Making people happy - Disney's mission and how it is enacted by its employees

Index

Abbreviations

Table of figures

1 Introduction
1.1 Problem Statement
1.2 Outline of Thesis

2 Theoretical Basics
2.1 Corporate Culture
2.1.1 Definition, Classification and Influences
2.1.2 Cultural Climate
2.2 Leadership
2.3 Motivation
2.3.1 Intrinsic Motivation
2.3.2 Extrinsic Motivation

3 The Walt Disney Company
3.1 Overview
3.1.1 Media Networks
3.1.2 Studio Entertainment
3.1.3 Parks and Resorts
3.1.4 Consumer Products
3.2 Chronic of the Walt Disney Company
3.3 Walter Elias Disney
3.3.1 Chronic of Walter Elias Disney
3.3.2 Visions

4 Corporate Culture at Disney
4.1 Mission and Mission statement
4.2 Communication
4.2.1 Internal Communication
4.2.2 External Communication
4.2.3 Significance of communication
4.3 Getting employed with Disney
4.3.1 Disney’s requirements
4.3.2 Traditions
4.4 Motivation at Disney
4.4.1 Intrinsic Motivation at Disney
4.4.1.1 Leadership at Disney
4.4.1.2 Cloud Chamber Effect
4.4.2 Extrinsic Motivation at Disney
4.4.2.1 Salaries
4.4.2.2 Perks
4.5 Control
4.5.1 How personnel is controlled
4.5.2 Problems

5. How to benefit from the “Disney Way”
5.1. Usage for other companies
5.2 Implementation

6 Summary and Conclusion

7. Bibliography
7.1 Literature
7.2 Internet

Affirmation

Abbreviations

illustration not visible in this excerpt

Table of figures

Revenues by Segment in US$ Billion

1 Introduction

The Walt Disney Company has always been a leader in the field of customer service. They have perfected the treatment of their customers in accordance with the company’s mission and values, many of which were coined by the founder of the company, Walter Elias Disney. The Disney Company sets standards not just in the service and entertainment industry but in business as a whole and any company can learn from their performance.

1.1 Problem Statement

The question is always: How does Disney do it? How does this media and entertainment giant plan all of its processes always with the customer in mind? Where does the “magic” come from?

Proclaiming to make the customer king is customary in the modern business world, but only a few organizations actually live by it. Disney is the prime example for how it is done. Doing it “the Disney way” is a good idea for many companies, but is important to look at the company as a whole in order to initiate a learning process rather than just taking little fragments and applying them.

This thesis tries to shed some light on Disney’s treatment of employees, as well as their corporate culture, as these are the key essentials to

customer service perfection.

1.2 Outline of Thesis

This thesis will first concentrate on the theoretical basics. In order to fully understand Disney’s way of delivering the “magic”, the company’s culture and everything that leads to it, has to be covered. This work will start out by explaining corporate culture and how it is influenced by a vision and mission, followed by an explanation of cultural climate, which even better describes a way of life within an organization. The next step is to look into leadership, how it is created and used. Another important part of the theoretical basics is the aspect of motivation. Intrinsic and extrinsic motivation will be explained, because it shows why the employees do, what they do. These theoretical approaches apply to all forms of organizations, but in this thesis, the main focus lies on companies. Therefore the word organization will be used in the sense of companies and corporations.

The practical part starts with an overview of not only the Walt Disney Company, its history and how it is organized, but also of the founder Walter Elias Disney himself. His history and visions are alive in the company even today, 40 years after he passed away and are therefore vital to this thesis and for understanding the whole concept.

The thesis will then provide an insight into the corporate culture of the Walt Disney Corporation. Disney is not only very unique in how they treat and work with their employees but also role model for many other companies. After explaining Disney’s vision, mission and mission statement this thesis will show to what great lengths the company will go to find the right employees and their ability to integrate them into the company’s culture. This is accomplished through a thorough selection process as well as an extensive schooling of new employees to manifest the cultural issues. The next part of this thesis will cover the motivation, Disney employees have for working there, whether it is intrinsic motivation through their passion for Disney and the vision that stands behind it, or extrinsically through the salaries and perks offered by Disney.

