to take its time to understand the new setting and make appropriate adjustment to its marketing mix in order to satisfy the specific needs of each market. Moreover, in this approach managers can maximize the use of available resources and leverage their experience from the first market to make necessary improvements or changes. In this companies case by just expanding to Paris at first it can transfer managerial and design skills from the US since the target market is similar. For the waterfall strategy to be successful, ideally the first market expanded to should be one that has characteristics similar to those found in the home market. For all these reasons Audrey Arden will focus on entering Paris, France to start. Audrey Arden will open this location in Paris as a wholly owned subsidiary. This strategy is preferred in service industries where there is close contact with end customers, high levels of professional skills, specialized know how, and customizations are required. Also this entrance demonstrates a visible sign of commitment from Audrey and the company to maintain the same standards and company culture. These are all essential elements that help give quality assurance from the company. Also another source of competitive advantage is Arden’s brand equity. Thus a joint venture or strategic alliance would lessen the value and reputation. Plus this strategy would allow for a more rapid entry since the brand is established and there is already a present interest in their services. Additionally, there are not any services like Audrey Arden’s in Paris to make a partnership with. Most importantly, Audrey Arden does not want to relinquish power or control over her company. This is because she wants and needs to be able to maintain the same culture, ethics, and practices that have brought her so much success in the past. Her strong presence in the company is a necessity and thus she is employing the strategy of a wholly owned subsidiary in establishing her Paris office. While this is the best entry strategy there are some down sides and possible issues that Audrey and Arden photography will have to cope with. For one a wholly owned subsidiary takes more capital and managerial effort. However, Audrey Arden has made enough excess capital from the past 30 years of business to be afford starting their own office in Paris. The company will also hire an extra manager in the Paris officer to help with the added logistics, flow of communication back to the US offices, cultural hurdles, and greater workload. Additionally, it will take more time establishing the location since the company is not partnering with any local businesses. However Audrey is willing to take more time in order to better establish this branch in the manner she desires. Another added responsibility the company will have to take on by entering as a wholly owned subsidiary is it must assess customer demand, gain legal and accounting assistance, protect intellectual property and obey regulations. Lastly and most importantly, the main down side to entering this market alone is that Audrey Arden must independently assess all cultural risks. This includes; differences in customer service and pricing, hiring the most qualified expatriates and providing them enough support, and learning how to run an office with employees from two different nationalities. Audrey has planned how to cope with the hurdles that come with being a wholly owned subsidiary, and overall it is still the best strategy to use to enter the Paris market. 4

Environment (Business) In France there are a handful of business customs that Audrey Arden Photography will need to be aware of and operate in accordance with. In terms of structure arriving for business appointments 10-15 minutes after the scheduled time is seen as impolite. Lunch is one of the best places to create business relationships in France, this also means one shouldn’t call anyone during their lunch break, general between 12 till 2pm . Commonly initial meetings are often dedicated to information sharing and discussion, rather than reaching final decisions. Also deadlines are open to negotiation and flexibility is appreciated. One reason for that is there a strong distinction between business and personal life in France. However, it is a highly organized and well-structured system where rules and administrative practices are desired. For example, in French business culture the highest individual in authority still tends to be the only one who can make the final decision. Below are some business etiquette rules in France: FRENCH BUSINESS ETIQUETTE DO’s DON’T’s  Maintain an air of formality  Wear formal business attire  Make direct but moderate eye contact  Try to learn a few basic French phrases and use them whenever possible.  Make direct but moderate eye contact  Greet with a quick hand shake with some pressure in the grip  Discuss your family or other personal matters during negotiations.  Be put off by frequent differences in opinion and rigorous debate during business negotiations.  Rush or display signs of impatience with your French counterparts. The French take their time before arriving at a decision. Environment (Political) France is a Republic, specifically it is a parliamentary democracy combined with presidential power. The President of the Republic, currently Francois Hollande, has Executive power and is Head of State. She/he is elected by direct universal suffrage for five years. The President also appoints the Prime Minister, currently Bernard Cazeneuve, and his/her Government at the suggestion of the Prime Minister. The Prime Minister is responsible for setting the amount of the State's expenses and revenue, and prepares some bills. The countries Legislative power is held in parliament, which is composed of the Senate and the National Assembly . Senators are elected by indirect universal suffrage for nine years, renewable by a one-third majority vote every three years. The deputies (MPs) are elected by direct universal suffrage. They examine bills and private bills successively, vote laws and monitor the Government. Overall the French culture to disagree and argue is believed to 5

