Murphy's 30-person strategic planning unit will be dramatically downsized, giving more autonomy to Disney's division chiefs, some of whom have complained of being marginalized and disrespected by Murphy. Critics of his operation, which reviews all major Disney initiatives, have dubbed it "the business prevention department."
Numerous Disney executives, as well as Wall Street analysts who track the company, had seen the internal unrest surrounding Murphy as an opportunity for Iger to score points with his troops while distancing himself from his predecessor's regime. He apparently succeeded.
"This is a welcome change and long needed," said USC business professor Warren Bennis. "Too many decisions are made by Eisner and the strategic planning department, and it's why to a great extent Disney has lost a lot of talent over the years."
Although Murphy, 42, played an important role in acquisitions that have built Disney into a global entertainment powerhouse, his style rankled some senior executives, who said projects too often got bogged down while Murphy's underlings reviewed them.
"You want to energize bold, thoughtful risk taking in a creative business," said Jeffrey Sonnenfeld, associate dean of the Yale School of Management. "You just can't do that when you're caught up in complex chains of command."
But the structural problems were compounded by Murphy's reputation as Eisner's guided missile, said several current and former Disney executives, who asked not to be named.
Eisner relied heavily on Murphy and his group to keep tabs on the decisions of his top managers in the company's four divisions — film, theme parks, consumer products and television — giving him authority to veto investments his boss didn't like or pursue projects he did.