Organizational Culture, Leadership, Corporate Governance, And Risk Management At Walt Disney

MN5903 Strategy, Governance and Leadership

Organizational culture and the role of the Board

Walt Disney is universally recognized as “Disney” and is an American multinational company which functions in entertainment and media industry. The corporation was founded in the year 1923 by Roy and Walt and is headquartered in California in United States. The company was founded in the form of Disney Brothers Cartoon Studio (Schickel 2019). The main products of the company include digital games and applications, Disney parks, books, apparel and many more. The report aims at examining organizational culture and leadership of the corporation along with its corporate governance and risk management.

Brief evaluation of the leadership style and organisational culture at Disney

Walt Disney has been through constant changes and transformation in last decades. The company has followed diverse leadership styles to gain success. The founder of the company “Walt Disney” used to follow authoritarian leadership style where the leader is the sole decision maker and controller of all decision inside the company (Goldsby and Mathews 2018). In this type of leadership, no or very little input is taken from the employees and no feedback of followers is considered. When individuals tried to argue with Disney, he was irritated and would dismiss them. He was really not harsh or careless regarding his workers, though (Becker 2017). Yet, he was committed towards his members, although he inclined to do things his way simply.

Bob Chapek is the current CEO of Walt Disney and has been working for the company since last three decades. He follows visionary leadership style and believes in creativity and innovation with the help of cut-edge technologies in order to drive expansion and growth and also enhance customer and guest experience (Cosenza et al., 2021). A visionary leader is person who has a different vision of the future. They outline explicit processes for carrying a vision to realism, and then lead a group of individuals in that track. A visionary leader is supposed to be risk taking, strategic, organized, communicative, and focused. Likewise, Bob Chapek is capable to successfully develop and implement ground-breaking business models and is proficient to identify revenue streams for achieving business goals and long-term progress in the market (Salah 2020).

Example: he is capable of managing some of the most profitable development projects during his tenure in the company. Throughout his tenancy, Disney Parks have seen the maximum investment and growth in its 60 years of operations, comprising outstanding introduction of Shanghai Disney Resort; doubling up the Disney Cruise Line fleet; incorporating the maximum technically sophisticated and interactive properties in the parks’ history, Star Wars: Galaxy’s Edge at Disneyland Resort and Walt Disney World Resort; the growth of Marvel-inspired sights all around globe are among his achievements (Bob Chapek 2022).

He is a great communicator and due to his guest-centric approach he makes sure that ever service and products is unique and exceeds customer’s experience. He brought famous and well known experiences to younger generations of Disney fans at Disney Parks through managing requirements at the parks, integrating new-fangled franchises at regions crosswise the world, and bringing renowned and memorable experiences to younger age group of Fans around the world (Bob Chapek 2022). He supervised a period of transition in the realms of playing, storytelling, and education as the head of Disney Consumer Products.

Organizational culture

Organizational culture

Walt Disney follows American culture which is a combination of traditions, customs and traditions. In the media, parks and resorts, and entertaining industries, the corporate culture make sure that staffs signify principles which match with target clients’ preferences and anticipations (Wills 2017). Employees enjoy a culture of passion, civility, collaboration and inclusion. The main features of culture of the company include:

Innovation: Company believes in developing products by integrating latest technologies which matches the industry developments in entertainment, mass media and amusement parks. Walt Disney set the standard for innovation by constantly questioning the existing quo, resulting in an ever-evolving learning culture.

Quality: Disney’s corporate culture emphasizes exceptional quality as an approach to establish the business apart from its international competitors (Disney culture 2022). Such cultural attribute requires high quality standards in all components of the organization, comprising the skills of employees.

Storytelling: The culture of Disney includes excellent storytelling skills. The corporation’s history, as well as its products in the worldwide media, media, and theme park businesses, is captivating. Employee actions which add worth to products are encouraged by this cultural perspective (Boguszewicz-Kreft, Kreft and ?urek 2019).

Community: One amongst Disney’s approaches by means of its organizational culture to handle individuals, their actions, and productivities towards the success of corporation objectives is to shape a community mind-set in human resource development. For instance: programs to motivate and retain personnel.

