Strategic Management - BBC - Essay Example

Strategic Management - BBC British Broadcasting Corporation (BBC) has been a pioneer as far as broadcasting is concerned. Starting its journey from the days of Marconi, the corporation has seen many tumultuous times so far, and the future promises to be more so. BBC's mission statement1 says, "The BBC exists to enrich people's lives with great programmes and services that inform, educate and entertain. Its vision is to be the most creative, trusted organisation in the world." In today's fiercely competitive environment, that's where company needs to focus more. The corporation has indeed been trying hard to come up to the expectations by implementing changes from time to time. BBC provides a wide range of programs and services, including television, radio, webcasts, interactive applications with programmes serving, national, local, children's, educational, language interests. SWOT Analysis Strengths BBC is on the broadcasting horizon since the days Radio was invented, i.e. it is the first corporation to make use of 'Broadcasting' technique. Even in today's market driven dynamics, BBC has maintained a unique identity of serving the interests of public broadcasts over and above the interests of advertisers and stakeholders. It has a strong infrastructure with 10 TV channels, 10 radio channels and runs 33 radio language services around the world. The staff strength of around 27, 000. Since it was the first one having started the broadcasts, therefore the inherent advantage of being the first one off the block will remain always with BBC. It earns its operating finances from the licenses paid by the households. The corporation has the backing of the government. BBC Resources is one of the largest production facilities in the UK offering services which include studios, outside broadcasts, post production, design, costumes and wigs. BBC Training provides courses, tailored training and consultancy services to help individuals and companies working in broadcasting and related industries. BBC caters to a wide range of viewers across the globe with services like BBC America, BBC Canada, BBC Japan, BBC Food, BBC Kids (Canada), BBC Prime BBC World, Animal Planet, People+Arts, UKTV, UK.TV (Australia) The ability to do truthful introspection and admit its shortcomings. Weaknesses Functioning of the corporation is being criticized in the public domain for quite some time now. In the recent past, BBC has tried to incorporate too many changes with limited success. Many of the steps have invited sharp reactions from different quarters. Its share of viewership/ audiences is on a downslide for quite a while now. With the high percentage of repeat broadcasts it appears there is dearth of talent in the corporation. Though BBC is an autonomous broadcasting corporation, yet in the recent past it has been mired in controversies on account of its overtly pro-government stance particularly for handling the stories of Iraq war and West Bank stories. Differences between different departments within the corporation Its dependence on the License fee as the main source of financing the operations. Opportunities Onset of digital technology in the field of terrestrial as well as satellite broadcasting. In fact, BBC Radio pioneered the world's first national digital radio service in September 1995. Corporation sees the need for improving the role of governors, which will help the corporation in managing the affairs more impartially. New editorial policy makes the corporation to improve the quality of editorials and the news content. Large number of BBC fans all across the globe. The corporation can provide them with quality content and truthful analysis, to make way for increasing the number of listeners/ viewers. BBC's urge to come of the London centric mould by shifting some of its offices outside London. This will provide the corporation better and wider perspective. The web space provides a hunting ground for catering to almost all segments. Increasing emphasis on original programs at BBC. BBC's new found stress on creative programming for the youth. Threats The license fee, main source of its financing, is increasing being challenged by experts, parliamentarians and the public alike. Increasing amount of competitive broadcast channels backed by financially sound sponsors and corporate houses. The growing sense of dissatisfaction and insecurity amongst its employees, owing to the frequent cut in employee's strength. BBC's finding fault with the number of employees, every time the need is felt for cutting the costs. Poaching of its well trained employees by other companies. PESTEL Analysis This type of analysis helps in identifying the factors surrounding the corporation which can affect its functioning. Political: BBC was forced to hike the license fee on account of increase in costs. The corporation is being criticized by a powerful British political lobby for this hike. From the outside world, BBC is being criticized in the Islamic world for, what is being termed as a biased attitude in reporting the affairs of Iraq, Afghanistan, Israel-Palestine conflict etc. Economic: With economic liberalization and globalisation ruling the economy all across the globe, BBC's broadcast face stiff challenge from it competitors. Competitors are poaching on its share of audience not only on the home ground but on its satellite broadcasts as well. Social: BBC is being criticized by employees unions like BECTU, IJU, UNI etc. for resorting to frequent cuts in employee's strength, while providing a hike in salaries and bonuses to a selected few. Technological: Newer advancements in technology is changing the way broadcasts reach to the audience. Newer technologies have appeared for the production, News gathering, other OB services as well as transmission techniques. BBC, ITV, Channel 4 and Five launched the UK's first high definition (HD) trial