Harvard Case - Saving Disney
"Saving Disney" Harvard business case study is written by Nancy Dean Beaulieu, Aaron M.G. Zimmerman. It deals with the challenges in the field of Organizational Behavior. The case study is 34 page(s) long and it was first published on : Apr 4, 2005
At Fern Fort University, we recommend a multi-pronged approach to revitalize Disney, focusing on transformational leadership, organizational culture, innovation, and strategic partnerships. This approach aims to re-ignite the magic of Disney, re-engage employees, and re-energize the brand for future growth.
2. Background
This case study examines the challenges faced by Disney under Michael Eisner's leadership, specifically the declining park attendance, the rise of competition, and the internal turmoil stemming from a rigid, top-down management style. The case study explores the impact of these challenges on Disney's organizational culture, employee morale, and overall performance. The main protagonists are Michael Eisner, the CEO, and his successor, Bob Iger, who inherited a company in need of significant change.
3. Analysis of the Case Study
The case study highlights the following key issues:
- Leadership Style: Eisner's autocratic leadership style, while successful initially, became a barrier to innovation and employee engagement. This created a rigid, top-down organizational culture that stifled creativity and discouraged open communication.
- Organizational Culture: The company's culture, characterized by a focus on cost-cutting and short-term profits, led to a decline in the quality of the guest experience and a loss of employee morale.
- Innovation: Disney's innovation slowed down, failing to keep pace with evolving consumer preferences and the emergence of new competitors.
- Strategic Partnerships: Disney's lack of strategic partnerships limited its ability to leverage external expertise and resources, hindering its ability to adapt to the changing market landscape.
Framework: We can analyze this case using the Organizational Culture Framework by Edgar Schein, which identifies three levels of culture:
- Artifacts: These are the visible aspects of the culture, such as physical environment, behaviors, and rituals. Disney's artifacts reflected a focus on cost-cutting and efficiency, leading to a decline in the quality of the guest experience.
- Espoused Values: These are the stated values and beliefs of the organization. Under Eisner, Disney's espoused values emphasized profitability and efficiency, but these were not always reflected in the company's actions.
- Basic Underlying Assumptions: These are the unconscious, taken-for-granted beliefs that shape the organizational culture. The assumption of a rigid, top-down management style and a focus on short-term profits became ingrained in the company's culture, hindering its ability to adapt to change.
4. Recommendations
1. Transformational Leadership:
- Implement a new leadership style: Bob Iger should adopt a transformational leadership style, characterized by vision, inspiration, and a focus on employee development. This involves:
- Communicating a clear vision for the future: Iger needs to articulate a compelling vision for Disney that re-energizes the brand and inspires employees.
- Empowering employees: Iger should empower employees to be more innovative and take ownership of their work. This can be achieved through employee empowerment programs, decentralized decision-making, and flatter organizational structures.
- Developing a culture of innovation: Iger should foster a culture of creativity and experimentation by encouraging employee feedback, brainstorming sessions, and cross-functional collaboration.
2. Revitalize Organizational Culture:
- Re-establish the 'magic' of Disney: Iger should focus on restoring the core values of Disney: creativity, imagination, and customer service. This can be achieved through:
- Employee training and development: Invest in employee training programs that emphasize customer service, creativity, and the Disney brand values.
- Rewarding excellence: Recognize and reward employees who embody the Disney spirit and contribute to a positive guest experience.
- Creating a sense of community: Foster a sense of belonging and shared purpose among employees through team-building activities, social events, and open communication channels.
3. Drive Innovation:
- Invest in research and development: Allocate resources to develop new attractions, experiences, and technologies that cater to evolving consumer preferences.
- Embrace emerging technologies: Explore the use of virtual reality, augmented reality, and artificial intelligence to enhance the guest experience and create new revenue streams.
- Partner with external innovators: Form strategic partnerships with technology companies, creative agencies, and other industry leaders to access new ideas and expertise.
4. Strategic Partnerships:
- Seek strategic alliances: Explore partnerships with other entertainment companies, theme park operators, and technology providers to expand Disney's reach and capabilities.
- Leverage cross-cultural expertise: Partner with companies in international markets to gain insights into local cultures and preferences.
- Develop joint ventures: Collaborate with other companies to develop new products, services, and experiences that leverage the strengths of both organizations.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: The recommendations focus on restoring Disney's core competencies in creativity, innovation, and customer service, aligning with the company's mission to provide entertainment and experiences that inspire and delight.
- External customers and internal clients: The recommendations address the needs of both external customers (guests) and internal clients (employees) by focusing on improving the guest experience, enhancing employee engagement, and creating a more positive and productive work environment.
- Competitors: The recommendations acknowledge the competitive landscape and emphasize the need for innovation, strategic partnerships, and a focus on customer service to stay ahead of the competition.
- Attractiveness: The recommendations are expected to have a positive impact on Disney's financial performance by increasing park attendance, enhancing brand loyalty, and generating new revenue streams.
6. Conclusion
By implementing these recommendations, Disney can revitalize its brand, re-engage employees, and position itself for future growth. The key to success lies in adopting a transformational leadership style, fostering a culture of innovation, and forming strategic partnerships that leverage external expertise and resources.
7. Discussion
Alternatives:
- Mergers and Acquisitions: Disney could consider acquiring other entertainment companies to expand its portfolio and gain access to new markets. However, this option carries significant risks and may not be the most effective way to address the company's core challenges.
- Cost-Cutting: Disney could implement further cost-cutting measures to improve profitability. However, this may lead to a further decline in the quality of the guest experience and employee morale.
Risks and Key Assumptions:
- Implementation challenges: Implementing these recommendations will require significant effort and commitment from all levels of the organization.
- External factors: The success of these recommendations will depend on factors beyond Disney's control, such as the overall economic climate and consumer preferences.
- Cultural resistance: There may be resistance to change from employees who are accustomed to the old ways of doing things.
8. Next Steps
- Develop a detailed implementation plan: Outline the specific steps, timelines, and resources required to implement each recommendation.
- Communicate the vision to all employees: Clearly communicate the new vision for Disney and the rationale behind the changes.
- Monitor progress and adjust as needed: Regularly track the progress of the implementation and make adjustments as needed to ensure that the recommendations are achieving the desired results.
By taking these steps, Disney can embark on a journey of renewal and growth, recapturing the magic that has made it a global icon for generations.
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Case Description
At a March 2004 annual shareholder meeting, 45% of Walt Disney Co.'s shareholders withheld their support from CEO and Chairman Michael Eisner, producing a large no-confidence vote in the company's leader. The company had struggled financially in recent years and the board was widely believed to be beholden to Eisner. Two directors, Roy Disney and Stan Gold, resigned in protest of Eisner's leadership and the board's unwillingness to change. The two began to wage a PR battle calling for Eisner's removal and asking all shareholders to withhold their support from him at the upcoming shareholder meeting. Traces the history of Eisner's reign at the company and the events leading up to the March 3, 2004, shareholders meeting.
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