Political Frame in the Walt Disney Company

Key political factors that led to Eisner’s downfall
Michael Eisner’s reign as the CEO and Chairman of Disney can to an end on March 3rd, 2004, after 43% of the company’s shareholders withheld their endorsement and failed to endorse his position on the Board. He stayed as the CEO of the company for one more year then left (Forbes & Watson, 2010). However, the downfall of Eisner has been precipitated by a number of political factors thitherto his removal. One of these forces is corporate social and political bureaucracy. This factor emanated from his desire to accumulate personal power rather than that of the Disney as a company. After Ovitz left in 1996, Eisner was left as the sole leader of the company, and the Board confirmed his status with a ten-year contract. Because of his desire for personal power, Eisner did not delegate duties. To further this endeavor, he adopted a top-down decision making model where the company fade criticism as lacking engagement in many of the critical decisions made by the top management (Bright & Eisner, 1987). To avoid any efforts by the Board challenging his leadership style, Eisner ensured that the Board was made up of individuals who were loyal to him, and the top leadership positions in the company were held by persons who has a personal relationship with him.
The second political factor that precipitated the downfall of Eisner was the view that he was incapable of making the right and appropriate decisions for the company; a factor that has developed and grown for some time as a result of several decisions that he had made and was seen to be inappropriate for Walt Disney company. One of these was his decisions to criticize Steve Job, who at the time was running ads for Apple’s iMac computer. While appearing before a Senate Committee to testify on DVD piracy and circumvention of intellectual property rights in music videos and films, he lashed out on the Apple’s founder in an unusual display of public emotion that did not fit his office. This political factor resulted in the development and buildup of conflict in the overall decision-making structure of the company. The fact that decisions where coming only from Eisner meant that some of the crucial departments of the company that ought to be autonomous for the growth and development of Walt Disney were detrimentally handicapped.
In addition to the above two political factors was the political environment within and without Walt Disney. First, as a result of the piracy and convention of intellectual property right concern from the senate committee, the external climate of the company was growing increasingly toxic for Eisner. This was further aggravated by the personal conflicts he had with other players in the industry, e.g., Steve Jobs and Stanly Gold and Roy Disney. These two united and formed a coalition that was oriented towards the removal of Eisner. Internally, the various wrong decisions that Eisner had made meant that employees within the various departments, as well as the considerably neutral members of the Board, were increasingly becoming anti-Eisner (Downes, Russ & Ryan, 2007). Both the external and internal political environment was targeted to Michael Eisner, for he had developed himself to be the image of the company; thus, the political environment was anti-Eisner.
The “Jungle” metaphor and its applicability on Eisner’s case
The jungle metaphor depicts a society that is comparable to the wilderness, where there are no laws the regulate relationships and operations, and thus, it is everyone to his or her own devices. This phenomenon has also been described in alternative phrases including, every man for himself and God for us all, and man eat man society. This society is defined by certain aspects of the uncontrollability of some aspects of society, and thus, they evoke a feeling of fear, powerlessness, and disorientation. This metaphor is therefore considered to be a perfect description of the Walt Disney company – society – in the time of Eisner. First, he had amassed the decision making power of the company through balkanization and bureaucracy; thus, Walt Disney as an entity was threatened and at the disposal of his power. All the departments of the company were disoriented and confused, and more so, the should-be-autonomous departments of the company, e.g., the Finance and Auditing Department.
Also, the balkanization and bureaucratic system created by Eisner meant that some of the essential parts of the Company leadership and critical stakeholders were alienated. The alienation of these sections of the company meant they were not only powerless but also immobilized and could only adopt a wait and see attitude. These sections of the stakeholders harbored negative attitudes towards the leadership, and in particular, Eisner, for his disregard of the law and policies that governed operations and decisions making ion Walt Disney (van Weezel, 2006). Given Eisner’s disregard of the laws of the company, and his growing power, and with the employees and other stakeholders of the company faced with the threat of Eisner’s way of doing things, and powerless to act on this aspect, the “Juggle” metaphor is entirely appropriate in describing Walt Disney at the time.
Coalitions development, division, and resolution of differences
The divisive nature of Eisner’s leadership meant that some were for and against Eisner, hence the development of two coalitions. The first coalition is that which was for Eisner and his way of doing this. This was primarily made up of those who were hired by Eisner, and they worked to propel his ideas. The second coalition was made up of those who were against Eisner’s methods and those who had the interests of the company at heart.
The first coalition was simply allies of Eisner, and they sought to develop a system of operations within Walt Disney that would ensure the development and sustenance of Eisner’s control of the company. Note: to avoid his decisions being questioned, Eisner had brought into the company – the Board and top executive positions, individuals who were loyal to him. These are the very same individuals who formed this coalition in the divide, and they largely benefitted from the management style that had been started by Eisner (Downes et al., 2007). Given the fact that the system was beneficial to them, the majority held the genuine opinion that Eisner’s remaining in the company, as well as developing his power, was suitable for the company. They, therefore, advocated for the continued stay of Eisner as the CEO of the company.
The second coalition was motivated by the desire to see the removal of Eisner, a motivation that was fueled by the opinion that his management style was terrible for the company. The management style instituted by Eisner had brought in significant problems as a result of the failure of the system and the management to support the company’s interests. This coalition held the opinion that Eisner was not the right person to head the company, and his continued stay at the helm of the company meant the company was headed for a downfall. This coalition was headed by among others, Steve Jobs, who had become to be a fierce critic of Eisner and Stanley Gold and Roy Disney, who were perceived to champion the interests of the company in the Board.