Apart from the above, diversity and inclusion, empowerment, citizenship and volunteerism, employee welfare, are among the major factors of culture.

The role of the Board members plays an active role in overseeing every operations of the company. Some of the main roles and responsibilities of the Board include:

• In cooperation with the Chief Executive Officer, set the Board’s agenda for the year and every meeting;
• Develop Board meeting agendas and allot enough time for all agenda topics to be discussed (The Board of Directors the Walt Disney 2022)
• Monitor the dissemination and sufficiency of information available to Directors to enable maximum and rapid knowledge transfer relevant to Director Requirements.
• Coordinating about the periodic evaluation of the management’s formulated and recommended strategic plan (Wasko 2020)
• Evaluation of annual performance of the CEO as well as other key managers
• To make sure proper communication is maintained among Board members and shareholders among every task.
• Preparing for the Chief Executive Officer’s succession, as well as reviewing management’s succession plans for other prominent leaders.

Annual report of every company is a lengthy publication of which involves details about performance of the company during the preceding year. The report involves performance highlights, financial performance, future objectives and targets, shareholders statements, and more.

As per the annual report of Disney for the year 2021, it reports on its business, risk factors, details about properties and assets, legal proceedings, safety disclosures, information about executive officers, financial information and performance, company’s common equity, matters of shareholders, issuer purchaser of equity securities, market risks, amendments in disagreements with accountants on financial and accounts disclosure, controls and procedures, corporate governance, exhibits and financial statements, and summary (Fiscal Year 2021 Annual report 2022).

Corporate Governance framework for Disney

Effective Board governance is very vital factor in attaining long-term-shareholder value. Walt Disney is committed towards governance instructions and procedures which confirms deliberate and unbiased symbol of shareholder welfares. The Board of Directors must be attentive about tendencies in authority to make sure that it remains factual towards its pledge of thoughtful and self-governing demonstration of stockholder interests (Corporate Governance 2022).

The Board includes formed committees to assist and accelerate the Board’s presentation of its responsibilities. The Audit Committee, Compensation Committee, and Governance and Nominating Committee are the three most important committees, which are all made up entirely of self-governing directors (Rehman 2021). On its corporate website, the Company provides the bylaws of each of these three committees as well as the Executive Committee which functions mainly as a purpose of undertaking action which officially needs Board support among regular schedule Board meetings.

Role of the Board

Standard code of conduct is adopted by the company for establishing ethical standards of accountability towards clients, members, guests, shareholders and the community where it operates as well as trying to recognize specific lawful compliant matters, in order to inspire and sustain higher ethical standards and lawful compliance. The standards are applicable to every member and therefore require additional training to ensure that the Requirements are followed (Corporate Governance Guidelines 2022). The Board of Directors has also approved a distinct Code of Business Conduct and Ethics for Directors, which consist of requirements that apply particularly to the parental Corporation’s board of directors.

 

Figure: Corporate governance

Source: (Rehman 2021) 

The Remuneration Committee is an independent body of The Walt Disney board, which it reports to. The Board assigned precise duties to the Committee under this Charter to support the Board in accomplishing its obligations towards the Organization and its shareholders. The main roles and tasks include:

• The committee must evaluate and authorize corporate objectives and goals which is relevant to compensation of the firm’s CEO and ascertain and support the compensation level for the Chief Executive Officer built on such assessment, either as a committee or with the further self-governing members of the Board of Directors (Compensation committee charter 2022).
• make remuneration, incentive compensation schemes, and equity-based strategies suggestions to the Board of Directors for non-Chief Executive Officers;
• The Committee would examine and report to the Board on the Organization’s business executive compensation plans and policies on a constant schedule (Kanokthaworntham 2018).
• The remuneration committee is accountable for determining salaries of CEO, CPO as well as other governing bodies which is subjected to the terms of some existing employment agreements, and also and authorize the incomes of those who report straight to the CEO, CPO and president.
• Performing targets are set by the committee about the eligibility of bonuses as well as approval of bonus awards which involves equity based bonus for every dedicated member (Compensation committee charter 2022).
• The Committee would analyse and certify any disbursements of equity-based compensation to executive officers, as well as conduct a periodic evaluation of the Corporation’s benefit programs.
• Annual report on remuneration is prepared by the committee for maintaining inclusion in the corporation’s annual conference delegation statement as per the pertinent regulations (Jeong and Weidhaas 2016).

