Advancements in technology are unavoidable. Whenever a new technology comes out of the market, the company should have a team that will evaluate the costs and benefits that comes with investing in that new technology. To make that point clearer, let us discuss this example. The success of the companys offerings in home entertainment market depends in part on customer preferences with respect to home entertainment formats (The Walt Disney Company, 2009). Recently, blu-ray discs (BDs) superseded the DVD format. In terms of storage capacity and resolution, BDs are better because of the use of blue light which has a shorter wavelength than the laser color used in DVDs. Blue laser technology is expensive and this affects its market price. If Disney decides to offer products in such formats, they should observe how consumers react with the its release. It has been observed that BD sales were slow to gain market share because of high cost.
Nevertheless, it has better quality than its predecessor (Katzmaier, 2006). The company may also consider taking a look at their past actions when the CD superseded the tape, and the DVD superseded the CD.
Economic issues, both local and international, play a big role in the success or downfall of any company. If the economy is good, business is generally doing fine as well. A good economy means that people generally has purchasing power and hence demands for Disney products increases. Attendance in their parks and resorts also increases and they bring along increase in revenue. Moreover, if any other company has financial obligations with Disney, they will have the ability to satisfy those obligations. On the other hand, economic decline adversely affects the companys profitability and operations. It can be expected that there can be unreasonable increases in price levels. Increases in basic needs such as house rent, electricity bills and food may shift consumer spending away from purchasing Disneys products which are more or less of luxurious types of products in times of financial crisis (The Walt Disney Company, 2009).
A way of dealing with the adverse effects of an economic decline is by way of prevention. In times of economic boom, the company should have enough money reserved for the rainy days. This will assist the company in making the necessary adjustments in the reduction of the prices for their goods, and the provision of attendance promos in theme parks and resorts. Since, economic decline comes with a decline in consumer demand, reducing the prices of the products to a reasonable level is necessary in order to increase demand and revenues. The operating costs of the company should at least be covered in times of financial crises. If revenues are always less than the costs of operating, shutting down should be considered because the company would not like to accumulate debt.
At all times, quality of goods should be assured.
Environmental issues can either be a threat or an opportunity for profit for the company. Let us first discuss the threats. Weather, natural catastrophes such as excessive heat or rain, hurricanes, and earthquakes may reduce demand for products. Such catastrophes can affect the living conditions of a lot of consumers. This in effect shifts away their spending into survival mode as discussed earlier. Travel advisories preventing visitors from countries affected by a spread of a deadly disease may reduce resort and park attendance. If worse comes to worst, catastrophes may even affect Disney resortpark infrastructures, warehouses, studios and offices (The Walt Disney Company, 2009).
The summer season, where it is hot and humid usually presents opportunities for the company in the form of increased resort or park attendance. Disney clothing may appeal to the childrens taste during summer and winter.
Disney should always be wary of the possibilities of a natural disaster. It has been explained earlier that the company should save for cases of emergency. Their infrastructures should be made of high quality materials so that they can resist the forces geological and atmospheric forces. Although insurance companies do not always cover all damage costs, investing in one is nevertheless advisable.
Disney should consider turning their company into an environmentally-friendly company. To do this their buildings, infrastructures and production process should make use of environmentally-sound principles. As a simple example, their offices should install a rainwater harvesting system. They may already have that feature as of now. The company should invest in technologies that would help the environment. Helping the environment, although produces no immediate benefits will help the country in the long run. Cutting down green house gas emissions can help in the fight against global warming which is the enemy behind strong storms and hurricanes.
Human resources (Human Resources Issues) provide the very framework that keeps the company alive. The employees are basically the sources of ideas that keep the company competitive. They also provide the basic services for consumers. They are being used for the purposes of operating the company should be given compensation in the form of salary, pension, postretirement medical and other employee health and welfare benefits. Giving them such benefits provides incentive for good performance. Unfortunately, sustained increases in cost of pension, and other employee benefits may reduce the profitability of the company.
