Entrepreneurial Style of Murdoch and His Impact on Business - Case Study Example

? Managing the human resource Table of Contents Introduction 3 Question 4 Entrepreneurial style of Murdoch and its impact on business 4 Question 2 10 People Management Skills of Murdoch 10 Question 3 14 Leadership Style of Murdoch 14 Conclusion 18 Reference 20 Introduction Entrepreneurs are often perceived as major drivers that brings major changes in the society. Their skills and powers are influential enough to make a significant impact upon the prevailing trends in the social norms. Generally, entrepreneurs possess a ‘gift of gab’ that make them efficient in bring improvements. Sarkis, Cordeiro and Brust have provided the same views and they commented that “an entrepreneurs can be conceptualized as a “driver” of a development process” (Sarkis, Cordeiro and Brust, 2010, p.23). However, entrepreneurial skills vary according the core nature of individual entrepreneurs. For example, Nelson Mandela and Bill Gates have different entrepreneurial skills as former more focuses on social entrepreneurial skills and later have entrepreneurial skills in terms for business and innovation business perspective. Many scholars and critics have presented their views and understating in explaining rationale behind the entrepreneurial skills among the people and at the same time, they have also categorized them in their core orientations. John B. Miner has identified four types of entrepreneurs i.e. “The Personal Achiever”, “The Supersalesperson”, “The Real Managers” and “The Expert Idea Generator” (Miner, 1996, p.4). On the other hand there are other groups of scholars who have their own perspectives in this regard. As per them, some of other types of entrepreneurs are like social entrepreneurs, lifestyle entrepreneurs, wealth creation entrepreneurs etc. However, there are certain common traits which are present in all types of entrepreneurs and these traits are responsible for shaping their entrepreneurial skills. These common skills are like innovative, motivation, risk taking ability, initiative, leadership qualities, determination, people management skills etc. The degree of these skills determines the effectiveness and success rate of the entrepreneurs (Nieuwenhuizen, 2008, p.3). The project aims to analyze and bring forth the entrepreneurial style followed by Rupert Murdoch, who was an Australian-American media magnate who was also the CEO of News Corporation. The project describes the management styles used by Murdoch in running his corporations. An analysis has also been provided with regard to the leadership styles followed by him to exercise control over his employees. Rupert Murdoch has been responsible for growing the giant mammoth of the media company, News Corporation from a very small; newspaper in Australia. It became one of the largest and the most influential media groups of the world. Murdoch has been able to gain immense power with the rapid expansion of the global media company. His company includes television, cable network programming, filmed entertainment, book publishing, direct broadcasting, magazines and even newspapers in Australia, United States, UK and Europe. Question 1 Entrepreneurial style of Murdoch and its impact on business Corporate entrepreneurship has lately evoked significant interest among the management practitioners and the academicians in the world. It is referred to as entrepreneurship in the established organisations and firms. It includes the set of activities characterized by proactiveness, risk taking and innovation which manifests themselves as acquisitions and mergers, licensing, franchising, research and development, contacting and divestment among other. Explorations of the theme of entrepreneurships have relevance in this regard as it seeks to identify how organisations are able to attain sustainable growth through this entrepreneurship. Analysis of the above issues provides an advantage for the other organisations for charting out a path (Jauhari, 2004, p.1). The project aims to put forward the conceptual framework of entrepreneurship of Murdoch following from the analysis of the case study. The conceptual framework put forth highlights on the interface between the individuals, organisations, the environmental factors, the style of entrepreneurships and the finally the organisations performance. The study contributes towards highlighting the features and attributes of Murdoch as an entrepreneur of the organisation (Jauhari, 2004, p.1). The success of the company can be primarily attributed to Murdoch’s ability to learn from his own mistakes. Moreover, his knowledge about the major and minor intricacies in the newspaper business accounted for the success he achieved. This was complemented with the logical mind and decision making capability that he carried which consequently allowed him to take major risks associated with his business. The bold style that he carried along with the unconventional visionary approach took him to achieve great heights in his career (The Museum of Broadcast Communications, 2011). Following are the typology of entrepreneurial styles showing the risk taking abilities of entrepreneur. The following figure shows the level of risks that entrepreneurs can take. Figure 1: Typology of Entrepreneur Styles (Source: Kuratko & Hodgetts, 2008, p.38) When different styles of entrepreneurship exist, every person who finds a business does not seek to minimize risks and maximize returns. Thus