I

Index

Index   I

Abbreviations   III

Table of  figures  IV

1  Introduction  1

1.1  Problem Statement.  1

1.2  Outline of Thesis.  2

2  Theoretical Basics.  4

2.1  Corporate Culture  4

2.1.1  Definition, Classification and Influences.  4

2.1.2  Cultural Climate  10

2.2  Leadership.  11

2.3  Motivation  13

2.3.1  Intrinsic Motivation  14

2.3.2  Extrinsic Motivation  14

3  The Walt Disney Company  16

3.1  Overview  16

3.1.1  Media Networks  17

3.1.2  Studio Entertainment  18

3.1.3  Parks and Resorts  18

3.1.4  Consumer Products  19

3.2  Chronic of the Walt Disney Company.  19

3.3  Walter Elias Disney  23

3.3.1  Chronic of Walter Elias Disney.  23

3.3.2  Visions  25

4  Corporate Culture at Disney  27

4.1  Mission and Mission statement.  28

4.2  Communication.  29

4.2.1  Internal Communication  30

4.2.2  External Communication  31

II

4.2.3  Significance of communication.  32

4.3  Getting employed with Disney  33

4.3.1  Disney’s requirements  34

4.3.2  Traditions  35

4.4  Motivation at Disney  36

4.4.1  Intrinsic Motivation at Disney  36

4.4.1.1  Leadership at Disney.  37

4.4.1.2  Cloud Chamber Effect  37

4.4.2  Extrinsic Motivation at Disney  38

4.4.2.1  Salaries  39

4.4.2.2  Perks  39

4.5  Control.  41

4.5.1  How personnel is controlled  41

4.5.2  Problems.  42

5.  How to benefit from the “Disney Way  43

5.1.  Usage for other companies  43

5.2  Implementation  44

6  Summary and Conclusion.  45

7.  Bibliography  47

7.1  Literature  47

7.2  Internet  52

Abbreviations

2D Two Dimensional ABC American Broadcasting Company CEO Chief Executing Officer CNN Cable News Network COO Chief Operational Officer e.g. Exempli Gratia (Latin: For Example) EPCOT Experimental Prototype Community of Tomorrow ESPN Entertainment and Sports Programming Network FH Fachhochschule (Universtity of Applied Sciences) HRSG Herausgeber (publisher) HR Human Resource(s) MGM Metro-Goldwyn-Mayer p. Page pp. Pages TV Televison US United States

Table of figures

Revenues by Segment in US$ Billion………………………………….17

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.

¹ E-Mail correspondence with Disney Online Communications

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.

² See Johnson / Philips (2003), p. 25

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

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

• 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.

⁷ See Stringer (2002), p. 16

⁸ See Scholz (2000), pp. 795-796

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

⁹ See BCG (1988), p. 7

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