walt disney company case study

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The Walt Disney Company

By: Frank T. Rothaermel, Noorein Inamdar, David R. King

The case is set in February 2020 and the protagonist in the case is Disney CEO Bob Chapek. The case examines how Disney grew through the corporate strategies of vertical integration, diversification,…

• Length: 21 page(s)
• Publication Date: Feb 27, 2020
• Discipline: General Management
• Product #: MH0070-PDF-ENG

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The case is set in February 2020 and the protagonist in the case is Disney CEO Bob Chapek. The case examines how Disney grew through the corporate strategies of vertical integration, diversification, and geographic expansion. It also focuses on the technological changes in the media entertainment industry. Impending streaming wars mean Disney will face even more formidable competition that may disrupt its reliance on leveraging billion-dollar franchises. In 2019, Disney closed its $71.3 billion acquisition of 21st Century Fox's entertainment assets. Disney is also rolling out its own new streaming service called Disney+, thus moving into the direct-to-consumer space. At the same time, Apple also announced is new streaming services, Apple TV+. With $60 billion in annual revenues in 2019, The Walt Disney Company is one of the world's largest media companies. As a diversified media company, Disney is active in a wide array of business activities, from movies to amusement parks as well as cable and broadcast television networks (ABC, ESPN, and others), cruises, retailing, and streaming.

Learning Objectives

Strategic Leadership and CEO Succession; Core Competencies; Innovation and Technology Strategy; Ecosystems and Platform Strategy; Vertical Integration; Diversification: Product-Market and Geographic; Economies of Scope; and Implementation of Strategic Initiatives

Feb 27, 2020

Discipline:

General Management

Geographies:

China, United States

Industries:

Media, entertainment, and professional sports

McGraw-Hill Education

MH0070-PDF-ENG

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Walt Disney Operations Management, 10 Critical Decisions, Productivity

The Walt Disney Company’s operations management deals with a diverse set of strategic goals and objectives corresponding to diverse business operations. The company operates in the media and entertainment industry and the travel, tourism, and hospitality industry, as well as markets for merchandise, such as Disney-branded books and clothes. The company’s 10 critical decisions of operations management are holistic in supporting high efficiency and productivity in this diversity of business operations. Business optimization strategies based on the competitive advantages, opportunities, and challenges discussed in the SWOT analysis of Walt Disney align with goals for efficiency and productivity in the company’s operations management decision-making processes.

Considering the impact of operations management on business capabilities and competitive advantages, effectiveness in the 10 critical decision areas addresses the competitive pressure described in the Five Forces analysis of Disney . The company’s competitors include the theme park operations of Six Flags, Cedar Fair, and Universal Studios; the entertainment businesses of Sony and Paramount; and the travel and tourism services of Royal Caribbean, Carnival, and Norwegian. Moreover, Disney’s streaming services (e.g., Disney+) compete with the video streaming services of Netflix, Amazon , Apple , YouTube ( Google (Alphabet) ), Microsoft , and Facebook (Meta) . Disney’s operations managers’ decisions affect competencies against these competing firms.

Disney’s Operations Management: 10 Critical Decision Areas

1. Goods and Services. Disney’s strategic objective in this decision area is to ensure consistency in operations that satisfy the company’s standards for the whole organization. For instance, the design and specifications of movies must be consistent with the design and specifications of the company’s theme parks and resorts. The design of goods and services is based on the business purpose and goals represented in Walt Disney’s mission statement and vision statement . For example, the objectives of the company’s mission and vision determine operations management decisions focused on the entertainment quality of organizational outputs. The elements of Walt Disney’s marketing mix (4P) and corresponding marketing strategies work with the operations management specifications of goods and services developed and released for target customers around the world.

2. Quality Management. The critical decision in this area of Disney’s operations management focuses on the objective of consistent quality while considering cost limits and resource availability. Walt Disney’s competitive strategy and growth strategies influence the quality specifications, resource requirements, and corresponding operating costs for ensuring product uniqueness as a competitive advantage. The company’s operations managers maintain processes that satisfy these requirements while optimizing efficiencies and productivity.

3. Process and Capacity Design. Disney’s operations management aims for high efficiency and productivity in processes that satisfy the output requirements of the business. For example, the company’s cruise line operations require high efficiency, capacity, and productivity despite the physical space limitations of cruise ships. Also, at Disneyland and other parks and resorts, the company’s operations managers adjust processes and production capacity to match seasonal and occasional trends in market demand.

4. Location. Walt Disney’s strategy for this critical decision area of operations management considers market access and geographic proximity for theme parks, resorts, and travel and tourism services. For its production and distribution of content, like movies and music, the company’s strategy focuses on accessibility involving talent and related human resources. The departments and divisions of Walt Disney’s company structure (organizational structure) influence some strategic variables of this operations management area, like groups and teams for handling operational targets in regional markets.

5. Layout Design and Strategy. Disney’s strategic objective for this critical decision area is to optimize the movement of people, materials, and other resources and assets through layouts that facilitate efficient and productive processes in the business organization. For example, in operations management for Disney theme parks and cruise ships, backstage layout designs prevent disruptions in providing entertainment to guests.

6. Human Resources and Job Design. The critical decision in this area of operations management at Walt Disney focuses on continuously improving human resources to support the operational requirements of the company and its subsidiaries and divisions. For example, the company has training programs and performance appraisal systems to facilitate skill development and to improve job designs. Walt Disney’s company culture (business culture) promotes innovation and quality in workplace behaviors for organizational learning and employee satisfaction, in line with this area of operations management.

7. Supply Chain Management. Walt Disney’s strategies for this critical decision area of operations management aim for a streamlined and stable supply chain involving suppliers whose strategies align with the media and entertainment company’s strategies. The company’s material supply chain management supports the material needs of the operations of amusement parks, resorts, hotels, cruise ships, and media and entertainment production. Operations managers account for the various market and industry trends discussed in the PESTLE/PESTEL analysis of Disney to ensure that the supply chain remains cost effective, efficient, and stable to support the company’s operations in different online and regional markets.

8. Inventory. The strategic objective of Disney’s critical decision in this operations management area is to maintain adequate inventory while minimizing costs and addressing internal and external variables. For example, the company’s inventory control decisions continuously adjust inventory levels to ensure adequacy despite fluctuations in supply and material availability, and to match changes in market demand. Disney has business information systems for coordinating inventory management and the supply chain in all areas of the business.

9. Scheduling. The critical decision in this area aims for work and process schedules that adequately support Disney’s business needs. The company’s operations management involves information systems for automated scheduling for some business processes, like the schedules of maintenance checks of IT assets. However, many schedules for employees and processes involve human input. For example, schedules of some rides and shows at Disneyland involve manual setting after employees perform necessary safety checks.

10. Maintenance. Walt Disney aims for reliability of processes and resources, including human resources, in this critical decision area of operations management. For human resources, the company has HR development and training programs, as well as leadership programs to develop workers’ knowledge, skills, and abilities that match business needs in media, entertainment, travel, tourism, and hospitality operations. Effective maintenance of machinery and equipment, like the ones used at Disneyland and in movie production, ensures optimal efficiency at all times. This efficiency and the corresponding minimization of wasted resources facilitates Walt Disney’s CSR (ESG) and stakeholder management practices , especially programs for business sustainability and environmental conservation.

Productivity in Walt Disney’s Operations

Walt Disney’s operations managers have high productivity targets, although external influences may reduce actual productivity. For example, unfavorable weather conditions may reduce the productivity of theme parks and resorts. The following are some productivity metrics suited to the case of operations management at Disney:

• Number of tickets sold per day (theme park productivity)
• Number of guests accommodated per day (hotel productivity)
• Episodes filmed per month (film production/studio productivity)
• Brookey, R. A., Phillips, J., & Pollard, T. (2023). Reasserting the Disney Brand in the Streaming Era: A Critical Examination of Disney+ . Taylor & Francis.
• Disney Careers – Benefits .
• Jahangir, J. (2023). Revisiting the principles of economics through Disney. Real-World Economics Review , 89.
• The Walt Disney Company – Form 10-K .
• The Walt Disney Company – Supply Chain .
• Tsarouhas, P. (2023). New Trends in Production and Operations Management. Applied Sciences, 13 (16), 9071.
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Esg case study – the walt disney company.

