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Human resource practices at Disney
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Chrm Message From: madure Total Posts: 278 Join Date: 06/06/2006
Rank: Coach Post Date: 05/07/2006 18:38:44 Points: 1440 Location: Sri Lanka

The Walt Disney Company was founded in 1922 by 21 year-old Walt Disney and his older brother Roy. Walt Disney was the creative producer, Roy the 'business brain' behind the company (Ellwood, 1998). The partnership ended only with Walt Disney's death in 1966. By the end of the 1990s, the Walt Disney Company had developed into a $23 billion media conglomerate, arguably the most influential force in the globalisation of Western culture (Ellwood, 1998).

Gomery (1994) argues that the Walt Disney Company was not always "a paradigm of corporate success". Initially specialising in animated films, it struggled to find a niche in the market until 1928 when it produced the first cartoon to use sound (Gomery, 1994). The company built on this success by negotiating distribution agreements with powerful corporate sponsors. It supplemented revenues by merchandising characters, initially Mickey and Minnie Mouse. Snow White and the Seven Dwarfs, released in 1937, was the first feature-length animated colour film and proved hugely successful. Innovative use of sound and Technicolor continued. Walt Disney also pioneered the use of 'audio-animatronics': life-like replicas of people and animals.

Early animation production was highly labour-intensive. Rigid division of tasks was further delineated on gender lines. By the time Fantasia was completed in 1941, the Walt Disney Company employed eleven hundred people. Ellwood (1998) describes Walt Disney as "a notorious workaholic, a perfectionist who ran his company like a personal fiefdom". Both "paternalistic and domineering" he rewarded loyalty and excluded dissenters. There were no women or black people promoted to senior positions during this period. The company was the only Hollywood studio without union representation and as such was targeted by the American Federation of Labor. Walt Disney became militantly opposed to communism after animators took industrial action over conditions and lack of recognition in 1941.

The Walt Disney Company responded to difficult economic conditions after the Second World War by expanding into television and theme parks. It continued to diversify into every sector of entertainment, publishing, film, broadcasting, and information technology. By 1971, both brothers had died. The business then seriously under-performed, especially within the film division, and came close to being broken up.

In September 1984 a new management team was employed, led by Michael Eisner and Frank Wells, both former executives with other studios. By 1988 they were " the highest-paid professional managers in the history of American business". However, Gomery (1994) suggests that despite their "supposed inventiveness" they adopted "common textbook business strategies" and maintained a 'hard' human resources management policy. Ellwood (1998) argues that real power within consumer capitalism increasingly has come to rest with those controlling the "infotainment industry". By 1991 the Walt Disney Company had become a corporate power.

The development of theme parks transformed the Walt Disney Company into "a core business in American mass culture" (Gomery, 1994). Disneyland opened in California, Florida, Japan and France between 1955 and 1992. Promoting fantasy and well-being, coupled with high consumerism, they are under-pinned by a comprehensive, largely invisible surveillance and control system (Hannigan, 1998). Together with other leisure enterprises they accounted for about 17 per cent of the company's revenue in 1997. The theme-park model is extensively reflected in contemporary urban and commercial development and thus has been said to mediate "social relations around the world" (Ellwood, 1998). The company runs 'People Management' courses using its own practices as a model.

Walt Disney World in Florida contains four theme parks and associated services, and attracts 30 million visitors a year. It employs 50,000 people, the largest number of workers located at one site in the USA, the majority in low-paid service jobs. The Florida state government initially was attracted by the development potential and gave the company "all the rights and powers of an independent municipal government" (Ellwood, 1998). The company has secured major tax concessions and effectively is exempt from state legislation governing various aspects of transport and public services (Wilson, 1994). The impact on the economy and development of Orlando and surrounding areas has been profound, with increasing disparity between affluence and poverty.

Employees are routinely assigned jobs according to age and appearance, a process officially known as "casting". The most "presentable" get the most popular "front-line" jobs and shifts. "Old ladies sell the merchandise, old men work in security. Haitian women work in housekeeping, Puerto Rican young people work in food services and preparation, African-Americans work as cooks or stewards or in food preparation" (Ellwood, 1998). Animal Kingdom, opened in April 1998, employs 50 Africans on 12-month contracts "to lend authentic flavour".

The rate of staff turnover is between 200 and 300 per cent a year. The Service Trade Council Union (STCU), a consortium of six unions, is the only workers' organisation recognised by the Walt Disney Company. It represents about 22,000 full-time and 5000 part-time workers at Disney World. In addition to concerns about wage scales and other conditions of employment, the STCU has concerns about the company's 'benchmark' monitoring system, based on maximising numbers using each attraction (Ellwood, 1998).