Disney has approximately 144,000 employees. These costs required to cover employee benefits are part of the operations cost. Significant increase in costs though not necessarily affects revenues may be detrimental to the company. It may happen that company revenue improves but the costs increased at an unfortunate rate. Since the costs are greater than the revenue, company profit becomes negative. Future investment projects may be hindered because of this (The Walt Disney Company, 2009).
The following suggestion is idealistic Disney should be able to hire people with healthy work ethics. It is a given that the company is hiring the most creative and talented people. Hiring people who have healthy work ethics makes a lot of difference. These people are concerned about their performance and they are aware if their work is taking its toll on their physical and mental states. Having such employees can greatly reduce the costs in covering employee hospital and health check-up bills. Disney should also set-up a workplace wellness program to help its employees take care of their health.
In times of economic crisis, it may be unavoidable that many employees will be relieved off their jobs. Since Disney has many talents, it would be devastating to fire them for the purpose of saving money. A Dupont regional manager in Asia suggested this idea in the recent financial crisis dont give employee salaries for two months in a year to save the other employees. Perhaps out of compassion or fear that they may be relieved off duty, employees agreed to those terms in order for the company to survive during the recession. Such a suggestion can be used by Disney in order to keep its employees (Anonymous, personal interview, August 2009).
Regulations mostly comprise the issues the company has with the Government (Government Issues). Regulations are intended to safeguard the welfare of the general public which may include the company itself. The implementation of those regulations is carefully studied by government entities and hence should be trusted more or less. In the event however that those regulations are unreasonable for the company to tolerate, then the company may have troubles following them for if they do not they will be answerable to the law.
Changes in regulations that are applicable to Walt Disney business operations may impair the profitability of its businesses. Perhaps the most affected product and market segment of the company as a whole is its broadcast networks and television stations. The Federal Communications Commission (FCC) for instance highly regulates broadcasting in the United States. Recently there has been a digital television switch that required updating of Disneys broadcasting facilities and systems. Other regulations are the followingEnvironmental protection regulationsFederal, state and foreign privacy and data protection laws and regulationsSafety Regulations for consumer products and theme park operations Trade restrictions or television content requirements or quotas by different countriesDomestic and international tax laws or currency controls (The Walt Disney Company, 2009).
Any changes in any of these regulations require additional spending for compliance. This may also restrict the companys ability to offer profitable products and services (The Walt Disney Company, 2009). Despite these adverse effects, Disney should still comply. If however the companys rights are severely affected, the company should take legal action. Hence a good legal council should be in place for the company.
To summarize, a lot of the risks are unavoidable hence the company must take precautionary measures to cushion their negative effects. In the creation of company policies, budgeting, and planning external risks should always be taken into consideration so that leeway can be given for those unfortunate events.
Amongst all the risks, economic decline presents the most devastating effect upon the corporation because it basically affects all sectors of the Walt Disney Company. If there is economic decline, sales, operations, prices, lower customer demand all turn against the company and the company can only do so little once recession hits.
Q2 As a starting point for this discussion, it would be wise to begin with a definition of organizational culture. Organizational culture is defined as the general pattern of behavior and the shared beliefs and values of that the members of an organization have in common. These shared values guide the action of its members. This culture implies how its workers ought to behave and do their tasks. This organizational culture in a sense is established by the leaders and it is strengthened or weakened by the work ethics of its employees. If for instance, the employees are not in total agreement with the existing culture, there will be a rift between them and the leaders. In effect, the company might turn out to be less productive.
At the onset, it is difficult to relate talent, organizational culture and ethics with the role of being a senior level corporate manager. However, after some thought, it can be said that the three areas are collocated in one of those areas which is the organizational culture. With that as a point of departure, let us discuss talents within the context of the company culture. Disney thrives with the employment of talented individuals in the field of computer science, entertainment, animation, engineering, science and management (which includes hospitality management). The company therefore recognizes the necessity of such a pool of diverse talents. As a senior level corporate manager (of any company including Disney), I should be able to recognize that each employee is different and that I should capitalize on their differences and their talents. It should be felt by most employees that the company serves as a venue for them to do and make money out of what they do best. I should be able to motivate employees to further enhance their skills and also learn from others whose talents are different from theirs. With this in mind, an organizational culture of learning and cultivating talent can be set gradually. Once this culture is set, overall company performance will improve and strengths will be maximized. Weaknesses can also be minimized with the culture of cultivating talent because talent refers to an innate strength that can be refined with skills and knowledge.
