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Political Frame in the Walt Disney Company Essay

Pages:8 (2328 words)

Sources:6

Subject:Business

Topic:Disney

Document Type:Essay

Document:#89023148


Key political factors that led to Eisner’s downfall

Michael Eisner’s reign as the CEO and Chairman of Disney can to an end on March 3rd, 2004, after 43% of the company’s shareholders withheld their endorsement and failed to endorse his position on the Board. He stayed as the CEO of the company for one more year then left (Forbes & Watson, 2010). However, the downfall of Eisner has been precipitated by a number of political factors thitherto his removal. One of these forces is corporate social and political bureaucracy. This factor emanated from his desire to accumulate personal power rather than that of the Disney as a company. After Ovitz left in 1996, Eisner was left as the sole leader of the company, and the Board confirmed his status with a ten-year contract. Because of his desire for personal power, Eisner did not delegate duties. To further this endeavor, he adopted a top-down decision making model where the company fade criticism as lacking engagement in many of the critical decisions made by the top management (Bright & Eisner, 1987). To avoid any efforts by the Board challenging his leadership style, Eisner ensured that the Board was made up of individuals who were loyal to him, and the top leadership positions in the company were held by persons who has a personal relationship with him.

The second political factor that precipitated the downfall of Eisner was the view that he was incapable of making the right and appropriate decisions for the company; a factor that has developed and grown for some time as a result of several decisions that he had made and was seen to be inappropriate for Walt Disney company. One of these was his decisions to criticize Steve Job, who at the time was running ads for Apple’s iMac computer. While appearing before a Senate Committee to testify on DVD piracy and circumvention of intellectual property rights in music videos and films, he lashed out on the Apple’s founder in an unusual display of public emotion that did not fit his office. This political factor resulted in the development and buildup of conflict in the overall decision-making structure of the company. The fact that decisions where coming only from Eisner meant that some of the crucial departments of the company that ought to be autonomous for the growth and development of Walt Disney were detrimentally handicapped.

In addition to the above two political factors was the political environment within and without Walt Disney. First, as a result of the piracy and convention of intellectual property right concern from the senate committee, the external climate of the company was growing increasingly toxic for Eisner. This was further aggravated by the personal conflicts he had with other players in the industry, e.g., Steve Jobs and Stanly Gold and Roy Disney. These two united and formed a coalition that was oriented towards the removal of Eisner. Internally, the various wrong decisions that Eisner had made meant that employees within the various departments, as well as the considerably neutral members of the Board, were increasingly becoming anti-Eisner (Downes, Russ & Ryan, 2007). Both the external and internal political environment was targeted to Michael Eisner, for he had developed himself to be the image of the company; thus, the political environment was anti-Eisner.

The “Jungle” metaphor and its applicability on Eisner’s case

The jungle metaphor depicts a society that is comparable to the wilderness, where there are no laws the regulate relationships and operations, and thus, it is everyone to his or her own devices. This phenomenon has also been described in alternative phrases including, every man for himself and God for us all, and man eat man society. This society is defined by certain aspects of the uncontrollability of some aspects of society, and thus, they evoke a feeling of fear, powerlessness, and disorientation. This metaphor is therefore considered to be a perfect description of the Walt Disney company – society – in the time of Eisner. First, he had amassed the decision making power of the company through balkanization and bureaucracy; thus, Walt Disney as an entity was threatened and at the disposal of his power. All the departments of the company were disoriented and confused, and more so, the should-be-autonomous departments of the company, e.g., the Finance…

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…his continuation. These differences are not only on the matter of Eisner’s tenure but also on the company’s management style. These enduring differences continue, and the result is the removal of Eisner. However, it is to be noted that, once Eisner is removed as the Board Chairman and the CEO, these coalitions come together and coalesce on the interests of Walt Disney.

These two assumptions play a crucial role in the removal of Eisner. The first factor that contributed to this result was the diversity in the company. This diversity then resulted in differences in values, beliefs, interests, and perceptions that eventually lead to shareholders not supporting his Board Chairmanship, bringing his tenure to an end.

Significance of the “Toxic Triangle” and how it informs Eisner’s case

The Toxic Triangle, as described by Forbes and Watson (2010), is a destructive form of leadership that is characterized by loyalty biases in the Board in which the corporate governance system is unable to reign in on damaging leadership. The toxic triable is made up of the destructive leader, weak owners or gullible followers, and an environment that accommodates it all.

This illustration fits Eisner’s case study, at least to the point before which the shareholders declined, endorsing his chairmanship for the Board. First, it is noted that the position of the CEO wields incredibly high power in terms of resource allocation and directing operations. For the case of Walt Disney, the CEO doubled in as the Chairman of the Board, which meant that, in addition to the powers of the CEO, he also held power to direct the Board. This is unimaginable power, which for any unethical leader, qualifies as destructive. Also, Eisner tapped individuals who were loyal to him into the position of the Board and the Top executive leadership. These individuals had unmet needs and held wrong values, e.g., greed and selfishness. As described in the toxic triangle, this meant that the Board and top management was weak and gullible. Lastly, the environment in the operational framework of Walt Disney did not have any checks and balances on wayward leadership. However, even though the operational environment was weak and…


Sample Source(s) Used

References

Bolman, L. G., & Deal, T. E. (2017). Reframing organizations: Artistry, choice, and leadership. John Wiley & Sons.

Bright, R., & Eisner, M. (1987). Disneyland: Inside Story. Harry N. Abrams, Incorporated, Publishers.

Downes, M., Russ, G. S., & Ryan, P. A. (2007). Michael Eisner and His Reign at Disney. Journal of the International Academy for Case Studies, 13(3), 71-81.

Forbes, W., & Watson, R. (2010, July). Destructive Corporate Leadership and Board Loyalty Bias: A case study of Michael Eisner’s long tenure at Disney Corporation. In Working Paper presented at the Behavioural Finance Working Group Conference, Cass Business School.

Sasnett, B., & Ross, T. (2007). Leadership frames and perceptions of effectiveness among health information management program directors. Perspectives in health information management/AHIMA, American Health Information Management Association, 4.

van Weezel, A. (2006). A Behavioural Approach to Leadership: The case of Michael Eisner and Disney. In Leadership in the Media Industry: Changing Contexts, Emerging Challenges (pp. 169–178). Jönköping: Media Management and Transformation Centre, Jönköping International Business School.

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