This thesis will show how communication within the company has an influence on Disney’s culture and why communication is regarded as a highly important factor within the organization. People are not only functioning on intrinsic or extrinsic motivation. Disney applies a strong level of control. In the following it will be shown how this control works and what kind of negative side effects it might have. For this reason, none of former or current employees agreed to give their official statements, since they did not want their names to be known. Even the Walt Disney Company refused to reveal information, but rather referred to their seminars.^[1] Therefore it is not possible to back up all information given in the latter half of the thesis with footnotes since the majority of it is based on interviews and personal experiences.

The final part of this thesis will give a summary of the “Disney Way” and show how other companies can learn from it or apply it in their own culture.

2 Theoretical Basics

Theoretical basics is crucial for understanding Disney’s human resource management and corporate behaviour. For the performance of Disney’s employees the corporate culture as well as a strong motivation and leadership are essential.

2.1 Corporate Culture

In any gathering of people, there is a shared way of fulfilling tasks. This applies to all groups whether it’s families, countries, parties, or companies and organizations. A culture can be shaped by its leaders or be passed on through the generations. For the purpose of this thesis, the focus will be on the corporate culture with a little insight into the cultural climate, which is often mistaken for the culture itself.

2.1.1 Definition, Classification and Influences

Corporate Culture is the social and political environment, in which people work.^[2] An organization’s culture is formed by values and beliefs of its founders. It is very difficult to change, if at all possible or desired. Culture is a set of beliefs and values about what is desirable and undesirable in a community of people. Furthermore it is a set of formal or informal practices to support the values. Culture has both prescriptive and descriptive elements and involves taken-for-granted assumptions about how to think, act, and feel.

A strong culture often is a strategic advantage. Ever since corporate culture first appeared in literature, it gained significance in organizational structuring as well as strategic marketing and human resource decisions.

Corporate culture is not of materialistic, but of ideational or cognitive nature.^[3] It contains shared ideals, expectations, beliefs, ways of thinking, and basic assumptions. Organizational culture can be used as competitive advantage and is shaped by four key components:^[4]

- The founder’s values
- The industry and business environment
- The national culture
- The senior leaders’ vision and behavior

A good way to explore any company’s culture is by applying Schein’s four levels of culture:

- Artifacts (e.g. architecture, dress code, jargon, rites and rituals, legends and myths)
- Espoused values (e.g. values that are passed down by leaders or visionary founders, company policies)
- Actual values
- Basic assumptions (values and beliefs that influence the behavior of employees on a subconscious level)

All of the above can be found within any company, it is just difficult to identify them.^[5] When trying to find out more about culture or even measure it within an organization it is useful to concentrate on five key components:^[6]

- Values: How the employees see and evaluate certain behaviors or activities within the organization. Often the values can be derived from the organization’s mission.
- Beliefs: Certain reactions employees think will be evoked by their actions. Also what they believe about the way the organization works. They do not usually stem from their values but from what they have seen throughout their careers.
- Myths: “Stories or legends that persist about an organization and its leaders, reinforcing the core values or beliefs.”^[7]
- Traditions: Reoccurring rites and rituals (e.g. celebrations, parties and dinners). This may also include honoring former leaders and visionaries.
- Norms: These are the informal rules regarding behavior, dress, work hours and communications, as well as a chain of command.

If any of the key components differ from the expectations of the employees or are treated hypocritically by leaders and managers, a strong culture can easily backfire and become demotivational.

There are many models and classifications of culture in literature. Another example which is very applicable to this case is Deal and Kennedy’s model of corporate culture. It focuses more on the external factors, which also play an important role in corporate culture.^[8] Deal and Kennedy apply a framework focusing on risk and feedback. They define risk as outside business environment, competition, and risk of going out of business. Feedback is defined as the time span between actions of employees and reactions from customers.

They identified four different cultural dimensions:

- work-hard/play-hard (low risk environment, fast feedback, very customer oriented and team-focused)
- tough-guy/macho (high risk environment, fast feedback, Stars, Gamblers, “All or nothing”)
- process (low risk environment, slow feedback, bureaucracy, strong hierarchy)
- bet-your-company (high risk environment, slow feedback, technology oriented, conference rituals).

A strong culture within a company can be very motivational for all employees and used as a way of leadership. However, it has to be fully accepted and lived by the management. If the company’s behavior differs from what it proclaims, it loses its credibility. That is why there have to be written guidelines for the company, on which to measure it. These usually start out with a vision, from which a mission and a mission statement derive.

