The Analysis of the Walt Disney Company - Essay Example

? A report on strategic human resources management at Disney Word count: 1796 (excluding contents and references) Table of contents Introduction 3 2. The Walt Disney Company 3 3. Analysis based on theoretical models 3 3.1 Life cycle model 4 3.2 Harvard model 4 3.3 Michigan model 6 4. Challenges 6 5. Recommendations and conclusions 7 1. Introduction: The Walt Disney Company is a world leading entertainment and media company that has invaded multiple business fields during last decades. Its achievements can be attributed to its strategic business approach, which includes a strategic human resource management (SHRM) at its core. This paper will present a short report on this company from theoretical perspectives on SHRM while focusing on external factors based on information available in the company’s website and other literature sources before identifying some key challenges and proposing recommendations to tackle those challenges along with concluding opinions. 2. The Walt Disney Company: As per their website, the Walt Disney Company and its subsidiaries group is a world leading international family entertainment and media enterprise with five business segments: media networks, parks and resorts, studio entertainment, consumer products and interactive media. Disney’s vision statement is ‘To make people happy’ (Plenert 2002; 77), and this they wish to accomplish through their mission, which states, ‘To be one of the world's leading producers and providers of entertainment and information. Using our portfolio of brands to differentiate our content, services and consumer products, we seek to develop the most creative, innovative and profitable entertainment experiences and related products in the world,’ (Erling, 23). As Bodenheimer puts it, “The Walt Disney Company is a great place to work because the Company is filled with people who enjoy creating great entertainment," is a clear indication of how well Disney’s strategies are linked to its mission in order to achieve its vision. 3. Analysis based on theoretical models: Evolution of SHRM has been the result of numerous challenges from conventional HRM practices, and SHRM works on the philosophy of integration of HR strategy with organisational or business strategy. While strategic management models strive to address company’s internal and external factors, the external factors stand out even before starting a business and also throughout the life cycle of the business. 3.1 Life cycle model: Considering the life cycle model, put forth by Sisson and Storey (2000 cited Marchington & Wilkinson, 2005), Disney can be categorized in the maturity phase after its rapid growth into locations worldwide during last decade; its standardized policies and procedures have been translated to suit the local needs and obligations. Although Disney continues to acquire and grow, its growth strategies seem to be in saturated markets, considering the evolution of advanced technology and systems, favourable economic conditions and regulations, which in turn are only sufficient to sustain its business. The recent acquisition of Lucasfilm and all of its franchisees, which has not only added greater value to Disney’s brand but also increased its share value in the US market (Cieply, 2012) also indicates that the company still continues to grow and expand while maintaining its standardized policies. The life-cycle perspective shows Disney fluctuating between growth and maturity phases. Resistance to change, adaptability of old strategies to new conditions and employee motivation and commitment are common issues that need to be addressed. 3.2 Harvard model: Gaining an understanding of the external factors is crucial for strategic decisions that can eventually spell the success, or performance of the organisation. The Harvard strategic management model, proposed by Beer and his associates (1984, cited Marchington & Wilkinson, 2005) identifies two critical factors that influence management, namely, situational and stakeholders’ interests, with the former including internal and external environmental factors such as labour market conditions, societal values, business strategies, technologies, management philosophies and market conditions; and the latter including management employees, unions, government agencies. However, this model does not talk about customers and clients or business partners, which are also critical influencing factors in contemporary businesses. The key external factors that determine the success of Disney include existing and potential customers, suppliers, government policies and regulations, competitors, labour markets, shareholders and investors, culture, and other business partners. At Disney, from a SHRM perspective, critical external factors that need to be considered include employment-relations laws, competition, workforce skills and qualifications, national culture, and socioeconomic conditions. The Harvard model helps in understanding the relation between SHRM practices, business environment and organisation’s performance as it provides a platform for managers to consider situational and stakeholders’ interests while making key strategic decisions, especially in organisations that wish to reach out to large masses of people. This model clearly indicates the level of interdependence of some stakeholders, and the impact of their decisions on business outcomes. Making SHRM decisions in line with situational factors also helps in constructive outcomes for the business. Considering its diverse customers and revenue generation, Disney is a capitalist corporation that adopts corporate strategies to attract best workforce in return of good employee benefits. The company claims that its policies and procedures comply with all requirements from government, labour relations, environment, governance, human rights, safety and security perspectives, and provides a direction to its internal entities towards a common vision. Disney also complies with the Equal Employment Opportunity law by hiring people on the basis of skills and qualifications, irrespective of race, religion, colour, sex, sexual orientation, national origin, age, marital status, covered veteran status, mental or physical disability, pregnancy, or any other basis prohibited by state or federal law. Disney puts significant efforts to align its HR policies and organisational culture with its goals and objectives, thereby creating conducive atmosphere for its employees to perform, learn and grow; these in turn help in retaining their competitive position in the market. Some of Disney’s initiatives towards this direction include talent acquisition, learning and development programmes, employee benefits and compensation, and effective as well as advanced communication processes. From a community perspective, Disney’s strategies to promote high performance from employees help in earning confidence of its investors, thereby creating more options and opportunities to improve the business. Long ago, Disney had established its presence by undertaking certain initiatives such as the MWBE (Minority and Women Business Enterprise) program in which it was able to successfully mobilise hundreds of women-run businesses that eventually partnered with Disney’s business through diversified products and services that were otherwise manufactured or produced outside (Flewellyn, 1997). 