Eisner's Destruction of Disney

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Since its humble beginnings in 1923, the transformation and transition of The Walt Disney Company has been staggering. The ability of the organization to integrate and excel in so many business areas is admirable and should be respected on many levels. Michael Eisner’s crucial role in the turnaround of the organization since his arrival in 1984 is valued on many levels, but over that last few years, he has taken many missteps in properly managing the organization. Although Eisner often vocalized his want for Disney to effectively “manage creativity,” the strategy he implemented while CEO did not reflect this want, and over time dismantled the creative core of Disney, and essentially depleted all the synergy that he had created in his early years as head of the organization. After assessing Eisner’s actions, it is evident that his want of a sustained 20% increase in earnings per share year over year caused him to acquire and attempt further diversification without fully comprehending the affect of each added business unit. When Eisner began as CEO of Disney, the organization was an organization that had a related-linked diversification strategy (operating in multiple geographic areas in film, television, and theme parks”. The key factor linking these separate business units was “cross-merchandising” goods so that each new animated film produced became its own miniature industry through strong marketing efforts. Although this “cross-merchandising” strategy was very successful when Eisner began its implementation, in order for the company to maintain growth and diversification, Disney had to keep expanding at a rapid rate. This expansion may have been valuable initially, but by having the company grow at such a rapid rate (1984: 28,000 Disney employees, 2000: 110,000 Disney employees) the tight knit creative culture that Disney had spent so many years cultivating and maintaining quickly eroded, destroying synergies within the organization and damaging the unique...
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