This article was originally published on ETFTrends.com.

By Sara Rodriguez, Sage ESG Research Analyst

About The Walt Disney Company

The Walt Disney Company is an American multinational media and entertainment conglomerate operating in multiple segments including media networks, studio entertainment, and theme parks and experiences. With a long, rich history of producing entertainment content since 1923, Disney owns some of the world’s most recognizable brands—in 2021 Disney’s brand was valued at $51.2 billion and was number 22 on BrandFinance’s list of the top 500 companies globally.

Environmental

According to the Sustainability Accounting Standards Board (SASB), there are no identified environmental key performance indicators for companies in the media industry. However, Disney’s business model is far from that of a traditional media company, and encompasses multiple industries including leisure facilities, hotels, restaurants, cruise lines, apparel and footwear, and toys that make up its Parks, Experiences, and Products segment. This piece of Disney accounted for 25% of total revenue in the third quarter of 2021, and as much as 37% pre-COVID. As such, environmental concerns are of material importance to Disney’s business model, as this segment faces both climate change risks and opportunities.

Disney is a leader from an emissions perspective. While many companies focus on a reduction in greenhouse gas (GHG) emission intensity, Disney has been able to decrease its absolute Scope 1 and 2 emissions and total energy usage from 2018 to 2020. In 2020, Disney met its target to reduce GHG emissions by 50% from 2012 levels. Disney’s parks and experiences offer customers a variety of restaurants, which generate food waste. The company recognized a desire to send less total waste to landfill and implemented extensive programs focused on food waste capture, material sorting, and the reduction of plastics and unnecessary waste. In 2020 Disney diverted 60% of waste from landfills and incineration, sending less total waste to landfill than in 2015. Additionally, Disney reduced its potable water usage from 6.46 billion gallons in 2018 to 4.99 billion in 2020.

Disney’s 2020 annual investor report mentions that the demand for travel and tourism can be significantly adversely affected as a result of severe weather conditions or natural disasters such as hurricanes, earthquakes, and excessive heat. Additionally, the company may incur additional costs if it must obtain insurance coverage with respect to these events. Disney’s corporate sustainability report (CSR) does not yet cover climate change risk and it seems that the company does not have a proposed mitigation strategy, which is something we will continue monitoring.

Disney encounters most of its financially relevant sustainability issues in the social category. The company’s CSR features links to a multitude of company policies including: a code of conduct for manufacturers, conflict minerals policy, diversity and inclusion commitment, human rights policy, nutrition guidelines, and smoking in movies policy. While this is commendable, it is difficult to gauge the effectiveness of a policy merely on its existence. This is a problem that reigns true for ESG analysis across the board, and we hope to continue to see sustainability standards and frameworks work to solidify the decision-usefulness and transparency of disclosures related to policies.

Despite the difficulty in determining if policies strengthen a company’s social performance, it is simple to gauge past performance based on controversy. Disney is the world’s leading licensing business and has a global network of suppliers. As such, Disney is exposed to a variety of supply chain risks, especially labor rights. Over the past decade, Disney has been subject to numerous controversies involving labor rights and has been accused of multiple violations including unsafe working conditions, severe overtime, inadequate safety training and protective equipment, and paying wages below the legal minimum. These accusations have ranged in location across the globe. Although it is unclear whether Disney adopted it supply chain policies due to its bad behavior or if they were previously in place, Disney has programs to conduct due diligence of its supply chain operations and prevent labor rights violations. Disney’s Code of Conduct for Manufacturers is consistent with the International Labor Organization (ILO) and is enforced through the company’s International Labor Standards (ILS) program. This program requires licensees and vendors to conduct on-site compliance audits in higher risk countries and report to Disney for review and approval. Notably, Disney terminated its manufacturing contracts in Bangladesh following the 2013 Rana Plaza Building collapse due to noncompliance with its policy.

Freedom of association is another pertinent labor rights issue present in Disney’s operations. 54% of Disney’s U.S. employees are covered by collective bargaining agreements – however, the company operates in countries where collective bargaining is prohibited. Recently, Disney committed to paying all U.S. Disney Parks and Resorts hourly employees a minimum of $15/hour by the end of 2021. However, this development may have been the result of increasing scrutiny of Disney by both the public and elected officials. In 2018, 23 congress members signed a letter to Disney’s former CEO Robert Iger, urging him to use the company’s profits to pay Disneyland employees a living wage.

Media pluralism is a social topic material to media companies, and refers to the social, racial/ethnic, and political diversity represented in the company itself and in the media content it produces. Disney tracks and discloses company demographic data including its global breakdown of female and minority employees. From 2018 to 2020, Disney’s percentage of female employees and female management decreased. During that same time, the percentage of minority employees increased, as did minority employees in management positions. Overall, the company offers transparent and in-depth demographic reporting that exceeds that done by most other companies regardless of industry.

To bolster diversity within its content, Disney recently unveiled the Onyx Collective, a production entity designed to feature work by underrepresented creators. Disney’s long history also means it must grapple with how to approach past content depicting offensive racial stereotypes and culturally insensitive material. Movies such as Peter Pan, Dumbo, and Pocahontas have been a point of contention for modern audiences. Rather than remove the content, Disney’s launch of streaming service Disney+ featured a warning for some movies, informing audiences of “outdated cultural depictions.” This decision has been praised as a way to spark conversation and acknowledge the harmful impact of these films without eliminating them from view.

Journalistic integrity is one of the main ESG facets related to companies operating in the media industry. SASB describes journalistic integrity in three pillars:

Truthfulness, accuracy, objectiveness, fairness, and accountability

Independence of content and/or transparency of potential bias

Protection of privacy and limitation of harm

While it is difficult to gauge company performance on these pillars, the second pillar of journalistic integrity is one where Disney struggles. Acquisitions have been a major vehicle of growth for Disney. In 1995, Disney merged with Capital Cities/ABC Inc., which was the second largest corporate takeover at the time. The merger included a minority stake in A&E Television Networks and a majority stake in ESPN. In the 2000s under CEO Robert Iger, the company acquired Pixar Animation Studios, Marvel, and Lucasfilm. In 2019, Disney completed the purchase of the majority of 20th Century Fox’s entertainment assets. That same year, the company launched its own streaming service, Disney+. Even with Disney’s pre-established dominance, these mergers and acquisitions have allowed Disney to own some of the world’s best known, highest-grossing entertainment franchises. From 2015 to 2019, Disney’s market share almost doubled from 20% to about 40%, and in 2019, almost 40% of all U.S. box office sales came from a Disney-owned movie. The company’s news segment also has an incredibly far reach. According to Disney’s annual investors report, ABC Television networks has affiliation agreements with 240 local television stations reaching almost 100% of U.S. television households.

[caption id="attachment_445071" align="aligncenter" width="1435"]

Source: 2020 Corporate Social Responsibility Report, Disney.[/caption]

This consolidation was allowed by the Telecommunications Act of 1996, which reduced the Federal Communications Commission’s (FCC) regulations on cross-ownership of media and eliminated the 40-station ownership cap. The effect of this legislation is often cited using a popular statistic – today, only six media conglomerates control 90% of the media we read, watch, or listen to. For comparison, 90% of American media was owned by about 50 companies in 1983. This consolidation is inherently at odds with the principle of media companies to supply access to accurate and unbiased information, and while Disney is hardly the only media vertically integrating, it is consistently ranked in the top three largest media companies by revenue.

