Founded in 1923, Walt Disney has grown to be the world’s largest animation company (Watts, 2013). From the humble beginnings of an entertainment company that started in the 20th century, Walt Disney has been able to develop a reputable brand in the family entertainment business.
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Certainly, for more than nine decades, Disney World has been able to provide quality entertainment, not only for its customers in the US, but around the world as well. With its growing success, Walt Disney has become a multifaceted conglomerate that has developed deep roots in the entertainment industry.
The company has about five main business enterprises that include “media networks, parks and resorts, studio entertainment, consumer products and interactive media” (Watts, 2013, p. 5). The company’s niche has been on content innovation and the adoption, or introduction, of new technologies (Watts, 2013).
According to the vision of the company’s founder, Mr. Disney, most of the company’s activities have focused on fulfilling the vision of the founder, which is to position the company as a leader in the creation of “fun” entertainment (Johnson, 2011).
This paper provides a critical evaluation of the company’s activities by focusing on the structures and pillars of its human resource strategy. Through this analysis, the attraction of high quality employees, excellent customer service, and the focus on the company’s profitability surfaces as the main factors outlining the company’s human resource strategy.
These findings manifest through an understanding of how Walt Disney has been able to merge its human resource strategies with its business culture and values. Comprehensively, this paper explores the main pillars of Disney’s corporate culture and human resource strategy to establish the successes and failures of the company’s plan. However, first, this paper explores Walt Disney’s industry, competitors and key customers
Industry, Competitors, and Key Customers
Walt Disney is an industry leader in the media industry. The company’s market share is strong, especially considering the fact that the company enjoys a significant market share in the movie, television, and theme park industries.
Considering Walt Disney is an entertainment industry, its main competitors are similar entertainment companies such as News Corporation, Time Warner Inc., and NBC Universal Media, LLC (Hoover’s Inc, 2013). Many researchers say Walt Disney has a strong competitive advantage because it has a strong growth potential and financial performance (Wall Street Journal, 2013).
For example, when comparing the financial performance of Walt Disney and Time Warner, both companies offer mild dividend yields of about 1.5% and 2% respectively, but Time Warner cannot match Disney’s ability to generate free cash through its diversified business segments (Wall Street Journal, 2013).
Nonetheless, Walt Disney experiences stiff competition in film production and network services because of the existence of other strong cable network companies (especially premium network companies such as HBO, which rate better than Walt Disney because its high subscription fees attracts more profits). CBS, Time Warner, and Viacom also pose equally stiff competition to Walt Disney.
Since there are many major communication and entertainment companies in the industry that pose a stiff competition for Walt Disney, a strong likelihood in the market will be price wars and increased product differentiation among the competitors.
Lastly, Walt Disney’s main target market appears to be children, but this is a wrong conceptualization of the company’s market scope because Walt Disney attempts to appeal to the entire family. Stated differently, Disney’s target market ranges from children, teenagers, and even adults.
The main criterion for defining Walt Disney’s main customer pool is therefore identifying anyone who has a “young heart.” Indeed, the criterion for defining Walt Disney’s main customers is enshrined the words of Disney’s founder, “You are dead if you aim only for children. Adults are only kids grown up, anyway” (Corrine, 2012, p. 142).
Human Resource Management Strategy
Disney’s corporate culture stems from the core values that it shares among all its business segments. According to the company’s website, Disney Careers (2013) say, “Each of our company has a special ability to harness the imagination in a way that inspires others, improves lives across the world and brings hope, laughter and smiles to those who need it most” (p. 1).
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Some of the core values that inform the culture of Walt Disney premises on innovation, quality, community partnerships, storytelling, optimism, and decency (Disney Careers, 2013). However, the main company values that stand out as the most significant values to the company’s human resource strategy include the values of optimism and innovation.
Attracting Human Capital
The first principle that informs Disney’s recruitment strategy is the conviction that the company should hire the best employees and give them adequate room to perform their duties (Watts, 2013). The exception to this rule is the understanding that the best employees are not necessarily the brightest or the smartest, but the best employees who demonstrate good aptitude for working in the company.
Walt Disney therefore considers a positive employee attitude as the first criterion for hiring new employees. Walt Disney offers the same significance for searching for internal talents as they do for searching for external talents (away from the organization).
When searching for external talent, Walt Disney appreciates the importance of embracing diversity as an important corporate value (Disney Careers, 2013). Walt Disney strives to ensure its employee pool reflects its global diversity. Certainly, among the most notable characteristic of Walt Disney’s recruitment strategy is the understanding that the human resource team needs to reflect the global diversity that informs its business.
Therefore, the company’s human resource team has a very diverse workforce that comes from different parts of the world. The company expects this diverse workforce to work in its different theme parks that are located around the world (Watts, 2013).
Consequently, Walt Disney boasts of having a diverse workforce that represents its global business. The company also demonstrates a strong commitment to incorporate diverse opinions and ideas to support its goal of upholding diversity.
Walt Disney believes that by embracing diversity, it mirrors the community that it serves. Therefore, the company may connect with its customers and guests better. Similarly, through this environment, the company may easily foster innovation and creativity throughout all functions of the company’s business.
