International Business Management
Carnival Cruise Lines: Organization and Organizational Culture This paper presents my former employer, an American company Carnival Cruise Lines (CCL) which is part of the Carnival Corporation. Describing the organization of the whole corporation in general, the paper places a special emphasis on the strategy, organizational structure and culture of the CCL.
Carnival Cruise Lines is the flagship brand of Carnival Corporation & plc, the largest cruise company in the world with its 12 brands, including Carnival Cruise Lines, Holland America Line, Princess Cruises, Seabourn Cruise Line, Costa Cruises, P&O Cruises, Windstar Cruises, Cunard White Star Line, Swan Hellenic, Ocean Village, Aida, and P&O Cruises Australia. Carnival Cruise Lines was established in 1972 by Ted Arison, an Israeli immigrant. Started with a single ship, the Mardi Gras, the company has since grown into the most successful American cruise line. Nowadays, having 22 vessels in its fleet the company carries more than 60,000 passengers a week.
Yet about thirty five years ago, when the cruise industry looked very differently, while it was targeting only wealthy customers, in his vision Ted Arison saw “…a vacation experience once reserved for the very rich [to become] accessible to the average person” (2008). Later on his company made a revolutionary change in cruise industry offering the products and services available to the mass-market. Ted’s vision has reflected in the corporate mission statement, which says: “Our mission is to deliver exceptional vacation experiences through the world's best-known cruise brands that cater to a variety of different lifestyles and budgets, all at an outstanding value unrivaled on land or at sea” (from Carnival Corporation official web-site). In pursuing its goals the company has built a “Fun Ships” positioning strategy based on a promise of fun – fun in everything: in dining, drinking, dancing, playing, lounging, etc. Unlike the others, Carnival “Fun” ships offered a wide range of entertainment – discos, live music, casinos, night bars, Las Vegas-style shows and wild activities – dancing with waiters on the tables after a dinner, belly-flop competitions, beer-chugging etc. The ships itself were decorated very differently using bright and neon colors. Overall the company’s strategy may be determined as a hybrid: combination of a low-cost and differentiation strategy. The company is able to maintain its low-price leadership based on economies of scale, simultaneously trying to offer a different product form competitors: “We try to never use the word gourmet, though we think our food is as good as or better than anyone else in our market…Still, we’re trying not to forget our roots. ...The rock-climbing wall is their icon—that’s their brand (about their competitor – Auth.). Our icon is fun—that’s our brand”- says Bob Dickinson, the president and CEO of CCL (2006 (2), p.10).
Carnival has a number of business objectives: among them greater efficiency from combined operations, and expansion. The latter company achieves through purchasing or merging with
Volha Buslava 1
International Business Management
other cruise lines, building new ships and acquiring new markets, such as Mediterranean area, United Kingdom, North Europe and Russia. However, maintaining the customer loyalty offering the high quality service remains one of most important goals.
Carnival has a very complex organizational structure, compounding of three parts: corporate structure, shore-side company structure and ship structure. It is also a mixture of organic and mechanistic organization: corporation and shoreside offices are the organic organizations, which inherited Arison's non-hierarchical management style, while ships are mechanistic ones. Carnival Corporation uses multi-focused grouping that combines characteristics of horizontal and...
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