Disney-owned ABC saw an uptick in viewers in 2020, making it the network with the third-highest market share among adults aged 18-49. As such, Disney’s potential to heavily influence ABC coverage may have a negative effect on viewers’ access to unbiased information. When news breaks of unsavory events related to accusations of labor rights violations in Disney’s supply chain or low wages at its theme parks, can ABC present an unbiased view of its parent company? Will it choose to cover the topics at all?

On top of affecting free and unbiased information, consolidation can negatively affect wages, innovation, and the viability of independent films. As a corporation concerned with reporting its revenues, Disney is more inclined to seek content that can move fluidly across its different media channels, making it more likely to ignore creative talent and content in favor of commercial viability.

We can see Disney contradict its journalistic integrity in its relationship with China. China’s box office is considered the largest market in the world, however, the Chinese Communist Party exerts strict control over the content it allows played in China and often censors films that do not meet the criteria of “telling China’s story well.” According to a report published by PEN America, “as U.S. film studios compete for the opportunity to access Chinese audiences, many are making difficult and troubling compromises on free expression.” In 2020, the release of the remake of Disney’s Mulan faced intense backlash and calls for a boycott after the leading actress expressed her support for Hong Kong police during protests. Additionally, audiences noticed that the movie’s credits thanked eight government entities in Xinjiang, the region in China where Uighur Muslims have been detained in mass internment camps. As Disney expands its Chinese business interests (such as its 47% stake in the new Shanghai Disneyland Park), it is possible that increased censorship in line with the wishes of the government in Beijing may further align with the company’s business goals. Additionally, while Disney’s ownership of cross-media entities is in line with regulation by the Federal Communications Commission (FCC), the company may face future regulatory risk, especially if it partakes in further consolidation.

Governance is the pillar of ESG that must be solid for a company to succeed in its sustainability goals, and we find that Disney presents governance risks despite having some strengths. The company’s board of directors is generally diverse, with four out of ten directors being women and three out of ten considered racially/ethnically diverse. Disney’s executive team is 42% female and 22% racially/ethnically diverse, the latter of which can use improvement. Disney’s sustainability report discloses to multiple frameworks including the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), CDP, and Task Force on Climate-related Financial Disclosure (TCFD). The company is generally considered to be highly transparent in its disclosure by ESG rating providers, however, the report offers no level of third-party assurance of the data.

Political lobbying, an important issue often left out of the governance section of ESG analysis, has been found to correlate with more than 3,600 corporate risk incidents worldwide over the past 13 years. Lobbying is connected to numerous ESG issues pertinent to investors’ financial decision-making, including corruption and bribery. We know that Disney has previously used its political clout and campaign contributions to secure tax incentives in Florida and California, the home of its expansive theme parks and studio entertainment hub, respectively. The company disclosed that it spent almost $39 million on federal lobbying from 2010 to 2019 but does not disclose state lobbying expenditures. A March 2021 shareholder proposal called for Disney to improve its disclosure of lobbying activity, however, the proposal was rejected by shareholders. It is notable that over two-thirds of Disney stock is owned by large institutional investors who take responsibility for proxy voting when clients purchase shares in a fund. Calls for Disney to disclose lobbying activity have been brought forward by activist shareholders before, and we expect to see it happen again.

Risk & Outlook

While Disney’s environmental progress is commendable, the company faces material ESG risk present in its social and governance activities due to past controversies and current behavior. Furthermore, we are not fully convinced that Disney’s net positive effects on society significantly outweigh its net negative effects. Corporate citizenship is important for building mutually beneficial relationships between organizations and the public, and as a company largely dependent on the intangible asset of brand value, it is crucial for Disney to prioritize its reputation as a corporate citizen. Overall, we’d like to see progress on the social and governance issues that really matter when it comes to Disney and will be watching for developments. We have decided to downgrade Disney from its previous Leaf Score of a 4 to a 3. We still consider Disney to be suitable for our ESG strategies, but no longer consider it an above average ESG performer.

Sage ESG Leaf Score Methodology

No two companies are alike. This is exceptionally apparent from an ESG perspective, where the challenge lies not only in as­sessing the differences between companies, but also in the differences across industries. Although a company may be a leader among its peer group, the industry in which it operates may expose it to risks that cannot be mitigated through company management. By combining an ESG macro industry risk analysis with a company-level sustainability evaluation, the Sage Leaf Score bridges this gap, enabling investors to quickly assess companies across industries. Our Sage Leaf Score, which is based on a 1 to 5 scale (with 5 leaves representing ESG leaders), makes it easy for investors to compare a company in, for example, the energy industry to a company in the technology industry, and to understand that all 5-leaf companies are leaders based on their individual company management and the level of industry risk that they face.

For more information on Sage’s Leaf Score, click here.

2020 Corporate Social Responsibility Report. The Walt Disney Company.

Institutional Shareholder Services (ISS) ESG Corporate Rating Report for The Walt Disney Company.

Fiscal Year 2020 Annual Financial Report. The Walt Disney Company.

2021 Notice of Annual Meeting of Shareholders and Proxy Statement. The Walt Disney Company.

Media & Entertainment: Sustainability Accounting Standard. Sustainability Accounting Standards Board. 2018.

BrandFinance Global 500 (100) 2021. Brand Finance. 2021.

Dreier, Peter. Disney Is Not the Greatest Place on Earth to Work. The Nation. March 2020.

Lobbying—the forgotten ESG risk? RepRisk. September 2020.

Sanders, Bernie. How Corporate Media Threatens Our Democracy. In These Times. January 2017.

Disclosures

Sage Advisory Services, Ltd. Co. is a registered investment adviser that provides investment management services for a variety of institutions and high net worth individuals. The infor­mation included in this report constitute Sage’s opinions as of the date of this report and are subject to change without notice due to various factors, such as market conditions. This report is for informational purposes only and is not intended as investment advice or an offer or solicitation with respect to the purchase or sale of any security, strategy or investment product. Investors should make their own decisions on investment strategies based on their specific investment objectives and financial circumstances. All investments contain risk and may lose value. Past performance is not a guarantee of future results. Sustainable investing limits the types and number of investment opportunities available, this may result in the Fund investing in securities or industry sectors that underperform the market as a whole or underperform other strategies screened for sustainable investing standards. No part of this Material may be produced in any form, or referred to in any other publication, without our express written permission. For additional information on Sage and its investment management services, please view our web site at www.sageadvisory.com, or refer to our Form ADV, which is available upon request by calling 512.327.5530.

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Walt Disney: Changing the World

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Robins Case Network

The Walt Disney Company: A Corporate Strategy Analysis

Carlos Carillo Jeremy Crumley Kendree Thieringer Jeffrey S. Harrison , University of Richmond

Walt Disney is a completely integrated media powerhouse. Films provide material for theme parks and resorts, consumer products, and even a cruise ship. Network and cable broadcasting is also a part of the integrated Disney package. None of Disney’s competitors are as successfully integrated. Still, in spite of a long record of success, Disney is facing more competition on many fronts and, like other media and entertainment companies, must continue to adapt to a changing technological and social environment.

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Having developed the Leadership Lifecycle over the preceding chapters, including the leadership roles that correspond with the phases of the organization’s lifecycle, the dangers inherent in transitions from one phase to another, and how it is possible for some individual leaders to span multiple roles, it is perhaps advantageous to illustrate the Lifecycle by looking at how the various roles and transitions apply over time within an organization. This chapter and the next will apply the model to two organ-izations that have enjoyed substantial and storied histories to provide a historical application of the Lifecycle to these respective organizations. This chapter applies the Lifecycle model to The Walt Disney Company, and the following chapter to Marks & Spencer.

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Flower, Joe. 1991. Prince of the Magic Kingdom: Michael Eisner and the Re-making of Disney. New York: John Wiley & Sons, p. 21.

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Eisner, Michael, with Schwartz, Tony. 1998. Work in Progress. New York: Random House pp. 136–7.

Masters, Kim. 2000. The Keys to the Kingdom: How Michael Eisner Lost his Grip . New York: HarperCollins.