Evaluate the Board’s responsibility for risk management

The Board’s responsibility for risk management of Disney is as follows:

• Inside the foundation of Risk Management Process, describe, analyse, and monitor present and prospective risk factors that could impact the corporation’s capability to accomplish its objectives; and define risk management principles in accordance with the business’s risk taking portfolio and making sure that such fundamentals are being used in decision mechanisms (Daley 2018).
• According to the probability and impact assessments, to assess potential hazards which will be maintained and controlled, distributed, or fully eradicated in the business.
• Ensure that risk management and auditing standards are integrated into the corporate structure of the company (Disney’s Counterparty Risk Program 2022).
• To ensure that procedures in separate departments, which are capable of monitoring systems and procedures and risk management at least once a year, are carried out in accordance with panel decisions.
• To facilitate rapid recognition of technological bankruptcy and to alert the Board of Directors; and to generate recommendations for appropriate measures (Daley 2018).
• Risk management committee is responsible for setting policies as well as develop counterparty risk criteria. Monitoring counterparty positions as well as manages collateral settlements and exchanges (Disney’s Counterparty Risk Program 2022).

Examine and evaluate the regulatory landscape for Disney and the impact regulators have on Disney’s success

Following are some of the regulatory landscapes that are followed by the company for remaining ethical and successful in the long run.

Anti-trust laws: The Corporation, including each Member Of the crew and personnel functioning on its behalf, shall obey by every antitrust laws in the United States and all other nations wherein Disney conduct commerce. Antitrust and rivalry regulations apply to the Firm’s doings in the United States and many further jurisdictions. The antitrust rules create a basis for defining what institutes equal and complete competitiveness (Legal standards 2022). At all times, every Member Of the cast and employee should comprehend and perform within this structure.

Security laws: Material data provided to the marketplace has to be accurate and comprehensive, as per securities regulations. All information that a sensible investor would find relevant in deciding whether or not to buy, sell, or hold stock in the Company is referred to as “material” information. Documentation submitted to federal agencies by the Corporation should be precise, comprehensive, equitable, and prompt (Miller 2017). Securities regulations make it illegal to begin trading or other securities based on material information which hasn’t been publicly disclosed.

Foreign corrupt practices: Giving anything of significance to foreign officials, international political parties, party leaders, or aspirants for political office for the purpose of getting, keeping, or directing commercial to the Corporation or anyone else is illegal under the Foreign Corrupt Practices Act (Miller 2017).

Taxation laws:  Federal and state taxation is applicable to the Firm’s management. Fail to abide with these regulations might result in criminal charges being brought against the Company. The Business intends to fully comply with all applicable laws.

Reporting requirements: The policy of the company is to comply with monetary instrument reporting regulations and to make quick and correct reports for all reportable transactions. Customers shall not receive any advice or guidance from Casting Members or employees about how to arrange transactions in order to avoid reporting obligations (Legal standards 2022).

Corporate governance

Environment laws: The Company is committed towards protection and conservation of environment. It complies with policies that support waste management and sustainable development.

Hence, regulators are able to manage the business to be conducted in an ethical manner and assist in managing processes and pave the path towards fair and equitable competition. Such regulations not only helped the business to remain accountable for its actions but also give rise to innovation at Disney which is among one of the competitive advantages of the company (Miller 2017).

The main risks faced by Disney are as follows:

Intense competition: Huge competition is faced by the company in areas like parks, resorts, tourism, entertainment and media. In the mass media industry, as newscast and television transfer virtually and different players with new business models participate extra effectively than existing mass media companies, the competitive setting fluctuations fairly intensely (Rehman 2021).   Smaller suppliers who could really provide a better-adapted service directly compete against Disney’s parks and resorts corporate segment. This intensifies competition for Disney.

