Organizational Transformation at the BBC
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Case Code: BSTR231 Case Length: 27 Pages Period: 1992-2006 Pub Date: 2006 Teaching Note: Available |
Price: Rs.400 Organization: BBC Industry: Media and Broadcasting Countries: Britain Themes: - |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Need For Restructuring
Until 1982, there were only four television channels in the UK - BBC1, BBC2, ITV, and Channel 4 - all of which used the terrestrial television broadcasting method to air their programs. The early 1980s saw the rise of satellite television in the UK. Launched in 1982, Satellite Television was the first of such channels. It was purchased by News Corporation in 1984 and re-launched as Sky Channel, a pan European network. In February 1989, Sky Channel was again launched as a four-channel network for the UK -Sky Channel (later Sky One), Sky News, Sky Movies, and Eurosport. After a lot of delay, the British Satellite Broadcasting (BSB) was launched in March 1990, to compete with Sky Channel. Both companies lost huge amounts and in December 1990, they merged to form BSkyB. BSkyB slowly rose to become a major competitor of BBC...
Greg Dyke Becomes Director General
In January 2000, Birt was replaced by Dyke, CEO of Pearson Television. Dyke, who took over as Director General on February 01, 2000, found the BBC's organizational structure extremely complex. There were far too many layers and the organization was much too bureaucratic. He immediately announced the creation of the 'One BBC' program where various departments and their employees would cooperate with each other and work toward achieving common goals...
Thompson Takes Charge
The committee submitted its report on June 23, 2004, a day after Thompson took charge as the Director General of the BBC. The Neil Report called for a vast improvement in the training process of the journalists. It suggested establishment of a college of journalism and a greater role for editors and lawyers in the BBC's editorial process. The committee wanted the BBC to continue to broadcast reports based on a single source but only after proper examination. It emphasized that only the most accurate information should be given to the public...
Charter Manifesto
Since the early 2000s, the license fee charged by the BBC had come under severe criticism. In August 2003, the Conservative Party, the second largest political party in the UK, charged that the viewers were paying for programs that had been copied from commercial channels and demanded that the fee be cut. It said that the BBC was getting an unfair advantage by receiving £2.7 billion as annual fee. On June 29, 2004, the BBC announced its Charter manifesto called 'Building Public Value' aimed at providing value to its customers in the wake of changing customer preferences and the competition. The Charter manifesto, which consisted of BBC's proposals for the coming years, would be sent to the government to peruse while reviewing the Royal Charter. The manifesto justified the continuance of the license fee and the Charter for the next ten years. In the wake of criticism over the license fee, Thompson announced sweeping measures in the nine-point manifesto...
Implementing Change at BBC
In the first week of December 2004, Thompson began implementing the manifesto by announcing a new vision aimed at making the BBC a more creative and efficient digital broadcaster. He announced that his vision had three aspects - 'a bold new program and content strategy based above all around the idea of excellence,' 'a transformation of the BBC into a state-of-the art digital broadcaster,' and 'an irreversible shift in the culture of the BBC toward simplicity, opportunity, and creativity...
The BBC Journalism College
In the last week of June 2005, the BBC launched the BBC Journalism College at an investment of £5 million to train journalists working in various divisions of the BBC such as news, the World Service, etc. As opposed to the concept of classroom training, the instructions were imparted through interactive e-learning sessions, seminars, and workshops (conducted by Neil) at various locations across the globe...
The Road Ahead
Though the BBC had been cutting costs, the compensation paid to the top executives remained the same, and for a few executives, it was actually rising every year. The bonuses paid to them were criticized severely by many industry analysts and BECTU as they came at a time when television viewership was falling. For 2004-05, Thompson received a bonus of £64,000 on a £210,000 basic pay and Byford received £92,000 on his salary of £351,000...
Exhibits
Exhibit I: BBC's Old and New Executive Committees
Exhibit II: BBC's Royal Charter
Exhibit III: Growth in Television Channels in the UK(1950 -2002)
Exhibit IV: BBC's Organizational Chart Under Dyke (2005-06)
Exhibit V: BBC's Television and Radio Services in the UK
Exhibit VI: Summary of the Neil Report
Exhibit VII: How the Monthly License Fee is Spent by BBC
Exhibit VIII: Framework for Measuring Performance of BBC
Exhibit IX: Details of BBC's Television Channels
Exhibit X: BBC - Details of the Creative Future Strategy
Exhibit XI: BBC - Pictorial Representation of the Organizational Changes (July 2006)
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