Disney’s Organizational Culture And Innovation Performance

Abstract

The concept of organizational culture and innovation have well researched in organizational theory. Their important role of them has also gained a lot of attention in the manufacturing industry. However, only a few of researchers paid attention to their relationship. The tourism industry, as an important sector, which benefits for economic development at both country and firm-level, has been ignored by researchers. The core aim of this essay is to assess the relationship between organizational culture and innovation performance in the tourism industry. In order to achieve the objective of this paper, the Walt Disney Company is taken as an example because of its reputation and diversity as well as its success in innovation performance.

Keywords: Organizational Culture, Innovation performance, Disney

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1. Introduction

The author search for journal articles using keywords organizational culture, corporate culture, and innovation on the ScienceDirect database. Only eleven journal articles’ topics include culture (organizational or corporate culture) and innovation together. Among them, six articles studied the relationship between culture and innovation. Two of them analyzed national culture and four discussed organizational culture. All of these four articles are empirical researches. Sullen et al. (2014) collected data from the professional service industry, law firms, and developed an empirical model based on Schein’s organizational culture model. Also, in 2014, Abdullah, et al. (2014) published an article that studied the relationship between organizational culture and product innovativeness by investigating SMEs in Malaysia. Julia et al. (2016) did an investigation in Spain companies to study the link between organizational culture and innovation. Similar to Julia el al. (2016), Shahzad et al. (2017) explored the relationship between organizational culture and innovation performance in the author’s country. They focused on Pakistan’s software industry.

Through reviewing the previous literature, it could be concluded that the relationship between organizational culture and innovation have not received enough attention considering their important role in the company. In addition, despite recent researchers pointing out the role of organizational culture as one of determining factors in a company, empirical researches have lacked as Abdullah, et al. (2014) and Julia et al. (2016) argued, especially in the service industry (Sullen et al., 2014).

Innovation has become the core pillar of achievement for every organization in the current business world. a report from the Organisation for Economic Co-operation and Development (OECD, 2010) highlights the potential of innovation for long-term economic growth. Innovation is a key driver of economic development and plays a crucial role in competition at both the national and firm levels (Cefis & Marsili, 2006; Tellis, Prabhu, & Chandy, 2009).

Innovation is now a core part of organizational strategies to achieve and sustain a competitive advantage in the market (Shahzad, et al., 2017). Prior literature proposes a positive link between innovation and a range of desired performance outcomes. Consequently, empirical interest continues to increase understanding- ing of paths to innovation. Not surprisingly, much of this research has focused on manufacturing firms. Few studies document processes that support innovation in service firms that deliver high “value-added” services, by comparison.

Organizational culture as the key to fostering pro-cesses that support innovation is one speculation (Khazanchi, Lewis, & Boyer, 2007; Tellis et al., 2009)

Innovation is the key to organizational survival and therefore the study of processes that support innovation should be of interest to researchers and practitioners alike. Schein's multi-layered model of organizational culture offers a useful framework for thinking about processes that foster innovation. A defining characteristic of the model is the subtle but important distinctions between the varied “layers” of organizational culture (i.e., values and norms, artifacts and behaviors). The basic assumption of this study is that Schein's model offers a tractable explanation of cultural processes that support organizational innovation, especially in service firms. Despite the intuitive appeal and practical value of Schein's conceptual framework, empirical research in relation to the model is limited. This paper develops a rationale for an empirical model based on Schein's conceptual model; the study reports a test of an empirical model. Data collected from approximately 100 principals of law firms provide a suitable empirical context for a test of the model. The findings generally support the hypothesized relationships. A key result is how layers of organizational culture, particularly norms, artifacts, and innovative behaviors, partially mediate the effects of values that support innovation on measures of firm performance. The findings have implications for theory and practice, especially in relation to building an organizational culture within professional service firms that foster innovative behavior.

Schein (1992) considers organizational culture as a social force that is largely invisible yet very powerful. Empirical evidence suggests that organizational culture significantly influences market-oriented behaviors, and market and financial performance (Homburg & Pflesser, 2000), employee attitudes and organizational effectiveness (Gregory et al., 2009), and has a greater contribution to knowledge management and organizational effectiveness than organizational strategy and structure (Zheng, Yang, & McLean, 2010). An organization's culture strongly influences employees' behaviors beyond formal control systems, procedures, and authority (O'Reilly, Chatman, & Caldwell, 1991). As such, organizational culture is a powerful means to elicit desired organizational outcomes.

However, there are only a few studies examining the relationship between organizational culture and product innovation among SMEs in Malaysia. This study is aimed to bridge the gap by examining the relationship between organizational culture and product innovation

The concept of corporate sustainability has gained importance in recent years in both organizational theory and practice

The importance of innovation at various levels (national, industrial, organizational and individual) has been firmly established. Organizations that fail to innovate are at risk of losing their competitiveness and sustainability (Tidd et al., 2001).

