In the early 2000s, Walt Disney CEO Michael Eisner came under increasing criticism for the company’s falling performance and for the way that he had centralized decision making so that all important decisions affecting the company had to have his approval. He began to lose the support of the board of directors, especially of Roy Disney, who as a member of the founding family commanded a great deal of support. However, the majority of Disney’s board of directors had been handpicked by Eisner, and he was able to control the agenda until the company began to incur major losses in the mid 2000s. Poor performance weakened Eisner’s position, but so did his personal relationship with Steve Jobs, who was the CEO and major owner of Pixar, the company that had made most of Disney’s recent blockbuster movies such as Toy Story, Cars, and so on. 

After Jobs threatened to find a new distributor for Pixar’s movies when its contract with Disney expired in 2007 because of the personal antagonism between himself and Eisner, Disney’s board decided to act. Eisner was encouraged to become chair of Disney and to allow his handpicked successor, Bob Iger, assume control of the company as its CEO. Iger owed his rapid rise at Disney to his personal relationship with Eisner, who had been his mentor and loyal follower. Iger had always suggested new ways to improve Disney’s performance but had never confronted Eisner—always a dangerous thing to do if a manager wants to become the next CEO! 

Once Iger became CEO in 2006, pressure was applied to Eisner, who soon decided to resign as Disney’s chair; then Iger negotiated the purchase of Pixar by Disney that resulted in Steve Jobs becoming its biggest stockholder. Disney was still performing poorly, but now that Iger was in total control and no longer under the influence of Michael Eisner, he adopted a plan to change the way Disney operated......

Discussion Questions

1. What are the various sources of conflict and politics that have plagued Walt Disney in the past?

2. Discuss how Iger used different conflict resolution and political strategies to solve these conflicts to make better use the company’s resources.