Management/DISNEY term paper 41524

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1) The Walt Disney Company has virtually no level of cohesion in its corporate management. In March 2004, CEO and Chairman Michael Eisner was removed as Chairman of the Board with a 43% no confidence vote. This was due in no small part to the efforts of former board members Roy Disney and Stanley Gold, who together formed the �Save Disney� campaign with the goal of ousting Eisner. Eisner initially planned to stay on as the CEO of Disney until his contract ends in September 2006, however it was recently announced that the current president of the company will take over the CEO position on October 1, 2005. Disney has had a long history of corporate management cohesion issues since Eisner took over in 1984. This lack of cohesiveness can lead to a myriad of problems for the company as an entity. One scenario is the possibility of a hostile takeover (one was initiated by Comcast in February 2004 and later withdrawn). Another problem that could arise due to the lack of corporate management working together is the loss of confidence in the company being reflected by stock prices dropping (Disney�s stock price has hovered from $24.00 to $28.00 per share for the last 4 years).

2) The Walt Disney Company has all of the classic types of conflicts taking place on a daily basis; power struggles, personality clashes, differing priorities, diversity issues, and different work methods are the main issues running rampant throughout Disney�s executive management. The problem is that all of the varying conflict issues are interwoven; there is no clear and resolute conflict that can be dealt with and resolved. When Michael Eisner was hired in 1984 to run the company, the focus was on saving an ailing animated motion picture company. Everyone was in agreement and pitched in to help change the direction of Disney turning it into the second largest media company in the world. Along the way there were several casualties; Jeffrey Katzenberger who was fired by Eisner for wanting to be named president, termination of a new theme park in Virginia, the complete removal of artists from making the animated films and replacing them with computer animation, fall-out with the company�s alliance with Pixar films causing Disney to release their distribution contract with the company, the resignation of board members Roy E. Disney and Stanley Gold in 2003, changing Disney�s image from family oriented to blood, guts, gore and sex (Miramar Pictures and Hollywood Pictures, who are owned by Disney consistently release R-rated movies). These are just a sampling of the variety of conflicts waged at Disney on a daily basis. I believe the stock has been dormant for 4 years because of these internal conflicts becoming external knowledge. Stockholders want a strong, firm and fair hand leading the helm of their investment; anything less will cause doubt and chaos.

3) The first agenda for the new CEO will be to repair Disney�s tarnished reputation as a producer of family oriented media. Either divest of these companies manufacturing the inappropriate (for Disney) media or tone them down by no longer making R-rated movies. I think anyone can accept a PG-13 Disney film (Pirates of the Caribbean: the Curse of the Black Pearl was a huge success) but not a R-rated one, no matter what subsidiary releases it Disney is still the parent company. Return to what Walt Disney said about making children�s films that adults will want to see too. This is clearly evident by the success of Pixar movies like Shrek, Monsters, Inc., A Bug�s Life and others. Draw on the diversity of the executive management; use it to an advantage rather than fighting it. Restore the confidence of the stockholders by showing a united front at all meetings; in other words don�t just talk the talk, walk the walk too.

4) SWOT Analysis

a) Internal Strengths � impressive list of subsidiary companies with holdings throughout almost all media industries. This gives the company a huge advantage when it comes to surviving market fluctuations and economic instabilities. With a new CEO coming on board in October 2005, the opportunity to take a new direction and a fresh outlook will come too. The change to mend fences and rebuild relationships internally has never been more promising. Longevity, Disney has been around since 1923, in other words the company is not going to dissolve or go away. The name Disney � it is recognized internationally, just like Coca-Cola.

b) Internal weaknesses � lack of corporate management cohesion for the past several years. Communication between management and employees is non-existent, there is no apparent effort to repair this disconnect. The conflict between executives is hurting the very fabric of the company and keeping the stock price low despite having several profitable films within the previous two years. Trying to continue to present Disney as �the family film� company is also hurting its reputation, especially with holdings in several motion picture companies that regularly release R-rated films.

c) Opportunities � get back to making animated films, families are craving good movies to watch with together. Take advantage of the past � re-release the classics that so many grew up with. Digitize them and add better sound quality, release them in movie theatres and then offer DVD and VHS sale of the films. Go back to movies that are fun, that teach life lessons; not quirky revisionist historic-type animated films. Look to the past and build on the future with it.

d) Threats � Disney needs to plan for more possible hostile take-overs. This is due impart to the low stock price. The company needs to begin repurchasing its stock in order to boost up the price. Disney also needs to implement an international anti-terrorist initiative, their name is synonymous with the USA � being an international company with theme parks in France and Japan could make them targets of terrorist plots.

e) Disney needs to implement a major stock repurchase program now, with the price low, in order to stop any more attempts for a hostile take-over.

Disney needs to show its stockholders and the international investment community that change is a good thing (removing Eisner) and returning to one�s roots is also good for business.

Disney needs to leverage its mass appeal to the world by launching an immediate re-release program of its classic movies.

Disney�s new CEO should ask Roy E. Disney and Stanley Gold to return to the board and resume their important roles within the company.

Disney needs to take advantage of the prevailing climate and begin making more animated feature films geared towards the entire family.

Works Cited

"Comcast Drops $54.1 Billion Disney Bid; Cites High Shares in Calling off Hostile Takeover." The Washington Times 29 Apr. 2004: C08. Questia. 10 Apr. 2005 .

Compaine, Benjamin M., and Douglas Gomery. Who Owns the Media?: Competition and Concentration in the Mass Media Industry. 3rd ed. Mahwah, NJ: Lawrence Erlbaum Associates, 2000.

"Disney Strips Eisner of One Top Job; Names New Chairman after Shareholders Withhold Votes." The Washington Times 4 Mar. 2004: C08. Questia. 10 Apr. 2005 .

"Eisner to Retire; Disney Chief to Leave after Tumultuous Command." The Washington Times 11 Sept. 2004: C10. Questia. 10 Apr. 2005 .

Goode, Stephen. "Disney Betrayed." World and I Dec. 2001: 75. Questia. 10 Apr. 2005 .

Leavitt, Stacey Eager. "Disney World Rockets into the 21st Century: A Futuristic Space Attraction, Another Visually Astounding Vacation Village, and a Dazzling Fireworks Display Keep Folks Clamoring for the Magic Only Disney Delivers." USA Today (Society for the Advancement of Education) 132.2704 (2004): 46+. Questia. 10 Apr. 2005 .

"The Shame of Disney; N&D." The Mail on Sunday (London, England) 7 Jan. 1996: 7. Questia. 10 Apr. 2005 .

Wasko, Janet. "The Magical-Market World of Disney." Monthly Review Apr. 2001: 56. Questia. 10 Apr. 2005 .

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