Mac Cosmetics 7d-Hofstede Analysis

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Makeup Art Cosmetics (MAC) was founded in 1985 in Toronto by Frank Toskan and the late Frank Angelo. The business plan concentrated on targeting young, fashionable females by creating cosmetic products which contain unique textures and colours. Using this strategy, the company targeted the ¡°hip¡± celebrities and other cosmetic influencers to gain recognition and market share in the younger consumer market. Since its inception, the company has grown to become a multi-national organization operating in over 180 locations worldwide. In the late 1990¡¯s, MAC was purchased by Estee Lauder, which has led to the alteration of the company¡¯s governance; the culture of the firm changed from that of an entrepreneurial-style with limited rules into a culture dominated under a stricter control by top management. There is a medium power distance between managers and associates. Evidence supporting a high power distance is that promotions are based on job performance and not on obedience.; employees are individually reviewed at the end of each year by their superiors and are rewarded with salary increases and promotions based on their review. The organizational design and structure is vertical with a tell pyramid since MAC directors now have to report to Estee Lauder top management (please see Appendix 1 for a simplified organizational chart). Further evidence which supports our conclusion of a medium power distance is that the purpose of training is for the improvement of skills rather than for instilling compliance. The motivational assumption is that people like to work and get rewarded for their hard work at MAC, which is why the company provides its employees with free product giveaways on a monthly basis and an annual two thousand dollar credit for each manager towards the purchase of all Estee Lauder products. Uncertainty avoidance at MAC is moderate or medium in nature. Cultures with high uncertainty avoidance are characterized by many standardized procedures. At MAC, there are codes of conduct that employees must follow in order to avoid any misunderstandings. Further, MAC has a highly vertical structure as discussed in the section on power distance. Evidence which supports low uncertainty avoidance is the propensity for taking risks as outlined in their corporate strategy. The nature of the make-up industry is an environment that is constantly changing. Therefore, the company would have to take risks and adapt to environmental changes frequently in order to survive. Individualism at MAC is quite high. This is shown through management selection of candidates for openings based on universal qualifications. In addition, the firm evaluates employees on an individual basis at year-end to see which employees deserve promotions or additional rewards. The company has a culture based on low masculinity. This can be attributed to the fact that the target feminine customer group discourages rigid gender roles. For example, management and employee selection is based independently of gender, and potential employees are evaluated based on past work experience and accomplishments. The quality of life for employees is a concern for the company, and they are given quite liberal policies regarding time away from work. Generally, the firm allows a participative leadership style, however decisions are ultimately made by top management with the desired goal of economic growth. Management selection is also based on personal, educational, and characteristic fit. The company also values long-term employee commitment. However, it is also short-term orientated as shown through the provision of incentives for achieving short-term goals. The decision making process focuses on both logical problem solving and group consensus. Hence, we are able to conclude that the company values long-term growth, yet under the influence of a generally unstable job market in Canada, with a high job turnover rate, MAC is somewhere in the middle in terms of its time...
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