The human resource management (HRM) has undergone dramatic changes with the globalization of technology and economy. In a fully globalized context, all become interconnected and no company can remain isolated. It forces HRM function to change accordingly. HRM traditionally plays an executive role, but nowadays plays a more strategic role.
This report is discussing the strategic role of HRM function within the Walt Disney Company. The second part is about the strategic role of HRM and globalization. The third part explores globalization issues in the Walt Disney Company. In this part, the author first introduces the background of the company, then talks about globalization impact on structure, practice and strategy of the company; Disney HRM and its business strategy; Disney HR function in globalization; the evaluation of globalization practice, policies of Disney; and finally gives his understanding of challenges and responsibilities with globalization. The final part concludes Disney's strategic HRM function from the perspective of globalization.
The Strategic Role of HRM and Globalization
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The traditional role of the Human Resource refers to "those aspects of managerial work that deal with employees (this is often used interchangeably with the term people management)" (Watson, 2006). In other words, Human Resource Management (HRM) means executive management of personnel-hiring, training, developing, organizing, and maintaining employees in an organization.
With the globalization of world economy and advances in technology, the role of HRM has changed accordingly. Globalization refers to "The intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events many miles away and vice versa" (Giddens, 1990, p.64). Globalization brings both opportunity and challenge to HRM of organizations. On the one hand, they can search wider areas for employees and get more qualified ones, and study excellent ways of HRM from foreign companies. On the other hand, globalization makes HRM more complex. The HRM style of the parent company may not applicable to the subsidiaries in the foreign countries, where political, economic, and cultural situations are all different. Besides, globalization makes organization structures change from bureaucracy to new forms such as flexible firm and networks. HRM is supposed to meet the needs of the changing organization.
Nowadays organizations are becoming more adaptive and flexible to cope with economic changes. Within this environment, HRM lays emphasis on strategy. "Strategy is the direction and scope of an organisation over the long term, ideally matching its resources to its changing environment and in particular its markets, customers or clients, so as to meet stakeholder expectations" (Johnson, Scholes, Whittington 2005). The department of HRM is now considered as a strategic partner of other departments. We can understand the strategic role of HRM more clearly from Diagram 2.0.
This model closely connects HR Strategy with organizational strategy. It lays emphasis on achieving strategic integration through human resource practices. Integration with organizational strategy refers to that the department of HRM not only align the organization strategy, but also contributes in the formation of organization strategy.
Diagram 2.0 Levels of integration with organisational strategy (Torrington Hall &Taylor 2005)
3.0 Globalization issues in the Walt Disney Company
3.1 Brief Background of the Walt Disney Company
The Walt Disney Company, often simply known as Disney, is the largest media and entertainment conglomerate in the world. The company was founded by brothers Walt Disney and Roy Disney on October 16, 1923. It was an animation studio at first, but now it has become one of the biggest Hollywood studios. The company responds to difficult economic conditions after the Second World War by expanding into televisions and theme parks. In 1955 it opened the first Disneyland Park in California and now it becomes the owner of eleven theme parks. Besides, it is also the owner and licensor of several television networks, including ABC and ESPN. Nowadays the Walt Disney Company has diversified into a number of entertainment mediums, including radio, television, publishing and travel. Since May 6, 1991 the company has been a component of the Dow Jones Industrial Average (http://en.wikipedia/wiki/ Walt-Disney-Productions/[6 Jan., 2010]).
3.2 Globalization Impact on Structure, Practice and Strategy of the Walt Disney Company
Globalization, which brings rapid technological and environmental changes in world economy, is forcing organizations to change their structures. "An organisation's structure refers primarily to the patterns and regularities in its division of labour by task or function, its hierarchies of authority and control mechanisms"(Thompson and McHugh, 1995:156). Nowadays organizations usually restructure themselves from rigid bureaucracies to leaner, more flexible structures because these new forms of organizations are highly adaptive and cost efficient. New organizational structures are often realized by downsizing, which seeks to reduce cost and bureaucracy by decreasing the size of organizations. Successful downsizing is closely aligned with the organization's strategy.
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The current financial crisis worsens the global economy. Within this environment Disney's theme parks have also met difficulties. In earlier February of 2009, Disney reported a 32 percent drop in profit in its first quarter of 2008, with its parks and resorts reporting revenue of $2.67 billion, down 4 percent. Disney also reported a decline in attendance and occupied room nights at Walt Disney World Resort and Disneyland Resort during the last three months of 2008 (Christopher Boyd, 'Management-structure overhaul planned for Disney World, Disneyland', the Orlando Business Journal (19 Feb, 2009), p.4.).
In a fully globalized context no company can remain isolated and therefore the Walt Disney Company has to change its former strategy to deal with current financial crisis. The company can do little to stop decreasing attendance, so it must change its internal structure. Walt Disney Parks and Resorts announced it would overhaul its theme park management structure with the goal of consolidating its decision-making process for Walt Disney World and Disneyland, and make efforts to streamline back-office operations. In order to align with organization strategy, the HRM department announced plans to cut 600 high-level management jobs through voluntary buyouts, 300 of them at Disney World in January, 2009. Later, the company announced three management changes: a new global business development team to be lead by Executive Vice President Nick Franklin will combine business and real estate development functions; Walt Disney Imagineering will be reorganized into a single practice merging resort development with attractions and entertainment development; Al Weiss, the company's president for worldwide operations, will lead an effort to merge the operating structures of Disney World and Disneyland to create a single domestic organization (Christopher Boyd, 'Management-structure overhaul planned for Disney World, Disneyland', the Orlando Business Journal (19 Feb, 2009), p.4.).
3.3 Disney HRM and its Business Strategy
Diagram 3.3 The human resource cycle (Fombrun, Tichy and Devanna, 1984)
In Diagram 3.3, a company is supposed to manage its human resources in the following stages. First, select qualified employees for certain work. Second, let them perform their work. Third, assess their performances. Then give rewards to those who performed excellently and help employees develop and perfect themselves. Finally, output the feedback of development to the first two stages.
Disney's HRM is similar to the above one, but it has some features of its own at the same time. Disney lays emphasis on company culture and regards it as an important component of business strategy. Similarly, Disney HRM is also responsible to maintain and promote company culture. The department of HRM starts introduction and education of company culture from the very beginning of selection. When applicants come for a job interview, Disney's HRM department will issue pamphlets that describe work conditions and the rules for employees to comply with. Besides, throughout the interview