Introduction
This critical review paper examines the globalization of Disney theme parks and the company’s ability to adapt to different cultures while still maintaining its core brand identity. The paper provides a research background on Disney’s international expansion strategy, locations where the theme parks have been established, and the company’s approach to cultural adaptation. It then explores the theoretical and practical understanding of strategic execution and leadership from the Disney theme park case study and compares them to the development of a collaborative culture within the project. Through the analysis of the Disney theme park case study, the importance of leadership in creating a collaborative culture within the Disney Imagineering project, and how this can impact performance, is explored extensively. The paper concludes by offering recommendations for leaders on how to achieve better performance in a professional and inclusive context, based on findings from this case study analysis.
Executive Summary
The Walt Disney Company can be categorized as an entrepreneurial organization, as defined by Said (2023). These types of businesses are known for their innovative cultures, willingness to take risks, and their ability to identify and pursue new opportunities. Such organizations have a visionary founder or a small team that experiments with new ideas to create value for their customers. Walt Disney Company, founded in 1923 by Walt Disney and Roy O. Disney, has a notable history of innovation and has demonstrated an ongoing ability to adapt to changes in the market landscape. From its early days as a cartoon studio, the company has expanded into new areas such as theme parks, television shows, and digital media. Disney’s ability to create and monetize intellectual property, such as its popular characters like Mickey Mouse and Star Wars, further exemplifies its entrepreneurial spirit.
Disney’s global success is attributed to its strategic expansion into diverse cultural markets, adaptation to local customs and values, and utilization of technology to enhance customer experience and engagement, as stated by Kerzner (2017). This expansion began with the opening of Tokyo Disneyland in 1970, which was the first Disney theme park outside of the United States. Since then, the company has established four more theme parks in different global locations, including Hong Kong Disneyland, Shanghai Disneyland, Disneyland Paris, and Tokyo Disney Sea. Kerzner (2017) highlights the challenges faced by The Walt Disney Company in planning and executing these global ventures.
Theoretical and practical understating of strategic execution and leadership.
Kerzner (2017) states that in Disney’s globalization efforts, issues of enterprise environmental factors and cost were crucial. The company weighed different options, such as building a wholly-owned park, which was considered risky and expensive. As a result, they explored alternatives such as licensing agreements and joint ventures, which required navigating contractual agreements and enterprise environmental factors. Despite team leadership and a well-defined imagineering process, Disney faced challenges and made mistakes in its globalization projects, according to Kerzner (2017). The cultural acceptability of Disney characters and miscalculation of expected earnings were some of the significant issues encountered by the company in its globalization venture.
According to Hitt, Ireland, and Hoskisson (2019), strategic execution is vital for the successful implementation of Disney’s international expansion strategy, which involves adapting to diverse cultures and providing a unique experience for visitors. Effective communication, quick decision-making, and strong leadership are necessary for strategic execution. In particular, leaders must motivate their teams, create a collaborative culture, and provide the necessary resources and support for success. They must also communicate, set expectations and goals, and empower employees to take ownership of their work.
- Comprehensive strategy planning
Kerzner (2017) notes that cost has been a significant challenge for Walt Disney’s globalization projects. To mitigate this, the company has turned to license agreements such as allowing outside manufacturers to produce merchandise featuring Disney characters and granting construction firms the right to use its proprietary technology. However, licensing agreements have their limitations, such as potentially limiting future opportunities for licensees despite reducing risk for licensors, and may include terms related to finance, intellectual property, timeframes, and territorial rights.
Disney Waltz Company used joint ventures as the second strategy to cover the costs of their globalization projects, according to Kerzner (2017). A joint venture is a business agreement in which two parties contribute shared equity to develop a new entity and assets, sharing control, revenues, expenses, and profits. It allows both parties to share start-up costs and profits and may involve a dominant partner, public participation, or local government funding. The success of a joint venture requires honesty, communication, integrity, and a strategic plan.
In China, Disney partnered with the Shanghai Shendi Group to build and operate Shanghai Disney Resort, with both parties contributing shared equity. This joint venture allowed Disney to enter the Chinese market while sharing the start-up cost and profits. Disney also entered a joint venture with Indian media company Star India to launch the streaming service, Hotstar. Through this joint venture, Disney gained access to the Indian market and the opportunity to leverage Star India’s expertise. Joint ventures have been an effective way for Disney to diversify and expand its business globally while mitigating risk and sharing the costs of new ventures (Kerzner,2017).
- Localization efforts
Kerzer (2017) notes that Disney had experience with American customs, and visitors to their US theme parks knew they were experiencing an American-themed park. However, when it came to expanding to foreign countries, there was uncertainty about how visitors would react if the park did not respect the cultural and social standards of the host nation. Additionally, it was unclear how much management practices would need to be modified to fit the new location.