The importance of innovation at various levels (national, industrial, organizational and individual) has been firmly established. Organizations that fail to innovate are at risk of losing their competitiveness and sustainability (Tidd et al., 2001).

A company’s organizational culture or corporate culture is a

2. Literature Review

2.1 Organizational Culture

The concept of organizational culture originates in cultural anthropology and is popular within the organizational behavior, management, and marketing literature (e.g., Gregory, Harris, Armenakis, & Shook, 2009; Homburg & Pflesser, 2000; Schein, 1992). Organizational culture refers to the values and beliefs that provide norms of expected behaviors that employees might follow (Schein, 1992). Many definitions of organizational culture exist, however, organizational culture generally refers to the organizational values communicated through norms, artifacts, and observed in behavioral patterns (Homburg & Pflesser, 2000; Schein, 1992).

While most prior research considers organizational culture as a single construct, Schein (1992) considers the importance of analyzing and distinguishing between several layers of culture (see Fig. 1). Further, Schein (1992) attributes the confusion in definitions of culture to failure in differentiating the levels at which organizational culture manifests correctly.

2.2 Innovation

Innovation has received a lot of attention by researchers in both theoretical and practical areas. Diverse definitions from various schools of thought were stated. Among these, the concept that defined by the Organization for Economic Co-operation and Development (OECD, 2005) is widely accepted and popularly cited. OECD defined innovation as “transforming an idea to a marketable product or service, new or improved manufacturing/distribution method or new social service method”. This definition described that innovation converts innovative thoughts of organization or employees into practice and then benefits to the company. These creative ideas focus on providing products or services that could meet customer and market needs. Hogan, et al. (2011) coincided with OECD’s definition and proposed a Three-point Model of organizational innovation, which includes client-focused, marketing-focused and technology-focused (Suellen, et al., 2014).

2.3 Relationship between Organizational Culture and Innovation

3. The Walt Disney Company

The Walt Disney Company started in 1923 as an unknown cartoon studio and has grown to an international media corporation with operations in more than 40 countries and approximately 166,000 employees (Global Footprint, n.d.). The Walt Disney Company, together with its subsidiaries, is a diversified worldwide entertainment company with operations in four business segments: Media Networks, Studio Entertainment, Direct-to-Consumer and International; and Parks, Experiences and Consumer Products. Disney is a Dow 30 company and had annual revenues of $55.1 billion in its Fiscal Year 2017 (“The Walt Disney Company Announces”, 2018).

The Walt Disney Company is a diversified international corporate. The four business segments mentioned above are the manufactory industry and also a service industry. According to the development history of The Walt Disney Company, Disney is popular in the world because its cartoon movies at the beginning. And then, based on the cartoon characters, Disney created cartoon products. Now, Disney is very famous for its movies. cartoon products, and theme parks. Disney is a diversified international corporate. The four business segments mentioned above are not only the manufactory industry but also the service industry. Therefore, Disney is taken as an example to analyze in this paper.

The other reason that Disney is chosen is its success in innovation. In April, 2019, The Walt Disney Company has taken the No. 4 spot on Fast Company’s list of “The World’s 50 Most Innovative Companies” (“Disney Ranks High Among”, 2019). How The Walt Disney Company find its way to creative success? According to Govindarajan (2016) stated, the key to success is innovation. In addition, William (2019) argued that Disney’s organizational culture contributes to excellent business performance, the Disney brand’s popularity and also motivates employees to maintain behaviors for strategic success.

For that reason, this essay will discuss the relationship between Disney's organizational culture and innovation performance.

The Walt Disney Company’s corporate culture (Williams, 2019):

1. Innovation
2. Decency
3. Quality
4. Community
5. Storytelling
6. Optimism

Our Mission (About The Walt Disney Company, n.d.).

The mission of The Walt Disney Company is to entertain, inform and inspire people around the globe through the power of unparalleled storytelling, reflecting the iconic brands, creative minds and innovative technologies that make ours the world’s premier entertainment company.

