Read the following scenario and answer the following questions:
1. WHAT IMPORTANT MANAGEMENT SKILLS DID MICHAEL EISNER BRING TO DISNEY?
2. ARE HIS MANAGEMENT SKILLS STILL EFFECTIVE IN TODAY'S ENVIRONMENT?
PART: Once Upon a Time at Disney
Since its founding in 1923, Walt Disney Co. has become more than just another corporation: it is an icon of American creativity and ingenuity. Walt Disney’s realization of animated and live-action films, TV shows, theme parks, and merchandising tie-ins is the triumphant story of an entrepreneur’s creative drive and vision. However, it is under the leadership of Michael Eisner that Disney has become an entertainment conglomerate. Eisner’s management of the much-beloved brand is one of the great turnaround stories of the twentieth century. Today Disney’s global reach six theme parks, book publishing, cruise ships, TV and radio networks, Broadway theaters, and even a city (Celebration, Florida), created in the Disney vision of small-town life. In recent years, Eisner, described as a very “handson” manager, has come under fire for a series of missteps, ranging from movie box-office busts; the loss of key executives; and underperforming theme park, retail store, and animation division; to mismanaging Disney’s partnership with digital animation pioneer Pixar. But under his leadership, the company has thrived by adapting to a fast-changing entertainment environment whose consumers have grown up with Disney’s fresh-faced Americana but now demand increasingly sophisticated fare. Disney plays to its strengths, creating synergies throughout its brands and divisions: stressing efficiencies in its management and film-making divisions; and embracing new technologies and management competencies.
Since its founding in Hollywood in 1923 as Disney Brothers Studio, the company has steadily progressed in size and management style. Walt and his older brother, Roy, split their talents and energies: Roy handled money, Walt headed the creative side. Their small company was a flat, nonhierarchical organization where employees were on a first- name basis. “You don’s have to have a title,” said Walt. “If you’re important to the company you’ll know it”. Dedicated to creativity, innovation, and quality, Walt emphasized teamwork, communication, and cooperation. The brothers churned out a series of short films starring Oswald, the Lucky Rabbit, which became so popular that the distributor commandeered the series. The Disney’s eventually developed a new character--- Mickey Mouse. Mickey received little notice until Walt added synchronized sound, a technology never before attempted in a cartoon. Mickey’s first feature, Steamboat Willie, was a hit, and a corporate identity was born. Walt’s death in 1966 did not stop the company’s progress; his brother Roy oversaw the opening of Walt Disney World in 1971, which included Disney’s first on-site resort hotel. Tokyo Disneyland followed in 1976. But while the parks were booming, film output suffered. Rather than pushing new ideas, managers asked, “What would Walt have done?” The result was sequels rather than new productions. As Disney incurred heavy costs to finish its Epcot attraction in 1982 and began developing new cable TV venture, the company0s financial performance deteriorated. Corporate raiders zeroed in, planning to break up the company’s assets. In late 1984, backed by a friendly investment group, 42-year-old Michael Eisner was named chairman. Eisner immediately began transforming Disney into a learning organization dedicated to creativity. He focused the entire organization on the primacy of its famous brand and the importance of corporate synergy. “This concept of cross-promotion and transformation of popular products into new media is an engine that helps drive our company”, Eisner said. “Synergy, for us, goes with creativity—which rhymes with selectivity, which means keeping one’s eye on the ball”. Each Disney unit was assigned a representative who reported to a corporate synergy group. Corporate gatherings, referred to as the “Cast of 100”, were held two to three times a year around the world to help create and reinforce relationships among divisions. Monthly operating reports, read thoroughly by Eisner, always included at leas a paragraph on the latest cross-divisional initiatives. Eisner lured skilled managers from his former company, Paramount Pictures, and pushed all employees closer to the “shop floor”--- the operations where new ideas and products were created. Ever mindful of the importance of Disney culture, Eisner created a three-day training program at Disney’s corporate university that inculcated employees in the company’s history and Walt’s legacy. Training did not stop in the classroom, however: All new employees, including executives, spent a day dressed as characters at the theme parks to develop pride in the Disney tradition. Building the Disney brand while preserving the corporate values of quality, creativity, entrepreneurship, and teamwork became Eisner’s mantra. In this view, “managing creativity” is the company’s most distinctive corporate skill. By the end of Eisner’s first 15 years at Disney’s helm, the company’s revenues had climbed from $1.65 billion to $25 billion, while net earnings rose from $.1 billion to $1.2 billion. Disney’s ability to read the public and respond to its changing tastes while retaining the wholesome image parents yearn for has created management challenges but is key to the company’s long term survival.