CSR and the Disney Company

Walt Disney Company CSR

The Company

Walt Disney Company began as a small cartoon studio in 1923, produced its first sound-synchronized short five years later, its first full-color cartoon short in 1932 for which it received an Academy Award, and from there the Company catapulted to greatness with hits such as Snow White, Dumbo and Pinocchio. Disney expanded into live-action production, television, theme parks, and global productions over the decades with Walt Disney World among its major attractions, even as it grew the Disney Channel, merged with ABC (in 1996), purchased Pixar in 2006, acquired Marvel Entertainment in 2009 and LucasFilms in 2012 (rebooting the Star Wars franchise).[footnoteRef:1] It appeals to a broad-based audience from young children to older generations, with cross-cultural demographic appeal as well. The vision of the company is to be a "leading diversified international family entertainment and media enterprise," consisting of media networks, parks, resorts, studios, Broadway shows, consumer products (toys, games, books, videos), and interactive media.[footnoteRef:2] [1: Walt Disney Company: About -- History. Web. Accessed 5 Jun 2016 from https://thewaltdisneycompany.com/about/] [2: Walt Disney Company: Our Businesses. Web. Accessed 5 Jun 2016 from https://thewaltdisneycompany.com/about/#our-businesses]

The company employs 180,000 persons in over 40 countries around the world.[footnoteRef:3] Its financial activities for 2015 were revenue of U.S.$52.46 billion, net income of U.S.$8.38 billion, operating income of U.S.$14.68 billion, and total assets of U.S.$88.18 billion. The company is global in every sense of the word, with parks in Europe, Asia, Africa, the Middle East and America and its audience reach just as wide. Headquarters are in Burbank, California. [3: Walt Disney Global Footprint. Web. Accessed 5 Jun 2016 from http://disneycareers.com/en/about-disney/global-footprint/]

Stakeholder Mapping

As Freeman notes, there are multiple stakeholders in a single firm.[footnoteRef:4] In the Walt Disney Company, the stakeholders are: Owners -- Disney is a publicly-traded company, thus, shareholders own the company. Institutional holdings account for nearly 60% of shares in Walt Disney Company, divided among nearly 2000 holders; top five institutional owners are Vanguard, State Street Corp, FMR, State Farm and Blackrock. Laurene Jobs (wife of Steve Jobs) is the largest single shareholder of the company.[footnoteRef:5] Management -- the management of the company is extended across the world in over 40 countries. Community -- Community stakeholders are global as well, with residents near theme parks in Florida, California, Japan, Europe, the Middle East, cruise ships, plays, etc. Employee -- with 180,000 persons employed around the world, Disney's employees are culturally diverse. Suppliers -- range from toy piece suppliers to production design suppliers, cruise ship suppliers, broadcasting suppliers, manufacturing, costume, broadcasting, and more. Customers -- Consumers of Disney services, products and entertainment are persons from demographic age group 5 to 65. [4: Freeman E. R. (2005) "A Stakeholder Theory of Modern Corporation." In L. P. Hartmann (ed.),

Perspectives in Business Ethics, 3rd edition, (pp. 112-122). NY] [5: "You'll Never Guess the One Woman Who Owns More of Disney Than Anyone Else." Motley Fool. Web. Accessed 5 Jun 2016 from http://www.fool.com/investing/general/2014/02/01/youll-never-guess-the-one-woman-who-owns-more-of-d.aspx]

According to Freeman's stakeholder theory, there are two main definitions of stakeholders -- the narrow definition and the wide definition.[footnoteRef:6] Within the narrow definition are stakeholders who play a vital role in the successful operation of the company; within the wide definition are stakeholders who can in some way impact or be impacted by the company. [6: Freeman E. R. (2005) "A Stakeholder Theory of Modern Corporation." In L. P. Hartmann (ed.),

Perspectives in Business Ethics, 3rd edition, (pp. 112-122). NY]

