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. Strategic direction 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 4/12/2008 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. Organizational structure
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 divisional structures: corporation office, hich has a horizontal non-hierarchical structure – all employees are organized around core processes like health, environment, safety and security; in the other hand, there are 12 brands which are organized into self-contained divisions with decentralized decision making (Figure 1). Figure 1: Carnival Corporation Organizational Chart Board of Directors HESS Committee Vice Chairman Maritime Policy & Compliance Health/Medical Working Group Environmental Working Group Safety Working Group Security Working Group Operating Une CEO / President
Operating Lines Shoreside Management Ship’s Masters & Heads of Departments Source: http://www. aimu. org/Issues%202007/Mary%20Sloan. pdf Carnival Cruise Lines, which is one of the self-contain divisions, has a matrix structure combining characteristics of both functional and divisional structures. Functional structure with a flat hierarchy and horizontal linkages is used in the shoreside CCL office which has a CEO (Bob Dickinson) and five departments (Figure 2. ). All the company’s 22 divisions (ships) report to the shoreside office. 4/12/2008 Volha Buslava 2
International Business Management Figure 2: CCL Shoreside Management CEO/President Ships Carnival Sensation Carnival Conquest Carnival Glory Carnival Liberty Carnival … Carnival … Source: Author Accounting Administration Air Operations Marketing/ PR Reservations/ Sales Every division is a mechanic organization with a functional departmentalization, very high hierarchy and a span of control. Though the Captain is responsible for the whole operation of the ship, the authority is decentralized to four main departments which report to both a Staff Captain (Figure 3) and to the CCL office.
Depending on the ship, a quantity of crew-members is varying from 800 up to 1200, as well as a number of departments and managerial levels in the scale of rank. Such a structure, where all reporting relationships and jobs descriptions are clearly defined, and where strict rules and regulations are to obey by everyone – is the best fit to an organization like ship. All innovations coming from the corporation or the shoreside office can be efficiently implemented through this structure. Organizational Culture
Carnival corporate culture may be referred as a mission culture, since it serves a specific type of customers selling them experience – an experience of fun. It focuses on the company’s clear vision and knowledge about the industry, and realization of organizational goals, such as expansion, greater efficiency and profitability. Nevertheless, every division (ship) has its own culture or subculture, which is a bureaucratic one. This distinction is based on the different from corporation and CCL office structural design and a focus which make this subculture less flexible, though consistent, cooperative and highly efficient. /12/2008 Volha Buslava 3 Environmental Off. 4/12/2008 Second Officer Third Officer Safety Officer Security Officer Chief Electrician Source: Author First Engineer Deck & Engineering Dept/1st Officer/ Chief Engineer Second Engineer Third Engineer Ch. Air Conditioning Bankers Cashier Slot Attendants Musicians Dancers Show Manager Photo – Manager Photographers Cruise consultant Man. Art-Action Man. Motorman Figure 3: CCL Ship’s organizational chart Entertainment Dept/ Cruise Director Supervisors Casino Manager Chief Purser Captain Head Waiter Hostesses 1st Cook Chef de Partie Chef Supper Club Chef de Cuisine Ass.
Maitre d’hot Staff Captain Office Positions Team Waiter Maitre d’hotel Crew-Training Center 2nd Cook Store Keeper Cooks Bar-Tender Bar-Waiter Bar-Boy Stewarts Workers Floor Supervisor Laundry Superv. Pastry Cooks Ass. Bar Man. Bar Manager Food & Beverage Man. Gift-Shop Manager Chief Accountant Bakers Service & Hospitality Dept/Hotel Director In addition, CCL culture exists at two levels: a visible and an invisible one. Ass. Housek. Man Housekeeping Man. Tailor Ass. Room St Room Stuart Spa Fitness Beauty Saloon Nurse Senior Doctor Personal Care Dept International Business Management
A visible part of the CCL ship’s culture provides all its employees with organizational identity, also helping newcomers to successfully integrate into the organization. The following aspects of culture are practiced onboard: Volha Buslava 4 International Business Management Rites and Ceremonies: – Rites of passage: Ship-introduction training, Crowd-Management training, Safetytraining – Rites of enhancement: monthly awards events (“employee of the month”) – Rites of renewal: professional, hospitality and language skills trainings – Rites of integration: crew-parties, Bingo-games, beach-activities Stories.
They are frequently told to newcomers about management or guests, to let them know about the company and its heroes both good and bad. Symbols. There are few different forms: – Company’s slogan: “There are Million Ways to Have Fun”, “Share a S. M. I. L. E. ” (Say Hello And Recognize Enthusiastically) – Symbol of CCL – a human-size doll “Freddy” walking around the ship and cheering the guests – Carnival uniform, which is mostly combined of tree colors: white, red and blue. Language. English is the official language of the company.
However, since there are about 80 nationalities on board with its own languages, at all times a special ship’s slang was created among crew-members to express oneself in an easy way using words from different languages (e. g. : paisana – one’s countrymen; mamagayo – a person, who avoids working hard. If you lacked a space in elevator – you may get to hear: “A next cruise! ”…). In fact, this slang brings a detrimental influence to the employees’ language skills, as it litters theirs anyway imperfect English.
In addition to that there is a special sea-jargon existing also in any sea-company in the world. An invisible level of the company’s culture includes personal believes, values and assumptions. It is very diverse, assuming existence of different nationalities onboard with their different cultures and traditions, religions and attitudes. Unfortunately, this aspect has been paid the least attention by company’s administration. Being frequently interpreted by the crew incorrectly, cultural differences become a reason for misunderstanding among them, hatred towards another nationality and racism.
An obligatory to all employees cross-cultural training, would probably be a good solution to this problem, teaching to respect and be patient to different cultures and traditions. 4/12/2008 Volha Buslava 5 International Business Management Bibliography All About Indonesian People Working For Carnival Cruise Lines. (n. d. ). All About Cruises. Retrieved December 4th, 2008, from http://www. allaboutcruisesandmore. com/indonesianpeople-working-for-carnival-cruise-lines Boorstin J. (2003, June 9). Cruising For A Bruising? Micky Arison built the world’s biggest and most profitable cruise company. But he has never navigated seas quite this rough.
CNN Money. Retrieved December 4th, 2008, from http://money. cnn. com/magazines/fortune/fortune_archive/2003/06/09/343951/index. htm Carnival Corporation & PLS. (n. d. ). Presentation. Retrieved December 4th, 2008, from http://www. aimu. org/Issues%202007/Mary%20Sloan. pdf Client Successes. (n. d. ). Hogan & Hartson. Retrieved December 4th, 2008, from http://www. hhlaw. com/about/successes/detail. aspx? casestudy=96 Gibson, P. (2006, (1)). Cruise Operations Management. New York: Butterworth-Heinemann, pp. 91-100. Mission and history. (n. d. ). Carnival Corporation & PLS. Retrieved December 4th, 2008, from http://phx. orporate-ir. net/phoenix. zhtml? c=200767=irol-history Overview of Cruise Line Employment. (n. d. ). CvTips. Retrieved December 4th, 2008, from http://www. cvtips. com/overview_cruise_line_employment. html Robert, J. and Kwortnik, JR. (2006, (2)). Burnishing the Brand. Retrieved December 4th, 2008, from http://people. cornell. edu/pages/rjk34/Research/Carnival%20Cruise%20Lines%20Burnishing% 20the%20Brand. pdf 36 Years of Fun – A History of Carnival Cruise Lines. (2008, Jan 8). Carnival. Retrieved December 4th, 2008, from http://www. carnival. com/CMS/Articles/history_virtual2. aspx 4/12/2008 Volha Buslava 6
