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1.1a: Background of BBC The BBC is one of the UKs most renowned brands.

It is not only known in UK but has a global reputation and is renowned for its news coverage. The main aim of this organization has always been to produce content which is cultural in nature. It took its inception in 1922 and started as a company which worked upon private lines. Initially it only worked on broadcasting programs for radio transmission. After five years it came under Royal Charter in 1927. From then on it expanded to become a public corporation. It started to gain popularity and started working at a national level. It played crucial part in encouraging the troops and building their morale in World War II. It further provided coverage services during the war. After the war was over, it had established on firm basis and was literally a monopoly in supplying of broadcasting service to television. The main aim of this corporation is to increase creativity in the field of broadcasting. This is also the vision statement of the corporation. However by 1955, it faced competition with other news agencies and lost its sovereignty on television broadcasting (Schlesinger, 2010). By 1973, the market share of BBC was reduced in radio as well as more corporations entered in the business. Although over the period of almost 9 decades, BBC has come under scrutiny over its broadcasting yet it has established firmly as a political and cultural force. 1.1b Comparing Creativity between IBM and BBC The BBC has been hailed as the flag bearer of bringing technological advancements. As the world is now moving towards an era which is known as post-broadcasting, the options to broadcast your content have increased manifolds. This has also been realized by BBC and it has worked on it as well. Nowadays BBCs strong point is its presence on internet as well. It has taken BBC to develop and make efforts so that it transformed itself from radio transmission to

broadcasting on digital media (Schlesinger, 2010). Similar mission statement has been shared by IBM. As BBC works in the broadcasting sector, IBM works in the computer manufacturing sector providing B2B sales services as well. However IBM also aims at providing the innovative technologies for the entire world and promotes trust within the organization. It should be noted that this mission statement has always been IBMs core value (IBM, 2013). It is different from BBC because initially under Birt there was no as such statement to promote trust within the organizational members. It was only after Dyke that the efforts to build trust were incorporated. Beside this the organizational structure of IBM is much different because it works in a completely different sector. There is no Trust Board in IBM and instead of Director General IBM top most management post is held by CEO (IBM, 2013). However since both corporations aim to increase creativity and innovation, both have recently struck a deal named as web 3.0. In this deal, IBM with its creative technology will provide creative solutions to BBC. This deal has been hailed as one of the success for BBC and has happened because both the corporations share the same purpose (Sweney, 2007). 1.2: Stakeholders at BBC and the top management This journey was not smooth but it involved different stages of shifts and transformations. It is obvious that these efforts have to be made within the organization. This is because any decisions that are made flow from top to bottom (Fowler, 2009). Beside this the director generals dont work in isolation, they have to constantly consult other top management. This includes Chief Executive of BBC and the Board of Governors. These two bodies constantly help the director generals. During recent years however some changes have occurred in the structure of the organization. In 2007 because of political turmoil and pressure from media and the law making

bodies, BBC went a change in its structures. The Board of Governors were replaced by BBC Trust (Fowler, 2009). 1.3 Responsibilities of Organization and the management BBC Trust is now responsible for directing the BBC strategically. Beside this it looks after the interests and demands of those who pay the license fees. This includes the viewers of the television broadcast. The Trust aims to carve the mission, it has the authority to issue new license and other related issues and is responsible to check that whether the executive board is delivering the right quality or not. In order to remain in contact with the needs and demands of its audience, it is the duty of Trust to work closely with the national Audience Councils (BBC, 2013a). As far as other members of the organizational structures are concerned, the Executive Board looks after the operations of the corporations. It delivers the BBCs broadcasting services and runs the organization under the rules which are laid down by the Trust. Below the top management come the media regulators. They are called Department for Culture, Media and Sports (DMCS). They are responsible for the broadcasting the Government content and look after the creative industries in UK. Other departments in the organization include the departments which provide the services. These include TV, Radio, and Newsgroup. There is another operational department called Future Media which is responsible for all digital media services. BBC north looks after the sports broadcast and 5 Live. The finance department looks after the financial records of BBC (BBC, 2013a).

2.1 Constraint faced by BBC during the regimes of Thatcher and New Labors As the years passed, there were some ideological shifts in the BBC Corporation. These ideological shifts happened because of the policies brought by Margaret Thatcher and her successor John Major. These policies caused a slur within the organization to change according to the new government policies (Born, 2004). This prompted Birt to take on measures to curb the costs and introduce accountability measures because of Thatchers policies prices hiked up quiet high unemployment rose and demand for the BBC programs fell considerably. The next government which put constraints on BBC was the New Labor. This party came into power in mid 90s and early 2000s. This regime encouraged market economics and promoted trust within the organizations and made reforms which aimed at increasing efficiency. Although their policies were favorable for BBC yet they were a constraint because BBC was still running on policies that were made for Thatcher government. They needed to change their organizational climate altogether. This was done by Dyke as he had to bring in number of reforms so that the constraint of increased demand for efficiency by UK government on BBC could be removed. He then laid the foundations of creative BBC in order to meet this constraint (Negus and Pickering, 2004). 2.2 Economic factors and how they affect output at BBC As BBC is a corporation so any economic effects will also affect the BBC as well. One must first understand the revenue generation sources of BBC. BBC gathers its finances from charging its viewers a license fee. This is the basis of its monetary strength. Any increase in income tax will fall on the license fee and which can hurt the economic activity of BBC. Beside this the BBC is a public venture that brings substantial advantages to audiences which are its consumers and it also