First, this segment will assess stakeholders in the narrow definition: Owners are responsible for funding the operations of the company via cash flow through the purchase of shares through the stock market. Without owners, the company would not survive, as its stock would be deemed valueless. Management oversees operations, addressing issues that arise whether they affect workers, consumers, or other stakeholders; like owners, managers are vital to the company as they direct its course either to successful earnings, which also contribute to cash flow, or to more debt, which can lead to bankruptcy if it becomes too unwieldy. Employees too are vital to the success of the company, as they execute the mission on the local scale, in each individual market, segment or enterprise. In turn, the company gives them incentives to work hard, such as 401k, insurance, wages, etc. Suppliers contribute to the company's ability to grow, develop and produce its products/services and in turn receive cash flow for their own firms. Customers consume the goods/services of the company and in turn receive a level of satisfaction or dissatisfaction; the former leads to company praise, the latter to lawsuits, returns, complaints. Government administrations also play a vital role in the company, as regulators oversee all aspects of business today and in turn administrators in office are also lobbied and funded by the company, so as to back legislation that is pro-business. In terms of the global enterprise, regions and countries have specific broadcasting laws and content rights that must be negotiated, and for the various theme parks, governments have associated legal and regulatory guidelines that must be followed. As Browne and Nuttall note, "The success of a business depends on its relationships with the external world -- regulators, potential customers and staff, activists, and legislators."[footnoteRef:7] [7: J. Brown and Nuttall R. (2013) Beyond corporate social responsibility: Integrated external engagement.]

The wide definition includes: Community -- the firm and the community are intertwined in a relationship in which both must benefit or the company does not succeed. The company employees persons from the community and adds to its economy, so long as the company is profitable and willing to employee in areas where it is based. The Environment is also impacted by and impactful on the company, as it allows for lush areas for theme parks such as Disney's park in Florida, and its cruise lines depend upon the sea; its manufacturing parts depend upon carbon control legislations, etc., so the environment, if hurt, can damage the company too.

Analysis of Corporate Social Responsibility Strategy

As Porter and Kramer acknowledge, "Companies must take the lead in bringing business and society back together."[footnoteRef:8] The Walt Disney Company is committed to doing just this through its corporate social responsibility plan, which is mapped out in its latest Citizenship Performance Summary (2014). For example, the company notes that "to continue inspiring a passion for conservation and the environment, we connected more than 13 million kids and families with nature experiences, meeting our 2015 target ahead of schedule. We've also begun working towards the ambitious new long-term goals we set to reduce our emissions, waste, and water use."[footnoteRef:9] Thus, the Disney Company is committed to working with members of the global community, both young and old, to effect strategies that benefit the environment and raise awareness about conserving energy. This helps in turn to create great brand affection and loyalty on the part of consumers. [8: Porter E. M., Kramer M. R. (2011), The Big Idea: Creating Shared Value. Harvard Business Review, 89 (1), 4.] [9: Walt Disney Company Citizenship Performance Summary, 2014. Web. Accessed 5 Jun 2016 from https://ditm-twdc-us.storage.googleapis.com/FY14-Performance-Summary.pdf]

Zadek notes that for companies looking to stay ahead of the curve and be able to act offensively rather than defensively to both the market and the needs of consumers through a corporate social responsibility platform, companies must "be able to predict and credibly respond to society's changing awareness of particular issues."[footnoteRef:10] For Disney, there are few gaps between the declarative level and the actual situation of the company's corporate responsibility. Indeed, the Boston College Center for Corporate Citizenship and Reputation Institute recently named The Walt Disney Company a "leader in Corporate Social Responsibility" for its charitable donations, especially to victims of natural disasters such as those who experienced the earthquake in Haiti in 2010.[footnoteRef:11] The company also encourages volunteerism in exchange for a million free tickets, boosting support for active engagement within communities for care of the environment.[footnoteRef:12] Thus, the company makes good on exactly what it says it will do, and is noted for making good on its promises by centers of learning, such as the Boston College. [10: Zadek, S. (2004). The path to corporate social responsibility. Harvard Business Review 82(12), 126.] [11: Business Review (2013) The Walt Disney Company -- A leader. Web. Accessed 5 Jun 2016 from http://www.businessreviewusa.com/leadership/3827/The-Walt-Disney-Company-A-Leader-In-Corporate-Social-Responsibility] [12: Business Review (2013) The Walt Disney Company -- A leader. Web. Accessed 5 Jun 2016 from http://www.businessreviewusa.com/leadership/3827/The-Walt-Disney-Company-A-Leader-In-Corporate-Social-Responsibility]

