SYN 960 Business Government & Society
Albright College
Application Test #1
Read the following case below and then answer the questionsfollowing the case.
Case: A Brawl in Mickey’s Backyard
Outside City Hall in Anaheim, California—home to the theme parkDisneyland—dozens
of protestors gathered in August 2007 to stage a skit. Wearingcostumes to emphasize their
point, activists playing “Mickey Mouse” and the “evil queen”ordered a group of “Disney
workers” to “get out of town.” The amateur actors were there totell the city council in a
dramatic fashion that they supported a developer’s plan to buildaffordable housing near
the world-famous theme park—a plan that Disney opposed.
“They want to make money, but they don’t care about theemployees,” said Gabriel de
la Cruz, a banquet server at Disneyland. De la Cruz lived in acrowded one-bedroom apartment
near the park with his wife and two teenage children. “Rent istoo high,” he said. “We
don’t have a choice to go some other place.”
The Walt Disney Company was one of the best-known media andentertainment companies
in the world. In Anaheim, the company operated the originalDisneyland theme park,
the newer California Adventure, three hotels, and the DowntownDisney shopping district.
The California resort complex attracted 24 million visitors ayear. The company as a whole
earned more than $35 billion in 2007, about $11 billion of whichcame from its parks and
resorts around the world, including those in California.
Walt Disney, the company’s founder, had famously spelled out theresort’s vision when
he said, “I don’t want the public to see the world they live inwhile they’re in Disneyland.
I want them to feel they’re in another world.”
Anaheim, located in Orange County, was a sprawling metropolis of350,000 that had
grown rapidly with its tourism industry. In the early 1990s, thecity had designated two square
miles adjacent to Disneyland as a special resort district, withall new development restricted
to serving tourist needs, and pumped millions of dollars intoupgrading the area. In 2007, the
resort district—5 percent of Anaheim’s area—produced more thanhalf its tax revenue.
Housing in Anaheim was expensive, and many of Disney’s 20,000workers could not
afford to live there. The median home price in the community wasmore than $600,000,
and a one-bedroom apartment could rent for as much as $1,400 amonth. Custodians at the
park earned around $23,000 a year; restaurant attendants around$14,000. Only 18 percent
of resort employees lived in Anaheim. Many of the rest commutedlong distances by car
and bus to get to work.
The dispute playing out in front of City Hall had begun in 2005,when a local developer
called SunCal had arranged to buy a 26-acre site in the resortdistrict. (The parcel was directly
across the street from land Disney considered a possible sitefor future expansion.)
SunCal’s plan was to build around 1,500 condominiums, with 15percent of the units set
aside for below-market-rate rental apartments. Because the sitewas in the resort district,
the developer required special permission from the city councilto proceed.
Affordable housing advocates quickly backed SunCal’s proposal.Some of the unions
representing Disney employees also supported the idea, as didother individuals and groups
drawn by the prospect of reducing long commutes, a contributorto the region’s air pollution.
Backers formed the Coalition to Defend and Protect Anaheim,declaring that “these
new homes would enable many . . . families to live near theirplaces of work and thereby
reduce commuter congestion on our freeways.”
Disney, however, strenuously opposed SunCal’s plan, arguing thatthe land should be
used only for tourism-related development such as hotels andrestaurants. “If one developer
is allowed to build residential in the resort area, others willfollow,” a company
spokesperson said. “Anaheim and Orange County have to addressthe affordable housing
issue, but Anaheim also has to protect the resort area. It’s notan either/or.” In support of
Disney’s position, the chamber of commerce, various businessesin the resort district, and
some local government officials formed Save Our Anaheim ResortDistrict to “protect our
Anaheim Resort District from non-tourism projects.” The groupconsidered launching an
initiative to put the matter before the voters.
The five-person city council was split on the issue. One councilmember said that if
workers could not afford to live in Anaheim, “maybe they canmove somewhere else . . .
where rents are cheaper.” But another disagreed, charging thatDisney had shown “complete
disregard for the workers who make the resorts sosuccessful.”
Sources: “Disneyland Balks at New Neighbors,” USA Today, April3, 2007; “Housing Plan Turns Disney Grumpy,” The New
York Times, May 20, 2007; “In Anaheim, the Mouse Finally Roars,”Washington Post, August 6, 2007; and “Not in Mickey’s
Backyard,” Portfolio, December 2007.
1. Using Disney as the focal organization, identify all therelevant stakeholders to this case.
2. For each of the stakeholders above, clear explain theirrespective “interest” or claim to the situation using evidence fromthe case. Also, indicate if each stakeholder is in
favor of, or opposed to, SunCal’s proposed development.
3. What sources of power do each of the relevant stakeholdersidentified above have in this case?
4. Based on the information you have included in yourstakeholder analysis/map, what do you believe is the sociallyresponsible decision for Disney? Justify your solution by applyingeither the ownership theory of the firm or the stakeholder theoryof the firm.
