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Case from journal
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Reference no. JIACS13-03-09
Published by: Allied Business Academies
Published in: "Journal of the International Academy for Case Studies", 2007

Abstract

This is a story of the triumphs and challenges of one of the most notable executives in corporate American history, Disney Chairman and CEO Michael Eisner. The purpose of this case is to highlight the impact of corporate governance from a shareholder perspective. In particular, two problems are addressed – (i) Disney’s reputation for weak governance, whether justified or not, and (ii) dissention among the top ranks of the organization. While it is difficult to determine which came first, the case shows how each of these issues perpetuates the other, and that removing the source may be the only way to recover. As CEO, Michael Eisner was blamed for both, and thus the board was divided into two camps. There were those who supported Eisner and his actions over the years and those who did not. The question remained as to which side would prevail. The case begins with a description of the situation facing Eisner at the close of 2003. Two long-standing Disney board members had called for his resignation from both positions, in letters rife with criticism of Eisner and his management team. Eisner’s many options are presented and revisited later in the case. In order to help the reader analyze Eisner’s situation, the case provides a brief history of The Walt Disney Company, as well as biographical descriptions of the CEO and the two dissenting board members, Roy Disney and Stanley Gold. Coverage includes company milestones under Eisner’s leadership, and comparisons are made between the company’s financial performance and Eisner’s highly criticized compensation package. We then describe the conflict that arose between the parties and offer some discussion of the governance practices that come under attack in the letters. As there are usually two sides to every story, voices in favor of Eisner’s management are also heard. The case then discusses what transpired as shareholders met and voted on a key governance issue with clear implications for the future – both for Eisner and for the company and its shareholders. Topics addressed in this case include management conflict, corporate governance, shareholder value, and CEO succession. It may be used in an undergraduate, upper-level classroom, and is particularly appropriate for a capstone course in strategic management. It will also work well in any number of graduate business courses, including general management, leadership , and organizational behavior. Prerequisites for this case include some understanding of prevailing corporate governance topics, as well as familiarity with The Walt Disney Company’s diversified portfolio of businesses. As a result, no outside readings should be necessary to understand the case, but some outside research will be necessary in order to address the assigned questions. The case should prove to be an easy read, taking no more than 20 to 30 minutes and then allowing 1.5 to 2 hours to address the questions that follow.
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About

Abstract

This is a story of the triumphs and challenges of one of the most notable executives in corporate American history, Disney Chairman and CEO Michael Eisner. The purpose of this case is to highlight the impact of corporate governance from a shareholder perspective. In particular, two problems are addressed – (i) Disney’s reputation for weak governance, whether justified or not, and (ii) dissention among the top ranks of the organization. While it is difficult to determine which came first, the case shows how each of these issues perpetuates the other, and that removing the source may be the only way to recover. As CEO, Michael Eisner was blamed for both, and thus the board was divided into two camps. There were those who supported Eisner and his actions over the years and those who did not. The question remained as to which side would prevail. The case begins with a description of the situation facing Eisner at the close of 2003. Two long-standing Disney board members had called for his resignation from both positions, in letters rife with criticism of Eisner and his management team. Eisner’s many options are presented and revisited later in the case. In order to help the reader analyze Eisner’s situation, the case provides a brief history of The Walt Disney Company, as well as biographical descriptions of the CEO and the two dissenting board members, Roy Disney and Stanley Gold. Coverage includes company milestones under Eisner’s leadership, and comparisons are made between the company’s financial performance and Eisner’s highly criticized compensation package. We then describe the conflict that arose between the parties and offer some discussion of the governance practices that come under attack in the letters. As there are usually two sides to every story, voices in favor of Eisner’s management are also heard. The case then discusses what transpired as shareholders met and voted on a key governance issue with clear implications for the future – both for Eisner and for the company and its shareholders. Topics addressed in this case include management conflict, corporate governance, shareholder value, and CEO succession. It may be used in an undergraduate, upper-level classroom, and is particularly appropriate for a capstone course in strategic management. It will also work well in any number of graduate business courses, including general management, leadership , and organizational behavior. Prerequisites for this case include some understanding of prevailing corporate governance topics, as well as familiarity with The Walt Disney Company’s diversified portfolio of businesses. As a result, no outside readings should be necessary to understand the case, but some outside research will be necessary in order to address the assigned questions. The case should prove to be an easy read, taking no more than 20 to 30 minutes and then allowing 1.5 to 2 hours to address the questions that follow.

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Size:
Large

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