“The Walt Disney Company is a leading diversified international family entertainment and media enterprise with five business segments: media networks, parks and resorts, studio entertainment, consumer products and interactive media.” (The walt disney, n.d.) At year end of 2013, the company had net revenues of $45 billion, up from $42.3 billion the previous year and net income of $6.1 billion, up from $5.7 billion the previous year. ("Walt disney co," 2014)
Enterprise Risk Management
Risk management is a way for firms to grow and create value. Enterprise risk management programs give organizations the tools they need to make quicker decisions with confidence. Steven Hunt, vice president of research at Forrester Research states, “It’s like driving a car: You can only go fast if you know you have good brakes.” (Buchanan, 2004) “As organizations develop their risk management processes, they can use those processes to consider the opportunity side of risk and use those processes to both protect and create value.” (Frigo & Anderson, 2014) The following will be an overview of The Walt Disney Company’s risk management practices.
At The Walt Disney Company, they understand that the people are one of their biggest assets. The success of the company wouldn’t be possible without their employees, from top-level executives to individual employees, which they refer to as cast members. With that being said, it would only make sense that they implement a comprehensive risk management strategy for workers’ compensation. Disney recognized that reputation is another one of their biggest assets and disregarding the safety of their employees and care for injured workers would be a contradiction to their closely held values and reputation. (Gusman, 2008)
The impact of Disney’s loss control program on the company’s claims experience helped Disney become one of three winners in the second annual national Underwriter Award For Excellence in Workers’ Compensation Risk Management program. (Gusman, 2008) An example of cost savings for Disney was at the Walt Disney World Resort in Florida. After implementing their multifaceted loss control and safety program, the OSHA frequency rate fell 60.3 percent from 2002 to 2007. (Gusman, 2008) During this same time period, the lost-time frequency rate fell nearly in half. (Gusman, 2008) Work related injuries are inevitable, but Disney has programs in place to get employees back to work as soon as possible. They focus on helping employees to stay employed during their recovery process by helping to minimize their time away from work. They believe “it is not only important to know limitations, but it is also essential to know what the injured worker can do.” (Gusman, 2008)
Another way Disney manages risk is by implementing safety programs at their parks for customers. Visitors to Disney parks receive safety-themed literature filled with Disney characters. (Bradford, 2005) Parks also...