stem from their distrust in government during the French Revolution. However, since that time the system has been remodeled and fortified now supported by a strong sense of French nationalism. In today’s political scene there will actually be elections held in April and May of this year, 2017. The three main candidates are Hamon, Fillon, and Le Pen. The winner of this election will dictate the countries response to Brexit and how it affects France’s economy and business. For example, if Le Pen wins France could certainly undermine the EU by taking France out of the European Monetary Union (EMU). Another area that is under political scrutiny is how to handle and respond to terrorist attacks. This past year in November the coordinated attacks around Paris where devastating and eye opening. Recurrences could further damage tourism, which is Paris’s number one industry. However despite these unknown-unknown risks, the political environment in France is stable and operates similar to that in the United States. This is an area of confidence for Audrey Arden moving into this country. Environment (Legal) The French legal system is based on a civil code compared to America that operates on a common code. Since the French legal system is not only different but it is also extremely complicated the company will be hiring a lawyer to assure no laws or regulations are overstepped or broken. In all contracts the company must clearly define the both parties obligations, the methods of quality control, and expectations. There are a few elements of the French legal system that will work in favor of Arden photography. For one English is commonly spoken and there is equal legal treatment to nationals and foreigners. Additionally, intellectual property design is protected for 25 years and is renewable once. One area that the company will put a heavy focus on is the French labor law, which is known as ‘Loi travail’. Some important points for employee’s are getting above minimum wage, paid leave, maternity leave, medical cover, and working time. Currently the minimum wage is €9.67/hr and the workweek is 35 hours with 5 weeks off per year. The company plans to honor the shorter workweek and longer vacation, and all employees will be on salary except the photographers who will be paid far above the minimum wage hourly. Employees will get the accustom paid maternity leave and medical coverage will be provided to all employees. The company wants to hold and provide standards that are seen as common and necessary in France. Audrey wants her employees to be satisfied and feel supported by the company. Lastly, new legal provisions passed in parliament make the company-level agreements prevail over the national-level bargaining agreements to set the rules regarding working time. This legislation shows that the government is making steps to help companies have more independence in their policies. So while all the employees will have the usual 35 hour workweek, this law makes it easier for the company to send photographers and support staff out to work if it falls outside normal work hours. 6

