Read “Case Study 7.2: Don’t Mess with the Mouse: Labor Negotiations at Disney” on pp. 387-390 in Ch. 7 of
Meeting the Ethical Challenges of Leadership:
Casting Light or Shadow.
Write a 250- to 300-word response to the following:
- Does the wide gap between the pay of low wage employees and Disney executives cast the shadow of privilege?
- Do you feel this gap is ethically justified? Why or why not?
- Should all workers be guaranteed a “living wage”? Why or why not?
- How might this scenario relate to learning organizations?
1131486 - SAGE Publications, Inc. (US) © iber base for traditional newspapers is shrinking as more people access their news through phones, tablets, and computers. The chain’s owners believe that going to a digital format will ensure that its publications survive. Converting to a digital format is a major challenge, particularly for a newspaper with a long history like South Town. Every aspect of the operation will be impacted, including the news department, advertising, and circulation. The electronic version of the paper will be much shorter, requiring layoffs in the newsroom. At the same time, new technical support staff will be hired. Alicia Pia has been assigned as the new publisher at South Town Press to oversee the transition. Pia has a long history in the newspaper business. She believes that journalism is more important than ever given recent attacks on the media. Alicia recently led the move to digital publishing at another of the company’s papers in the Midwest. That transition succeeded but at a high cost. Employees didn’t think they could make the change, which slowed the process, and some quit. Salespeople struggled to sell digital ads and the number of online subscriptions was low at first, though circulation eventually rebounded. Some of the initial digital editions of the paper crashed due to technical problems. Alicia wants to learn from her prior experience to ensure a smoother switch over at South Town Press. She believes that South Town employees have the ability to make the change but, like the staff at her last post, lack confidence in their ability to do so. She also knows that layoffs will initially lower employee morale. Pia takes a couple of days before arriving at South Town to develop a strategy for the transition. In addition to all the technical details, she gives careful thought to whom she needs to influence and what she wants to communicate to each group and individual. She knows she wants to boost the confidence of both the entire staff of 40 while setting a high standard for her leadership team made up of the news editor, information systems manager, circulation manager, and advertising manager. She wants all employees to know that they are doing important work that supports a greater cause—a free press. However, she is not sure how he should go about conveying these messages to her staff and team. Discussion Probes 1. How should Alicia frame this change to employees at South Town Press? What ethical messages should she communicate? What alternative frames might be 1131486 - SAGE Publications, Inc. (US) © offered by workers and subscribers? How should she respond to these interpretations? 2. What obstacles does Pia face in communicating high expectations to the entire staff? What advantages does she have? 3. What initial steps should Alicia take when arrives at South Town? 4. How can the new publisher foster self-efficacy in her entire staff? Promote a learning orientation? 5. How can Pia use indirect channels to communicate high expectations to each individual member of her leadership team? CASE STUDY 7.2 DON’T MESS WITH THE MOUSE: LABOR NEGOTIATIONS AT DISNEY Disney employees were excited to learn that they would be getting a $1,000 bonus after the federal government lowered the tax rate for major corporations. The Disney company announced that it would give a portion of a $1.6 billion tax windfall to 125,000 nonmanagement workers. The excitement was short-lived, however, for the company’s union employees. Disney officials threatened to withhold the bonus unless members of the Service Trades Council Union representing housekeepers, kitchen staff, shop clerks, and other low-wage employees ratified the company’s latest contract offer. Ninety-three percent of the union membership had previously rejected the contract proposal, which called for a 50-cent an hour raise over two years with a $200 bonus. Union leaders cried foul, claiming that the company was engaged in “extortion,” punishing members who had voted against the contract proposal. The union representing employees at Disneyland Resort filed a complaint under the National Labor Relations Act, alleging that Disney was withdrawing the bonus as a threat against workers. For its part, Disney claimed that the bonus should be included as part of any settlement. Those familiar with Disney’s history shouldn’t be surprised by the latest labor unrest. In 1941, Disney cartoonists and illustrators went on strike, unionizing and asking for higher wages. Walt and Roy Disney retaliated, threatening workers and firing head animators. Later Walt would use the House Un-American Activities Committee as a platform to condemn the strikers as Communists. In 2008, visitors to Disney parks were greeted by union protestors dressed as Snow White, Tinkerbell, and other Disney figures holding picket signs. In 2017, the company was forced to pay 16,000 Florida employees $3.8 million in back wages for illegally charging them for costumes. Lawsuits by laid off technology employees claim that Disney illegally replaced them with foreign workers. 