affects the social welfare (BBC, 2013b). If the value of the pound increases, it will increase the cost of making programs as compared to the programs that are made outside UK. This will decrease the economic value and hence the activity of BBC. Beside this if the government expenditure increases, it means that government spending on BBC will also increase. This means that BBC will have more funds at helm and it can produce more programs. The BBCs activities also have a significant and positive effect on the UK economy (BBC, 2013b). BBC is one of the leading employers of creative talent. It employs actors, writers, singers and other artists. The effect of rise in unemployment can have dual effects on BBC. If the employees from BBC are fired and hence get unemployed then it has a straight away negative impact. However if there is an unemployment within the country then there is a chance that BBC can hire creative talent at a lower wages (BBC, 2013b). In short BBC is affected by all the economic factors which may affect the country and any other organization. 2.3 BBC and the competition policy Once the effects of economic indicators have been studied one must also look upon how BBC aims to direct its policies taking in account the competition policy of the UK government. The BBC has direct impact on the market. Subsequently the BBCs activities can also affect a wider market which can affect the competition. This can hurt license fee payers and consumers who have variety of choice in this sector which can hurt the corporation. So in order to check the monopoly power of this organization, UK government has established competition policy. In order to maintain the impact of this competition policy, BBC has devised a competitive impact framework (Trust, 2007).

This framework policy has five characteristics i.e. Approvals for the BBC's activities, operational conduct of BBC, enforcement, monitoring and reporting. These five pillars ensure that firstly the consumers are not hurt by any policy. Secondly the operational conduct ensures that BBC follows the fair trading policy and follows the competition codes. The enforcement aspect caters to all the complaints whereas the last two parts of the framework ensure quality assurance and worthy feedback is taken into account. In this way government competition policy affects the BBC that it keeps the corporation at bay from exploiting the consumers because of its monopoly powers (Trust, 2007). 3.1 Market structures of BBC under two DGs Market structure under Birt Under the leadership of John Birt who as DDG from 1987 to 1992 and later who worked as a DG from 1992 to 2000, the changes that were happening at entrepreneurial and private level were captured and were incorporated in such a way that it resulted in the organizational level. These changes are discussed in depth by many business researchers and is being labeled as Britism (Born, 2004). The organizational changes that happened were the inception of Production Choice and BBCs own semi market. Subsequently there were changes in management systems as well and the Production department was separated from that of Broadcasting. Beside this the idea called Bimediality was also imposed. This imposition showed how BBC adopted to ideology that was governing the market at that time and how it incorporated that ideology on radio and television. It also showed how BBC can adopt to changes at management level and incorporate policies which save cost and transform the way public is served (Born, 2004). One

should note that these changes were implemented once the reforms brought by McKinsey failed in 1970. This divided the BBC Corporation along horizontal format and created a quasi market between BBC production, the departments which produce programs, the BBC broadcast, the networks of radio and television network (Born, 2002). His efforts can now be seen when one analyses the gigantic presence of BBC on internet these days. This implies that whatever the criticism of Birt may be, he was able to improve the financial condition of the company when there was severe austerity from the government during Thatchers era. He also made sure that BBC is sufficiently digitized (Schlesinger, 2010). Dyke and the creative market structure of BBC On the other hand lies another DG named as Dyke. Contrary to Birt, many researchers who criticize Birt hail Dyke. This is because he incorporated changes at organizational level and introduced creativity in the service creativity. This is because Dyke felt that there is a link between the organization level and creativity in the service industry. Dyke changed the organization by imposing the sense of creativity. This creativity was the key feature of Dykes tenure as effective management was in Birts leadership. Dykes managerial style which aimed at infusing creativity within the system has been hailed as a very smart move from PRs perspective. His creative invention was successful and it tends to undermine the changes that were brought about by Birt. His reforms made sure that BBC achieve its vision statement which aims at making BBC the most creative and trusted Broadcasting Corporation of the world. Creativity was also made the core competence of the organization and the organization established this core value for a long term (Kng-Shankleman, 2000).