Slater, Robert. 1997. Ovitz . New York: McGraw-Hill..

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Case Study: Disney’s Workforce of the Future

Jan 19, 2020

Facing aggressive growth targets coupled with a need to significantly increase its workforce, Walt Disney International (WDI) decided to launch an effort to prepare for the future.

Walt Disney International spearheaded a foresight effort, specifically following the Natural Foresight® Framework, that included fifteen Futures Teams established in 10 geographic regions. Through this multi-year engagement, hundreds of new futurists were trained and dozens of advanced practitioners were identified to lead the integration of sustainable foresight across its markets. Some of tangible outcomes resulting from this organization-wide competency development include:

• More than 500 leaders around the globe were trained in the Natural Foresight® approach and immediately began applying the standard toolkit.

• Traditional strategic planning processes have been revamped to include futures intelligence and scenario planning, and the organization has pursued specific business strategies as a direct result of its foresight efforts.

• To support change management efforts, advanced practitioners were selected to receive additional training and became foresight trainers.

• Broader company leadership has taken notice, declaring Strategic Foresight as one of the top enterprise-wide leadership competencies.

Recently, The Futures School founders Yvette Montero Salvatico and Frank Spencer authored the chapter “Disney’s Workforce of the Future: From HR Initiative to Organizational Culture” in Palgrave Macmillan’s Futures Thinking and Organizational Policy: Case Studies for Managing Rapid Change in Technology, Globalization and Workforce Diversity . 

The chapter’s abstract details the framework, structure, and successes of this global, multi-year foresight engagement: 

“Faced with ambitious growth targets and a challenging global labor market, The Walt Disney Company turned to a field initiative, Strategic Foresight, to create a more adaptive, resilient and transformative organizational culture. Over the course of four years, Walt Disney International (a segment of the company) established a culture of future thinkers through a multi-phased change management effort. This effort included recurring learning and development programs based on the Natural Foresight® Framework, the establishment of regional Futures Teams across the globe, and a dedicated project management lead. As a result of the effort, the following three organizational outcomes were realized: (a) organizational processes have been updated to include Strategic Foresight; (b) revenue-leading futures intelligence has led to innovative new product offerings; and (c) success within the International division has inspired other segments within the organization to follow suit. Recognizing the importance of Strategic Foresight, international leadership has declared futures thinking to be one of the organization’s top leadership competencies.”

The entire chapter and/or textbook is available for purchase here with the entire book serving as an excellent resource for additional organizational futures thinking case studies and best practices. 

Here’s more about the textbook:

“This book proposes that organizational policies are what ensure the institutionalization and sustainability of futures thinking in organizations. It presents several case studies from corporations and other institutions that describe effective use of foresight methods and internal policies to respond to rapid change. The case studies address changing trends in technology, globalization and/or workforce diversity, and the impact on the economic and political well-being of the organization. The editors also develop an organizational capability maturity model for futures thinking as well as providing questions for discussion that promote critical review of each case chapter. This book will inform scholars and organizational leaders how best to utilize foresight methodologies and organizational policies to sustain successful management strategies within futures thinking organizations.”

Read the chapter here .

Chapter Reference:

Salvatico Y.M., Spencer IV F.W. (2019) Disney’s Workforce of the Future: From HR Initiative to Organizational Culture. In: Schreiber D., Berge Z. (eds) Futures Thinking and Organizational Policy. Palgrave Macmillan, Cham

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Case Study: Marketing Strategy of Walt Disney Company

What started out to be nothing more than a dream of Walter Elias Disney , with the release of Alice in Wonderland, a series of short film comedies, the beginning of a world renowned global corporation Walt Disney had evolved. Walter and his brother Roy were equal partners in what was originally the Disney Brothers Cartoon Studio in 1923 and with the suggestion of Roy, it soon was renamed The Walt Disney Studio. After four years of success and profit, Walter and Roy experienced a business set back when they found their film distributor M.J. Winkler had stolen their cartoon characters and animators in attempt to undercut them. With the help from their chief and loyal animator, Ub Iwerks, Walt created Mortimer Mouse, which was renamed Mickey Mouse by his wife. The first cartoon with synchronized sound was released at the Colony Theater in New York, November 18, 1928. Walt Disney won its first Academy Award for Best Cartoon in 1932 and continued to be honored with an Oscar every year for a decade. Walt Disney consumer products started when Walt and Roy accepted $300.00 from a man that insisted Mickey should be applied to paper towels for school children. The company became public in 1940 and followed with the release of five successful feature films, including Snow White, Fantasia, Pinocchio, Bambi and Dumbo. In turn they revolutionized animation forever. In 1955, the first of many Disneyland theme parks were opened. At the same time, television became a new, huge, and successful avenue for its fans.

“I can never stand still. I must explore and experiment. I am never satisfied with my work. I resent the limitations of my own imagination.” -Walt Disney

Due to this dream with determination, The Walt Disney Corporation became an international powerhouse. Today, the company has four main business ventures: consumer products, theme parks and resorts, media networks and studio entertainment. The first being consumer products encompasses the development, advertising, promoting, licensing and selling of products that represents all of the new and old Disney characters. The theme parks and resorts that once started in California grew to one of the most profitable and loved venues internationally. Television, radio, and cable properties are the core of the media network. The driving force of the entire enterprise is the motion pictures and animated cartoons which are managed by Touchstone, Pixar, Walt Disney Pictures, Buena Vista, and Miramax.

The Walt Disney Company’s Target Market

Before a company even begins to look at its objectives, and marketing strategy, they must first decide what they are selling, and who they want to sell it to. A successful marketing plan requires a clearly defined and well researched target market, without knowing the desires and needs of the people you are selling to, you can not create a product that meets those needs. The well defined target market represents one reason why the Walt Disney Company has been so successful since their public start in 1940. Walt and Roy Disney started this company not to satisfy every consumer’s needs, but simple “To make people happy.” This quickly segmented the Walt Disney Company’s market into children till the age of about twelve. After many years, it was soon realized that the target market is not only young children, but often includes the decision makers. These are usually the parents that take their kids to the movies and buy the merchandise. Disney knows that it’s one thing to make a great movie that kids are excited about but the efforts often fall short if parents don’t approve of it.

The Walt Disney Company’s most recent, slight change in the target market has come from their new ideas of marketing and expanding. To reach kids and teens to promote Disneyland’s 50th anniversary this year, Walt Disney Co. will use one of the hottest – and most controversial – gimmicks in the media business: “advergaming.” Seeing as how the age-range of people that play video games are a little older than kids, they will be targeting at a teenager level. The attempt to expand Disney into a wireless network also stems the interest of an almost different type of target market. “The Walt Disney Co.’s decision to launch a wireless service aimed at its best customers – pre-teen children and their families – have focused a spotlight on two significant industry trends: the growing segmentation of services marketing and a fascination with the hottest of those segments, the youth market.”

The Walt Disney Company’s Marketing Objectives

Every company, whether a service enterprise, a retail shop, a restaurant, or a theme park must have one objective in order to be in business. It is the sole reason one goes into business, no matter how much they may have wanted to improve the lives of others. The foremost goal of every business is to make money . In an article published by the London Times, former Chief Executive Officer Michael Eisner was quoted as saying, “We [The Walt Disney Company] have no obligation to make art. To make money is our only objective”. At the time Eisner was CEO of Disney; from 1984-2005 he nurtured Disney from a $3 billion company to a $60 billion dollar company, a testament to the primary goal of the business.

Even though when Walt Disney first opened Disney Land in 1955 he coined the phrase, “The happiest place on earth,” the real reason for opening his entertainment park was to attract fans of Disney Studio Productions, promote his characters, and make money. Without a profit the Walt Disney Company, or any other company for the matter, would not be in business for long. Companies, especially large, well established companies like the Walt Disney Company, use their profits to do many things: expand their market share; research and development; expansion; new product lines; and various activities that help attract more customers. The Walt Disney Company has many fields in which they participate to make money: television; studio productions; theme parks; consumer products; and cruise lines, to name a few.

