The focus will be the cultural issues inside the BBC which emerged due to Greg Dykes new strategic approach, but in order to obtain a more detailed and comprehensive view of BBCs strategic position at the time, I will briefly discuss also the challenging factors for the corporation in terms of environment, capabilities and purpose. This will facilitate a more accurate definition of the eventual future strategic development.
What does the BBC's purpose require?
Originally, BBC's mission is to inform, educate and entertain. They see themselves as 'the most creative organization in the world'  and try to pursuit that vision. The values they follow are independency and impartiality, diversity and internal collaboration  ,delivery of quality and value for money,. The corporation should live up to that purpose and convince its stakeholders (the public and the government) that it does. Otherwise BBC will be deprived of its 'privileges' of being state funded.
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I will point out only the key factors, presenting challenges for the corporation.
Macro environment 
As a Public service broadcaster (PSB) the BBC depends on the political climate in the country, because the parliament periodically determines the size of the licence fee which is the main source of BBC's income (more than 90%) and also its charter. Moreover, its status of a PSB is often challenged by different politicians. Therefore, constant development is required.
Bearing in mind the source of financing of the corporation, the only left real economic challenge is the competition on the market which is part of the micro environment and will be discussed below.
From society's point of view, BBC has always been more like an institution than a company. BBC delivers a public service of a higher standard and is associated among UK's tax payers (and also worldwide) with an outstanding quality and value. Nevertheless, such a credit of trust should not be taken for granted and should be maintained in order to keep society's positive bias towards BBC and remain a preferred media on the landscape of diverse choices.
The new digital age brings new challenges for strategy and development - such as the need to deliver profound online services and cross-media brand-building. Harwood, S. (2004) cites different sources claiming that the contemporary overall trend on today's market is brand building via direct and online marketing which adds incremental brand value in whichever sector, product or service. Therefore, in order to stay competitive, the PSB needs to follow this trend.
Challenges of the Micro environment 
The threat of entry:
A lot of competitors are entering the media market, as there are relatively low threshold requirements and little legal restriction or limit of distribution channels. However, The BBC has the advantage of large scale and government protection.
Hard to Substitute
The supply of a vast multitude of media services on the market suggests elimination of the need for a PSB as the need for information, education and entertainment is satisfied. Despite that, no other than a non-commercial organisation, like the BBC itself, has the advantage to focus on high quality, creativity and impartiality rather than profit and stakeholder satisfaction. And that is basically the corporation's argument against anybody challenging its status.
Keeping the buyers
BBC provides a service and the ultimate customers are the viewers. Though, they are a limited number and BBC aims at a market share, i.e. ratings. The competitors offer a similar service, (usually) for a lower price or for free. Especially with the introduction of satellite and digital television the switching cost for the viewers is quite low. So keeping a leading position has become an issue for the public service model of the BBC.
Always on Time
Marked to Standard
A possible and emerging challenge is the attraction of external partners for the compulsory co-productions  . In addition, BBC needs cable and satellite stations to carry its free-to-air services and also commercial operators for additional screenings. Therefore maintenance of credibility and robust brand name is essential so as to make it 'unprofitable' for partners to leave the BBC out (Meech, P,2001) or to replace it.
Dealing with rivalry
Obviously, there are some commercial companies sharing the large-scale size of the BBC and some smaller ones, too. During the last couple of decades there has been an evident growth in the media industry. Consequently, this growth has lead to a steady decline for BBC's ratings and has shrunk the broadcaster's market share. The key to success has been seen by Greg Dyke in emphasis on differentiation, generally, by cutting costs from management and reinvesting in programme creativity (product development) and quality and enhancing internal collaborative behaviour(consolidation).
Strategic capabilities at stake 
When Greg Dyke came into office and during his governance several core capabilities of the corporation appeared to be in need for protection and development, in order to sustain BBC's competitive position and be able to head for future improvement. Unique resources like the multi-channel service delivery system needed upgrading. Also keeping the good reputation was crucial for: a positive bias of the society and politicians so that funding is secured; partnerships are maintained and attractiveness to employees sustained.
A resolution to all that the new CEO saw in converting the organisation's structure and culture which he considered ineffective and inappropriate. According to him, a new collaborative culture should have been implemented in opposition to the old market one, which would assist overcoming the current challenges and the future improvement. As Johnson,G., Scholes, K., and Whittington, R.,(2008) imply, 'strategic capabilities are very likely to have been embedded through the culture of the organization'. Apparently, Dyke shared that understanding and therefore initiated a conversion of BBC"s organizational culture.
Strategic challenges due to Dyke's cultural transition
Wilson, F.M.(1999) suggests that better organizational effectiveness could be accomplished by evaluating and changing the internal culture. Therefore the route to change implies taking the positive and the negative traits of the past and improving only the negative ones, while all that is valuable is possibly preserved. Dyke's Paradigm is 'Building One BBC' and making it work as one coherent and not segmented unit  . However, this does not mean that such a good plan has no pitfalls lying in the organizational culture  .
BBC's Routines and Rituals
The new appointed CEO saw the need to convert the organization's marketing and negotiating routines into cooperation and invert the focus from internal to external - make the viewers' satisfaction the objective. Reducing the business units from 190 to about 40 and merging some of them, actually meant that this will happen. However, to change people's behaviour is not that simple. Although the majority of the staff welcomed the change, it did not necessarily mean that everybody shared the enthusiasm. Usually an organization consists of different subcultures which are possibly mutually antagonistic (Wilson, F.M., 1999). So a probable conflict should not be excluded.
