Conflict at Disney - Case Study Example

? Conflict at Disney April 28, of Introduction The leadership ability of the managers of companies is very instrumental in the success of organizations. Walt Disney Company suffered operational problems due to the fact that its CEO was not a good leader. His inability to lead and establish good relations with customers and other power figures at Disney led to a series of dysfunctional conflicts. Dysfunctional conflict adversely affects companies because it causes tensions among the staff, leads to morale problems, and lowers the overall productivity of the employees of a company. Three stages of conflict are perceived, felt, and manifest conflict. Dysfunctional conflicts – Michael Eisner Conflicts in organizations are detrimental to the productivity of a company. During the tenured of Michael Eisner as CEO of Walt Disney Company his management style and personality clashed with a lot of key internal and external stakeholders. People skills are a critical success factor for managers today. The interpersonal conflicts he trigged became so distractive that it led to his demise as CEO of the company. Effective communications and managerial communication skills positively influence effective organizational behavior (Kondrat, 2009). Mr. Eisner created problems and conflicts with a lot of key and powerful players in Disney’s power hierarchy. I would categorize the conflicts Eisner had with the Weinstein brothers, the two board members, and Steve Jobs as dysfunctional. Dysfunctional conflict is an undesirable business practice because it hurts the morale of the company and it lowers the productivity of the employees. It also disrupts the corporate culture of an enterprise. Some of the reasons dysfunctional conflict arises is associated with organization’s structure, policies, and processes (Landau, 2004). This type of conflict can be instigated by a person that does not listen to what others have to say and impose his belief system on others. The disruptive leader at Disney was its former CEO, Michael Eisner. Harvey and Bob Weinstein were key business partners of the company. They were the founders of Miramax which was a company of interest to Disney because the company negotiated the purchase of copyrights from them valued at over $2 billion. Michael Eisner made a mess of the negotiations and ended up causing a conflict over the financial details of the deal that had the potential of leading to a lawsuit. Lawsuits are an undesirable business outcome because it hurts the public image of a company. Eisner’s blunder with the Weinstein brother was not his only incident of dysfunctional conflict. During his tenured as CEO he was often confrontational and fought with two members of the board of directors, Roy Disney and Stanley Gold. These two board members often publicly criticized Eisner and on many occasions called for his resignation. The actions of Eisner were undesirable because the executive management team is supposed to work in alliance with the board of directors to accomplish the mission and goals of a corporation. A third dysfunctional conflict that Eisner instigated was with Steve Jobs. Steve Jobs was the CEO of the animated producer Pixar. Michael Eisner publicly disrespected Steve Jobs and his company in front of Congress. After that incident the feud escalated and Jobs wanted to cut his relationship with Disney. In the end Michael Eisner was fired from his position at Disney due to his inability to build positive relationships with important customers and other power figures at Disney. His actions led to the manifestation of several dysfunctional conflicts. Dysfunctional conflicts are risky due to the fact that they can escalate and lead to bigger problems for a company (Businessknowledgesource, 2010). Conflict with Steve Jobs – conflict stage Michael Eisner did a terrible job in his relationship with Steve Jobs. Steve was a very powerful player both in the computer and film industry. He had several disputes and conflicts with Steve in regards to their business dealings. The conflict escalated due to the fact that Eisner made negative public remarks about Steve’s company in front of one of most prestige and influential audiences in the United States of America, the U.S. Congress. Steve Jobs took this disrespecting act personally. The stage of conflict that best describes the problem that occurred between Michael Eisner and Steve Jobs is manifest conflict. During manifest conflict suppression of the conflict can occur and the aftermath can lead to negative consequences (Schermerhorn, Hunt, Osborn, 2003). The manifest conflict stage was reached because Eisner went too far and made their personal issues a public affair. Steve Jobs felt he was disrespected and that the trust between him and the Disney administration was not longer present. In the aftermath of the conflict Steve Jobs threatened to end the Disney-Pixar partnership if Disney continued to operate with Michael Eisner as its CEO. Disney felt that its relationship with Pixar was more valuable than what Eisner could bring to the table as CEO of the company. Disney was forced to fire its CEO and bring a new executive to lead the company. This case study shows that managers have to be able to solve conflict in a cordial manner to avoid turning simple problems into complex situations. Conflicts should be avoided, but when they occur companies need to have leaders that are adept at conflict resolution. Approaches to resolving conflict – Eisner and Iger The conflict resolution technique utilized by Michael Eisner is dominating. Mr. Eisner was a very confrontational leader that likes to impose his will on others. He dominated the decision making process at Disney because he did not like to involve others. The excessive use of a dominating strategy to resolve conflicts created tensions with the customers, business partners, and board of directors of the company. The series of conflicts that were created by Michael Eisner were resolved by its new CEO, Bob Iger. Mr. Iger utilized accommodation to solve the conflicts at Disney. Accommodation involves playing down the differences and finding areas of agreement (Schermerhorn, et al., 2003). Bob Iger’s approach The less confrontational approach used by Bob Iger positioned the company to survive economic recessions because he ensured that the company secured a copyright portfolio that the firm could use to generate revenues. He also maintained important alliances with business partners. The charismatic leadership style of Bob Iger will help him obtain the cooperation of the firm’s stakeholder groups. Bob was able to enhance the company relationship with Pixar which eventually led to the acquisition of the company in 2006 for $7.4 billion. The firm now has a leader in charge with superb people skills and interpersonal abilities. Conclusion Walt Disney Company was facing tough challenges due to the fact that its CEO was not doing a good job of maintaining good relationships with key stakeholders. Mr. Eisner’s inability to resolve conflicts forced the company to replace him with Bob Iger. Iger was able to bring cooperation, teamwork and harmony to the company. He resolved the conflicts with the two board members, the Weinstein brothers, and Steve Jobs. The conflict resolution technique that Iger implemented successfully was accommodation. Disney is not positioned to increase its market share in the entertainment industry. The company solidified its portfolio of movies, cartoons, and television programming through its deals with Miramax and Pixar. The influence of Bob Iger is bound to improve the corporate culture of the company. The firm’s customer relations and customer service should improve as well. Bob will unify the staff at Disney and his influence should help the employees of the company achieve synergy. By increasing the production of the employees the company should improve its overall performance. The future of Disney is very bright due to the superb leadership abilities of its CEO. References Businessknowledgesource.com (2010). Tips for dealing with dysfunctional behavior. Retrieved April 24, 2012 from http://www.businessknowledgesource.com/smallbusiness/tips_for_dealing_with_dysfunctional_behavior_026810.html Kondrat, A. (2009). Effective Communication in the Workplace. Retrieved April 24, 2012 from http://alla-kondrat.suite101.com/effective-communication-at-workplace-a95815 Landau, S. (2004). The Conflict – Competent Organization. Retrieved April 24, 2012 from http://www.orgstrat.ca/articles/article1.html Schermerhorn, J., Hunt, J., Osborn, R. (2003). Organizational Behavior (8th ed.). New York: John Wiley & Sons. Read More