the organisation formation models are adjusted according to those who find the business. It must be understood that all entrepreneurs in the world are not driven only by financial gains. Also the risk levels cannot be completely evaluated by the existence of opportunities for profits. However, it requires to be understood that entrepreneurs can be of various nature and qualities. They do possess certain qualities which other people do not. Their main difference from the general persons is their ability to handle the professional riddles which involves great ambiguity, lack of clarity and consistency (Kuratko & Hodgetts, 2008, p.39). Most of the people who start new businesses are seen to put a thrust and drive into their business or their creation. Such was the case with Murdoch. The drive for enlarging the enterprise from a small scale enterprise into a large business house was present in him even from a very small age. Right from the age when he was in school Murdoch was driven by the thought of taking the newspaper business to great heights. As apparent from the case study, Murdoch falls in the fourth grid involving high risk acceptance and high profit seeking. Starting a business involves great risks. Moreover, as the rewards go higher, the risks associated with it also climbs in the same proportion. This is the reason why entrepreneurs take special initiative in evaluating the risks associated with their business. Starting from a very small business, Murdoch’s business to expand across and over the globe demonstrates great risk taking capabilities of the entrepreneur. The expansion was primarily done by numerous acquisitions and mergers. Entrepreneurs demonstrating high risk taking characteristics are seen to put a major proportion of his savings and also other resources into his business. At times he might also get exposed to personal bankruptcy. People willing to take that risk falls into the second and last quadrant of the grid. This also demonstrates a high profit seeking attitude along with risk taking. Some of the major acquisitions worth mentioning are acquiring of ‘News of the World’ in 1969, followed by ‘The Sun’ in the very same year. One of the most famous UK acquisitions for business expansion was New York Post. Apart from financial risks, entrepreneurs are also exposed to career risk. The question is that of a business falls, whether he would be able to return to his old job or not. Securing a favorable job in an organisation is one concern which is common to all entrepreneurs. Among some of the other risks are psychic risks and family and social risks. The study of Murdoch and his complete career growth reveals his extensive capabilities to handle all such types of risks. Little damage was caused in is business when it was said that the technology that he used went outdated. He was bold enough to adopt the new technologies in his business and replace them with the old ones which had been used for long and had caused tremendous success also. Frame work of corporate entrepreneurship Following is the framework for corporate entrepreneurship. The framework provides the set of activities which are accountable for the growth of the organisation Figure 2: A framework for Corporate Entrepreneurship (Jauhari, 2004, p.9) The characteristics of entrepreneurship are driven by innovation, risk taking and proactiveness. The framework is developed arising out of the collation of various perceptions on corporate entrepreneurship. Corporate entrepreneurship is perceived as an organisation’s legal behavior. This is characterized by risk taking, proactiveness and innovation and manifests through mergers, acquisitions, franchising, licensing and contracting. The framework brings up the relationships between the components like organisation culture, management style, strategy and structure, environment and entrepreneurship. A study of the case study reveals that Murdoch’s efforts towards innovation, risk taking and innovation is able to envision what is to happen in future and consequently he makes concordant changes (Jauhari, 2004, p.11). It is apparent that there are various factors which contribute towards influencing the entrepreneurship activities. Some of the factors worth mentioning are government policies, consumer demands, markets, suppliers, technology and competition. Murdoch’s’ speciality lies in abilities to understand and analyze the above external factors and their probable impacts on the organisation. Murdoch was good at identifying the markets which would be financially profitable. For example, while the competitors of News Corp like Walt Disney, Viacom, and Time Warner were paying tax rates ranging between 27% and 32%, News Corp was paying 5.7% tax in the 1990s. Moreover, it also running 800 business units across 52 nations, like Bermuda, Caymans, the British Virgin Islands, Netherlands which either had very low corporate tax or no tax at all. Murdoch’s abilities as an entrepreneur also gets reflected through his abilities to sense the emerging business trends while he expanded his operations. The following example would throw light on the above fact. In the middle of 1980, the possibility of the media to be driven by satellite television channels was sensed by him long before. At that time satellite television channels were dominating the households in Asia and America. Murdoch also remained extremely fascinated by the political environment which influenced the business operations significantly. In