Organizational Transformation at the BBC

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Case Details:

Case Code : BSTR231
Case Length : 25 Pages
Period : 1992-2006
Organization : BBC
Pub Date : 2006
Teaching Note : Available
Countries : Britain
Industry : Media and Broadcasting

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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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...

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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...


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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