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Environment (Economic) France has moderate economic freedom and their economy is projected to become more stable over the coming years. There was slight fall in unemployment and rise in wages this past year. Also the 2017 budget forecasts an ambitious 1.5% GDP growth rate and many tax reforms are expected. For instance, there will most likely be the establishment of income tax withholding, tax cuts for the middle class and measures in favor of companies. All of which would work in favor of Audrey Arden photography. Another element that is appealing about this market is that there is little to no competition with high level of demand. There are currently no services like Audrey Arden’s which will allow the company to have first mover advantage. Additionally, the country has one of the largest economies, in 2016 it was ranked 6 th in terms of nominal GDP globally. Moreover their domestic market value in fashion is 48 billion euros, so the industry in which the company is operating is strong and reliable. The current exchange rate is $1 to €0.94. In order to determine pricing in the new market and with a different currency the company will use a combination of price sensitivity survey techniques, the big mac index, and trial and error over the first few months. The company is also keeping in mind that designers in Paris are more concerned with status which could mean they are willing to pay more to get a reputable photographers name or a better fit. Also the unemployment rate is relatively high at 10% (compared to the United States at 4.8%). This mean it should not be too difficult to find host country nationals to work for the company, plus it’s a fashion hub filled with experienced workers. Finally, the inflation rate is only 1.1% so that currently does not have a large effect on the business or salaries. Overall France’s economic environment is not perfect but it is relatively stable and improving; moreover, it is a good fit for Arden photography as they move into the fashion industry in Paris. Cultural Profile Most people associate French culture with Paris, the center of fashion, art, cuisine, and architecture. However, there is much more to French culture than the arts associated with Paris. France has over 66 million inhabitants residing in the country's thirteen regions. The country's dominant and official language is French with over 88 percent of the population speaking French as their first and primary language. However, there are a number of variants of the local language based on the region of the country. The French take great pride in their nation and government and are typically offended by negative comments about their country. Compared to other nations around the world, government plays a large role in France. In fact, the government intensely intervenes in the lives of it's inhabitants, especially when compared to other countries such as the United States which has a much lower level of governmental involvement in the lives of its’ citizens. For example, 1998 French legislation reduced working hours to 35-hours per week. This legislation was formed under socialist rule with a two-fold goal, and is mandatory for all private companies with more than 20 employees as of January of 2000. First, it was created 7

in order to lower the level of unemployment in France, while additionally, aiming to introduce greater flexibility into French labor contracting. The fact that flexibility was created through government intervention proves the degree of government involvement and value in French culture. Regardless of the policy's impact on job formation, the French labor unions are pleased with the shorter workweek for ideological reasons. The labor unions feel that a shorter workweek is better for the workers' quality of life, an important factor that is highly valued in French culture. Additionally, the law enables flexibility in terms of employee working schedules. For example, at Carrefour, a French retail giant, cashiers have agreed to adjust their duties and work times in accordance with the number of customers in the store. This allows the company to adapt to the dynamic demand cycle. Another example of increased flexibility resulting from this law is the agreement reached by Samsonite workers who choose to work 42 hours per week in the summer, when the demand for luggage is high, in exchange for a shorter 32-hour workweek in the winter. While this legislation promoted flexibility in working schedules, it is important to note that the law does not increase flexibility in all sectors, and instead presents obstacles. For example, the restaurant and trucking industries are commonly known for working long hours., In these industries, the 35-hour workweek can only drive up labor costs, without much possibility of offsetting the additional wages through greater productivity. The 35-hour workweek law also faced strong opposition from small business as these employers have fewer options regarding workforce flexibility. For example, small retailers are concerned about profitability and worry that they may not be able to keep their doors open long enough under the shorter work week policy. Not only could this policy potentially limit hours of operation for small businesses, but could also significantly raise employee costs for these small employers. It is important to note that while the law originally applied to companies with over 20 employees, within two years, companies with fewer than 20 employees were also required to negotiate a 35-hour wage packaging beginning in 2002. Unfortunately, the two-fold goal of reducing the workweek to 35 hours and creating more flexibility for business was not achieved. Instead, France experienced higher unemployment and increased job sharing. It is not common practice to take work home in France, unless one is in a senior management level position. Even then, it is not as common a practice as it is in the United States. In fact, legislation was passed in 2016 making it illegal for companies to email their employees outside of regular working hours. The implementation of legislation that "[allows] people to disconnect" is another example of the high degree of involvement the Government plays in French society (Stump). This also highlights the country's mission and value placed on improving the French quality of life. Furthermore, French culture makes a strong distinction between work and personal life. This can partially be attributed to the fact that France is a high power distance country. In high power distance countries, it is common for employees to feel commonly put under pressure. Hence the need for separation between one’s work and personal life. Another aspect of French culture is the preference to be dependent on the central government. This is exemplified by the 35-hour workweek legislation, the law making it illegal to email employees 8

