Disney has a multidivisional (M-form) organizational structure which is common in diversified companies with many interests. Supporting these interests are six business-type segments that leverage Disney’s brand equity and are operated by centralized command.
Disney’s functional groups serve to coordinate growth between its various business segments in such a way that each benefit. Movie characters from the Studios Content segment, for example, may be incorporated into rides and merchandise for Disney Parks, Experiences and Products.
Four geographic divisions also help to manage various socioeconomic and cultural differences among the company’s many markets. These are U.S. and Canada, Europe, Asia-Pacific, and Latin American & Other Markets.
Type
Description
Implementation
Matrix Structure
Combines functional and divisional structures, allowing for both expertise-based departments and cross-functional teams.
Disney employs a matrix structure with different segments: Media Networks, Parks, Experiences, and Products, Studio Entertainment, and Direct-to-Consumer & International. Within these segments, various divisions and teams handle specific functions. For example, Disney’s Studio Entertainment segment includes divisions for film, animation, and television production.
Divisional Structure
Organizes different business units or divisions based on products, services, or geographical regions.
Disney’s Parks, Experiences, and Products segment operates with a divisional structure. This segment oversees Disney’s theme parks, resorts, consumer products, and more. Each theme park, such as Disneyland or Walt Disney World, functions as a division under this structure.
Functional Structure
Groups employees based on their expertise and functional areas, promoting specialization.
In various parts of the company, such as Studio Entertainment, Disney employs functional structures. Within this segment, there are specialized teams for animation, live-action film production, and distribution.
Disney, formally known as The Walt Disney Company, is an American entertainment and media conglomerate that was founded by brothers Walt and Roy Disney in 1923.
Disney has a multidivisional (M-form) organizational structure which is common in diversified companies with many interests.
In the following sections, let’s delve into this structure in more detail in addition to some secondary characteristics of Disney’s structure.
Business-type segments or divisions
Critical to Disney’s organizational structure are segments or divisions arranged that focus on specific business types or industries. Each segment is managed by centralized corporate management and leverages the company’s brand equity as a competitive advantage.
There are six business-type segments:
Disney Parks, Experiences and Products – this includes Disneyland, Walt Disney World, Disney Publishing Worldwide, and Disney Cruise Line.
Disney Media & Entertainment Distribution – comprised of various direct-to-consumer streaming services and international business units. Examples include ESPN+, Hulu, Hotstar, and Disney Music Group.
Studios Content – these are the studios responsible for producing movie and streaming content for Disney brands, including Marvel Studios, Walt Disney Animation Studios, Pixar, and Lucasfilm.
General Entertainment Content – or any producer of entertainment or news content such as ABC News, ABC Entertainment, Disney Branded Television, FX, National Geographic, and Freeform.
ESPN and Sports Content – a standalone segment for the acquisition and production of live sports programming, news, and other non-scripted content.
International Content and Operations – responsible for the development and production of entertainment and sports content outside of the United States. This group encompasses Disney’s geographic divisions which are outlined below.
Functional groups
For Disney, functional groups are those that serve to coordinate growth between its various business segments in such a way that each benefit. For example, popular movie characters from the Studios Content segment are regularly incorporated into Disney Parks, Experiences and Products as rides and merchandise. The Studios Content segment also works with Disney Media & Entertainment Distribution when streaming adaptations of the popular Star Wars film franchise are produced.
Centralized corporate management is responsible for fostering effective coordination between the various segments. Groups are headed by executive leaders who report directly to CEO Bob Chapek and include Corporate Affairs, Enterprise Technology, Compliance, and Global Communications.
Geographic divisions
Geographic divisions help Disney manage sociocultural and economic factors that influence mass media, entertainment, and parks across different markets. For example, the amusements, menu items, and overall customer experience differ markedly between Disneyland Hong Kong and Disneyland Paris.
To manage these differences, there are four geographic divisions:
Media Networks: Handles television networks, cable channels, and radio businesses.
Parks, Experiences and Products: Manages theme parks, resorts, and merchandise.
Studio Entertainment: Oversees film, music, and theatrical productions.
Direct-to-Consumer & International: Focuses on streaming services and international operations.
Functional Elements:
Marketing
Finance
Human Resources
Operations
This structure allows Disney to focus on specific entertainment sectors while maintaining corporate functions that support the entire organization.
Comparison with Other Entertainment Giants
Here’s how Disney’s organizational structure compares to other major companies in the entertainment industry like WarnerMedia, Universal Studios, and Netflix:
Comparison with WarnerMedia
Similarities: Both Disney and WarnerMedia use a matrix structure that includes both functional and divisional components, allowing for specialized management of diverse entertainment portfolios.
Differences: WarnerMedia tends to have a more integrated approach within its divisions, especially after merging with AT&T, focusing more on synergies across telecommunications and media. Disney maintains a clearer separation between its divisions, particularly with its direct-to-consumer strategies.
Implications: Disney’s approach allows for strong brand identity within each division, enhancing consumer loyalty and brand strength. WarnerMedia’s integrated strategy may offer better resource utilization and cross-promotion across platforms.
Comparison with Universal Studios
Similarities: Like Disney, Universal Studios operates with divisional structures that separate theme parks and entertainment production.
Differences: Universal Studios, a part of Comcast NBCUniversal, integrates more closely with its parent company’s cable and digital services, whereas Disney’s divisions operate more autonomously under the broader corporate umbrella.