Disney consumer products and theme parks are very essential to Disney’s ultimate goal of making money. The placement of Disney products on school supplies, lunchboxes and backpacks, in malls across the country, and within the walls of their marketing-giant theme parks themselves is, “a daily advertisement for our cartoons, [that] keeps them all [consumers] Mickey Mouse minded,” as stated by Walt’s brother Roy Disney. No matter the means behind the ultimate goal, the goal never changes.

As stated in the Walt Disney Company’s Mission Statement, another of their goals is to be, “one of the world’s leading producers and providers of entertainment and information”. For the accomplishment of this goal Disney already has a substantial foot in the door with organizations in studio entertainment and theatrical productions for children, teens and adults of all ages; television stations targeting a wide variety of audiences – ABC for news and families, the Disney Channel for children, ESPN, ESPN2, ESPNEWS, and ESPNU for the sports fanatics and even SOAPnet for the stay at home mothers and fathers; theme parks like Disneyland, Disneyworld and the Disney World Resort to attract families with younger children looking for a good vacation; and one of their newest additions is the Disney Cruise Line that tour the Bahamas and Caribbean Islands and even make a stop at Disney’s privately owned Castaway Cay Island.

Disneyland in particular, the first park ever to construct rides, shows and attractions around separate themes-the themes of Walt Disney’s motion pictures -was constructed and dedicated by Walt Disney to those people who want to “relive memories of the past and [that] youth may savor”. Disneyland itself was not just built to entertain young children, but also to give their parents a vacation in a place that they could remember from their pasts and relate to in a way for them to enjoy the experience.

With this impressive display lineup and many more to support the Walt Disney Company’s goal of being a leader in entertainment it is safe to say they are well on their way to accomplishing this feat. Disney’s reach is global, with theme parks in China, France, Japan, and all around the United States. They also have Disney stores across the globe selling Disney consumer products throughout the United States and also globally, both within their Disney resorts and theme parks and in globally placed retailers. The Disney trademark is recognized all over the world, once again keeping consumers “Mickey Mouse minded,” and showing what kind of a leader Disney can be simply through the reach of its grasps.

To become a leader in information Disney has constructed a team of people and engineers and tasked them for this assignment. They call the process of developing new technology Disney Imagineering. This is basically the research and development section of Disney which thinks up, designs, and implements all aspects of the Walt Disney Company. From developing rides and attractions of Disney’s theme parks, water parks, and cruise ships to their Disney resorts, Disney Imagineering is involved in all development.

The goal of the Disney Imagineering section is to continuously design and implement new, fun and exciting products for the Disney Company that will attract, amaze, and excite their customers. By developing fun new rides for Disneyland parks that drop you faster than gravity, new movie technologies offering cutting edge visual effects, or even combining the two into one gut wrenching, heart stopping, scream-of-a-good-time they have realized their goal.

The latest example of innovation at the Walt Disney Company is discussed in an issue of Business Week on November 12, and it outlines plans by Disney to release a mobile phone service in Japan. Disney will be involved in the phone from the ground up, from developing the handsets to dealing with subscriptions. In order to stay true to Disney practices, they will be offering content dealing with their characters and distributing cartoons to their subscribers. The cell phone market is one of the fastest growing markets in the world, growing in leaps and bounds–from 110,000,000 people in the United States in the year 2000 to 159,000,000 people in just 2003. As the use of cell phones continues to increase at an exponential rate it becomes more clear how important it is to have a stake in them, and Disney, realizing this, has become a player in the market and is using cell phones to spread their company name. To do this they offer many things that are popular among cellphone users, such as ringtones, graphics for wallpapers, games, and text message updates. Disney offers a cellphone in the United States, however Disney has recently announced it will be discontinuing their cellphone service as of the end of the year, December 31, 2007. They did not give any specific reasons for the cessation.

The utilization Disney has made of the mobile phone service brings to light their trend of target marketing. Cellphone users continue to grow younger as the devices become more popular and easier to afford, and Disney is trying to reach them. For years Disney has attracted young girls through the Disney Princesses Belle, Ariel, Sleeping Beauty, Snow White, Cinderella, and Jasmine. Now Disney is under continuous pressure to continue growing their Disney Princess Sector, and the result is the targeting of even younger girls – girls still in the crib. To accomplish this Disney will be making products such as cribs and various infant products picturing the various princesses and even some new princesses who are due to make their appearances in the near future.

The Walt Disney Company’s Industry Analysis

The Walt Disney Company is in the entertainment industry. This is a very simple way of saying something much more complicated: The Walt Disney Company is in business to produce entertaining theatrical productions that are family oriented and family friendly; they are in business to create products and toys that will promote their theatrical productions that are both entertaining and safe for children, and also stimulating enough to attract new customers; they are in business to entertain families with children who are looking for a fun, interactive and safe vacation spot both with resorts and parks, and also cruise lines; and finally they are in the business in keeping their name reputable and substantial in a growing business.

The Walt Disney Company has a long history and an established name, not only in the United States but throughout the world. Walt and Roy Disney founded the Walt Disney Studios in 1923, produced its first full length animated feature film, Snow White, in 1937, and the rest is history. From there they grew into an entertainment powerhouse acquiring TV channels, building theme parks based on their animated films and youthful dreams, and growing into one of the most recognizably-named companies in the world.

As generations change so do their goals and views of life. For example, the Baby Boomer generation is very work oriented and dedicated to their professional life, and sometimes their family lives suffered because of it. On the other hand, Generation X are more family oriented than their parents generation. Generation X like to take spur of the moment trips and are not necessarily as worried about the completion of their job tasks, which not only makes them more attractive to travel providers but also to companies who provide vacation resorts, or, more specifically, theme parks.

Because the generations are changing and families are more prone to taking vacations, the entertainment industry is a hot commodity. This produces a demand for entertainment and many opportunities for new players to enter the mix. This also creates a lot of competition, even for Disney, a well-established entertainment company. In Disney’s case, a lot of their competitors for their vacation spots are the same as their competitors for their theatrical productions: Universal Studios has theme parks and, like Disney, is a global organization with operations in the United States, Japan, Singapore, Dubai, and Korea; Paramount Parks is a more local example with many parks situated throughout the United States and one in Canada; and Disney’s most adverse competitor, and the leader in numbers in the industry of theme parks and amusement parks, is Six Flags Theme Parks who is also associated with Warner Brothers Studios. Disney however has the advantage in its global reach, where Six Flags is domestic. Also, industry wide, Disney’s name and history in the entertainment industry supersedes all of their competitors.

The history and name of Disney are very important when it comes to competition in terms of positioning their products and services in the minds of their consumers. The Walt Disney Company utilizes multiple positioning bases to their advantage, due to their long, successful history.

The attribute base is employed within Disney by the customer benefit–a family-friendly, safe, fun environment that is open for business all year. Disney offers specials for families, such as discounts on flights, car rentals and hotel rooms-many are seasonal-to attract more people to their parks, and this tactic is considered in the price and quality base indicating a value bargain to their potential customers. But the most important positioning base utilized by the Walt Disney Company is the one that distinctly sets them apart from any of their competitors: Emotion .

Emotion is, “how the product makes customers feel”. This is where the Disney history comes into play in a huge part because, being founded as a cartooning company in 1923 that produced widely popular children’s videos, the name Disney has been a part of people’s lives for a very long time. Entering a place called Disneyland, which embodies the characters every child has enjoyed since 1923, can have the effect of bringing the fond memories of their childhood back to them, producing a sense of eternal youth. Another advantage for Disney is that not only can it have an attracting effect on adults, but because Disney is now a powerhouse in the entertainment industry and recognized throughout the world, they can attract children of various ages. Disney can attract younger children who identify with the Disney characters and enjoy seeing them in full life form. Disney can also attract the older children who still identify with the characters in the form of knowing them and enjoying the movies they have seen them in, but also enjoy the themed rides that feature their favorite movies and characters in them.