outside working hours, and the government's degree of involvement in society. France observes eleven public holidays each year. These holidays consist of: New Year’s Day, Easter Monday, May Day/Labor Day, WWII Victory Day, Ascension Day, Whit Monday (Monday following Pentecost), Bastille Day, Assumption of Mary, All Saints Day, Amistice Day, and Christmas Day. Two of the French provinces, Alsace and Lorraine, celebrate a total of thirteen public holidays. These two additional holidays were established when the former German territory was returned to France at the end of WWII. In addition to the eleven or thirteen public holidays depending on an individual's residing province, employees receive 5 weeks of paid vacation per year. This vacation time is appreciated over a reference period running from June 1 st through May 31 st ." During this period, an employee accrues 2.5 working days of paid leave per month" (Fouquet). In order to assess France's cultural profile it is necessary to look at Geert Hofstede's 6D model. On each of the six elements a country is given a score ranging anywhere from 0 (low-scoring) to 100 (high scoring). This model aids international managers in assigning the culture of a host country. Hofstede’s model describes the effects of a society’s culture on the values of its members, and how these values relate to their behavior. The following graphic is visual of Hofstede’s model: 9

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The graphic below displays France’s score on the following elements: The first element, Power Distance, is “a dimension that deals with the fact that all individuals in societies are not equal". Power Distance is defined as "the extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally" (Geert). France scored a 68 on this element, meaning they are considered a relatively high power distance country. Several cultural factors explain this relatively high score. For example, children are raised to be emotionally dependent on their parents to an extent. This dependency is then later on transferred to teachers and supervisors. Additionally, in France there is a fair degree of inequality accepted. This is the case as most French companies have one or two more hierarchical levels than other German and U.K. based companies. It is also common for supervisors to have more privileges, such as fringe benefits, that are often inaccessible to lower level employees. This further demonstrates the degree of inequality that exists between job levels. Finally, in France CEO's are often referred to as Mr. PDG (President Director General). This is considered to be a more prestigious name than Chief Executive Officer, and again highlights the degree of inequality that is accepted in France. The second element, Individualism, is the "degree of interdependence a society maintains among its members" (Geert). This element often has to do with people's self-image and if it is defined by "I" or "we". As France scored a 71 on Individualism, they are considered a relatively individualistic society. In 10

individualistic societies everyone is expected to look after themselves and their immediate family only. This is opposed to a collectivist culture where family and progression towards group goals are put above individual goals or desires (Collectivist). Masculinity is the degree of traditionally masculine values present in a society. France scored a 43, meaning they are somewhat of a feminine society. In a feminine society success is measured by one’s quality of life, rather than their ability to stand out from a crowd. This score helps explain the degree of government involvement and its emphasis on improving the quality of life as shown in many of its policies such as “Securite Sociale”, the 35-hour work week, five weeks of paid time off per year, etc. When examining French society on a closer level, the upper class scored lower (more feminine), while the middle class scored higher (more masculine). This difference presents a challenge when figuring out how to effectively motivate people in the work place. The fundamental issue is figuring out if people want to be the best at their trade (the masculine viewpoint) or if people want to enjoy what they do (the feminine viewpoint). As Audrey Arden Photography is a service, to combat this potential issue the company will hire passionate employees who love photography and want to excel in their skill. Uncertainty Avoidance, another element of Hostede’s model, is the extent to which members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these. With a score of 86, France is high on Uncertainty Avoidance. This helps explain why the French don’t like surprises and instead value structure and planning. Because of the French dislike for ambiguity, they like to and receive all relevant information prior to meeting or negotiations so that they may come prepared. Additionally, France’s strong need for laws, rules, and regulations to structure life explain why the French prefer to rely on their central government. Lastly, the Long-Term Orientation dimension of Hostede’s model describes “how every society has to maintain some links with its own past while dealing with challenges of the present and future” (Geert). Societies prioritize these two essential goals differently. As France scored a 63 on this dimension they are a relatively long- term focused country. Often, countries that score high on this dimension take a pragmatic approach. This involves encouraging thrift and efforts in modern education as a way to prepare for the future. People in these high scoring societies, such as France, believe that truth depends on situation, context, and time. Additionally, these high scoring societies show an ability to adapt traditions to changing/evolving conditions. Organizational Chart 11