fact Murdoch’s political moves were influenced by the factors which suited his interest for business strategy. Lastly, the entrepreneur was also able to effectively integrate different cultures where his companies were located. He proved to be immensely successful in creating a challenging environment for his employees even amidst a variety of cultures. Question 2 People Management Skills of Murdoch With changing nature of society and human activities, there also have been significant changes in the management practices. In the post-modern organization culture, the managements are trying to manage the entire activities with different perspective so that, optimum level of success rate can be achieved. Entrepreneurs are having excellent foresight skills and hence, they are able to bring changes in their management skills as soon as new trends taken place in the society. This skill makes an entrepreneur efficient and effective manager who are able to increase the productivity of the employee. The task of managing an organization is nothing but managing the associate people like the group of stakeholders. The entire tasks of an organization mainly involve a group of people and managers must ensure that proper tasks must be assigned to proper people for completion of the tasks with better accuracy level. On the other hand, the managers also need to counter multiple issues relating to the people like dissatisfaction, revolt, protests lack of commitments etc. In this respect, it the prime task of the entrepreneurs to manage these people related issue by ensuring that it does not affect the organization growth and productivity. A study of 702 firms conducted by Huselid and Becker disclosed that shareholders’ wealth were amazingly high in those firm which has better people management skills that the companies having poor people management system (Whetten and Cameron, 2007, p.6). Rupert Murdoch’s people management was very crucial for his rapid success in the field of print media, electronic media and entertainment. His people management skill primarily indicates his core and basic entrepreneurial skills. As per the given evidences, it has been clarified the Murdoch belong to the group of very aggressive entrepreneurs and it is also reflected by his people management skills as well. Primarily, Murdoch’s people management skills are analyzed by two groups of scholars and analysts. The first group has criticized his people management skills, whereas; the second group of analysts has perceived his skills as very influential and productive for his organizational growth. Through the entire life of Murdoch, he faced a number of pretests from the people, critics and communities. For example, he is considered to be responsible for taking over the monopoly power in the Australian and US media industries. However, he efficiently managed these protests being determined in his overall goal i.e. to be one of the pioneers in the global media industry. This overall goal of Murdoch is primary factor for his self-motivation that makes him an aggressive kind of entrepreneur. However, his desires for the highest level of success have also led to make him follow a ruthless management style. He has developed his personality among their employees as a strict CEO and manager. Due his ruthless behavior, he created a feeling of terrorism among the employees in his organization. Moreover, his actions often depended upon his state of mood, and for the post editors he used to choose people who were having the thought process like him. This indicated that his only priority was his own views and opinions. Therefore, his one of the major negative feature in managing people was his habit of underestimating people. He can also be described as a follower of autocratic management style. The managerial grid theory of Blake and Mouton is very helpful in analyzing the management style of Murdoch. Figure 3: The Managerial Grid (Source: Kriel et al, 2005, p.35) The above model developed by Blake and Mouton explained different types of management styles. This model determines the management styles considering the two major factors in management activities i.e. people and task. Each of this factors, are scaled in 0 to 9 point scale. The managers who neither focus on people nor on task, they belong to ‘Laissez-Faire’. The success rates of such managers are the lowest comparing to others in the above grid. The ‘Country Club’ managers are more attracted towards the societal and people. This kind of managers can easily obtain very high employee satisfaction. However, their productively level is not influencing comparing to level of employee satisfaction. The ‘Team’ managers are the most superior kind of management style. They are able to manager people and task at same time by achieving the highest success rate. The ‘Autocratic’ managers are obsessed with task and their prior area of interests in completion of task by dictating their employees. The managers who combine the importance of people and task at rescannable level are known to have ‘Middle of the road’ management style (Kriel et al, 2005, p.35). As per the above analysis of managerial grid, it is very easily understandable that Murdoch falls into the group of autocratic managers. High level of performance level from each of employees was a compulsion for Murdoch. Many critics have described the autocratic leadership as their own ways. Deery and Jago (2001) have explained that autocrat managers have clear communication