Transcript AOL 2004 - HEC Paris

BEST IN FRANCE CASE STUDY
Macha Brazovskaia, Kathy Brustad,
Ramesh Mantha, Alfonso Ramos-Sandoval, Lionel Roux
Best In France:
Case Study on AOL France
 Evolution of AOL France
 Before and After the merger
 Constraints and Benefits
 Changes and Adaptations
 Essential advices
Best In France:
Case Study on AOL France
 Internet Service Provider (ISP)
 Established as Joint Venture in 1994
 Three stakeholders (reducing risks)
 AOL
 Bertelsmann
 Vivendi
 AOL and Time Warner merger in 2000
 Wholly owned after merger
Evolution
Before & After
Constraints
Benefits
Changes
Adaptations
Advices
Best In France:
Case Study on AOL France
Before
After
• Land of freedom (startup like)
• Culture change
• Plenty of money
• Market became more mature
• Powerful brand name
• US Regulations imposed
• Entrepreneurial spirit
• US drives local operation
• Problem with decision making
• Employees freedom curtailed
• Change in key policies (e.g.
compensation, appraisal)
Evolution
Before & After
Constraints
Benefits
Changes
Adaptations
Advices
Best In France:
Case Study on AOL France
AOL France today
 350 employees, 99% are French
 Good product supported by good
technology
 11 Competitors
 #3 in the market
Evolution
Before & After
Constraints
Benefits
Changes
Adaptations
Advices
Best In France:
Case Study on AOL France
 Labor law
 35 hour work week
 Trade unions
 Cultural differences
 Business environment
Evolution
Before & After
Constraints
Benefits
Changes
Adaptations
Advices
Best In France:





Evolution
Case Study on AOL France
Talent pool centralized in Paris
European Market
Low cost of highly educated workforce
Productivity is high
Lots of accountability, loyalty to employer
Before & After
Constraints
Benefits
Changes
Adaptations
Advices
Best In France:
Case Study on AOL France
 Change of Culture
 Ethic code (SOBC: Standards of
Business Conduct)
 Change of Key programs/policies
 Appraisal system
 Compensation scheme (stock
options)
Evolution
Before & After
Constraints
Benefits
Changes
Adaptations
Advices
Best In France:
Ethic Code
Case Study on AOL France
• Badly conceived because it was very culture driven
• Communication with US on conflicts with French law
• Partial implementation of Ethic code
Treatment of union
• Very different view on trade unions
• Explain to US the necessity of unions
• US agree not to push the issue
Appraisal system
• Small adjustments
• Make the US system French
• Full implementation of appraisal system
Evolution
Before & After
Constraints
Benefits
Changes
Adaptations
Advices
Best In France:
Case Study on AOL France
 BUILDING TRUST
 HAVE MUTUAL RESPECT
 BE FLEXIBLE
 HAVE CONFIDENCE
 FOCUS ON THE RESULT, BUT
LEAVE THE MEANS
Evolution
Before & After
Constraints
Benefits
Changes
Adaptations
Advices
Best In France:
Case Study on AOL France
 France is still competitive for
highly qualified workers
 France’s talent pool is attractive
to technology companies
 American company can still
succeed in France
Evolution
Before & After
Constraints
Benefits
Changes
Adaptations
Advices
Best In France:
Case Study on AOL France
Special Thanks To:
Stéphane Treppoz
CEO
AOL France
Dorothee Burkel
Director of Human Resource
AOL France
Evolution
Before & After
Constraints
Benefits
Changes
Adaptations
Advices