2.1.1.1. Vision

Literature defines vision in various ways. For example, the Boston Consulting Group defines a vision as an organization’s general alignment with foresighted goals.^[9] However, this thesis will restrict to a particular definition in detail, which is best applicable to the case at hand.

Günter Müller-Stewens and Christoph Lechner define a vision as a leading idea that provides future goals for any corporate unit and gives a strategic direction. The unit should consequently align with it in its developments and actions. A successful vision features three characteristics:^[10]

- It provides meaning, not only to the company but also to the individual’s work. The vision creates orientation as well as order.
- It affects motivation. The divergence between the actual situation and the one to be realised awakens enthusiasm amongst the employees. This vision of the future has to be realistic and must not be utopian. If it is not reachable, it will hurt motivation. However, the vision has to be far enough from the present state.
- It gives guidance. One of the major challenges organizations face today is forming a harmonized, collective pattern out of all involved individuals’ actions to benefit the whole company. Taking this into account shows how important a successful vision is in today’s marketplace.

The four categories of visions:

- Goal-focused visions set quantitative or qualitative goals. For example: “We want to double our sales by the year 2010.”
- Competition-focused visions aim at the competition. These are usually found in smaller companies competing with the dominant rival. For example: “We will beat Microsoft.”
- Role-focused visions emphasize a role, the company wants to play. For example: “In ten years, we want to be the most respected company in our field.”
- Change-focused visions are usually found in old traditional companies that try to implement changes. For example: “We want to go from a pharmaceutical company to one of the largest high-tech companies in the world.”

A good vision has to be understandable enough, so the visionary can pass it on to the different leaders throughout the organization.^[11] It also has to be flexible enough, so it can be adapted to different situations and conditions. The idea behind any vision is to implement it as a self-fulfilling prophecy throughout the organization.

2.1.1.2 Mission / Mission Statement

In literature, mission and vision are often mistaken for one another and seldom there is a clear differentiation between the two. Once again, Müller-Stewens and Lechner provide a good explanation. A mission does not necessarily have to reflect a vision of the future, but can be seen as a guideline for the present time.^[12] Whereas a vision can become obsolete, when the envisioned state occurs and then has to be changed. A mission can be unaltered for a long time and still be current.

A mission should give information about four central elements:

- The object of a company and its goals
- Values
- Strategies
- Behavioural standards

These elements make an organizational mission and do not have to be explicitly mentioned within the mission. There are many successful “one-liners”, missions that only consist of one sentence. They are kept in a very general manner but specific enough to lead and guide the members of the organization. A strong ideology can be very motivational and unleash creativity within the workforce.

When a mission is more extensively defined, it is called a mission statement. Such statements can often be found in modern organizations and are usually verbalized as policies.^[13] They give more detailed explanations than the mission itself. The focus is on the same mission aspects described earlier. However, it is seen as a compass that coordinates the employees’ behaviours.

2.1.2 Cultural Climate

As mentioned earlier, corporate culture and cultural climate are often mistaken for one another and in literature seldom clearly differentiated. All thoughts and feelings of the organization’s members make up the climate and drive their performance.^[14] It directly influences motivation within the organization. The better employees feel about their company, the more work they are willing to contribute. Cultural climate is an indicator of how the members experience their organization. Some determinants of organizational culture can be influenced by the organization. Stringer identifies five major determinants of organizational climate out of which the first three can be influenced, the last two can not:^[15]

[...]

^[1] E-Mail correspondence with Disney Online Communications

^[2] See Johnson / Philips (2003), p. 25

^[3] See Sackmann (2002), p. 25

^[4] See Francesco / Gold (1998), pp.130-131

^[5] Schein even goes as far as claiming that only outside professionals are able to
comprehend a company’s culture. He believes in the clinical approach.
See Schein (2003), p. 77

^[6] See Stringer (2002), pp. 16-17

^[7] See Stringer (2002), p. 16

^[8] See Scholz (2000), pp. 795-796

^[9] See BCG (1988), p. 7

^[10] See Müller-Stewens (2003), pp. 235-236

^[11] See Bleicher (1999), p. 104

^[12] See Müller-Stewens (2003), pp. 236-242

^[13] See Bleicher (1999), p. 159

^[14] See Stringer (2002), p. 1

^[15] See Stringer (2002), pp. 12-14