The overall organization structure has Audrey Arden as the CEO with her executive managers being her Chief Financial Officer, Chief Operations Officer, Chief Marketing Officer, and Public Relations Officer. These five over see all three branches in New York, Los Angeles, and Paris. The New York and Los Angeles office structure is the same. There is one senior manager who oversees the entire office. Immediately below this manager are the human resource manager, public relations manager, accountant, and the four account managers. These account managers are responsible for maintaining relationships with the designers. So they are in charge of assessing demand, negotiates contracts, making sure every designer is satisfied with the matched photographer, payment is completed, receives feedback, and overall manages designers needs and wants. Beneath the account manager is a sales manager who evaluates the photographers and helps the account managers decide which photographers are best for each designer and photo-shoot. The sales team is beneath that and they are in charge of reaching out to local photographers with different skills sets for designers who are in need of these talents. Finally, there are the photographers who the company chooses to carry and then assign to designers and photo shoots in order to create a compatible and cohesive experience for both sides. 12

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The Paris office is structured differently than the New York and Los Angeles Office for two main reasons. One is that this office will require more positions in order to handle working in the new French culture. Secondly, in this culture a hierarchical structure is more common and Audrey has decided to accommodate this local preference. So there will be a Mr. President Director General who is American and oversees the Paris office. Their main job will be making sure the culture, ethics, and practices of Audrey Arden are maintained in the new office. Also it will be their job to be the liaison between the Paris office and the American offices, so they will work closely with Audrey and the senior managers in New York and Los Angeles. Beneath the Mr. PDG will be a Senior Manager who is French that is responsible for overseeing the offices day-to-day operations. Then the accountant, public relations manager, local representative, lawyer, and human resource managers all report to the Senior Manager. French host country nationals hold all of these positions, except there are two human resource managers one is French and one is American. There needs to be one HR representative for each nationality so every employee feels comfortable expressing their contribution, hopes, and concerns. Also a native lawyer is needed since Audrey and her team are uneducated in their legal system and don’t want to break any laws or regulations. The local representative is on the team to help the company assimilate into the new culture and be a consultant as local differences arise. The next tier down are the account managers who will still report to the Senior Manager. They serve the same role as in the American offices, and are be made up of expatriates and host country nationals. Underneath that is an American Sales Manager, then the French sales team, and finally the French photographers. Overall the structure is similar but has more levels 13

making it more hierarchical and there are the added positions of Mr. PDG, lawyer, an extra human resource manager and a local representative. Staffing Policy As seen in the organizational structure the Paris office will be incorporating host-country nationals and expatriates. The combination will allow the company to benefit from both sides. The expatriates will bring experience and skills since they are trained on how to maintain company culture and quality. The host-country national will then bring their knowledge of local customs and culture. So it will be a moderate form of polycentric staffing. The means Audrey Arden is treating this 14