Piracy: Advancement in technologies like internet have given rise to many risks for entertainment and media companies like copying, disseminating and downloading of materials. Through the increasing quantity of internet users and the rapidity of the internet, Disney’s profits is at risk, as less individuals would go to watch movie theatre and shows or purchase DVDs as soon as they are accessible online for free (Du 2016). The rise in piracy puts Disney’s income and profitability in trouble.

Online movie renting: Apart from piracy, the company’s revenue suffers from growth of online movie renting, subscriptions to TV streaming and other options (Yang 2019).

The above risks faced by the company can be resolved by followed measures and roles played by Board members in risk management:

• The demand in the entertainment and media industry constantly fluctuates and people and children are often bored with watching similar stuff. In this regard, cartoons and other characters should be released as per the demand of customers as interests and preferences of customers might change. If products and services are not fulfilling their demands, they will either not buy the products or switch to other service provider.
  • In this regard, to manage competitive rivalry, the Board should collect and analyse data which is related to industry fluctuations and customer preferences and design the product as per the results (Chen 2017). Furthermore, Boards could also generate a strategic decision-making framework which summaries the fundamentals of the commercial portfolio and the leading operating model that will ultimately determine in what way resources and competencies would be assigned in the future.
• In order to stop piracy of its products, Disney must use license keys, antipiracy software, restrictions for printing, copying and downloading of its materials from internet, protections for streaming, using copyright symbol, providing anti-piracy incentives and provide trail version (Aversa, Hervas-Drane and Evenou 2019).  
  • In order to safeguard the products and services, Board members must develop policies to educate its audience about the authenticity of its offerings, making use of anti-piracy services, complying with GDPR Act and also making use of subscriptions.
• As technology progresses, smart gadgets have turn out to be more available for watching and engaging content; something Disney does not have (Brito and Carvalho 2018). The only method Disney could keep their safe zone is to mobile application which solely offers Disney content through subscription.
  • The Board must make sure that quality of products and services are maintained along with affordable pricing as this will help the company to sustain in the market for longer time (Brito and Carvalho 2018). Board must find alternative strategy to entice customers by leveraging opportunities in the market.

Executive leadership is the capability to manage as well as direct employees and operations in an organization in order to fulfil organizational objectives, undertaking decision-making and strategic development (Stock and Schnarr 2016). Corporate governance, financial leadership, risk management, regulatory compliance fostering organizational performance and effective culture are among the major role performed under executive leadership in gaining competitive advantage for the corporation. The report aims at examining various executive leadership roles at Disney which includes leadership and management, financial leadership as well as ethical leadership in the corporation.

Leadership and Management style within Disney

Leadership involves enhancing and nurturing by setting new directions and visions for the followers. Leadership assists in directing an organization’s resources to be used in an effective manner s that it could help in enhancing efficiency of processes and achieve organizational goals. An effective leader is expected to provide clarity to its flowers, motivate them to perform better as well as guide them towards achieving organizational goals (Liphadzi, Aigbavboa and Thwala 2017). Similarly, an effective leader adopts a specific management style for undertaking decisions, goals attainment, and plan work, organize them and exercise control.

The leadership and management style followed at Disney are visionary and Paternalistic management style. Walt Disney’s current CEO, Bob Chapek, has served the corporation for the past three decades. He has a visionary leadership style and believes in driving expansion and growth through creativity and innovation using cutting-edge technologies while also improving the customer and guest experience (Cosenza et al., 2021). Somebody who has a strong vision of the future is mentioned to as a visionary leader. They design comprehensive steps for carrying a vision to life and then inspire a group of individuals down that pathway. A visionary leader should be bold, strategic, organized, communicative, and laser-focused.

For instance, during his time at the organization, he has managed some of the most profitable development projects. All through his tenancy, Disney Parks has witnessed the biggest investment and growth in its sixty-years of operations, with notable highlights comprising the remarkable introduction of Shanghai Disney Resort, the doubling up of the Disney Cruise Line taskforce, and many others (Bob Chapek 2022). Bob Chapek has the ability to create and implement ground-breaking business concepts, as well as generate revenue streams for accomplishing business goals and long-term market growth (Salah 2020).