14 iconic milestones of Disney innovation (Lev-Ram, 2014)

• 1929, Disney releases Steamboat Willie, pioneering “fully synchronized” sound cartoons.
• 1937, Snow White and the Seven Dwarves, the first full-length animation feature, makes its debut.
• 1963, The Tiki Room opens at Disneyland, introducing parkgoers to audio-animatronics (electro-mechanical robots).
• 1977, Lucasfilm releases Star Wars, the first film shot with the motion-control camera.
• 1982, The re-recording of Fantasia breaks ground as the first film done in digital sound.
• 1986, Captain EO, one of the first “4-D” films (a 3-D movie incorporating special effects such as smoke and lasers), opens at Disneyland.
• 1988, ABC airs the first network broadcast in high-definition television, the live-action version of 101 Dalmations.
• 1995, Pixar Animation Studios releases Toy Story, the first feature-length computer-animated film.
• 2005, In an unprecedented deal, Disney makes full-length TV episodes available on Apple’s iTunes Music Store.
• 2006, ABC becomes the first network to offer ad-supported TV episodes online for free, via its own branded player.
• 2009, ESPN launches the SportsCenter app, the most downloaded sports app of all time (with more than 55 million downloads).
• 2013, MagicBands debut at Disney World, allowing guest to enter the park and pay for food using the RFID-enabled wristbands.
• 2014, Disney stores adopt Apple Pay, letting customers make purchases using near-field communications capabilities on few iPhones
• 2015, Later this year, Disney will release an Apple Watch with guess who on the face.

Technological landmarks first introduced in Disney’s theme parks include (“Disney Blends Imagination”, n.d.):

• A 360-degree motion picture technology using multiple synchronized cameras (Circarama, U.S.A., Disneyland, 1955); later refined and updated for multiple attractions around the world including Le Visionarium (Disneyland Paris, 1992).
• The first daily operating monorail system in the United States (Disneyland, 1959).
• The first roller coaster to use cylindrical rails and urethane wheels (Matterhorn Bobsleds, Disneyland, 1959).
• The creation of Audio-Animatronics figures, which allow humans, animals and creatures of fantasy to be animated in three dimensions with an astonishing degree of realism (Walt Disney’s Enchanted Tiki Room, Disneyland, 1963).
• The first computer-controlled thrill ride (Space Mountain, Magic Kingdom, Walt Disney World Resort, 1975).
• An advanced 3-D motion picture photography system (Magic Journeys, Epcot, Walt Disney World Resort, 1982); later enhanced for multiple attractions around the world including “Mickey’s PhilharMagic” (Magic Kingdom, Walt Disney World Resort, 2003).
• A thrilling attraction with random programming for an unpredictable ride and drop experience (The Twilight Zone™ Tower of Terror, Disney’s Hollywood Studios, Walt Disney World Resort, 1994).
• State-of-the-art vehicles that move through three-dimensional environments with a capacity for random motion-simulator effects (Indiana Jones Adventure, Disneyland, 1995).
• Trackless ride vehicles that follow a random path by relying upon unseen transmitters in the floor (Pooh’s Hunny Hunt, Tokyo Disneyland, 2000).
• A virtual hang-gliding experience that provides a panoramic view of sweeping landscapes augmented by scents released during key scenes (Soarin’ Over California, Disney California Adventure, 2001).
• A custom ride system that combines centrifuge technology with sophisticated virtual imagery for an exhilarating astronaut adventure to Mars (Mission: SPACE, Epcot, 2003).
• A blend of digital projection and voice-activated, real-time animation that permit live, unscripted conversations between theme park guests and an animated character (Turtle Talk With Crush, Epcot, 2004).
• The first Audio-Animatronics figure that features lips with a wide range of lifelike movements, and digitally animated eyes that can look directly at the particular guest with whom he is conversing (Mr. Potato Head in Toy Story Mania!, Disney California Adventure and Disney’s Hollywood Studios, 2008).
• Guests with visual disabilities can explore Walt Disney World theme parks in a whole new way through a handheld Disney-designed device that provides detailed audio descriptions of outdoor areas (Assistive Technology Device, Walt Disney World, 2010).
• Interactive Mickey Ear hats that glow in myriad colors, commanded with the latest technology to complement the imagery and beat of the fireworks and spectaculars (Glow With The Show, Disney California Adventure, 2012).
• Using spells in the form of trading cards, guests become active players in a role-playing game and are able to interact with Disney characters at an entirely new level (Sorcerers of the Magic Kingdom, Magic Kingdom, 2012).
• A high-tech detection device called F.O.N.E., or Field Operative Notification Equipment, helps maneuver guests through an interactive, undercover mission (Disney Phineas and Ferb: Agent P’s World Showcase Adventure, Epcot, 2012).
• Radio Frequency (RF) located in MagicBands interacts with touchpoints located in places such as resort room doors, theme park and water park entrances, Disney FastPass+ entrances, payment locations and on mobile devices used by Cast Members (MyMagic+, Walt Disney World, 2014).
• Featuring an innovative, first-of-its-kind ride system, the mine cars rock back and forth during twists, turns, hills and drops (Seven Dwarfs Mine Train, Walt Disney World, 2014).

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