branch as a separate national entity with some individual decision-making authority with host-country nationals and expatriates serving as managers. Audrey Arden is going to take special notice hiring the expatriates. For one there only needs to be three to six expats hired so the company can take more time to choose the right candidates, give them a lot of support, and help them adapt to culture. There are a handful of factors that will be considered during the hiring process to ensure that the expatriate will be successful. For one Audrey is going to require them to be bilingual and have experience in the fashion or photography industry. Also it will be important for them to be passionate, relational, and if they have a family they must all be on board with living in France long-term. The main personality traits that the company is looking for in these positions are flexibility, a willingness to learn, ability to deal with ambiguity, interest in other people, an extrovert, and a sense of humor. Also the company is going to offer support in many ways to the expatriates and their families in order to ensure they feel comfortable and supported. For one they will have a living stipend and the company will help them find an apartment to live in. Most likely this will be in the “expat” region which is in the western suburbs of Paris. The company will also assist getting their visas and finding schools for their kids, as France has a great public and private school system. There are four success factors that will be used to evaluate and monitor the expatriates. One is assignment length. Because this assignment is long-term is makes it more difficult to find someone who is willing to make the move; however, this willingness will be key to their success. The expatriate will also have to have cultural similarities, which means hiring people who rank similar to nationals on Hofstede's scale and have experience in the region/culture. The third element is communication, so they must be bilingual but they also must be able to interpret and appropriately respond to France’s high-context communication style. Lastly their success is tied to the complexity and responsibility in their positions. The expatriates working condition will be complex and they will have a lot of responsibilities, so again it will be very important for them to be extremely passionate or they could easily burn out. In terms of hiring both the expatriate and host country nationals the company plans on using three methods. The first will be interviews and questionnaires that measure attitudes toward experimenting with new behaviors. This is important for both sides in order to make sure they can work in a dual- cultural office environment. The second method will be roles play and job simulations to tangibly gage their decision-making, ethics, knowledge, and tolerance. Finally all employees will take psychological testing in the form of the Meyers Brig test, this help the company hire people with compatible personalities regardless of nationality. Training will be done on three platforms as well. For one there will be meetings and training held for the American expatriates and local French employees separately. These meetings will focus on how to best work, communicate, and understand the other culture. Then the expatriates and host-country nationals will all be trained together on site in Paris. This formal training as a whole will be the first step in establishing the unique working environment. Overall performance 15

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evaluations will be based on local criteria, as this will be more cohesive with the local cliental. Finally, compensation will be based on two categories, position and locale factors. Position factors will measure an employee based on their area and specific job in the office. So salary will be based on position, with the managers and Mr. PDG making the most. Also bonuses will be reward for best-reviewed photographers every 6 months. There will also be monetary bonuses for the other staff member’s bi-annually, and these will also be based on performance. The company will also give a travel allowance to photographers who travel to photo shoots. In terms of local factors the company will have lenient hours and 5 weeks off for all employees. Additionally, the expatriate will receive an extra stipend as a form of incentive and compensation for their long-term commitment and difficult move. This will be in addition to their housing and relocation allowance. Overall Audrey wants all employees to have a comfortable living wage, and for them to believe that quality performance will be rewarded monetarily and publicly. Leadership Style France’s leadership style tends to be Autocratic where, “the person in charge has total authority and control over decision making. By virtue of their position and job responsibilities, they not only control the efforts of the team, but monitor them for completion – often under close scrutiny” (Leadership). This means that in autocratic leadership decisions are made at the top by the chief executive and orders are then implemented from top-down. Often the opinions of middle managers and technical workers tend to be dismissed. This directive approach can often be seen as overly authoritative and lacking necessary team building elements. In French culture, education is highly valued. As a result, most senior managers received their education at “Grandes Ecoles”. These are the elite schools of France. This produces a highly educated management population and additionally emphasizes that intellectualism is something to be cherished in the French culture. As intellectualism is highly valued in French culture, managers tend to be autocratic and paternalistic. Motivational Style The effective motivational style in French culture would be a mix between goal setting and the reinforcement theory. Goal setting would an effective motivational style as setting clear goals, objectives, and expectations are all valued in French culture. It is important to note that for goal setting to remain effective, it is necessary to continually alter and further develop these goals to adapt to the needs of the employees. On the other hand, reinforcement theory could be effective as giving rewards for good performance caters to the French value of status. Since France is an individualistic culture, individual incentives such as job security, promotion, vacations and bonuses would be effective motivators. Additionally, rewards reinforce status, as people feel important when they are rewarded. Regarding Audrey Arden Photograph, the company should implement this combination of motivational styles by rewarding photographers who receive good 16