Global companies face a complex and uncertain operating environment especially when they venture into cultures different from their own (Diallo, Djelassi, and Kumar, 2021). Although globalization is often mistakenly associated with cultural homogenization, cross-cultural flows, movements, and exchanges continue to occur predominantly between local places and identities that are distinguished by cultural and social differences (Diallo, Djelassi, and Kumar, 2021). While Disney theme parks may be successful in certain markets, it was not appropriate to apply a uniform global marketing strategy across the board since it was impossible to Americanize all cultures.
The success and future of Disney’s globalization efforts were highly dependent on how the local people perceived them. It is important to recognize and appreciate the cultural differences that exist between America and countries where globalization attempts are focused on. Understanding these differences helped Disney Waltzo tailor their approach and gain acceptance of standardized concepts in different countries. By doing so, they created positive word-of-mouth and influenced their guest behaviour in a way that is beneficial to the company.
- Leadership styles
Disney walts have very unique leaders throughout its projects. The most common style of leadership is the interactive style. According to Oberer and Erkollar (2018), the style allows for less structure and more empathy with employees. In Disney Waltz, everyone on the project is an important member of the team. During brains storming all ideas are welcome and every member participates in achieving the objective of Disney theme parks “to cate visually alluring realities that remove their guest from reality and transport them to the reality of the theme parks”.
Visionary leadership also serves Disney’s globalization efforts in a big way. Hitt, Ireland, and Hoskisson (2019), describe being visionary a as being a pioneer. Disney Waltz has been a visionary in many ways and pioneered the entertainment industry. Despite losing its original leader and founder, those who have come after Waltz has had the objectives of the founders at heart (Kerzner,2017).
Leadership is the role it plays in forming collaborative culture for a project.
The Disney Company’s theme parks globalization project serves as an excellent case study to evaluate the impact of leadership on a collaborative project culture. Collaborative cultures are characterized by shared goals, cooperation, and communication, which enhance knowledge-sharing and problem-solving (Fladerer, Steffens, and Haslam, 2022). This can lead to better outcomes, increased productivity, and better overall performance. Effective leadership and communication are critical to achieving this success (Oberer and Erkollar, 2018).
Disney’s leadership prioritized collaboration and openness, creating a culture where team members felt comfortable sharing ideas. Architects, engineers, and designers from different countries collaborated to create a theme park appealing to diverse cultures. The slogan “we are all Imagineers” signifies that all members are integral. Collaboration creates a shared sense of responsibility, which motivates achieving common goals (Fladerer, Steffens, & Haslam, 2022).
At Disney Waltz, leadership comes into play in every project decision. When the decision for globalization was reached, all the experts and leaders sat down to map out the enterprise environmental factors (EEF’s). According to Kerzner (2017), the process of planning a project often involves looking at past successes to inform decision-making. EEFs, which refer to assumptions and predictions about the present and future, play a critical role in risk management activities. Identifying EEFs is typically the responsibility of senior management, project sponsors, or governance committees.
Disney Waltz recognizes team members through various programs, including the Disney Legends Program, which honours individuals who have made significant contributions to the company. The program is one of the most prestigious honours that the company bestows upon an individual, and their names and statues can be found in various areas of the theme parks. The leadership promotes collaboration by recognizing and rewarding team members for their contributions to the project.
The globalization of Disney theme park was a huge undertaking and a risk in so many ways. Despite there being constant communication, mistakes were made and the company had to do debt refinancing three times during the expansion to France. No bank was willing to take on the risk of financing a company that was almost going bankrupt. In France, the people were not accepting of the fact that Disney did not serve wine at its parks and they wanted the workers to dress conservatively. The unforeseen pitfalls of cultural misunderstandings can be avoided with improvements on the leadership front.
Achieving performance in a professional and inclusive context
According to Said (2023), strategic leadership is an excellent way to foster professional performance in project management. Strategic leadership allows for integrative change culture to thrive. An integrative culture gives room for adjustments and improvements. Change is perceived as an opportunity instead of being regarded as a threat. Disney’s integrative culture was instrumental in the development and operation of Tokyo Disney Sea. The leadership approach meant that it involved the collaboration and integration of diverse perspectives and expertise from various sources. Disney recognized that to create a unique and compelling park experience, it needed to incorporate the local culture and context of Japan while maintaining the Disney brand’s core values and standards.
The projects involved in the globalization of Disney theme parks were extremely high risk. Achieving better performance in a professional and inclusive context requires a combination of effective project management practices and a commitment to promoting diversity, equity, and inclusion (DEI) within the organization (Kerzner, 2017). All the aspects of DEI can be achieved when leaders stick to strategic project management.
According to Gemünden, Lehner, and Kock (2018), the concept of a project-oriented organization involves an entrepreneurial and innovative approach that prioritizes the future and the interests of stakeholders. This type of organization uses temporary, task-based projects to establish, develop, and execute its strategies. Projects are also utilized to transform the organization’s structure, culture, and behaviour, as well as to create and introduce new products, services, and business models. The project-oriented organization is based on three main components, which are values, structures, and people.