Other sectors within the Disney Company, including such parks and resorts, utilize paternalistic leadership styles. This permits workers to feel like they’re part of a group, and it permits the leader to make better decisions (Douglas 2019). Leaders are more concerned about the well-being of their assistants, which might also decrease frustration and boost enthusiasm. In this management style, a leader acts with the best interest for its followers. Disney as per its paternalistic leadership styles, make use of unilateral decisions and clarity and transparency is maintained in the process. Decisions taken are well-explained to the employees; however, there is no space for questioning and collaboration (Bedi 2020).

Compare Disney’s Leadership Style with that of its competitors

Disney is an international firm operating in media and entertainment industry. The company includes five major divisions like theme parks and resorts, studio entertainment, consumer merchandises, broadcasting networks and streaming services. In this regard, it had distinct competitor for all its five divisions.

Comparison has been done by considering Netflix from its streaming services division and Comcast which is also a renowned name in television industry.

The valuation of Netflix stock has increased by 260 per cent in just three years, from $124 at the finish of 2016 to $448 in 2020. For Netflix, that is indeed terrific. This could be a threat for Disney, but, the value of Disney stock has only augmented by 18% over the same time period (Team 2022). Regardless of the statistic that net profit margins of Disney are greater than Netflix’s.

Due to the strong leadership and management at Disney, its income margins have always remained high, although revenue growth remains the most important factor. The revenue base of Disney is three times larger than Netflix; still its revenue growth is lower at 26% than Netflix (Team 2022). Netflix, on the other hand, saw a 72 per cent rise in revenue from 2017 to 2019, due to increasing member counts and global expansions.

The management of Disney spends more money in research and development related to acquisitions, due to which its margin has dropped significantly because of the high interest cost and acquisition related expenses. In contrast, due to the effective management style of Netflix, the margins have enhanced significantly from 4.8% to 9.9% in the year 2019 (Team 2022). 

 

Figure: Comparison between Netflix and Disney

Source: (Disney vs. Netflix: 2022) 

Comcast is also the second leading cable television and broadcasting company globally. It is among the biggest competitors of Disney. There are six resorts and 12 theme parks operated by Disney in comparison to Comcast which operates only four universal theme parks. The main rivalry among two companies is focused on theme parks in Florida and California. The MCU movies were distributed under the Disney label following Disney’s acquisition of Marvel Studios, although the carton character privileges to Spiderman and the Incredible Hulk remain with Sony Pictures and Comcast, respectively (Havard, 2022). As a result, Disney would have to collaborate with both firms in order to include either character in the MCU; otherwise, this would impact its revenue in a negative manner.

 

Figure: Disney v/s Comcast

Source: (Havard, 2022) 

The Disney Corporation’s corporate strategies have been influenced by the development of technological innovations and an global market; as a result, the company’s strategies have progressed over time (Havard 2022). It adopts following strategies to overcome challenges and leverage opportunities in the market:

• Implementing a strong mission statement
• Creation of high-quality content as per the preferences of its customers
• Diversification for the brands to hot markets on global scale (Havard 2022)
• Incorporating latest technologies for content creation
• Keeping an eye on economic markets and global privacy laws
• Investment done to manage future uncertainties
• Flexible and adaptive towards changing preferences of its customers (Hiscocks 2016)
• Investment to make electronic data safe and secure

Balanced Scorecard for Disney with a range of Strategic Objectives and Key Performance Indicators

Balance scorecard is a strategic management tool used by organizations for strategy implementation. This acts a performance metrics and can identify and improve internal functions to focus on external outcomes. It has four elements namely: internal, financial, customers and learning and growth. Below is the balance scorecard of Walt Disney:

Strategy map	Measures	Actions
Financial	Sales revenue Market shares Savings on cost	Sales optimization, product development, standardization of products, lower expense
Customer	Delivery of products on timely basis Increases number of customers Customer satisfaction Repeat purchases Willingness of customers to recommend index (WTRI)	Quality management, excellent customer service, customer loyalty programs, quality initiatives
Internal	Delivery speed of service, timely operations, reduction in turnover ratio, waste management	Optimization of cycle time, total quality management, resource optimization, training and development, retention programs
Learning	Increase in operational staffs, % reduction in wastages, staff training and development	Developing effective learning sessions for employees, having employee stock ownership plan (ESOP), career development programs

