The man known among executives of Walt Disney Co. as "The Enforcer" took a hit Friday.
Chief Strategic Officer Peter E. Murphy, the rough-edged point man for Disney boss Michael Eisner, was removed from his powerful post and placed in an advisory job with diminished responsibilities.
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."
The overhaul was largely orchestrated by Disney's newly named chief executive, Robert Iger, who does not officially take the helm until Oct. 1 but already has begun putting his stamp on the company, with Eisner's blessing.
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."
In an interview, Murphy defended his tenure and style, saying spirited debate with other executives was a necessary part of the process.
"I did the job I was asked to do by Michael, Bob [Iger] and the board," he said. "It was not a popularity contest."
Murphy said he was consulted about the changes and added, "I feel great about it. It's the right decision for Disney and for me personally."
A source familiar with the new arrangement said Murphy, who'll report to Iger, was given a two-year deal with an option to leave sooner -- the most likely scenario. The source said Murphy had expressed interest in working for a private equity firm specializing in media and technology.
For his part, Iger said in a statement that the new corporate structure "will create efficiency with accountability and empower our business unit leaders in their ongoing efforts to create new, differentiated and compelling entertainment experi- ences."
He said Murphy's "foresight and talent have played a major role in making Disney what it is today."