In the globalization project, the business aspect was of great consideration as much as the customer experience. It was important to Disney Waltz that their clients were completely immersed in the virtual reality they had created for them. Leaders are often faced with making decisions where competing constraints are present (Kerzner, 2017). In these cases, it is impossible to meet all of these constraints simultaneously, so leaders need to prioritize them to determine which ones to address first. This may result in longer schedules or higher costs. While many companies typically focus on the triple constraints of time, cost, and scope, Disney’s theme parks in the US prioritize six constraints, which are time, cost, scope, safety, aesthetic value, and quality. Even in the globalization project, Disney chose to compromise on cost but retained quality and aesthetics as non-negotiable constraints (Kerzner, 2017).
Risk Management is a vital part of any project. Team leaders must have the skills and knowledge to identify risks in their internal and external environments. They should also be able to come up with active, proactive and reactive contingency plans to mitigate these risks. In an ideal environment, risk management and contingency planning should a continuous activity. In the Disney globalization project, there was an unforeseen risk that the local people in France, Japan and China would not be receptive to the cultural intrusion. The result was a huge debt that could not be offset and needed debt restructuring. There was also an unprecedented cost projection. Disney Waltz thought that people would pay for an experience.
Project team leaders and stakeholders need to be on the same page when it comes to value. According to Willumsen et al. (2019), the value created through project risk management is closely related to stakeholders’ perceptions of value. Their priorities and preferences, such as the potential outcomes of a project, have a significant impact on how they perceive the value of specific project risk management practices. In risk mitigation, different leaders may differ on what is the end goal of a project. Leaders who believe in the art could look at customer satisfaction as the end goal. On the other hand, those who are business-oriented will look at the trajectory of profit margins.
Conclusions and recommendations
The globalization of Disney theme parks has had its highs and lows. While it provides for a perfect case study to learn scalability in project management, it also offers an opportunity to learn from their mistakes. In determining the success of the project, this paper notes the project’s longevity and continued expansion. Issues such as financial performance, customer satisfaction and cultural impact are subjective. In the case study, Walt Disney’s plan to sell commercial and residential properties around Euro Disney to pay off their $3.5 billion debt failed due to a recession in Europe, leading to a depressed French real estate market and reduced leisure spending.
The recommendations can be derived from the initial failures of three projects. Euro Disney, a globalization project of Disney theme parks, failed due to a lack of cultural understanding. The park struggled to attract visitors because of its American-style opening hours, which did not suit French culture. Hong Kong Disneyland had a difficult start due to its location, far from the city with no viable transport options. The Chinese are very culture-sensitive and lack local cultural elements, leading to a lack of interest from the local population. Finally, Disney’s California Adventure project was designed to reflect the cultural diversity of California but failed to attract visitors due to its uninspired design and lack of cultural authenticity. Additionally, the park struggled with operational issues, such as long waiting times and low-quality attractions, which led to visitor dissatisfaction.
A closer look at cultural authenticity, economic placement, the economics of globalization, strategic leadership and communication is vital to Waltz Disney land going forward. It is possible to remain authentic to their core values and objectives and still make their work culturally palatable.
References
Diallo, M.F., Djelassi, S. and Kumar, V., 2021. Marketing and globalization: Relevance, trends and future research. Recherche et Applications en Marketing (English Edition), 36(3), pp.2-7.
Fladerer, M.P., Steffens, N.K. and Haslam, S.A., 2022. Bridging gaps in organizations: Leaders as entrepreneurs of identity.
Gemünden, H.G., Lehner, P. and Kock, A., 2018. The project-oriented organization and its contribution to innovation. International Journal of Project Management, 36(1), pp.147-160.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2019. Strategic management: Concepts and cases: Competitiveness and globalization. Cengage Learning.
https://books.google.co.ke/books?hl=en&lr=&id=WbWLDwAAQBAJ&oi=fnd&pg=PP1&dq=strategic+execution+in+the+globalization+of+disney+theme+parks&ots=uTvZ2gT3PT&sig=0hGOoniAaPiINp-cC9wQ_lthvWg&redir_esc=y#v=onepage&q&f=false
Kerzner, H. (2017). Project Management Case Studies (5th ed.). New York, NY: The International Institute for Learning.
Oberer, B. and Erkollar, A., 2018. Leadership 4.0: Digital leaders in the age of industry 4.0. International journal of organizational leadership. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3337644
SAID, W. (2023) ‘Change Management’, an MSc in Project Management, 7507BEQR Leadership For Strategic Execution, Lecture 4.
Willumsen, P., Oehmen, J., Stingl, V. and Geraldi, J., 2019. Value creation through project risk management. International Journal of Project Management, 37(5), pp.731-749.
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