broadcasts to terrestrial aerials in June 2006. Environmental: With increasing emphasis on interactivity, convergence of technologies is giving a new meaning to the interactivity. Websites are proving to be a good opportunity for allowing the audience to air their views and gathering crucial feedback. In fact a study carried out in January 2005 by The Economist places BBC's website at 6th place in terms of Blogs by the audience. Legal: Respecting the law of the land while making efforts for broadcast proliferation helps a broadcasting corporation in maintaining working relationship with the respective governments. Unlike other goods and services, broadcasts can be carried to different locations with the help of satellite and cable technologies. In addition BBC has terrestrial broadcast arrangement with some other countries. Stakeholder Mapping Any businesses operation takes place within a complex system of interests and influences. While identifying the stakeholders the corporation must look beyond the formal structure of the organization. Therefore it is required to have a look at the informal and indirect relationships as well. Stakeholders all have power, someone has a formal power invested in a position of authority or it could be the social power of being able to persuade others to support or oppose the policies of the corporation. People with higher power could be the company's most useful supporters or most dangerous opponents, depending upon the prevailing dynamics. In case of BBC the main stakeholders are; The Government of UK: The British government is the one which holds a big stake in the corporation. Though BBC is an autonomous corporation, yet it operates under certain rules and regulations of the government. Government of UK exercises its control as well on many occasions. The Governments of other countries: Governments of other nations make way for direct uplinking of signals from their lands and also allow the reporters and stingers working for BBC to provide news dispatch to the corporation. Audience: The listeners of radio programmes and the viewers of TV programs are the ones with high stakes. Audience preferences decide the content and style of programmes. Certain stories, news programmes also leave their influence on the audience. The audience can wield pressure by way of asking for better quality programme content. Society at large: It is said the media is a reflection of the society. The prevailing trends in society are reflected in the media or we can also say that the trends highlighted by the media are followed by the society in general. Therefore, media has a big role towards the well being of the society. BBC being the oldest broadcasting network has a bigger responsibility on its shoulders. Employees: In a broadcasting network all employees have certain responsibilities towards quality of the program content and its truthful transmission. Yet broadly employees can be further categorized in two categories; Lower level employees: These stakeholders are interested in their salaries at the end of the month, not involving themselves in the strategic decisions. They prefer to take orders from managers and keep working towards achieving the targets. Managers: This segment wishes to see better finances as well as better prospects for themselves in minimal time. This section also makes newer plans and policy guidelines for the corporation. Outside program producers: At times the responsibility of producing programmes is entrusted to some outside film/ documentary makers, some newsgroup of some etc. Therefore functioning at corporation is also influenced greatly by the outside producers making programmes for the BBC. Force-field Analysis Force Field Analysis allows the corporation to look into the forces for or against a particular decision. With this technique all the forces for and against a particular decision are enlisted and then a decision is taken. BBC as an organization is currently going through challenging times. Going through such phases either provide further strength to the organization or start a downward journey, depending on how the situation is handled under the prevailing circumstances. A need for organizational transformation at BBC is being felt ever since the onslaught of private TV channels, cable and satellite transmission channels in early 1990s. Realizing the need for such a transformation, John Birt initiated cost saving exercise and in the process reduced the workforce by about 4000 in the year 1992. This step resulted in savings worth US$ 465 million, but did not prove to be a lasting solution. The process continued in view of the many more developments requiring change. Some of the factors necessitating a change are enlisted below using the force field analysis. Fig: Force Field Analysis for BBC Once the force field analysis is carried out, the process of how's and what's begins in right earnest. As can be seen from the diagram above, change appears to be more or less a necessity, as most of the factors favoring change appear to be beyond the control of BBC. The license system too is talk of the town with voices for as well against emanating form different quarters. Sometimes back, Ofcom, the media regulator, found in a survey2 that nearly 60% of people from "AB" or affluent professional households support the idea of the license fee, but in the "DE" homes only 35% of support the idea. Similarly, the factors which stand against carrying out the change are equally valid. What BBC can do is to minimize the impact of the forces standing against the change. To start with, it'd be appropriate to address the concerns of the workforce. In fact the policy of finding fault with the employees' strength, every time a thought is spared for change, appears to point a blind eye towards other costly affairs. This way the corporation can minimize the impact of factors weighing against the changes. This