WALT DISNEY

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Walt Disney
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Politics occurs in organizations when managers manipulate information through their

power and influence in order to protect their jobs, income, and to receive favorable decisions
(Jones, 2013 p. 407). According to an article in the Investors Business Daily, Michael Eisner
implemented a host of successful new ideas at Disney, ultimately creating a lot of revenue for the
company. His success made him a powerful figure (Andrea, 2014). Anna, (2002) reported in the
Sunday Business (UK) that Michael Eisner used his power and influence over the company and
the Board of Directors to create a tall bureaucratic organization.
A bureaucracy generally occurs as a tall hierarchy with specific roles, rules, and reporting
chain of command (Jones, 2013, p. 134). One of the sources of conflict at Disney was the
bureaucracy in the strategic planning office which caused decision making to be slow and
inefficient (Jones, 2013, p. 414). Managers in decision making roles controlled the information
needed to approve new ideas. They exercised the power of centrality by controlling the flow of
information to top management. Decisions were made at a snails pace and innovative new
products were slow to come out (Jones, 2013, p. 414). It can therefore be argued that Disney was
experiencing a crisis of red tape (Jones, 2013, p. 320).
Innovation was being suppressed by the bureaucracy. Slow decision making caused
organizational inertia at Disney. Organizational inertia is one of the sources of conflict, and
causes of decline due to the effects of bureaucracy. It happens when an organization is unable to
adapt and change quickly enough to satisfy customer and stakeholder needs. (Jones, 2013, p.
323). This resulted in lost sales and revenue at Disney.

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Organizational decline occurs when a company cannot react quickly enough to counter
the forces in its environment that affect it negatively (Jones, 2013 p. 321). According to Weitzel
and Jonssons model, when an organization gets to the third stage of decline (faulty action stage),
decision making becomes erroneous. It is characterized by corporate infighting as managers play
politics while trying to protect their power, position and income (Jones, 2013 p. 325). Managers
at Disney put their personal priorities ahead those of the organization, therefore growth of the
organization was inhibited.
Another source of conflict involved Michael Eisners handling of Disney assets.
According to Epstein (2005), much of Disneys profits were tied up in assets and not the stock
market. Investors and stockholders were unhappy because of declining share prices, and
therefore began to lose confidence. Furthermore, Eisner had alienated and angered certain
powerful members of the board who started a campaign to have him removed. This further
contributed to the conflict and decline of the company.
All of these factors contributed to the issues that plagued the management of Disney
during Eisners last days. Further inaction would have led to organizational crisis and finally
dissolution (Jones, 2013, p. 327). Therefore, board members were compelled to take decisive
action to curtail the revolt against Eisner, and to please stakeholders (Joe, 2004).
2.
Unobtrusive power is one method of using power subtly to sway decisions in ones favor
while staying behind the scenes (Jones, 2013, p. 406). Unobtrusive power is an important tool in
organizational politics. Two methods of exercising that power for political gain are by forming
close relationships with top leaders, and becoming indispensable to them (Jones, 2013, p. 407).
According to Frank (2005), Bob Iger, who was COO, and head of the Asia Division at the time,

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had a close relationship with Eisner and was also a board member. He had a good reputation
with both employees and investors therefore became one of the top choices for the CEO position.
Despite opposition of some parties, he was eventually nominated by Michael Eisner.
Organizational conflict can be resolved in many ways depending on the stage of the
conflict. Based on Ponds model, Disney was at a stage of felt conflict (Jones, 2013, p. 397).
Lower levels of management were frustrated with the snail pace of decision making. Bob Iger
resolved the conflict by used his authority as CEO to make changes to the Disney chain of
command. The hierarchy was made flatter and power decentralized by removing the office of
strategic planning, hence making it easier for lower managers to communicate new ideas and
innovations with upper management. Another effective political strategy to gain power is in the
control and use of organizational resources. Iger rapidly made acquisitions that became major
sources of revenue for Disney. Two such acquisitions were the purchase of Pixar and Marvel
Entertainment (Holum, 2004).
In conclusion, Bob Iger employed several political and conflict resolution strategies to
solve the problems plaguing Disney and turned the company around. First he used unobtrusive
power to gain the confidence of Eisner and ultimately became CEO. Secondly, he used
authoritative power to change the organizational structure and roles, thus making the company
more efficient and reducing internal conflict. Finally, by exercising his control over the
companys resources he made several prudent acquisitions which generated revenues and profits,
which make shareholders and stakeholders happy, while increasing his power.

REFERENCES
Andrea, R. (2014). How Michael Eisner reanimated Disney. Investors Business Daily. p. A01.
Retrieved from http://web.a.ebscohost.com/ehost/detail/detail?vid=6&sid=039b4dcb-

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Anna, S. (2002). Walt Disney CEO Michael Eisner under pressure from board members. Sunday
Business (United Kingdom). Retrieved from,
http://web.a.ebscohost.com/ehost/detail/detail?vid=48&sid=039b4dcb-7af1415cb41aea6459cc5519@sessionmgr4001&hid=4114&bdata=JnNpdGU9ZWhvc3QtbGl
2ZQ==#AN=2W61561167269&db=bwh
Epstein, E. (2005). How did Michael Eisner make Disney profitable? The Hollywood Economist.
Retrieved 2015, from
http://www.slate.com/articles/arts/the_hollywood_economist/2005/04/how_did_michael_
eisner_make_disney_profitable.html
Frank, A. (2005). Disney Chooses Successor to Chief Executive Eisner. Washington Post, The.
Retrieved from
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Holum, T. (n.d.). The Genius of Bob Iger and Disney. The Motley Fool. Retrieved from
http://www.fool.com/investing/general/2015/08/21/the-genius-of-bob-iger-anddisney.aspx
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Joe, L. (2004). Disney rebels step up anti-Eisner campaign. Sunday Business (United Kingdom).
Retrieved from http://web.a.ebscohost.com/ehost/detail/detail?vid=12&sid=039b4dcb7af1-415c-b41aea6459cc5519@sessionmgr4001&hid=4114&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ==#
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Jones, G. (2013). Organizational theory, design, and change (Seventh ed.). Upper Saddle River,
NJ: Pearson.