To conclude the industry analysis the entertainment business is a growing business due to the change in demographics and the orientations of today’s generations. Disney has a strong foothold in the industry, a feat accomplished mainly due to their history and roots in the American culture. Their reach to the four corners of the United States and beyond has aided Disney’s stronghold on the entertainment industry.

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Problem Analysis of the Walt Disney Company Case Study

Introduction, problem analysis, recommendations, reference list, organization’s background and people involved.

The Walt Disney Company is a leading international entertainment center and media enterprise having subsidiaries all over the world. The operation and management of enterprise experience are carried out by the organization’s division Disney Parks and Resorts that is responsible for entertaining people and guiding those into the world of media culture (The Walt Disney Company, n. d. a).

Due to the fact that employees play the leading role in creating a favorable environment in entertainment center, this target audience should be carefully considered by human resources managers to enhance employees’ level of engagement.

Organization’s Purposes, Mission, Values, and Culture

The company’s purpose consists in introducing the people dimension in business sphere to meet Disney’s values and culture. Specifically, the human resource management department focuses on reinforcing the responsibility and commitment to people through such services as learning and development, talent acquisition, communication techniques, and employee services (The Walt Disney Company, n. d. b).

Specific attention should be paid to increased leadership for handling selection and recruitment processes effectively and contributing to ongoing retention and development.

Problem Identification

Judging from the above-presented information the company places a specific emphasis on leadership and supervision strategies for directing and motivating employees’ work.

The employees, in their turn, can take advantage of availability of direct support and, because all their actions are carefully controlled, subordinates might lack independence in making decisions, which can become critical under certain situations. As a result, leaders and managers prevail over employees’ steps of coping with their responsibilities and obligations.

Though employees have right to share their preferences and goals with supervisors, they still lack skills for cooperating in teams for solving the problems independently.

Specifically, the system of communication between the supervisor and employees, as well as between employees and guests, is well settled and, therefore, vertical management deprives employees of possibility to make decisions without informing their managers. Lack of responsibilities imposed on cast members creates a number of problems in terms of effective team management and employee engagement.

Discrepancies between Theory and Practice within the Organization

Effective human resource management should embrace a combination of theoretical frameworks applied to practice. It should also be constructed with regard to services and opportunities the employees can get while accomplishing their duties (Johns & Saks, 2005).

Judging from the case under analysis, it should be stressed that there is a certain inconsistency between the introduced employee engagement strategies and the ones that are still left unnoticed.

In particular, managers successfully meet the requirements of perceived organization support and positive reinforcement approaches, but fail to introduce techniques connected to motivated teamwork, job enrichment, and establishment of self-management working team.

Providing Meaningful Feedback on Performance

Excess accent on effective leadership and supervisions provides no perspectives concerning the opportunity for employees to increase their performance. In this situation, meaningful feedback can help the employees quickly adapt to a specific behavior for achieving the established goals (Phillips and Gully, 2011, p. 395).

The introduction of the feedback system can help employees become more team-focused for achieving the goals in a more effective way. More importantly, such an approach will increase employees’ incentives and motivations. For instance, the organization should create objectives the accomplishment of which is possible only under team working conditions.

At this point, employees can be encouraged to introduce their creative ideas directed at the improvement of the entertainment atmosphere, but the creative projects should be carried out in teams.

Such a technique can introduce a challenge for employees at first stages; on the other hand, cast members will have to encounter such aspects as responsibilities distribution, decision-making, and problem-solving. In addition, feedback on performance can be presented in the form of rewards contributing to more effective adjustment to a new teamwork environment.

Establishing Positive Relations and Healthy Competition between Co-Workers

Leadership and supervision practices imply well-coordinated communication between managers and employees. However, a healthy environment will be established with the introduction of favorable relations among co-workers.

According to Dutton and Ragins (2007), “…positive connections contributed to the shared emotions component of sense of community, because it was in moments of connecting that temporary employees shared positive and negative emotions” (p. 257).

Indeed, active interaction and successful communication provide a favorable ground sharing and gaining wider experience in communicating and negotiating with guests and managements. What is more important is that the established solutions impel employees to discover the points of similarities.

Due to the fact that job is a potential source for self-expression, the establishment of a healthy competitive environment is also indispensible to meeting those goals (Dutton and Ragins, 2007).

In fact, the idea of competition consists in creating opportunities for all employees to win, instead of one individual dominating at the expense of another employee (Dutton and Ragins, 2007). The proposed approach can help the company understand whether the level of employee recognition is sufficient for increasing performance and motivation.

Coping with Emotional Displays in Various Countries

Greater group cohesiveness can be achieved through better recognition of cultural diversity within the organization. In this respect, company’s success largely depends on the techniques it will introduce for managing diverse emotional displays as presented in various cultures.

People coming from different countries also expect specific reactions to their emotions due to peculiar values, personal needs, and social factors of subordinates. Cultural display principles are conceived in childhood to help people cope with their emotions and adapt those to different facial expressions.

In order to react properly to these displays, employers should take into consideration psychological analysis of different cultures presented in the working environment (Phillips & Gully, 2011, p. 149).

Due to the fact that the Walt Disney Company is a multinational organization, it should count the phenomenon of cultural diversity and analyze a variety of psychological portraits. Better recognition of emotional displays will significantly foster employees’ organized work in team.

However, information about psychological techniques should also be proliferated among the employees through specific training courses. At this point, the educational program should be directed at enhancing employees’ understanding of other cultures through representation of different behavioral and psychological patterns.

Appreciation of Theories With Regard To Feedback on Performance

Slight shift from leadership management to self-management in teams will help employees enhance their awareness that their work is highly appreciated. Theoretically, performance feedback will be more effective if it is conveyed in a positive manner, provided immediately after performance observation, and is specific to the behavioral patterns that are being established for feedback.

While presenting performance appraisal, it is important to introduce both objective and subjective means for measuring employee productivity and success. In this particular case, providing feedback on collective performance is much more appropriate because it enhances collaboration among the co-workers and fosters the accomplishment of the established goals.

The necessity to introduce rewards is also justified by theory of self-managed work teams. Such a system provides several benefits. First, because reward presupposed reduced supervision, greater responsibilities and independence in decision-making will be imposed. Second, the introduction of self-management can teach employees to act independent and solve difficult problems.

Self-determination and introduction of effective decision-making can deprive managers of the necessity to constantly monitor the work of the staff. Finally, the given approach contributes greatly to increasing employees’ competence, which, in fact, can increase a competitive advantage in general.

The organization under analysis can further develop new concepts and strategies based on the newly developed patterns of appraisal.

Theories Contributing To Enhancing Positive Relations between Co-Workers to Increase Employee Engagement

While evaluating the effectiveness of the ideas of enhancing positive relations, it is purposeful to refer to the theory of group cohesiveness and operant learning supporting the necessity to introduce positive and negative reinforcement, as well as create a healthy competitive environment. To enlarge on this issue, competition and reward systems define the extent to which a working team is ready to face challenges.

It also outlines the major psychological and ethical problems existing among employees within the identified organization. The approach will especially effective for the managing international issues and conflicts because failure to cooperate in team can lead to dismissal. In this respect, the negative reinforcement should also take place to tackle the problem employee engagement.

Due to the fact that operant learning theory implies reinforcement of behavior through punishment and reward, employee engagement can be significantly increased through the introduction of interdependent relations between subordinates. The approach is also congruent with the company’s philosophy because it strives to meet employees’ interests and choices, but in a very narrow-focused way.

Consequently, the main task of the managers is to foster independent decision-making through reinforcement of group liabilities. In case one member of the group is not able to contribute to the welfare of the department, the rest of the group should be responsible for the failure.