will help in reducing the strength of the forces opposing the project. The strategy of using most of its strengths to minimize the impact of its weaknesses will help in maintaining a unique identity for BBC and will help it in its plans switch the country from analogue to digital television in 2012. Porters 5 forces: Michael Porter's Five Forces model has become a yardstick for assessing the practicability, usability and profitability of any commercial venture. The five forces in case of BBC are; Buyers'/Consumers' power: The consumer in case of BBC happens to be the general listener/ viewer. This power forces the broadcaster to come out with quality broadcasts, otherwise the listener will prefer to tune another more informative and entertaining channel. Suppliers' power: This is the power wielded by suppliers on the organization demanding that their supplies be fairly valued. Suppliers for BBC include; the production houses which supply it with programme content, the hardware suppliers for its transmission and production equipment, software suppliers, the experts and analysts. The extent to which such 'suppliers' can dictate terms to the corporation determines its impact. Increasing number of repeat telecasts appear to have emanated from the lack of adequate support from program producers, and lack of newer programmes. Rivalry amongst Competitors: Rivalry with broadcast companies like GCap Media plc, Chrysalis Group PLC, GWR Group plc, SMG plc, ITV PLC, RTL Group SA catering to almost similar type of audience and the fight to have a bigger pie of the market has indeed kept BBC on tenterhooks. For this very reason, BBC has been actively taking up different measures for cost savings. Threat of new entrants: The media scene is indeed changing very rapidly, with the digital storage replacing spool, terrestrial transmission going digital, reporting techniques going high-tech, and satellite transmission going from C-Band to Ku-Band. This has resulted in making the media scene very competitive. Today, theoretically broadcasting has become very easy, as it requires some investment in up-linking and production facilities, and a broadcast set up is ready. But the level of competition prevents an easy entry. Threat of substitute products: Internet, webcasts and interactive transmission have come to be known as the main substitutes for a broadcasting corporation. BBC appears to be well aware of such developments. For this very reason, the corporation has taken up the website initiative in a big way. Further work requires to be done on this front to make the website more popular amongst the patrons of BBC. Cultural Web By culture we basically mean the values, beliefs and assumptions. Cultural web tries to analyse the prevailing culture within an organization encompassing the ground level workers, managers, salary/ incentive systems, encouragement to other stakeholders, respect for consumers etc. Cultural web mainly answers the following queries; i. Core beliefs existent in the workplace This explains the basic ideology, the vision and mission of the organization. BBC believes that it exists to enrich people's lives with great programmes and services that inform, educate and entertain. Its vision is to be the most creative, trusted organisation in the world. BBC's value statement says that, "Audiences are at the heart of everything we do and We take pride in delivering quality and value for money". ii. The routines which are emphasized in BBC BBC provides a wide range of distinctive programmes and services for everyone, free of commercial interests and political bias. They include television, radio, national, local, childrens', educational, language and other services for key interest groups iii. Organizational Structures BBC is established under Royal Charter. The current Charter came into force in 2007, and runs until the end of 2016. Under the new Charter, the BBC is governed by the BBC Trust, which sets the strategic direction of the BBC and has a clear duty to represent the interests of license fee payers. Operational responsibility rests with the Executive Board, made up of ten executive directors and five non-executive directors. It is chaired by the Director-General. The organizational structure appears to be too formal for being a professional organization. Such a huge hierarchy proves to be a big drain on scant resources. iv. Controlling mechanism Effectively the Director General runs the show as the big boss. He is the final authority in all matters concerning editorials and managing the affairs at BBC. The performance of the Executive Board is assessed by the BBC Trust as set out in the Royal Charter and Agreement. The BBC Annual Report, which gives an account to licence fee payers and Parliament of how the BBC has performed against its objectives, is published in July. The trust passes on requisite directions to the DG in cases which require immediate attention, or on matters sent to it by the executive board, like initiating new strategies to combat the competitors. Therefore we can understand that the cultural web in essence studies the organization in its entirety. If carried out in a comprehensive manner, this tool can come out with the most appropriate answer to the questions posed by the circumstances. References: 1. Criticism forces BBC chairman to quit, http://news.bbc.co.uk/2/hi/uk_news/politics/3436931.stm (January 21, 2007) 2. Tony Blair's criticism of BBC 'beyond contempt' says NUJ, http://www.nuj.org.uk/inner.phpdocid=1092 (January 21, 2007) 3. PESTEL, http://www.improvementnetwork.gov.uk/imp/aio/1033478 4. BBC available online at http://www.bbc.co.uk (January 21, 2007) 5. Force Field Analysis Understanding the Pressures For and Against Change, http://www.mindtools.com/pages/article/newTED_06.htm (January 21, 2007) 6. The Economist (2005), 'The BBC has asked for a lot more money' Oct 13th 2005, The Economist. Read More