Organizational Climate and Leadership
The organizational climate at Disney changed dramatically after the sudden death of Frank Wells, a close associate of Michael Eisner. Eisner’s leadership and its effect on the organizational climate are analyzed in this essay.
Eisner, in his later tenure at Disney, became more authoritative as a leader. His leadership was initially based on providing Disney a creative edge, however, failed to do so after the death of Wells. Eisner had failed to create a culture of innovation and creativity at Disney and his superior attitude leads to the break-up with strategic partners like Pixar. The estrangement with the shareholders was also because of his initiation of internal politics in the company and his probable belief in a heist.
Eisner’s leadership principles were based on four tenets:
- A leader is expected to set an example for other employees in order to inspire others to act in a similar way.
- As a leader, one must be always present in order to gauge others’ interest and engagement with the project.
- A leader must push the employees to validate their own ideas.
- A leader should also generate ideas and not just forward other’s creations.
Eisner welcomed the presence of friction and diversity within the organization, as he believed that they helped to innovate. A company with no diversity or friction often fell into the trap of mediocrity. He also believed in working at a slow pace for it allowed more time to generate ideas as well as helped in developing a well-conceived idea.
Questions were raised about Eisner as a visionary leader. He believed in a stable company and did not change with the changing requirements of the business. Further, many believed that Eisner was arrogant and complacent. The corporate governance of the company suffered due to his egotistical nature.
The organizational climate of Disney was plagued with high tension, as there was a high degree of disappointment in the internal climate of the organization. Further, the rational goal of the company was under distress as the leadership was not sure what step would be better for the company’s immediate and long-term future. The group climate was in tension as the majority of the shareholder, the employees, and the pensioners alike showed a lack of confidence in the leadership of the company.
Further, the developmental climate with the company was also under tension, as the employees believed that there was not enough opportunity for creative expression. Therefore, to change this state of high tension in the organizational climate, internal confidence had to be restored. For this, the leadership style and the vision of the company leadership had to be changed drastically. The case definitely shows that the discontent among the employees and shareholders was due to a lack of trust in the leadership. One option would be to change the face of leadership and bring in a new, energetic, visionary leader to turn the way the company operated for two decades under Eisner.
Strategic implications of Michael Eisner’s leadership
The implication for Eisner’s leadership due to this unrest was his probable impeachment as the head of the organization. Eisner had helped the company turn into a profit-making machine during the first half of his tenure; however, his decisions became shortsighted and prone to egotism, which hampered the interest of the company. The decision for Comcast not to withdraw its takeover bid on Disney showed that maybe he still had time, but he had to make immediate changes.