Developing Human Capital
Hiring a new employee is only the first step of Disney’s human resource strategy. Training is the second step in this sequence because the company’s human resource team should provide newly hired employees with the best training, once they are hired.
This type of training may occur in different forms, including classroom training and virtual training (Watts, 2013). Occasionally, the company also uses hands-on training. Regardless of the best methodology, Johnson (2011) explains that the company always gears its training process to align with the vision of the company.
Walt Disney also emphasizes greatly on the need for placing new employees in the correct departments for maximum use of their talents.
To realize this goal, the company has a three-month period where the company places new employees in new departments where the company evaluates their skills to ascertain if they meet the requirements for their departments (Watts, 2013). If not, the company moves the employees to another department within the company where their skill-set meets their talents.
The principle of allowing workers to choose their area of interest and suitability within the company is among Disney’s greatest strength because it helps the company to build trust and loyalty with the employees. Therefore, stated differently, Walt Disney gives its employees a second chance to redeem themselves, even if they fail to impress in their first attempt at working for the company.
Walt Disney therefore does not subscribe to the belief that if employees do not excel in one department, they are useless to the organization. Instead, the company finds another area where the employee may be useful.
Retaining Human Capital
Walt Disney admits that it reports varying employee retention rates across different departments (Hodges, 2008). However, the company’s employee turnover rate is lower than the industry’s average.
Much of the company’s commendable employee retention rates stem from the company’s commitment to provide a supportive work environment for the employees and its commitment to provide every employee with sufficient knowledge resources. The provision of knowledge resources is part of the company’s employee empowerment plan.
Walt Disney exudes a strong commitment to empower its employees so that they can exceed the expectations of their customers (Watts, 2013). This commitment premises on the understanding that customer loyalty grows where there is high quality customer services. Walt Disney believes that every employee may offer customers a “special service” that they will value about the company (Lamb, 2008).
This is especially important in making the customers have a special and exceptional experience with the company. If customers show discontent with their experience at the company, Disney authorizes its employees to give monetary compensation to the customers (Johnson, 2011).
Most companies do not accord their employees this type of privilege. Therefore, many employees of Walt Disney feel privileged to work under such conditions. This positivity improves the company’s employee retention rate.
Albeit every manager is supposed to be sensitive about the concerns of their employees, special groups of managers (service managers) ensure employees have a good experience with the company (Hodges, 2008).
Part of the role of a service manager is to avail the company’s products and services for the employees to enjoy whenever they are not working. Comprehensively, Walt Disney strives to ensure their employees have a good experience when working for the company. This commitment improves the company’s employee retention rate.
Weaknesses of the HRM Strategy
Despite the positive acclamations made about Walt Disney’s human resource strategy, the company has failed to register a high employee retention rate. Johnson (2011) blames the inability of Walt Disney to have a high employee retention rate to the weaknesses of the company’s HRM team.
While the company believes that having a positive attitude is the best criterion for evaluating employee suitability for Walt Disney, the company expects its employees to exude the same attitude, even when the workload is overbearing, or when the employees meet overbearing customers.
This may be a difficult demand for the employees because they are human and not machines that may maintain a positive attitude every day. The demand that the employees should demonstrate a positive attitude always may therefore be too demanding for some employees.
After weighing the findings of this paper, it is correct, to say that Walt Disney’s human resource strategy stems from the commitment by the company’s founder to employ the most positively driven employees to work in the company. This direction explains why Walt Disney does not consider talent as its first criterion for hiring new employees.
Instead, the company values an employee’s commitment as the first criterion for hiring new employees. Therefore, prospective employees who demonstrate a positive attitude to work have a higher possibility of getting a job at the multibillion-dollar company.
Indeed, Mr. Disney firmly believed that a positive employee attitude would be a very crucial component for ensuring that the company provided innovative and entertaining content to its customers. This strategy has worked successfully for the company.
Considering Walt Disney’s culture hinges on the virtues of diversity, optimism, and innovation, Disney has done a good job in merging its human resource strategy to reflect these values. Indeed, its human resource strategy demonstrates a strong willingness to recruit talents from diverse backgrounds, recruit employees who are highly optimistic about the company, and recruit highly innovative employees.
The company’s commitment to empower its workers through training and flexible skill transfer supports this strategy. Other companies can borrow from Disney’s successful human resource strategy by taking good care of their employees and nurturing employee talent.
Corrine, J. (2012). Finding Your Piece: 32 Principles to Help You Live Your Calling. New York: Balboa Press.
Disney Careers. (2013). Culture & Diversity. Web.
Hodges, J. (2008). Managing the Magic at Disney. Web.
Hoover’s Inc. (2013). Top Competitors for The Walt Disney Company. Web.
Johnson, C. (2011). What can be Learned from Disney HRM Practices. Web.
Lamb, C. (2008). Essentials of Marketing. New York: Cengage Learning. Wall Street Journal. (2013). Comprehensive Analysis on Walt Disney and Time Warner: Intense Competition, Steady Returns. Web.
Watts, S. (2013). The Magic Kingdom: Walt Disney and the American Way of Life. University of Missouri Press.