performance reviews and feedback. Better performance and feedback will earn photographers assignments to higher-status, more well-known fashion designer jobs. Communication Style As is typical in most high context countries, France is no exception when it comes to the importance of long-term relationships and face-to-face communications. In high context societies people have close connections over a long period of time. “Many aspects of cultural behavior are not made explicit because most members know what to do and what to think from years of interaction with each other” (Beer). For example, one’s family serves as an example of a high context environment. Some common elements in a high context culture related to communication include communication being less verbally explicit as well as being less written/formal. Additionally, there is a more internalized understanding of what is communicated. Long-term relationships are highly valued and there are often strong boundaries of who is accepted as belonging and who is considered to be an outsider. Due to the importance of relationships, decisions and business communications focus around personal face-to-face relationships and interactions. France uses a contextual style of communication. This style is popular in high context societies and is often associated with high power distance countries. An example of France utilizing a contextual style is the common practice of addressing people with formal titles, as opposed to using a casual first name basis. For example, in France it is appropriate to refer to the CEO as “Mr. PDG”, not by his/her first name as would be the common practice in the United States. Additionally, France uses an affective style. This style is common in high-context societies. It requires the listener to note what is being said and intently listen. It is important to note that often the meaning is not verbal. Furthermore, planning and structure are highly valued in French society as the French are long-term oriented. Managers at Audrey Arden Photography must keep this in mind when communicating policies and explaining decisions to colleagues. Potential Communication Problems As noted earlier, France is a high context culture. Consequently, the meanings of their messages are often implicit and highly coded. As Audrey Arden Photography is based in the U.S. (a low-context society) and is expanding to Paris, France (a high- context society) there are bound to be challenges between the two communication styles. These challenges include misinterpretation, misunderstanding, and potentially incorrect perception of signals. Audrey Arden’s France location will have to deal with low context culture when working with expatriates or employees in the New York or Los Angeles locations. As a result, communication problems may arise due to the differences in communication styles. For example, the French may feel that Americans insult their intelligence by explaining the obvious. While Americans on the other hand, may feel that French managers provide little or no direction. Additionally, another aspect displaying France’s high context communication style and how it effects business communications centers in the negotiation and meeting 17

process. The French come well informed with information gathered prior to the meeting. Because the French come to meetings highly prepared, explicit and detailed discussions would be considered an insult, as everything is already clear to them. Furthermore, the French place great importance on ambience, decorum, the relative status of the participants in a communication, as well as the manner of the message’s delivery. Furthermore, it is common for low context cultures to perceive high context cultures as non-disclosing, sneaky, and mysterious. Language barriers such as accents, differences of language and unfamiliar common sayings all complicate the communication process as these factors impact message comprehension. Although Audrey Arden Photography’s employees will be bilingual in order to ease some of the communication problems, there is still a difference in language comprehension between a native speaker and someone who has learned French as their second or third language. For example, a non-native speaker may not understand the meaning of French common sayings and may interpret them incorrectly. For example, the common French saying, “Arriver comme un cheveu sur la soupe” literally means to arrive like the hair in a soup (15). However, the saying refers to entering a situation at the most awkward moment possible. Without growing up and being exposed to French culture, a French language learner would not understand the contextual element of this message and might take it for the literal translation meaning. Control Issues Audrey Arden Photography will also have to monitor external and internal control issues to best set the company up for success. Externally the difference that will affect business the most is the higher uncertainty avoidance seen in the French designers and photographers. This means that the company will have to earn trust and loyalty by giving them consistent quality and reassurance. If the designer is not satisfied with the photographer Audrey Arden will pay to redo the photo shoot with a new photographer. In tern we give all photographers one hundred percent reassurance they will get paid in full for every job, even if the designer can’t pay in full, the company will cover the difference. Also Arden photography has a local French consultant that can help establish and see though these quality assurance control measures. The main control issues that will need to be address are those internally, there are five main elements. The first is separation of duties. In a smaller company there is a greater risk of error or fraud since multiple tasks are managed by only one person. In order to make sure all business operations are thorough and done correctly different people are responsible for authorizing and recording transactions, maintaining custody of related assets, and reconciling accounts. The second element is policies and procedures. Audrey Arden Photography will have a well-written policy and procedure manual that helps to align business objectives between the Paris and American offices, and establish the best operating procedures. The same company code of ethics will also be heavily emphasizes as it is in the New York and Los Angeles offices. This is a key way to assure that decision- making and behaviors are aligned company wide. Plus having clear ethical and 18