Ethics or a set of rules or principles that define right and wrong conduct have great implications in the performance of any company. Ethics is important first of all because it can establish harmony within the company. Each and every individual within the company acts by the Golden Rule and they also think of the greater good more than themselves if an ethical culture is cultivated. Moreover, a non-fraudulent organizational culture gets the respect and trust of customers. This trust is reflected in increased revenues. As a leader, it is necessary to set up a code of ethics that documents the primary values and ethical rules that the organization expects both managers and employees alike are to follow.
Organizational culture establishes identity, fosters commitment and a sense of loyalty within the employees. Talent and ethics and the cultivation thereof should be identified with the company as a norm. Being a leader, establishing that culture is part of the job. To develop culture this culture, it is important to understand the companys past that continue to influence its operation until today. A leadermanager should also observe its people and work with what the company has. Communication and modeling is a key to foster the environment I want to create. An important part of developing culture is staffing. In employment, people must also be chosen on the basis of their willingness to work with the culture the company intends to create.
Q3 Corporate Espionage is the stealing of competitive information for commercial purposes. The theft of intelligence that Hilton purportedly committed has crossed the border between ethical and unethical information gathering. However, anyone can argue that there should be no patent for ideas and that the all information will be revealed anyway. Hence, the border being referred to earlier is blurred.
The quick backstory Starwood sued Hilton and two former Hilton executives last April, alleging that they stole more than 100,000 documents containing competitively sensitive information and used it to pursue a rival to Starwoods successful W hotel chain. The report tells about the role of top Hilton Worldwide executives in information theft (The Wall Street Journal 2010).
Hiltons misconduct reached the highest levels of the chains management, including its chief executive officer, Christopher Nassetta, and its head of global development, Steven Goldman. The complaint says that the alleged theft was known to and condoned by at least five of the ten members of Hiltons executive committee. (The Wall Street Journal, 2010)
We note here that leaders condoned the acts of stealing information that Starwood considered vital to their success in the industry. The heads themselves had helped develop a culture of espionage within Hilton. The law recognizes the right of Starwood to complain against Hilton. However, we cannot always be too legalistic. It could happen that Hilton executives sincerely believe in the acceptability of their actions with the belief that ideas should not be patented anyway. They could believe that all information is bound to be released anyway. Unfortunately, Starwood claims that what they lost was critical information. That is why in the end it can be argued that Hilton tarnished its reputation just for it to get an unfair advantage over its commercial opponent.
Q4 Personally, I think that despite the competition and the dog-eat-dog world of the business industry, corporate CEOsmanagers should always maintain a sense of morality in dealing with both subordinates and clients. A manager should be dedicated to high standards of ethical behavior. It is important to establish respect, harmony and trust within the company so that a sense of righteousness will persist in the office place. If trust is maintained within the workplace, workers ideally would work with the thought of honesty and excellence at the back of their minds. Clients on the other hand give their trust by coming back and availing the companys services. To gain trust, business operation should be well above what laws requires.
As a CEO, there should be a focus on doing the right thing. Unfortunately, the good to be done in every situation is not always clear. That is perhaps the reason why there are four approaches to managing a companys ethical conduct. Amongst all the approaches, I am in favor of the Ethical Cultural Approach.
High ethical principles must be deeply ingrained in the corporate culture so that every action of all employees are guided. By establishing a culture of ethics, there is no longer a need to have a dictatorial kind of leadership just to follow the code of ethics.
An ethical strategy in business operation also comes with this approach. By upholding the interest of the companys shareholders, good business is achieved. Moreover, with this kind of approach, the company has a chance to be socially responsible. This is important for the following reasons first it has internal benefits1, reduces risk of reputation-damaging incidence, leading to increased buyer patronage and it works in the best interest of shareholders2.
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