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Leadership Crisis, Rising Revolt and Falling CEO:

A Case Study Of Walt Disney Company Presente by: Aditya Syal Alisha Loll Ankur Verma
A Case Study Of Walt Disney
Ankur Verma

Walt Disney Company

Founded in 1923 by Walt Eliar Disney leads the family entertainment business at global level

Over 112,000 employees worldwide and over 189,000 shareholders

Five major business segments: Media Networks, Studio Entertainment, Parks and Resorts, Consumer Products, Internet Group

Parks and Resorts: The Magic Kingdom (Anaheim) opened in 1955

Walt Disney (1923-1966)

Born in Chicago, Illinois in 1901.

At the age of 20, he joined the Kansas City Film Ad Company Advertisements.

In 1923,Walt Eliar Disney with his brother




founded Walt Disney

Company in the rear of a small office in

Los Angeles.







Mouse” & it was first watched in a movie called “Steam boat Willie” which turned out to be a huge success.

Walt Disney kept on diversifying his areas

Leadership Crisis

Death of its founders Walt Disney in 1966 and his brother Roy.O.Disney in 1971.

In 1977,Ron-Miller, Walt Disney’s son-in-law, became the new C.E.O.

1980’s saw Disney in a deep crisis, share prices slumped heavily and the hostile takeover attempt.

Roy E. Disney (Roy Disney) and Stanley Gold allied with Bar Brothers, bought a 25% stake in Walt Disney. C.E.O. Ron Miller forced to move out, the


Michael Eisner took Charge as a C.E.O in


Disney’s market value went up to staggering heights.

Disney Chairman and CEO reaped enormous rewards which earned him more than $1billion in salary.

The assets of Disney company which were worth less than $2 billion in 1984 rose up to $60 billion in 2000

“Pirates of Carribean” made more than $261 million in the US and at least $100


Quick Action Taker Strategist Change Champion Optimistic Creative Idea Generator Finicky- Micro managing

Power • Legitimate Power • Reward Power


Legitimate Power Reward Power

Ideology • A leader requires four qualities: – being an example, – being there, – being


A leader requires four qualities:

being an example, being there, being a nudge, and finally being an idea generator

Leadership Style

Marketing savvy and shrewd leadership style.

Job-Centered Leadership Style. Autocratic Style

Gubernatorial Arrogant Micro- management

Critics and failures

Walt Disney Company’s performance slipped badly in the year 2001.

Business decisions proved to be wrong and the company suffered financial setbacks

Obsessive micro-management resulted in Brain-Drain for co.

Criticized for overbidding for such assets as the ABC Family channel


Failure of Comcast merger would have combined with Disney’s assets, which include ABC Television, ESPN and Disney and Miramax film studios.

Disney shares even after gaining 27% still trading at 1997 levels.

Eisner’s long meetings made people bored, angry, tired and eager to leave.

Eisner was to be blamed for tumbling stock price of Disney.


Focus on short term gains over the company’s core mission.

He insulated himself from criticism by rewarding executives who play it safe and sidelining risk takers and critics.

Eisner also angered investors and share holders with his business decisions.($140 million to friend Michael Ovitz)


The Fiscal year 2001 was marked one of the company’s worst financial years ever.

Disney lost its ever worst $15.8 million in


Greenpeace report entitled “Toxic Childrenswear by Disney”. But Disney took no action.

The shareholders revolted against him with their 43% no confidence vote.

Till 2005 lead the company as the CEO with 57% of shareholders support.



h 13

2005 R




Dear Michael Eisner,

Roy Disney in his letter to Michael Eisner:

“You had a very successful first 10yrs at the company in partnership with Frank Wells, for which I salute you. Since Franks death in a helicopter crash in 1994, the company has lost its focus, its creative energy and its heritage”.

Institutional shareholders services was noted as saying:

“For 20 years Disney’s revolving door for board members and management has had one constant…Mr. Eisner”


Michael Eisner