Introducing Theoretical Frameworks for Managing Cultural Diversity

It should be recognized that the problem of cultural diversity has now acquired a growing popularity. The issue concerns both customer management and employee engagement because these two dimensions are united by the purpose of enhancing human element.

In this respect, the entertainment services provided by the Walt Disney Company will be significantly advanced with the introduction of techniques managing emotional displays. The practical approach can be effectively carried out by referring to the theories of observational learning and behavior modeling training. The former is concerned with process of imitating various behavioral modes.

The practice is aimed at examining others’ behavior, analyzing the consequences of experience, evaluating the outcomes of choosing a specific behavior and imitating the mode to introduce favorable consequences. The former focuses on the introduction of an educational program directed at describing a set of behaviors that should be consider and providing patterns demonstrating how to use those models effectively.

The training is also connected with the presentation of social reinforcement and feedback to the trainees, as well as with taking measures to ensure the behavioral transformation with regard to organizational goals. In whole, both theories should contribute to better understanding of emotional displays and creating a more favorable environment for employee engagement.

Dutton, J. E., & Ragins, B. R. (2007). Exploring Positive Relationships at Work: Building a Theoretical and Research Foundation . NY: Routledge.

Johns, G., & Saks, A. M. (2005). Organizational Behavior: Understanding and Managing Life at Work . NJ: Pearson Prentice Hall.

Phillips, J. and Gully, S. M. (2011). Organizational Behavior: Tools for Success . NY: Cengage Learning.

The Walt Disney Company. Business Standards and Ethics . Web.

The Walt Disney Company. Company Overview . Web.

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For Disney, Small Shareholders Loom Large in Boardroom Fight

Individuals hold as much as 40 percent of the company’s shares, and they may decide a proxy battle that is one of the most expensive in history.

By Brooks Barnes and Lauren Hirsch

Gavin Doyle used allowance money in 2009, when he was 11, to buy a few shares of Disney stock. They cost $31 apiece.

Listen to this article with reporter commentary

Open this article in the New York Times Audio app on iOS.

He now owns a little over 400 shares — barely enough to be a speck of dust in the Disney investor galaxy. But the entertainment company, which has 1.8 billion shares outstanding, has nonetheless barraged him for months with political-style campaign materials (letters, email, social media ads) that urge him to elect certain people to its board .

“I guess every vote matters,” said Mr. Doyle, 26, who runs MickeyVisit , a blog unaffiliated with Disney that focuses on theme park vacation planning.

In most cases, global companies pay little attention to individual shareholders. Powerful institutional investors like mutual funds and index funds typically run the show. But Disney finds itself in an atypical situation as it scrambles to thwart Nelson Peltz , an activist investor who is seeking two board seats, including one for himself.

Up to 40 percent of Disney shares are held by individuals — retail investors, as Wall Street sometimes refers to them, with a hint of derision. On average among public companies, individuals represent closer to 15 percent of the ownership, according to analysts and academic studies.

“In the retail market, a lot of individuals don’t feel comfortable investing in companies they’ve never heard of,” said David Reibstein, a professor at the Wharton School at the University of Pennsylvania. “Disney is known: I can relate to it, I have taken my kids there, I’ve seen their movies.”

In other words, the Disney-Peltz proxy battle, expected to be one of the most expensive in history, may be decided by the little people.

Disney’s fight with Mr. Peltz will come to a head on Wednesday, when the company is scheduled to virtually host its annual shareholder meeting. A smaller activist investor, Blackwells Capital, is also seeking seats on Disney’s board, to the company’s irritation. While Mr. Peltz and Blackwells have sharply different views on how Disney should be managed — one wants “Netflix-like margins” of up to 20 percent in streaming, the other has floated splitting up the company — they have expressed the same basic motivation: Disney’s stock price is not high enough.

Shares are trading at about $122, down from $197 three years ago.

Robert A. Iger, Disney’s chief executive, and the company’s 12-member board have responded to the insurgents like Avengers battling Thanos — that is, with startling force. They say a 13-month-old turnaround plan has taken hold, and point to drastically improved financials, a new strategy for ESPN in the streaming age and a retrenchment at Marvel Studios to improve movie quality, among other initiatives. Yes, Disney’s stock is down from three years ago, but it’s up from $81 six months ago.

Disney executives contend that Mr. Peltz’s campaign is rooted in revenge. He is backed by Ike Perlmutter , the disgruntled former chairman of Marvel Entertainment, and aligned with Jay Rasulo , a former Disney executive who was passed over for the top job in 2015 and resigned. Elon Musk, who has been throwing elbows at Mr. Iger since November, when Disney and other major companies paused spending on X, has cheered on Mr. Peltz.

At first, Disney seemed poised to easily defeat Mr. Peltz. A parade of prominent shareholders (George Lucas, Laurene Powell Jobs), business titans (Jamie Dimon), analysts (Guggenheim, Macquarie), shareholder advisories (Glass Lewis, ValueEdge) and Disney family members ( Abigail E. Disney ) have advised against giving Mr. Peltz seats on the company’s board.

But it has evolved into a much closer contest. Two weeks ago, an influential proxy firm, ISS, partly sided with Mr. Peltz , recommending that shareholders elect him to the board and advising against adding Mr. Rasulo. ISS largely cited Disney’s botched succession planning. On Tuesday, Mr. Peltz won the backing of Egan-Jones , another advisory firm.

Until ISS weighed in, “I was pretty sure that Peltz was kind of cooked,” said Michael Levin, an independent activist investor and adviser who oversees the Activist Investor website. Mr. Levin estimated that ISS’s recommendation could influence 5 to 10 percent of Disney’s vote, with institutional shareholders like Vanguard and BlackRock likely to pay close attention.

Mom-and-pop shareholders are more of a mystery. Retail investors are frequently apathetic, even in the face of a contest, proxy experts say. “You have to find a way to connect with somebody who doesn’t have a requirement to vote, who doesn’t necessarily have it within their routine,” Bruce Goldfarb, the chief executive of Okapi Partners, a proxy solicitation firm working with Mr. Peltz, said at a recent conference .

Disney and Mr. Peltz have each been spending heavily to get out the small-fry vote. Trian Partners, Mr. Peltz’s investment firm, said in a securities filing that it expected to spend about $25 million in total on its campaign; it hired Okapi and another firm, D.F. King, to help identify shareholders and encourage them to vote. Disney, which has teamed with the firm Innisfree M&A, among others, has priced its countercampaign at up to $40 million.

In part to appeal to individual shareholders, Disney has deployed characters like Moana and Iron Man to solicit votes. In February, the company released an animated video starring Donald Duck’s uncle, Professor Ludwig Von Drake. “Voting this year is critical no matter how many or how few shares you may own,” a narrator says. “Do not vote for the Trian Group or Blackwells’ nominees.”

Mr. Peltz responded with a letter to Disney shareholders that included a cartoon showing bored and haggard board members and a messy bowl of noodles. “Spaghetti on the wall will not feed shareholders starved of returns” was the letter’s headline.

Douglas Chia, the president of Soundboard Governance, which advises on corporate governance, got calls from both sides of the battle. Mr. Chia, who says he owns a couple hundred shares of Disney, said he was left unimpressed by the first call on Trian’s behalf. (Mr. Chia conceded that his professional background trained him to ask questions a traditional retail investor might not.)

After he posted about it on LinkedIn, he got a follow-up call from Trian directly, underlining just how much each side is paying attention to every vote.

“These were very senior people at Trian who talked to me for about 45 minutes,” Mr. Chia said. “And it’s like: The meeting is less than a week away — they could be on the phone with BlackRock.” (Mr. Chia said he was not persuaded by Trian’s arguments, but appreciated the follow-up call.)

Retail investors tend to side with management in proxy contests. In the case of Disney, many of these shareholders are fans.