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operational procedures makes it easier to train new employees. This is also helpful and important for the company since there will always be new clients in and out the door that need to know the standard of service they are receiving. The third element is documentation. Being a form of a staffing agency means that Arden photography has many different moving parts to track from financials, legal, photographers assignments, designers needs, payroll, transnational logistics with the American offices, and much more. Thus having organized and detailed documentation of all logistics and transactions is very important. There always needs to be a hard and electronic copy that demonstrates that transactions were completed, procedures were performed right, and controls are in place and working. The fourth is oversight and review. Audrey Arden is more involved in strategic goals and development of the business, so there is not enough time for her to personally ensure basic internal control monitoring procedures are in place. Thus that is why there is a Mr. PDG on site to manage those office specific details for her, and there is a senior manager who can offer support. They have the time and resources to review key metric, such as budget or pay roll, on a daily/weekly/monthly basis to help identify problems that may exist. Not only is this needed because Audrey cannot be there, but it needs a full time position since these managers are overseeing a new office and the balance of cultural differences as well. Finally, the last control element is user access rights. Confidentiality of designer and photographer partnerships is important for the integrity and competitiveness of the business. Also since Audrey Arden photography is a unique business the trade secrets are extremely valuable, so employee’s discretion is vital to the company keeping its competitive advantage. Thus employees will just have access to information systems as needed to perform their work functions. Also every employee signs a nondisclosure agreement about the details and functions of the office. Overall these control measurements should ensure Audrey Arden photography is run effectively, efficiently, and ethically. 19

Works Cited "15 French Idioms You Should Know But Don't." FluentU French . N.p., n.d. Web. 18 Apr. 2017. Beer, Jennifer E. "Communicating Across Cultures." Culture at Work . N.p., n.d. Web. 25 Mar. 2017. "Collectivist and Individualist Cultures." Psychology Wiki . N.p., Web. 1 Apr. 2017. Fouquet, Judicael. "Employees' Right to Holidays in France." Global Workplace Insider . N.p., 16 July 2014. Web. 02 Apr. 2017. "France: Economic and Political Overview." Sud De France . N.p., Apr. 2017. Web. 15 Mar. 2017. "French Social and Business Culture." Global Alliance of SMEs . N.p., n.d. Web. 15 Mar. 2017. "Geert Hofstede." The Hofstede Centre . Itim International, n.d. Web. 05 Apr. 2017. Lash, Steve. "5 Internal Control Issues for Small Businesses." BeaconCFO Plus . N.p., 27 Jan. 2016. Web. 2 Mar. 2017. "Leadership Styles: Autocratic Leadership." Leadership Toolbox: Your Source for Leadership Development Resources . N.p., n.d. Web. 12 Apr. 2017. Shaw, Seyfarth. "Employment & Labour Law in France." Lexology . N.p., 8 Mar. 2017. Web. 15 Mar. 2017. Stump, Scott. "Is Disconnecting from Work a 'right'? French Law Makes Weekend Emails Illegal." TODAY.com . TODAY, 26 May 2016. Web. 03 Apr. 2017. "The Family Is Moving to Paris! (Now What?)." Expat à Paris . N.p., 12 Mar. 2012. Web. 2 Mar. 2017. 20

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