As the company continuously reconceives products and markets, redefines productivity in the value chain, and enables local cluster development, in accordance with the three ways of creating Shared Value and on the CSR managerial tool of Zadek, [footnoteRef:13] it also manages to boost stakeholder value by appealing to corporate social responsibility concepts. For example, in its marketing and making of films, it showcases and boosts the role of female heroines and other minorities, in films like Star Wars and the Marvel films; its shows on TV support LGBT issues, as on ABC with the drama series Pretty Little Liars, which highlighted lesbian issues. And its theme parks, as the one in Florida, promote environmental issues by teaching visitors about the effects that activities have on the planet and how to conserve natural resources. [13: Zadek (2004) The Civil-Learning Tool]

The only elements of CSR that are lacking in Disney's conduct are an assertive and aggressive stance on worker's rights. Working at Disney could be an even better idea if Disney were to provide some of the best benefits to workers the world over and give employees a real monetary incentive to work there by raising minimum wages.

The other aspect that Disney should focus on is safety in its theme parks. The recent death of a child attacked by an alligator at one of its parks shows that Disney needs to be more aggressive in ensuring the safety of its guests.

An alternative strategic plan of action for CSR for the Disney Company could be to redefine productivity in the value chain better and to enable better local cluster development by supporting local growers and organic food growers in local communities and offering these products at its parks; it could redefine productivity in the value chain by promoting more issues related to equality, such as worker's rights, by raising minimum wages for workers and offering even better incentives so as to be regarded as a great company to work for in terms of benefits. These strategies would help to increase the public's perception of Disney as a force for good in the community. As for the environment, Disney already does a good job of committing itself to supporting the environment, but to do even better, it could develop an environmental clean-up crew that assists in teaching others how to take care of the environment by visiting schools and campuses around the world. In the workplace, Disney could support equal rights by showing that it has no LGBT biases and that there is no glass ceiling for women, and it already does a good job at both of these. By raising wages and providing benefits to workers, it could also better the workplace in terms of giving workers even more incentive to remain loyal to the company. Likewise, the company should focus on safety at its parks, as this shows that it cares about its guests. Alligators and threats such as these should be closely monitored and prevented.

Implementing an Ethical Plan

A main business dilemma associated with the company is how to address the issue of safety at its outdoor theme parks. The conflict that arises is that Disney prides itself on its parks' natural settings and the interaction that guests can have with nature. The problem is that some of the wildlife are too dangerous for this to be safe. Thus, the ponds and places where dangerous animals such as alligators live serve as a risk that needs to be mitigated -- especially in the light of the recent tragic death of a child at the park in Florida.

The moral values related to this problem are that Disney appears to show a lack of regard, compassion and care for human life, placing the need to keep its parks realistic over the need to be practical and safe. Thus, instead of putting up fences around its marshes, it leaves them open -- but this also allows alligators to roam and attack unsuspected. Disney should not allow children to wade and step into the ponds or marshes, even though this activity is something that guests may like about the park. Safety should always come first, and thus stepping into these areas should be considered off-limits; it should be policed heavily, and barriers between the public and these dangerous waterways should be in place.

Business considerations for this, of course, could be detrimental, as the appeal of the parks is the naturalistic setting and the ability of the public to be one with the glades, etc. However, from an ethical consideration, safety must come first, and Disney should realize that it is not taking as much responsibility for its services at the park as it should. Alligators should either be removed completely from the park, or barriers should be set up -- there cannot be both alligators and no barriers and this represents an irresponsible course of action by Disney that is inviting tragedy to strike again.