3.3 Michigan model: The Michigan Model, by Fombrun et al (1984 cited Marchington & Wilkinson, 2005), highlights political, economic and cultural forces as the external influencing factors along with internal factors related to strategy, structure and HRM. This model considers employees as critical resources that need to be acquired and maximally used; this model takes a hard approach to HRM and outlines specific guidelines to recruit, select, monitor and control human resources with an aim to derive maximum output and profits for the company. This model emphasizes performance management and evaluation, rewards and recognition, and training and development activities for human resources for achieving business objectives. Price (2011) argues that though this model provides many good and practical practices for business management, its hard approach towards HRM is discouraging despite the fact that this approach has been extremely beneficial to many companies. For instance, Disney’s current position is largely attributed to its highly talented workforce; its policies and procedures meant for acquiring highly talented, creative and suitable workforce from the market; and its employee retention efforts. Disney employs highly specialized hiring and selection programmes. These programs are not only aimed at acquiring the best talent but also make Disney as one of the employer of choice, thereby gaining an edge over its competitors in the market (Lachman, 2009). Adherence to regulations is achieved through its strong HR policies for hiring, workplace safety and security policies, and discrimination policies. For instance, all employees at Disney are given appropriate training on company’s code of ethics and principles through its learning management system known as the Disney Development Connection (The Walt Disney Company, n.d). Disney focuses on providing on-the-job training to its employees, which includes inculcation of the Disney Tradition, thus sharing its vision with all employees. 4. Challenges: While SHRM seems to be the answer to contemporary business management, its challenges never end. This is because strategies need to be changed with changing situations, which usually erupt from external factors, and thereby have an impact on the internal factors. Disney’s growth, expansion, performance, and value can be considered as the outcomes of continuous influence of external factors. The most significant and serious threat to any business is competition. For Disney, competition is multidimensional considering its diversified businesses; however, its brand value provides significant advantage in the competitive market. In the media and entertainment fields, numerous other channels that continue to emerge and expand, pose serious threat to Disney’s current position. These threats usually surface in the form of employee dissatisfaction, voluntary turnover, and non-performance (Dess & Shaw, 2001). Strategic integration of policies of the newly acquired organisations, especially the HR policies, is highly challenging as well as critical to the success of the acquisition process (Schuler & Jackson, 2001). At an international level, changing economic conditions, developing markets, and diverse workforce pose a challenge, as well as opportunity. Moreover, cultural considerations also play an important role in decisions related to products and services in different nations. Organisational policies and procedures that are aligned to national regulations may not work in foreign settings because of cultural influence on the regulations and labour expectations. For instance, workplace safety norms might be different in different countries, and considering the importance of policies governing workforce safety, especially at Disney, suitable practices hold paramount importance. Therefore, these challenges necessitate modification or change in organisational strategies, practices and procedures to suit the local needs. From a HRM perspective, these changes, in accordance with the national labour laws, would be required in terms of employee compensation and breakup, workplace safety and security, vacation and leave policy, employee benefits and insurance coverage policy, workplace rights and safety policy, discrimination policy, etc. Economic conditions of nations and its citizens need to be considered while introducing new products and services in other nations, as well as citizens ’life styles need to be considered in order to frame effective strategies that can benefit the business. 4. Recommendations and Conclusions: In order to sustain its competitive position and performance, Disney’s HR internal strategies should be modified to suit the external factors such as national regulations, economic conditions, life styles, and workforce laws. Disney should continue to employ the best talent available in the market by providing the best workplace benefits and compensation in addition to learning and growth opportunities. In addition, its organisational culture, growth and development programs must suit the national culture. Finally, findings from this brief review indicate that SHRM approach has facilitated an effective and planned business growth and expansion for Walt Disney during past few decades. Though SHRM seems complicated compared to the conventional HRM, outputs of SHRM are more promising as it provides a framework for companies to constantly change their strategies in accordance with the market, location, culture and customers. References Bodenheimer G (n.d). ‘Walt Disney, Parks and Resorts Online.’ Disney. Available at: http://www.disneyonlineworlds.com/index.php/Disney (Accessed 8 Mar, 2013) Cieply M (2012, October 30). ‘Disney buying Lucasfilm for $4 Billion.’ The New York Times. Available from, http://mediadecoder.blogs.nytimes.com/2012/10/30/disney-buying-lucas-films-for-4-billion/ (Accessed Mar 9, 2013). Dess GG and Shaw JD (2001). ‘Voluntary Turnover, Social Capital, and Organizational Performance.’ The Academy of Management Review. 26 (3), 446-456. Erling D. (2011). Match: A Systematic, Sane Process for Hiring the Right Person Every Time. New Jersey: John Wiley & Sons. (Ch.2, 17-25). Flewellyn T (1997). ‘Diversity means business at the Walt Disney Company’. Black Enterprise, 27 (11), pp: 311-312. Available from, http://www.blackenterprise.com (Accessed Mar 8, 2013) Lachman VD (2009). ‘Ethical challenges in health care: developing your moral compass.’ New York: Springer Publications. (Ch.15, pp:181-192). Marchington, M and Wilkinson, A. (2005). Human resource management at work: people and development. 3rd ed. London: CIPD Publishing Plenert GJ(2002). Developing International Goals. In International operations management. Denmark: Copenhagen Business School Press. (Ch.3, 67-116). Price A. (2011). Human resource management. 4th ed. Hampshire, UK: Cengage Learning. (Ch.2, pp:25-50). ‘Schuler R and Jackson S. (2001). ‘HR issues and activities in mergers and acquisitions.’ European Management Journal, 19 (3), 239-253. The Walt Disney Company. Available at http://thewaltdisneycompany.com (Accessed Mar 8, *2013). Read More