1131486 - SAGE Publications, Inc. (US) © While labor conflict is nothing new to the home of Mickey Mouse, recent negotiations were particularly tense. That’s because the company took a hard-line stance even as corporate profits and executive salaries soared. Of the company’s recent $10.7 billion profit, $2.2 billion came from its theme parks. (Disney raised prices on daily and multiday ticket packages to its properties.) Disney CEO Robert Iger made $43.9 million, chief operating officer Tom Staggs received $15.6 million, and chief financial officer Christine McCarthy took home $10.2 million. In addition to holding public protests and sponsoring a rally featuring Bernie Sanders, union leaders commissioned a report by researchers at Occidental College. The investigators found that most union employees have been unable to keep up with soaring housing costs in Orange County, California, where Disney is the largest employer. Eighty-five percent earn less than $12 an hour, which puts them below the poverty line for a family of four. Many are homeless, living out of their cars or at the homes of friends and relatives. Three quarters say that they do not earn enough to meet basic expenses. Sixty percent said the food they bought didn’t last the month. According to the authors of the report, The Walt Disney Company promotes Disneyland Resort as the “happiest place on earth.” But for many of the approximately 30,000 people who work there, it is not the happiest place to work. Despite steep increases in the cost of housing and other necessities, Disneyland workers have suffered steady pay cuts and are struggling to make ends meet. Spurred by the report’s findings, Disney labor leaders in Anaheim placed a “living wage” initiative on the ballot, which proposed raising the minimum wage to $15 and then $18 an hour for hospitality companies receiving a city tax subsidy. Disney settled with the Disney World and Disneyland unions before the initiative came to a vote. Disney boosted starting wages to $15 an hour at both theme parks and guaranteed future raises over the life of the contract. The living wage ballot measure then passed by a comfortable margin. The head of the Anaheim Chamber of Commerce called the ballot result a “tragic outcome” that would drive away future hospitality projects, costing jobs. A union spokesperson called his claim “laughable.” Discussion Probes 1. Are you surprised that Disney has a history of labor unrest? Are you less likely to go to Disneyland and Disney World knowing how workers have been treated by management in the past? 2. Does the wide gap between the pay of low wage employees and Disney executives cast the shadow of privilege? Is such a wide gap ethically justified? 3. Was withholding the bonus from union employees an unfair negotiation tactic or a legitimate strategy? 4. What role did the Occidental report play in the union’s success? 1131486 - SAGE Publications, Inc. (US) © 5. Do you think Disney would have agreed to meet union demands if it hadn’t been for the threat of the ballot initiative? Was this an unfair negotiation tactic? �. Should all workers be guaranteed a “living wage”? What impact would raising the minimum wage have on business and the economy? Sources Bergfeld, K., & Bergfeld, M. (2017, November 21). Cartoons and class struggle. Jacobin. Calfas, J. (2017, March 17). Disney is going to pay $3.8 million to employees who were charged for their costumes. Fortune. Caron, C. (2018, August 25). Walt Disney World workers reach deal for $15 minimum wage by 2021. The New York Times. Isidore, C. (2018, February 20). Union workers want Disney to pay $1,000 tax cut bonuses. CNNMoney. Madrid, M. (2018, February 23). The happiest place on earth? Not for Disney employees. The American Prospect. Martin, H. (2018, November 12). Anaheim’s “living wage” initiative is expected to pass. A business advocate calls it a “tragic outcome.” Los Angeles Times. Medina, J. (2018, February 28). Trying to make ends meet with job at the happiest place on earth. The New York Times, p. A1. Noguchi, Y. (2018, February 22). Disney says promised bonus depends on workers signing wage contract. NPR. Picchi, A. (2018, July 27). Disneyland’s minimum wage gets a boost to $15 an hour. CBS News. Preston, J. (2016, January 25). Lawsuits claim Disney colluded to replace U.S. workers with immigrants. The New York Times. Rainey, J. (2017, January 13). Robert Iger’s pay as Disney CEO dips slightly in 2016 to $43.9 million. Variety. Roosevelt, M. (2018, February 27). Disneyland Resort workers struggle to pay for food, housing and medical care, union survey finds. Orange County Register. Roosevelt, M. (2018, February 28). Disney unions ballot drive seeks $18 an hour at hospitality companies that receive Anaheim subsidies. Orange County Register. 1131486 - SAGE Publications, Inc. (US) © CASE STUDY 7.3 ROOTING OUT THE WEED OF HAZING Joining a sorority or fraternity could be hazardous to your health. A number of Greek societies put pledges through dangerous initiation rituals. Some victims of hazing suffer posttraumatic stress, injuries, paralysis, and scarring. A few die. At least one hazing death has been recorded every year in the United States from 1967 through 2017, according to hazing expert Hank Nuwer, a journalism professor at Franklin College. (The streak extends back to 1954 if Canada is included in the count.) Since the first known hazing death in the United States in 1873, pledges have perished from a variety of causes, including, for example, – being run over by a train – electrocution – burning – suffocation after a self-dug grave collapsed – choking on oil-soaked liver – beatings – drowning – alcohol poisoning – car wrecks – water