The divisions between these two coalitions were evident in how they pulled to diverging direction on matters to do with Walt Disney and, more importantly, Michael Eisner. The main issues at contention between the two coalitions were the continued stay of Eisner at the helm of the company and the effectiveness of the management in developing the company into profitability. The coalition against Eisner was supported by the fact that, during the contested period with Eisner as the CEO, the company has missed its profit projection with a significant margin. The failure by Eisner to meet the set objectives gave the coalition that advocated for his removal much grounding.
These differences between the two coalitions were resolved after the departure of Eisner as the Board Chairman and as the CEO of Walt Disney. The primary issue of contention was Eisner’s tenure continuation. However, after 43% of the shareholders failed to endorse him as Chairman because of his polarizing nature for the company, the primary issues for both coalitions was the wellbeing of Walt Disney as a corporate individual. Within the tumultuous period of Eisner as the CEO and Board Chair, Walt Disney had suffered enormously, both socially and financially (Forbes and Watson, 2010). The social image of the company had served to owe to the poor decisions and the failing management style. Financially, because of the poor management style, the company had failed to meet the set financial targets and was ended for financial losses. With a common goal, the two coalitions resolved to adopt a clear and united voice and to advocate only for the interests of the company. The coalescing around a common goal motivated the various stakeholders, and more importantly, the company employees and the firm’s fortunes made a turn for the better.
Eisner’s case study in the context of Bolman and Deal’s Political Frame
Bolman and Deal’s Political Frame/Leadership Model described four leadership frames; human resource, structural, symbolic, and political. These frames are, however, founded on five assumptions (Bolman & Deal, 2017; Sasnett & Ross, 2007), and for the Eisner’s case, it is argued that three of these assumptions are relevant and contributed to what happened to Michael Eisner, removal from the company’s leadership. It is to be noted that Eisner’s leadership model was political frame, in that he believed in focusing on individual and group interests – of persons loyal to him, would guarantee him success in both the leadership and company levels.
The first assumption is that organizations are a collation of diverse individuals and interest groups. Walt Disney at the time was made up of a Board, top executive leaders, and shareholders, three of the most influential organs of any company. This meant that there was diversity at these three vital groups, not even to mention the employees. For Eisner, he only focused on the interests group that supported him by being loyal to him. His strategy had worked by ensuring that the Board and the top executive leadership had individuals who championed his interests. This was possible because the shares he held allowed him to, but for him to be the Chairman of the Board, he needed to be supported by shareholders who were diverse and held divergent interests.
The second assumption is that there are enduring differences among coalitions members in values, beliefs, information, interests, and perception of reality. This is evident in the matters of Eisner’s tenure; one faction of the coalition advocates his removal, while the other supports his continuation. These differences are not only on the matter of Eisner’s tenure but also on the company’s management style. These enduring differences continue, and the result is the removal of Eisner. However, it is to be noted that, once Eisner is removed as the Board Chairman and the CEO, these coalitions come together and coalesce on the interests of Walt Disney.
These two assumptions play a crucial role in the removal of Eisner. The first factor that contributed to this result was the diversity in the company. This diversity then resulted in differences in values, beliefs, interests, and perceptions that eventually lead to shareholders not supporting his Board Chairmanship, bringing his tenure to an end.
Significance of the “Toxic Triangle” and how it informs Eisner’s case
The Toxic Triangle, as described by Forbes and Watson (2010), is a destructive form of leadership that is characterized by loyalty biases in the Board in which the corporate governance system is unable to reign in on damaging leadership. The toxic triable is made up of the destructive leader, weak owners or gullible followers, and an environment that accommodates it all.
This illustration fits Eisner’s case study, at least to the point before which the shareholders declined, endorsing his chairmanship for the Board. First, it is noted that the position of the CEO wields incredibly high power in terms of resource allocation and directing operations. For the case of Walt Disney, the CEO doubled in as the Chairman of the Board, which meant that, in addition to the powers of the CEO, he also held power to direct the Board. This is unimaginable power, which for any unethical leader, qualifies as destructive. Also, Eisner tapped individuals who were loyal to him into the position of the Board and the Top executive leadership. These individuals had unmet needs and held wrong values, e.g., greed and selfishness. As described in the toxic triangle, this meant that the Board and top management was weak and gullible. Lastly, the environment in the operational framework of Walt Disney did not have any checks and balances on wayward leadership. However, even though the operational environment was weak and accommodating, the assumption to office clause for Board Chairman was all the company needed, and thus the removal of Eisner.
References
Bolman, L. G., & Deal, T. E. (2017). Reframing organizations: Artistry, choice, and leadership. John Wiley & Sons.
Bright, R., & Eisner, M. (1987). Disneyland: Inside Story. Harry N. Abrams, Incorporated, Publishers.
Downes, M., Russ, G. S., & Ryan, P. A. (2007). Michael Eisner and His Reign at Disney. Journal of the International Academy for Case Studies, 13(3), 71-81.
Forbes, W., & Watson, R. (2010, July). Destructive Corporate Leadership and Board Loyalty Bias: A case study of Michael Eisner’s long tenure at Disney Corporation. In Working Paper presented at the Behavioural Finance Working Group Conference, Cass Business School.
Sasnett, B., & Ross, T. (2007). Leadership frames and perceptions of effectiveness among health information management program directors. Perspectives in health information management/AHIMA, American Health Information Management Association, 4.
van Weezel, A. (2006). A Behavioural Approach to Leadership: The case of Michael Eisner and Disney. In Leadership in the Media Industry: Changing Contexts, Emerging Challenges (pp. 169–178). Jönköping: Media Management and Transformation Centre, Jönköping International Business School.