The Walt Disney Company

a. The main facts about the activities of the company.

The Walt Disney Company was founded on October 16, 1923, by Walt and Roy Disney as the Disney Brothers Cartoon Studio. Disney, together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with four business segments: media networks, parks and resorts, studio entertainment and consumer products. With the creation of Mickey Mouse and Snow White and the Seven Dwarfs, the world?s first full-length animated feature, Walt Disney was able to establish itself as a name for quality entertainment.

The company?s objective is to be one of the world’s leading producers and providers of entertainment and information, using its unique portfolio of brands to differentiate its content, services and consumer products.

b. The ethical challenges this company is addressing

In China, Disney has responded to the following ethical challenges:
1) Labor Standards
It was reported that the hourly wage in one of their manufacturer?s Chinese factories was lower than the minimum wage standard of China, and it didn?t provide overtime (O.T.) to employees. However, in 1996, the company established the code of conduct for manufacturers with respect to labor standards and working conditions from several aspects such as compensation to prevent unethical labor practices. It states that manufacturers will, at a minimum, comply with all applicable wage and hour laws and regulations, including those relating to minimum wages, overtime, and maximum hours.

2) Advertising
Disney was criticized in China for using misleading advertising to attract more customers that promoted an idealistic view to the public that was not rooted in reality. However, Disney can educate the public on how to face realistic challenges through the inspirational lessons that are featured in their movies, and one of the main purposes of the theme parks is to provide an escape from reality and to make dreams come true.

3) Pricing
When the Hong Kong theme park opened, some Chinese questioned the ticket prices as being too high for China as a developing country. However, after some analysis, it was found that many domestic tourist places have comparable ticket prices. Also, with Disney?s strong brand value and unique entertainment features, the ticket pricing turned out to be reasonable. The Hong Kong theme park now has 4.5 million visitors each year.

c. What makes you think this company is ethical and why you trust it.

We feel that Walt Disney is an ethical company and we trust it for three key reasons:

1) Longstanding History
Disney has sustained almost 90 years of entertaining audiences, a 60 year legacy of contributing to nature conservation, and a 26 year history of community service.

2) Commitment to the Environment and the Community
A. Environment
Disney created new environmental goals to minimize its waste, carbon emissions, energy, and water usage, in addition to inspiring and educating its employees, guests, consumers, and business partners to take positive action for the environment

Here are just a few of the many environmental initiatives that Disney has implemented:

? The Green Standard
On Earth Day 2008, Disney introduced the Green Standard, which asks that every Cast Member and employees make simple environmentally minded changes in four areas: workspace, meetings and events, travel, and dining.

? Disney Worldwide Conservation Fund (DWCF)
Established in 1995, it awards grants to both local and global nonprofit organizations that positively impact wildlife, ecosystems and the communities that are closely linked to their survival. In 2010, DWCF granted almost $1.5 million to 64 nonprofit organizations in 33 countries.

? Disney Planet Challenge
A project-based learning competition designed for 4th - 6th grade students to empower them in environmental stewardship. This has reached more than 2,000 classrooms in all 50 states.

Disney recognizes their power to shape how children, one of their primary consumer targets, view the world and educate them on how to respect the environment for the rest of their lives.

B. Community
Disney focuses on brightening the lives of children in need around the world through global outreach programs, local community initiatives and the Disney VoluntEARS program.

In 2010, Disney donated more than $198 million in cash and in-kind support to various charities around the world.

Disney VoluntEARS is their program for employee volunteerism. In 2010, Disney VoluntEARS dedicated more than 495,000 hours of volunteer service. Since the program’s inception 26 years ago, VoluntEARS in over 42 countries have donated more than 5,000,000 hours of service.

3) Recognition as one of the most socially responsible companies in the world

A few of the many awards that it has received for its social responsibility efforts:
? Fortune Magazine - #4 in Corporate Social Responsibility, World?s Most Admired Companies (2010)
? Working Mother Magazine ? Best Green Companies for America?s Children (2010)
? Human Rights Campaign Corporate Equality Index ? 100% Rating (2010)
? Corporate Responsibility Magazine ? 100 Best Corporate Citizens (2010)
? Corporate Register Reporting Awards (2010) recognizing Best First-Time Report for The Walt Disney Company?s 2008 Corporate Responsibility Report

Even with all of their environmental and community initiatives, the company?s net income in 2010 increased 20% to $3.96 billion and revenue rose 5% to $38 billion, exemplifying how a company can be socially responsible and financially successful at the same time.

d. The possible challenges facing the company in the future and how you think this company may improve.

1) Maintain its highly recognized level of corporate social responsibility (CSR)

The company values making it a desirable place to work, reinforces the attractiveness of their brands and products, and strengthens their bonds with consumers and neighbors in communities around the world. Its core principles help guide the daily decisions and actions into the right direction, resulting in many CSR awards and indices: the CR Reporting Awards (CRRA), The Dow Jones Sustainability Indexes (DJSI), FTSE4Good Index, and KLD Indexes. Recently ranked #2 in the world in the ?2010 CSR Index? released by the Boston College Center for Corporate Citizenship and Reputation Institute, Disney Corporate Citizenship serves as a role model in corporate social responsibility in business. The company has a full range of CSR activities which include environment, community, and labor standards. Therefore, the first and most difficult challenge for the company is to maintain its high performance and efforts in CSR. And the most important issue is to prioritize social and environmental issues above profits. The financial crisis is now widespread; it could easily affect the entertainment business as people will spend more money on necessities, not entertainment. As a result, long-term strategy and planning are required to continue to be successful both financially and socially.

2) Avoid disputes regarding permission of land acquisition

To build one Disney theme park requires a significant area of land. As we know, land is now considered to be one of the scarce resources in every country and location is one of the key factors for Disney?s success. Therefore, the second challenge for the company is to have an attractive site without any community protest or demonstration. Business will be successful with the support from the community and a positive corporate image. In order to achieve this, the company has to intensively conduct research for accurate data, pay close attention to community response, and carefully cooperate with the local government to get strong support.

3) Make Disney everywhere meet its global labor standards

The world has become smaller because of globalization with people connecting to Walt Disney in many countries. Since Walt Disney is a global corporation with a great reputation, people will expect that Walt Disney has the same standard in all of its operations, codes of conduct, and labor standards. Many companies are targeting their business expansion in developing countries in Asia and South America where there can be unfair labor standards. Hence, to sustain the ethical behavior of the corporation and to assure its customers and employees? satisfaction, the company must pay attention to the labor standards and monitor them continuously throughout the world.