Japan

Disneyland in Japan is virtually an exact copy of the original Californian development but with some features ostensibly adapted for the Japanese market. For example, "Main Street USA", a highly-idealised version of small-town America, is renamed "World Bazaar". Yoshimoto (1994) argues that the opening in 1983 had symbolic value for a generation seeking to dissociate or 'move on' from the Second World War. Success also is attributed to 'the absolute separation of leisure from work'. With maintenance and other utilitarian functions effectively invisible, Disneyland offers an almost unique opportunity for Japanese visitors to forget about everyday working life. Yoshimoto (1994) suggests that with its focus on order and minute attention to detail in management Disneyland 'is arguably the most Japanese institution in the United States'. Equally, those same preoccupations make the Japanese market ideal for Disney: 'the epitome of American popular culture'.

Euro Disney

Euro Disney opened in April 1992 in an agricultural area just outside Paris of which it was one fifth the size (Anthony et al., 1992). The French site was chosen over its main rival in Spain in the face of significant local opposition, despite the anticipated creation of 30,000 jobs. As in Florida, the French government agreed to substantial financial and tax incentives and to make major improvements to transport infrastructure. Ease of access for the populations of a number of European countries was seen as a major advantage, offsetting potential problems caused by inclement weather associated with a more northerly location. The success of Tokyo Disneyland was cited in support. More extensive European holiday entitlements and the enduring popularity of Paris were also relevant factors. However, early visitor attendance was significantly below projected levels leading to a trading deficit and substantial reduction in share value.

The project was promoted and defended by senior company managers in America, but other analysts questioned whether the Disney ethos would be compatible with French culture. While incorporating many standard Disney theme park features, some adjustments were made in response to these criticisms. Links were made with European literature and mythology. As in Tokyo Disneyland, renaming was used as a marketing device, resulting in Euro Disney reflecting European interest in the history of western United States. Unlike Tokyo, an international cuisine was provided, served in accordance with European social and eating patterns. However, the non-availability of alcohol proved controversial. Faced with charges of cultural imperialism the corporation had to reassure the government that French was technically the first language in the complex. However, employees also were expected to be fluent in English and signs were bilingual (Anthony et al., 1992). These dilutions of the Disney image led to the counter claim that the corporation was trying to be "all things to all people" and would be less successful as a result.

As at its other complexes, Euro Disney placed particular emphasis on rigorous training, orienting employees to the global corporate philosophy. As early as 1961 the company had created the Disney University for this purpose, located at individual sites and also addressing issues of specific local relevance. The Euro Disney division opened in September 1991. The aim was to recruit 10,000 people in six months with nationalities to reflect anticipated visitor profiles. However, when the development opened 70 per cent of employees were French compared to the target of 45 per cent. A total of 270 managers had been trained in service delivery standards operating in the other three centres. An additional 200 experienced Disney managers were relocated to the French site. From the outset Euro Disney was criticised for elements of its selection process and human resources management. In particular stringent requirements regarding personal appearance were compared unfavourably with the approach of other employers. In addition, some 4000 employees were unable to find suitable, affordable accommodation in the vicinity.

Retention also proved to be a problem. Within the first nine weeks, 1000 of those appointed left, about 50 per cent voluntarily. Doubts were raised about whether people familiar with European work expectations would be able to adapt to the regimented enthusiastic service-driven ethos required by Disney. Unreasonable working conditions, poor communication and lack of cultural awareness among managers were the main reasons given for the staff turnover (Anthony et al., 1992).


Branded merchandise
The Walt Disney Company has promoted branded merchandise since 1930 and has contracts with about 3000 factories worldwide (MacAdam, 1998). The National Labor Committee, an American human rights advocacy group, has highlighted the position of 2000 Disney workers in Haiti, the poorest country in the Caribbean. Unemployment is about 70 per cent and subcontracting a vital source of income. The National Labor committee attempted to persuade the Walt Disney Company to allow independent monitoring of terms and conditions in their four Haitian plants. At first Disney claimed that it had no employees in Haiti and no responsibility for subcontractors. It then sent its own representatives but refused requests for independent monitors. The company's chief executive, Michael Eisner, received over $185 million in pay and share options in 1996. MacAdam (1998) points out that one hour's remuneration for Eisner was the equivalent of 156 years work for a Haitian machine operator producing Disney clothing.

More recently, the Walt Disney Company has focused attention on the lucrative Chinese market. The familiar story of low-cost production emerges again (Hong Kong Christian Industrial Committee, 1999). In 1996, the company launched a Chinese-language radio station broadcasting from Hong Kong. Chinese state television uses the Disney network for 50 per cent of programming on its specialist sports channel. The company's 1998 animated film Mulan is based on a Chinese legend and represents a "strategic incursion" into the Chinese film market (Maio, 1998). There are plans for a Chinese Disneyland. Taken from Ideas expressed by Alan Price

 
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