Stories and Symbols
The unseen bases of BBC's culture lay in the shared history and the common idea of superiority over the others. Everybody acknowledge that they are the best and are working with the best. The staff associates itself with the brand of the BBC and the uniqueness of its products -news, programmes, etc. Working for the BBC means that you are a professional in your field. The quality, independency and creativity of the organization are promoted and are recognized by the public. All this was a fact on Dyke's arrival, but it was staring to erode.
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Converting J. Birt's dispersed power structure, where all the business units (Broadcasting, Programming, Production, etc.) had a relative independence, was one of the first tasks of G. Dyke. The former CEO has been implementing the principles of an internal market which was the common belief in the public sector at that time. The new General-Director, though, had a background in commercial television and followed a 'bureaucracy-breaking perspective' (Littler, C.R.2003). As Littler, C.R.(2003) claims, too many layers of management result in increased bureaucracy and less accountability. So we might say Dyke opted for a pragmatic power structure in order to improve performance and effectiveness. Unfortunately, the reform inevitably faces the cultural rigidities of the people's behaviour who had been working in a certain manner up to that moment. Staff may be enthusiastic about the development, but change takes time and a model and people need a period of adaptation before starting to work properly.
The flatter organizational structures
The formal organizational structures of BBC were transferred from highly hierarchical to 'flatter'. The act of flattening (or delayering) itself consisted in cutting managerial levels, reorganizing certain business units(e.g., the programming groups) and centralizing the support functions like Marketing, Finance or Strategy. The delayering is a 'planned vertical compression of managerial levels of hierarchy, involving the wholescale removal of one or more layers of managerial or supervisory staff from the organization's payroll' (Littler, C.R., 2003). By removing some reporting levels (layers) the CEO aims at faster communication and decision-making, stimulating internal innovation and creativity and, of course, more involvement and commitment by the managers, (Littler, C.R.2003). This has been achieved in BBC by including more people from broadcasting and programming in the Executive Committee and also creating a Leadership Group ( together with them and the top 50-60 managers) so as to increase the two divisions' participation in the strategy process. The reorganization of the business units  seeks better effectiveness and cooperation in the creative process and planning in opposition to the former competitive and negotiable manner of work.
A New Media division is created, merging together BBC Online, Interactive TV and ' blue skies' departments for the purpose of conveying a coherent vision in the field of new technologies and act consistently to develop quality services.
Effectiveness of control systems?
The former object of control in the BBC, as viewed by J. Birt, had been the market discipline. Therefore, the function of the center was a regulator of the market. Dyke, on the other hand, acted as a supervisor of the collaboration inside the organization in order to facilitate internal focus and effectiveness. Unfortunately, the transition period of cultural adaptation in the BBC lead to some unsuspected results. The research of Littler, C.R.(2003) shows that in some cases delayering leads to inefficient decision-making and also 'the demise of managerial internal labour markets, changing managerial workloads and 'burnout', reduced organizational commitment, a rise in inter-firm mobility, a collapse of loyalty, and even increases in white-collar crime'. All that actually manifested itself in the case of Andrew Gilligan's actions (and the BBC as a whole) and the effect they had on the events around Dr. David Kelly's death. Dyke's paradigm of One BBC was driven by the need to change in order to stay competitive, and even by adopting the roles of both Chief Executive and Editor in Chief , he tried to live up to his own idea. Though, in the contemporary situation the complexity of the environment and tasks implies reliance on many people, so relationship skills are critical and sharing the load is a necessary step (Martin, A., 2007). A single person is not capable of managing, controlling and supervising everything in a multi-branched and multi-functional corporation. The information flow is overwhelming and focused attention is hardly achievable in 'a world of interruption'  ( Martin, A., 2007).
The way forward for BBC
In brief, through 'Building One BBC' Greg Dyke opted for and sought consolidation, product development and diversification. He wanted to sustain BBC's market share, build on the company's strengths by investing more in creativity. In the situation of a saturated market he emphasized on the core competences of the BBC and even continued expanding them in new areas in order to satisfy the public, being his actual 'stakeholders'. Although the cultural conversion that he conducted produced good results and was welcomed by public and staff, it implicitly contained a pitfall. Littler, C.R. (2003) concluded from his study of organizations, that a decrease in layers and processes produces sloppiness and insecurity which make the reform ambiguous and unsustainable and could often lead to a back 'relayering'. This corresponds to the idea of Martin, A. (2007) that no single innovation is absolute or everlasting. Therefore, after the unfortunate downfall of Mr Dyke a revised strategic route should be considered so as to repair the dysfunctions within the organizational culture and structure and the ineffective routines. An organic development should be the suitable method for achieving that. The problem occurred because of such a development. Consequently, it should be reinvented. The analysis has shown that the emphasis should be on reforming the control systems and revising some operational routines in the corporation. However, the relevance of the implemented paradigm and the conduct of the consolidation, product development and diversification have proven to be a suitable, acceptable and feasible strategy. Therefore, the descendent of the BBC's CEO position should maintain that principal route, but only modify it as Building One Responsible BBC.
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A world of interruption
Due to globalization and increasing complexity our attention is spread over multiple places and tasks. With the help of modern technology people are able and even forced to do that without even leaving there workplace. We are expected to cope with an overwhelming flow of information constantly coming at us. This leads to unfeasibility to concentrate our attention at a single task or problem. (Martin, A., 2007)
Organizational culture is the 'basic assumptions and beliefs that are shared by members of an organisation, that operate unconsciously and define in a basic taken-for-granted fashion an organisation's view on itself and its environment'. (Johnson,G., Scholes, K., and Whittington, R.,2008)