Cori Borgstadt has been a Disney stockholder since 2008, when her grandmother gave her a single share for Christmas. She was 3. Ms. Borgstadt, who has continued to acquire shares, said she had read a few news articles about the proxy contest but had largely disregarded Trian’s case.

“I admire Bob Iger, and I trust him to know what’s right,” Ms. Borgstadt said. “So I voted the white slate.” (Each side has a ballot — white for Disney, blue for Trian.)

Still, experts say there is one big factor in Disney’s fight that may affect the instinct of fans to support Mr. Iger. It involves politics.

Disney has become a political punching bag in recent years, partly because it has added openly gay, lesbian and queer characters to its animated movies. The emphasis on diversity in some of Disney’s live-action films, including “The Little Mermaid” and “The Marvels,” has also led to fan complaints. Although Disney has also received positive reactions, the blowback — and poor ticket sales for some of the films in question — has prompted Disney to retrench.

In what some proxy solicitation experts viewed as an appeal to disenfranchised Disney fans, Mr. Peltz recently waded into the “woke Disney” debate by commenting about “The Marvels,” which focused on female superheroes, and “Black Panther,” which had an all-Black principal cast.

“Why do I have to have a Marvel that’s all women? Not that I have anything against women, but why do I have to do that?” Mr. Peltz told The Financial Times . “Why can’t I have Marvels that are both? Why do I need an all-Black cast?”

The move could “backfire against him — there’s presumably a lot of Disney investors who support diversity in the content,” said Scott Bisang, a partner at Collected Strategies, a communications firm. “But I don’t think he would be doing that unless he thought there was sort of a supportive audience for it.”

Mr. Peltz has been victorious in proxy fights with retail investors before. In 2017, he won what was then the most expensive proxy fight in history at Procter & Gamble with a margin of about 0.0016 percent. (The sides spent about $60 million, or $77 million in today’s money.)

But he lost a hotly contested proxy contest with DuPont in 2015, with studies citing retail investors as one reason.

As Mr. Peltz said in a January securities filing detailing some of Trian’s outreach to Disney shareholders, “Every vote counts!”

Read by Brooks Barnes

Audio produced by Jack D’Isidoro .

Brooks Barnes covers all things Hollywood. He joined The New York Times in 2007 and previously worked at The Wall Street Journal. More about Brooks Barnes

Lauren Hirsch joined The Times from CNBC in 2020, covering deals and the biggest stories on Wall Street. More about Lauren Hirsch

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Public domain, where there is life after copyright

By Lee Cowan

April 14, 2024 / 9:20 AM EDT / CBS News

For nearly four decades, United Airlines licensed George Gershwin's "Rhapsody in Blue" to be its musical identity. In 2020, however, Gershwin's jazzy classical classic fell out of the friendly skies – and landed in the public domain.

Which means, when the copyright expires, anyone is free to use and build upon that work. "No fees, no licenses, no tracking down the person who owns it, no permission," said Jennifer Jenkins, director of the Center for the Study of the Public Domain at Duke University Law School.

She said there are a lot of famous works that don't belong to their creators anymore – films like Charlie Chaplin's "The Circus," and Fritz Lang's "Metropolis," books like Ernest Hemingway's "The Sun Also Rises," and characters like Peter Pan, Dracula and Frankenstein. They're all now owned by us , the public, free for anyone to use to create something fresh.

Jenkins said, "The public domain doesn't represent the death of copyright. It's just the second part of copyright's life cycle."

The concept of putting an expiration date on intellectual property was something the founding fathers actually put in the U.S. Constitution, "...to promote the progress of science and the useful arts." They left it to Congress, however, to decide just how long copyright terms should last.

According to Jenkins, "If copyright lasted forever, it would be very difficult for a lot of creators to make the works they want to make without worrying about being in the crosshairs of a copyright lawsuit."

F. Scott Fitzgerald's "The Great Gatsby" was published in 1925. Anyone who wanted to use elements of the novel, whether it be Robert Redford or Leonardo DiCaprio, had to get permission from the Fitzgerald Estate, which held the copyright for 95 years.

Blake Hazard admits that's a long time, but doesn't think it's too long. "Then, that's my personal opinion, and I'm obviously biased," said Hazard, who is Fitzgerald's great-granddaughter, and a trustee of his estate.

When "Gatsby" finally entered the public domain in 2021, she watched as a slew of Gatsby-esque projects were waiting at the starting line, including the novels "Nick," a prequel by Michael Farris Smith; and "Beautiful Little Fools" by Jillian Cantor, and "The Chosen and the Beautiful" by Nghi Vo, which each retell the story of "Gatsby" through different characters.

"I always hope there'll be some faithfulness, but we don't have any control over it," said Hazard. "So, we just have to kind of embrace that."

She's just been invited to a new post-copyright adaptation of her great-grandfather's work – a "Great Gatsby" musical which opens on Broadway this month. "I hope it's good!" she laughed.

The show's writer, Kait Kerrigan, said, "We didn't want to do something that was wildly different from the novel. We wanted to add perspective and layers to the novel."

The director Marc Bruni said, "Any group of artists is going to distill down a story through their own lens."

The truth is, most works aren't lucky enough to be economically viable for as long as F. Scott Fitzgerald's, or Ernest Hemingway's, or even Walt Disney's.

This year, "Steamboat Willie," which unleashed two of the most lucrative rodents in history, entered the public domain. To be clear, though, don't go using the modern Mickey or Minnie, because they're still under copyright; it's only the version as they first appeared that's fair game.

Still, as soon as those first copyrights expired, we got this: a Mickey slasher film, "Mickey's Mouse Trap."  The same thing happened when A.A Milne's Winnie-the-Pooh entered the public domain: The very non-G-rated "Winnie-the-Pooh: Blood and Honey."  

• "Steamboat Willie" horror film announced as Mickey Mouse enters public domain (Variety)
• Trailer for Mickey Mouse slasher film drops on same day "Steamboat Willie" character enters public domain (Hollywood Reporter)

It's those kinds of re-imaginations that many estates fear.

Sherlock Holmes is one of the most recognized literary characters from the 19th century, but Sir Arthur Conan Doyle's estate began to see its copyrights begin to expire in the 1980s. Nevertheless, the Conan Doyle estate kept seeking licensing fees, arguing that since some of the later Sherlock Holmes stories were still under copyright, they should own the rights to all the characters still.

Author Les Klinger, one of the leading scholars on Sherlock Holmes, said, "At some point, enough is enough."

In 2013 Klinger was about to publish an adaptation of the supposedly copyright-free detective, titled "In the Company of Sherlock Holmes," when this happened: "The estate contacted that publisher and said, 'You need a license,'" said Klinger. "And we said to the publisher, 'No, you don't.' We just thought it was wrong, absolutely wrong, and it made us very angry."

So, Klinger filed a civil suit in Federal Court … and he won. "They didn't give up easily," he said. "They were trying to squeeze all the juice out of these lemons that they could right up until they've run out of copyright."

• Sherlock Holmes and the Case of the Public Domain (The Gotham)

Duke University's Jennifer Jenkins said, "Copyright gives rights to creators and their descendants that provide incentives to create. But the public domain really is the soil for future creativity."

There are surely more copyright clashes ahead. Characters like Bugs Bunny, Superman and Batman will all find themselves out of copyright protection soon enough.

Even Luke Skywalker will eventually find himself in the public domain, too, sometime around 2073. That sure seems like a galaxy far, far way.

       For more info:

• Jennifer Jenkins, director, Center for the Study of the Public Domain, Duke University
• Public Domain Day (January 1): New works added in 2024
• The Estate of F. Scott Fitzgerald
• "The Great Gatsby"  at the Broadway Theatre, New York City |  Ticket info
• "Sherlockian" Leslie Klinger

      Story produced by Mark Hudspeth. Editor: Ed Givnish. 

• public domain
• Mickey Mouse
• The Great Gatsby

Lee Cowan is an Emmy award winning journalist serving as a national correspondent and substitute anchor for "CBS Sunday Morning."

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