3.2 Market forces and its effect on BBC As the presence of BBC grew it attracted other companies as well and competition started to grow. In the production sector which was independent in nature, the increase in competition also increased the concentration of companies and it led to the oligopoly type of structure. The companies that had abundance of talent in the field of singing, writing, acting and comedy started to exploit this and demanded more commission from BBC Broadcast. The conditions of the market that prevailed at that time led to massive inflation. The value of the genres which were based on talents hiked up which increased the cost of producing a program (Berrisford, 2005). Beside this in order to look after the legal, financial and editing maters, in various BBC centers, more staff was urgently needed. Before the reforms the British system was integrated vertically. The production and reproduction of professional ethics was common and was backed by cultural institutes. Training was provided by internal organization and the competition was lesser. However this was abolished by the deregulation under the neo-liberal regime (Lash and Urry, 1994). This happened during the regime of Birt and he resorted to cost cutting methods to cater to these effects. 3.3 Cultural change and the need for creativity in BBC As the New Labors gained power, they led down a more social democratic system of government which brought cultural change. New ideas came and so BBC had to meet this cultural change. This was met by introduction of creativity in the corporation and inculcation of trust by Dyke. The first project was known as One BBC which was introduced in April 2000 (Aris and Bughin, 2005). The main purpose of One BBC was to divide Broadcast and Production and to decrease the overhead cost of the corporation from 24% of the total income earned to 15% of the total income. This reduction was aimed to be achieved within 5 years and it was estimated that it will

save 200 million pounds from every program that is being produced (BBC, 2004). Under the banner of One BBC Dyke decreased the managerial levels and rationalized in the engagement of the support services. Besides reducing the number of managerial levels he gave a new structure to all the divisions. This brought closer the producers of programs and those who broadcasted it in the Executive Committee, which led to the building of a big and cohesive team at the heart of the corporation (Howard and Richard, 2000).

Dyke also introduced some programs which were aimed at promoting the feel good sense within the organization. The consumer satisfaction index reflected friendly figures for BBC and on top of it BBC 1 was rated as number one channel in 2001 and defeated its arch rival iTV. This was a major step in advancing the corporation in digital world. His next strategy was the introduction of One BBC: Make it Happen. This was aimed at integrating the whole BBC. Dyke introduced the participatory type of management and every organizational member was made to take part in the decision making process (Dyke, 2005). His other project was called Just do it. The main aim of the project was to remove the elements within the organization which cause inefficiency. As this project was started, the groups which aimed at the creativity and which dealt with the audience were oriented as such that they faced out and dealt external matters (Dyke, 2005). Efforts were made to renew the Charter and the rest of the management was directed to work as a support group. Every segment of the project was assigned a leader which work with the 18 divisional level leaders which were assigned to carry the plan and execute it in the corporation. In order to create cohesion within the organization Just imagine project was launched in 2002. It was a project based on various stages. The first stage was known Leading the Way which

was aimed to train for 400 senior executives. The next stage was holding workshops which were based on principles laid down by AI. By July 2002 5000 participants were already engaged in this project (Hesmondhalgh, 2007). As the next stage was launched, the total number of participants had reached 10,000. This was more than 37% of the total work force. It also helped in spreading the agenda of ownership sense which was shared in nature (Hesmondhalgh, 2007). 4.1 Gap in creativity after Dyke and the threats to BBC The cultural change that was brought about by Dyke and his beliefs that were reflected in his leadership style were pivotal in creating what the researchers call as creative ecology. By his efforts Dyke helped to save the organization from the shortfalls of structural change. These shortfalls included little loyalty to the institution, decrease in trust within coworkers and decrease in the innovative knowledge of the institutes (Negus and Pickering, 2004). The analysis that is done on Dykes management style and the creative reforms that he brought with them are of the view that those projects led to a great deal of the activity. Those projects tend to change the business environment in which the BBC operated and brought cohesion within the organization by removing the barriers between various staff members (Negus and Pickering, 2004). However it cannot be concluded that these reforms became effective after his departure since the new DG is still in process of building upon those projects. After the departure of Dyke, BBC continues to face the crisis and this has slowed down the new DGs efforts in establishing the BBCs Creative Future. This has exposed BBC and the corporation is in need of new structural reforms (Negus and Pickering, 2004).

4.2 Future of BBC After Dyke it is viewed that the future of BBC is in danger. This is because it is now being felt that revenue generation through license fee is insufficient to cater to all the finances of this corporation. Thus it is now considering various options in order to increase its finances. Up till now the situation is under control till 2016 (BBC, 2013c). However after this BBCs current Royal Charter will expires. By then, complete digital television switchover will take place and it will open for other markets such as in India, Brazil and China for next ten years. People can then choose between bigger bands of channels and will view television content such as video on demand. If BBC will not have enough finances it will fail to cater to such markets and will make a loss. The future of BBC thus lies in increasing its revenue base or introducing more creativity in its organization in the coming next ten years (BBC, 2013c). 4.3 Impact of EU on BBC Any impact of EU on UK will have a direct effect on BBC as well. If one studies the EU impact then one notices that it will affect BBC in two fields such as legal and the viewership. As far as the legal impact of EU on BBC is concerned, the legal issues of BBC will be decided in Human Rights court which is outside the jurisdiction (WHEELER and PETER, 2013). This will seriously undermine the sovereignty of BBC as it has to take upon legal directions from outside UK. On the other hand EU would be beneficial for BBC as all the protectionist policies will be stripped away and the EU Arrest Warrant will also be lifted. This will in turn increase BBCs viewership and then BBC can increase its financial base on the basis of volume of viewership as it will be broadcasted in all Europe (WHEELER and PETER, 2013).

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