and prompt decisions and they want their employees to be loyal and able to execute their task without any difficulty. However, their comment does not fit with the management style of Murdoch. He used to think from his point of views and did not consider employees’ justification for their failure. Instead, employees with low or often average performance were sacked without any consideration. On the other hand, Thiagarajan and Deep (1970) have given more clear accurate view in explaining the autocratic management style. They explained that autocratic managers use their power or dominance to enforce their views, opinions and decisions on their employees and they “like to maintain tight control often requiring detail reports” (Rolon, 2010, p.5). Other negative aspects of Murdoch’s people management style within style were that he used to exercise unhealthy practices with their employees that led to develop a favorable organization culture. For example, divide and rule policy caused to make his employees vulnerable before that reduced the chances of protest from employees. Many have identified these policies as clever and god for organizational growth but in case of long term success and social benefits, it is not desirable. His abusing comments for its employees and his terrorizing activities caused a number of resignations of employees which increased the employee turnover ratios. He never wanted to pass the power or decision making authorities to subordinates or to the group of senior management. His organization primarily used to follow a traditional concept and there were no developments in HR systems. This traditional and poor HR system hindered the growth of talented people. However, Murdoch is man with very effective skills and he wanted to maintain a line of authority and superiority in his organization. His capabilities were so effective that in spite of unfavorable work culture for employees, he was able to maintain the higher growth rate. Moreover, he was also able to counter people protests and criticism at every point of time. This indicates his excellent skills in people management. Question 3 Leadership Style of Murdoch The qualities of leadership are inevitable skill that must be present in the managers and entrepreneurs. Entrepreneurs or managers aims to achieve a common goal with support of their followers or employees. The support from the followers and employees is very necessary as it is not possible for any individual to broad organizational goals and objectives. In case of managing business organization, managers have to take decisions for multiple tasks which involves a number of people. In this process, they are responsible for motivating and leading their employees towards the direction of growth. Many theorists have presented their definition of the leadership as per their own ideas. However, there is something common in all leaders i.e. they are capable to bring social changes. In traditional concepts, leadership used to be seen as the process of influencing a set of followers who will later communicate the message of their leaders with society. However, with time, leadership styles keep changing and currently, leadership more concentrates on the “process of direction, alignment, and commitment (DAC)” (Velsor, McCauley and Ruderman, 2010). New structures of organization are the main drivers of the changing leadership styles and leaders of the popular organizations prioritize the strategic leadership styles. Robert M. Grant has realized that “the era of restructuring and shareholder focus has been associated with “change masters” and these changes masters are “highly visible, individualistic, often hard-driving management styles of CEOs” (Grant, 2005, p.524). In this respect, he also motioned the name of Rupert Murdoch’s role in News International as a change masters. His business leadership styles mainly include strategic decision making, directing his companies through various phases of restructuring, critical decisions for acquisitions, product developments and disinvestments (Grant, 2005, p.524). In case of maintaining the HR system, the Murdoch used to follow the traditional process. However, for his business developments process, he is one of the most capable leaders in the world. He has the power and ability to play a very instrumental role in the complex business environment where he has to face a number of hurdles like protest and steep competition from key rivals. His fearless, aggressive and strategic moves against these forces were only key success factors for his tremendous business success. His business acumen was the perfect for contemporary business environments and he used to seek business opportunities in the global market place. Analysts has defined that his business leadership skill were shaped by own mistakes and on the other hand, he was fast in correcting and learning from his previous mistakes. In order to explain this specific leadership styles, the situational and contingency theories are very helpful. The importance of the situational and contingency theories lies in the limitations of behavioral and trait theories. The behavioral and trait theories often fail to identify the factors that influence the leadership style of a manager, entrepreneurs or leaders. There are two approaches i.e. situational theory and contingency theory which is effective in identifying major influencing factors of leadership in Murdoch (Ghuman, 2010, p.390). According the situational