 
Figure: Balance score card of Disney

Source: (Created by Author)

How “Leadership for Performance” approaches can be used to help achieve the objectives identified above

Leadership for Performance is a set of leadership efficiency elements which give first- and mid-level executives, team leaders, and project leaders the knowledge and capabilities they need to build productive working associations with others (Stefanescu, Negulescu and Doval 2019). Leadership for performance has various aspects that can be used strategically for achieving the above objectives:

Motivator: This will encourage employees to perform and evaluate their performance to make sure that they are performing consistently to meet the desired objectives (Stefanescu, Negulescu and Doval 2019).

Builder: This aspect will assist in shaping structures and processes which will be beneficial for goals and outcome achievement. This will make sure that necessary resources are available for delivering quality products and services (Long 2016).

Learner: This will assist in constant development of knowledge, abilities and skills of the workforce through designing and implementing various development programs.

Mentoring: A leader provides a role to everyone and guides their actions towards gaining excellence. This further develops personal relations and links as well as ethical decision making in terms of financial, internal and other aspects (?tef?nescu, negulescu and doval 2017).

Communicator: This will help in maintaining clarity and transparency in information flow and construct a culture that fosters honest, open and equality by reducing barriers.

Navigator: This will generate meaningful roles, and provide direction towards attaining vision, mission and end-result (Long 2016). Also, to succeed in the market, risk taking and continuous assessments of operating environment will be done to make sure that progress is heading towards correct direction.

Key sources of financial and non-financial information that the Board should have considered in making the decision to launch of new product

Every product before launching in the market must be including feasibility test to analyse what is needed to complete the proposed project or product. This is mainly conducted to identify the scope of success of the product in the market. In this regard, non-financial information is required by the company before launching new product in the market. Some of the information required is:

Market analysis: This is done to identify possible threats and opportunities a product can face in the market, strategies to make it reach customer base, identification of buying patterns, impact on environment and more.

Labour required: Every product requires diverse expertise to be developed and launched in the market. This will involve need analysis about labour requirement for the new product (Daniel 2021).

Technology required: This will help in identifying the type of technology that will be used in developing ad launching new products, for example; Artificial intelligence, Iot and other.

Competitiveness: This is very essential to identify and research about the competitors in the market. Conducting regular audit of the competitors will assist in overcoming performance gaps.

Financial information required to launch new product by Disney are as follows:

Cash flow statement: This informs the company about the cash flow and position of cash inside the company. This will decide further expenses, investments, loans, debts, taxation, assets and other elements required for new products (Areas 2018).

Statement of Owner’s Equity: This provides an overview about the change in cash position of the company. This could inform business if business owes more revenue than it has, as well as the current value of assets and the overall worth of your company. Such information is very valuable in planning ahead about the product development, launch, marketing and other vital steps.

Profit and loss statement: The P&L statement’s objective is to determine a business’s income and expenditures over a precise time period, typically one fiscal year (Palepu et al., 2020). This could be used to identify areas that have suffered loss and gain and can be used to make projections about how profitable the new product can be in the market. 

Discuss the main factors that led to the dramatic change in fortunes and compare Disney’s performance with that of its competitors

Disney’s financial statements for the year 2020 were announced on November 12, 2020, and revealed that the corporation had incurred a liability of $2.8 billion. In the fourth quarter, income declined by 23%, whereas year-over-year income fell by 6%. Apart for media and entertainment, parks and resorts are among the major source of revenue generation for the company. Pandemic had its biggest impact in 2020, causing the company to suffer a lot.

Because of the extensive closures during pandemic, the theme parks, and merchandises industry has been hit the toughest. Disney’s revenue from its parks, entertainment, and merchandise segment fell down by 37% in the 2020 fiscal year, causing in $81 million in damages, representing the effect that lockdown restrictions are having on the company as a whole (Disney to lay off employees  2022). Due to the financial loss, it has decided to lay twenty eight thousand employees.

The first quarter of Disney’s 2020 fiscal year experienced income from its parks, events, and merchandise section which grew by nine per cent, signifying how ruthlessly the pandemic has hit this business. The business’s fiscal problems are not limited to theme parks; the entertaining segment is one more core area that has struggled (Mahendher et al., 2021).

