Disney Intends to Overhaul Planning Unit

By LAURA M. HOLSON

LOS ANGELES, March 25 – The Walt Disney Company announced Friday that it was reorganizing its corporate strategic planning division, giving more authority to the company’s individual units.

Disassembling the strategic planning division is one of the first acts by Robert A. Iger, the president who will succeed Michael D. Eisner in September as chief executive, and one that many people on Wall Street had expected he would make.

Many of the functions of the strategic planning division will be absorbed into Disney’s business units, including parks and resorts, consumer products and media networks. These functions include small acquisitions and product development.

Peter E. Murphy, a longtime Disney veteran who has been chief strategic officer since 1998, will step down from that position and serve as an adviser to Mr. Iger.

A small corporate group will remain and work with Disney’s chief financial officer, Thomas O. Staggs, to develop Disney’s five-year plan and explore corporate acquisitions as well as new business opportunities.

In an interview on Friday, Mr. Murphy said he would focus on two areas important to Mr. Iger: new technology and international expansion.

Mr. Murphy, a 17-year Disney veteran, oversaw or was involved in several of the company’s major acquisitions, including Miramax Films, Fox Family Worldwide, Baby Einstein and the Muppets franchise, and Disney’s stakes in E Entertainment Television and US Weekly. He also served as chief financial officer of ABC Inc. after the acquisition of Capital Cities/ABC.

“I’m very proud of what we’ve accomplished as a company, what our strategic planning division has accomplished and what I’ve accomplished personally,” Mr. Murphy said. “I had a job to do, and I did it with a lot of energy and enthusiasm. Sometimes there were unpopular business decisions to make, but I’ve played a significant role in transforming this company.”

In many ways, the reorganization of the strategic planning division at Disney signals the passing of an era. Mr. Murphy joined the division in 1988, and it attracted some of the brightest young executives in the media business to aid in Disney’s rapid growth in the 1980’s and early 1990’s.

Among Mr. Murphy’s former peers in strategic planning were Meg Whitman, who later became the chief executive of eBay; Richard Nanula, who became chief financial officer of Amgen Inc.; and Mr. Staggs.

The strategic planning unit was fashioned by Mr. Eisner and others at Disney to create a dynamic tension between the units and the corporate suite. But as the business units grew over the years, the executives who ran them chafed under strategic planning’s oversight.

As Mr. Iger gives the divisions more authority, he has also pledged to hold the executives of those units accountable for the decisions they make.

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