approach of the leadership style, the leader tends to react per the given situation. The different situational aspect is the main driver for the changing behaviors of the leaders. Murdoch used to take business decisions as per the available opportunities and the prevailing condition of the market. His foresight for identifying business opportunities was very helpful in understanding the overall situations and take proper decisions accordingly. In his business career, he made a number significant takeovers and acquisition, and for such critical decisions, his insight regarding prevailing conditions was very accurate and perfect. The situational theory of leadership totally discards the concepts that leadership skills are inborn. Murdoch developed his own business leadership styles after making a number of mistakes on his business. During courses of his business, he faced a number of significant changes in different global markets and every time he took effective initiatives to counter those different situations. For instance, during 1986, in England he introduced new technology for print media when he realized the existing printing practices were outdated. In spite of protects from the labor union, he was determined for introducing the new technology. This instance is major evidence his changing behaviors as per changing time. Moreover, he was also an opportunist. He kept changing his support as per changing political power in England. The maturity of his leadership skills also keep changing with past experiences. However, the situational theories also describe the relationship between the leaders and followers. In case of Murdoch leadership style, he was not attached to his subordinates or employees as he primarily belongs to the group of authoritarian. In this respect, to analyze his leadership style situational theory of Hersey-Blanchard is very useful (Hitt, Black and Porter, 2009, p.260). The following figure represents a Hersey-Blanchard situational leadership model. Figure 4: Hersey-Blanchard Situational Leadership Model (Source: John Wiley & Sons, Inc, 2006) The above model depicts four leadership styles based on the relationship and task behaviors. This model is quite similar to the managerial grid model which explains four types of managerial styles. However, the above model focuses on the follower maturity and it “views leaders as varying their emphasis on task and relationship behaviors to best deal with different levels of follower maturity” (John Wiley & Sons, Inc, 2006). As per the Murdoch behavior with their follower or specifically with employees, he belonged to ‘telling style’ of leadership. He used to believe in giving instructions to his employees rather than making decision after discussion with their employees. In order to meet his instructions without any flaw, he used to impose his decision on employees. Another strength of Murdoch was it innovation skills. He expanded his business in the global market place on the basis of major innovations. Therefore, his leadership style can also be interpreted as ‘innovative leadership style’. In the prevailing business environments, innovative skills are major criteria for growth and success. In this regard, Murdoch’s efficiency was excellent. This helped him in determining his own way of business path. Few people have the ability to think something innovative and out of these people, very few have the capability of adopting and commercializing their innovative ideas. Fortunately, Murdoch was equipped with both the skills that made him one of the pioneer’s entrepreneurs in media and entertainment industry. Moreover, he was efficient in blending the diversified cultures of acquired companies with his News Corporation’s culture that reduced chances of acquisition failure. He developed a specific cultural code within his business organization which is a true feature of innovative leaders (Lyons, 2010). Conclusion This paper has dealt with a case of Rupert Murdoch by focusing on his entrepreneurial, leadership and management style. Murdoch, the CEO of News Corporation, is a famous personality in the global business environments. He started his business with newspaper publishing in Australia and now he has become the biggest business tycoon in global media and entertainment industry. His business acumen was excellent, but due to his irresistible ambition of being the best in media and entertainments industry he was also criticized by many people. In order to analyze their skills and behavior, this paper has presented three major sections. The first section reveals Murdoch's abilities as an entrepreneur following from the analysis of the case study. According to the entrepreneur styles, his style falls into the fourth quadrant of the grid depicting entrepreneur styles, which is high risk acceptance and profit seeking. In the second sections, his managerial styles have been explained using managerial grid. His management style was a typical autocratic type and he used impose his decisions on employees. His behaviors with his employees terrorized the entire organizational environment. The third section has described his business leadership style. The situational and contingency leadership theories have been used to understand his leadership skills. His leadership style was primarily driven by conditional or situational factor and by his innovative skills which make him the media tycoon. Reference Ghuman, K. (2010). 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