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Ethical Leadership: Normative Theory within Walt Disney Company by stephanie taylor
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Ethical Leadership: Normative Theory within Walt Disney Company |
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Business News,Entertainment
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Normative theory which is also known as individualism within a business organization is where the primary goal of a business is to make a profit. Did Isaac Perlmutter of Marvel apply this theory to not only increase profits of the consumer products division of the Walt Disney Company but to also further his reputation in the entertainment industry? Perlmutter’s approach and behaviors ultimately resulted in the resignations of top executives including that of Andy Mooney, multiple litigation settlements for female employees and a rather large racial slur repercussion from the Iron Man movies. His approach has been referred to as a back seat managing style. The Walt Disney Company has been a successful family entertainment business for nearly 100 years. Beginning in 1920 as a cartoon studio to the conglomerate they are today which operates in five business segments: media networks, parks & resorts, studio entertainment, consumer products and interactive media (Couch, 2013). For a company to grow and be successful Walt Disney believes it takes many attributes with the strongest being ethics and morals. The Walt Disney Company incorporates ethics into every aspect of their business. They require ethics training by all employees and cast members mandating compliance with the company’s standards of business conduct training. Their complete Code of Business Conduct and Ethics can be viewed at http://thewaltdisneycompany.com/content/code-business-conduct-and-ethics-directors. Their code was tested about three years ago when they purchased Marvel. The Avengers movie had taken Marvel to an all-time successful high as the third highest grossing film ever. Isaac Perlmutter was the largest shareholder in Marvel, moving him to the second largest shareholder within Disney after the acquisition (Couch, 2013). He was known to conduct business inappropriately, often rubbing people the wrong way. The more successful one becomes, the more power they achieve, even crave. Marvel had a large inventory of superhero characters that Disney was interested in using to expand their consumer products division. Disney had their standard characters and with the Marvel superhero collection added to the shelves felt their consumer products division could increase sales significantly. Perlmutter’s ways of increasing sales, although done within the limits of the law, were unethical cost-cutting and selfish approaches. He demanded that Marvel products dominate the Disney stores. His approach to this is what led to Disney losing many of their long time executives. Disney was however pleased with the 35% increase in sales from 2011 – 2012. A sales increase of that nature in that time frame is almost unimaginable. While Perlmutter achieved the unachievable, he did so at a serious cost to Disney. He used his status within the company and made Bob Iger’s life miserable until the decision was made to fire Rich Ross after the failed movie John Carter. Again, Perlmutter always maintained and adhered to the law while conducting business but his ethics failed in all areas. Little has been done to stop his antics and his managing style has affected the entire dynamics of Disney. Ethics is defined as a set of principles a person uses to determine whether an action is good or bad (Collins, 2012). “Every decision made during a day has ethical ramifications”, (Collins, 2012), Perlmutter’s actions while making money for the company, were not necessarily ethical in the end. His bullying, cost-cutting ideas and racial implications were changing the lives of individuals that helped make Disney the success it is today long before Isaac Perlmutter came along. Even four years after the Disney acquisition of Marvel, the superhero flicks have continued to rake in billions of dollars. The Avengers epic $1.5 billion worldwide gross in 2012 and Iron Man 3’s global earnings of $1.2 billion have achieved a whole new level of success for Disney. Has it been worth it? All the issues and repercussions that have surfaced during Perlmutter’s leadership have definitely made for pain staking events albeit the profitability and success that he has set forth in Disney. In summary, it is important to foster positive relationships within any work environment. Promoting team work, empowerment and communications are key to ethical leadership. Leaders should energize their team, not beat them down or demoralize their efforts as Perlmutter often did. Damage control was inevitable as the media scrutiny continued to grow as Perlmutter maintained his position within the company. There is no question that Disney/Marvel is successful and profitable. Could they have been more successful and profitable or even more powerful had Perlmutter’s ethics been more appealing? References Collins, D. (2012). Business Ethics: How to design and manage ethical organizations. Hoboken, New Jersey: Wiley. Couch, A. (April, 2013). Business Ethics Case Analysis. Retrieved from http://businessethicscases.blogspot.com/2013/04/the-walt-disney- corporation-marvel-ceo.html Finke, N. (April, 2012). Why Rich Ross Was Fired at Disney: What does it say about Bob Iger’s leadership? Retrieved from http://www.deadline.com/ The Walt Disney Company: Code of Business Conduct and Ethics. Retrieved from http://thewaltdisneycompany.com/content/code- Business-conduct-and-ethics-directors The Walt Disney Company: Business and Ethics. Retrieved from http://thewaltdisneycompany.com/about-disney/business-ethics
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Walt Disney Company, Isaac Perlmutter, Ethics, Leadership,
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