The worldwide box office has stopped as an outcome of the pandemic, resultant in a 13 per cent yearly loss for Disney’s studio entertaining division. The box office in the US and Canada has fallen by more than 79 per cent in 2020, associated with the similar time the previous year, placing more pressure on Disney.

Although revenue growth remains the most crucial aspect, Disney’s profit margins have always been strong. Disney’s income base is three times that of Netflix, but its income progression is still lower, at 26%, than Netflix’s (Team 2022). Netflix, on the other hand, had a 72 per cent increase in revenue from 2017 to 2019 as a result of growing membership and global expansion. Disney’s management spends more money on acquisition-related research and development, resulting in a considerable decline in its margin because of the high interest costs and acquisition interrelated expenditures. Netflix’s margins, on the other hand, have increased dramatically from 4.8 per cent to 9.9 per cent in 2019. This is owing to the company’s effective management approach (Team 2022).

Ethical decision making at Disney based on environmental issues 

While functioning and developing its business, the Walt Disney Corporation is dedicated towards shielding the environment and leaving a constructive conservational legacy for upcoming generations. For example: in order to reduce carbon emission, Disney has collaborated with utility partners for the development of novel 75 megawatt solar facilities and it is expected to come online till 2023 (Wisneski 2020). This is aimed at gaining renewable consumption of energy and saving around 40% of electricity usage.

Also, for waste management, the company has decided to eliminate plastic straws and stirrers from all its operated locations. This is aimed at reducing around 175 million straws every year (Environmental Sustainability 2022). Furthermore, the organic waste from Disney locations is sent to composting facility where it is processes to get converted into nutrient rich soil fertilizer.

Most significant ethical issues that Disney now faces and provides recommendations 

Business ethics is considered very vital in running a successful global business. Disney conducts its business effectively with every possible regulations and policies applicable in the industry. However, it is faced with several ethical concerns which if remain unresolved will prove detrimental for company’s reputation. Some of the ethical issues are as follows:

Wage disparity: The Company is recognized for its anti-union outlook, and has been condemned of offering slave wages to employees in other nations who are involved in manufacturing of toys which retail for a massive profit margin in the US. The main issue is among Chinese and US employees. Since it is costly for an expatriate to live and operate in China, compensating US workers more often than their Chinese counterparts is significant (Ethical Issues Faced by Disney Walt in Overseas Market, 2022). Apart from the problems in finding restaurants which offer their meals, they have expensive rental expenses. 

Gender discrimination: Disney is well-known for its diverse culture but its reputation of inclusivity is in question when it faced protest against lack of representing LGBTQ in their films. Disney employees have organized mass demonstrations in protest of CEO Bob Chapek’s lethargic reaction on Florida legislation described as “don’t say gay.” A scandal has erupted at Disney as a result of the discussion in Florida over a controversial anti-rights measure supported by Republicans (The Guardian. 2022). Several workers of the media company claimed that the firm planned to edit LGBTQ+-themed scenes in many of its films.

Age discrimination:  a 26-year old employee of Disney Studios employee in California filed a complaint in contradiction of the business, claiming age discrimination. He was fired and told that company is making few films but soon after he left, a much young employee was promoted to his position (Almnaseer and Saleh 2019). He claimed that he was not provided chance to apply for the new position.

Following are some of the recommendations to resolve ethical issues in the company:

• There are certain advantages to transferring a US employee to China. To beginning with, the company would save millions on overhead by not having to train new Chinese personnel to function in the parks. Also, to maintain cultural diversity, both U.S and Chinese employees must be provided equal opportunity to work in the parks.  This will eliminate cultural differences (Kirton and Greene 2021).
• To eliminate gender and age discrimination, Disney must implement blind recruitment which eliminates all details related to personal identification from the job application. Also, equal opportunity must be provided to women and people of minority and LGBTQ community.
• Training on cultural sensitivity is a viable option to remove unconscious bias from the workplace. Also, anti-discrimination policies must be developed in place to build diversity and inclusion in place (Kirton and Greene 2021).

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