Implications: Disney’s structure might promote more innovation and tailored experiences in its divisions, potentially leading to higher creativity and divisional success. Universal’s tighter integration can streamline operations and marketing strategies but may limit individual divisional autonomy.
Comparison with Netflix
Similarities: Both companies focus heavily on direct-to-consumer platforms, especially with Disney+ and Netflix’s streaming service.
Differences: Netflix operates under a more functional structure with a global focus on streaming, without the divisional separations found in Disney. Disney’s structure supports a wider range of product lines and geographical markets.
Implications: Disney’s diversified structure allows for significant cross-promotion and monetization across different platforms and products, enhancing revenue streams. Netflix benefits from its singular focus, which may lead to greater efficiency and agility in the streaming market.
Strategic Insights
Disney’s matrix organizational structure allows it to leverage its massive and diverse portfolio effectively, promoting operational efficiency and innovation across its various business segments. Compared to its peers, Disney’s ability to maintain distinct brand identities while benefiting from cross-divisional synergies provides a competitive advantage in both content creation and global market penetration. The balance of divisional independence with functional support helps Disney adapt to market changes and consumer preferences more fluidly than companies with more rigid structures. This flexibility is critical in the rapidly evolving entertainment industry.
Key Highlights
Multidivisional Structure (M-Form): Disney employs a multidivisional organizational structure, which is common among diversified companies with varied interests. This structure helps the company manage its diverse operations effectively.
Business-Type Segments: Disney is organized into six distinct business segments:
Disney Parks, Experiences and Products: Manages theme parks, resorts, merchandise, and publishing.
Disney Media & Entertainment Distribution: Includes streaming services like ESPN+, Hulu, Hotstar, and Disney Music Group.
Studios Content: Responsible for producing movie and streaming content, including brands like Marvel Studios, Pixar, and Lucasfilm.
General Entertainment Content: Produces entertainment and news content for various platforms.
ESPN and Sports Content: Focuses on live sports programming, news, and non-scripted content.
International Content and Operations: Develops and produces content outside of the United States and encompasses Disney’s geographic divisions.
Coordination through Functional Groups: Disney’s functional groups ensure coordination and growth between business segments. This synergy allows characters from Studios Content to be integrated into Disney Parks, Experiences, and Products, enhancing the overall brand experience. These groups report to executive leaders and the CEO, Bob Chapek.
Centralized Corporate Management: The coordination between different segments is managed by centralized corporate leadership, facilitating effective collaboration and leveraging the strengths of each division. Groups like Corporate Affairs, Enterprise Technology, Compliance, and Global Communications play a role in this coordination.
Geographic Divisions: Disney’s geographic divisions are designed to manage socio-cultural and economic differences across markets. These divisions include U.S. and Canada, Europe, Asia-Pacific, and Latin American & Other Markets. They address variations in customer preferences, local culture, and market conditions.
Leveraging Brand Equity: Disney’s strong brand equity is a competitive advantage that’s leveraged across all segments, enhancing the appeal of its products, services, and experiences.
Holistic Approach: Disney’s structure demonstrates a holistic approach to managing its diverse operations, ensuring that its various business segments work together to maximize their collective impact.
Disney’s main shareholders include Robert A. Iger, chief executive officer (CEO) of The Walt Disney Company between 2005-2020 and he returned as CEO by 2022. Other significant individual shareholders, as of 2022, comprise Susan E. Arnold, Christine M. McCarthy, and Alan N. Braverman. Main institutional investors include Blackrock Inc. with 6.4% and The Vanguard Group with 8%, respectively.
It would be hard to argue for a more recognizable entertainment brand than Disney. Disney is, of course, synonymous with Walt Disney, but it was Walt and his brother Roy who started the company in 1923 in Burbank, California. Disney content is now broadcast on over 100 channels in 34 different languages across the globe.
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Costco’s geographic divisions reflect its strong presence in the United States combined with its expanding global presence. There are six divisions in the country alone to reflect its standing as the source of most company revenue.
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Dell has a functional organizational structure with some degree of decentralization. This means functional departments share information, contribute ideas to the success of the organization and have some degree of decision-making power.
eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.
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IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.
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McKinsey & Company has a decentralized organizational structure with mostly self-managing offices, committees, and employees. There are also functional groups and geographic divisions with proprietary names.
Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.
Nestlé has a geographical divisional structure with operations segmented into five key regions. For many years, Swiss multinational food and drink company Nestlé had a complex and decentralized matrix organizational structure where its numerous brands and subsidiaries were free to operate autonomously.
Nike has a matrix organizational structure incorporating geographic divisions. Nike’s matrix structure is also present at the regional and sub-regional levels. Managerial responsibility is segmented according to business unit (apparel, footwear, and equipment) and function (human resources, finance, marketing, sales, and operations).
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Starbucks follows a matrix organizational structure with a combination of vertical and horizontal structures. It is characterized by multiple, overlapping chains of command and divisions.
Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson. Tesla’s headquarters in Austin, Texas, decide the strategic direction of the company, with international operations given little autonomy.
Toyota has a divisional organizational structure where business operations are centered around the market, product, and geographic groups. Therefore, Toyota organizes its corporate structure around global hierarchies (most strategic decisions come from Japan’s headquarter), product-based divisions (where the organization is broken down, based on each product line), and geographical divisions (according to the geographical areas under management).
Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
