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Generally speaking, to be a successful entrepreneur and moreover to survive in this fierce business scenario with all the economic issues. For instance, government regulations, economic recession or globalization. You have to show and prove a different concept of how to do business; Murdoch has shown that his particular style of leadership could be successful in terms of money. But is it a fair style for all the stakeholders or only for himself? This assignment will deal with the follow topic "From a Human Resource Management perspective, provide a reasoned and academically underpinned critical analysis the leadership style of Rupert Murdoch"
Charismatic, controversial, risky or just careless about people?
According to the case some of Rupert Murdoch's associates describes his management style as "Calculated terror", it could be the key to Murdoch's success and it seems to be clear through his businesses background that is is how he has built his empire. Started from his school holidays where he used to work in newspaper offices in Australia, then University and after graduation he started developing his career at the media sector. But, how come someone can get that level so quick? There is no doubt about Murdoch's ability to do business, for instance; some of his methods include driving out competition by reducing the selling price; giving basic and populist content information or adding suggested female pictures to increased paper circulation and finally acquiring the competitors or making profitable agreements, such as: SKY or applying new technology. Whatever he has done, it works. Most of the strategics are valid on this uncertain economic scenario. But what about ethics, culture or management style? Does it affect the commitment of the employees?
As a global businesses group with branches all around the world, Murdoch's businesses has been faced several changes in the last recent years. For instance, globalisation and internationalisation, according to Hill (2005). Globalisation refers to the shift towards a more integrated and interdependent world economy. But is not only about experience of other cultures that impacts on our everyday life, it is also about businesses and how to take advantage of this situation by exploiting the resources capabilities of different countries and integrated those to the main objectives or goals. Clearly, Murdoch has shown a triumphant business plan to control the whole media in many countries through News Corporation. Of course it has opposition, such as: campaigns against to monopoly in the media industry based on regulations, unclear sources of information, etc., which means bad reputation and losses.
Porter's Competitive Advantage refers to cost leadership and differentiation as a pivot of outstanding model, referring to the reading, Murdoch has applied those. For instance, auspicious price war and adopting new technology.
Based on the five forces analysis to determine competitive power for Murdoch's businesses. There are:
Supplier power: According to the reading and news, it seems that their suppliers have not got any power to negotiate to News Corporation, and could be replace quite easily. News Corp. is big enough to have numbers of suppliers who want to provide goods and services in terms of hight volume of elements for lower prices or discounts.
Buyer Power: It is widely known that in the latest decades people want to have more for less price, Murdoch Knew that. Therefore, one of the strategics that Murdoch has adopted is price war which means less price, but more volume of sales. For instance, in 1993, Murdoch cut the price of The Times and as a result the circulation increased 40%. Moreover, cover 24 hours the war in Iraq in 2003 on Fox News or juts post topless girls in his newspaper The Sun, which means in a way all we need Murdoch's companies can full fillxxx with all the services and products, before we look at new alternatives. All this offers means for us, do not have any Buyer Power. For example, looking at people who like football in UK, the only way to watch the Premier League matches is to have a subscription to Sky.
Competitive Rivalry: As the world's third largest conglomerate just behind of The Wall Disney and Time Warner, and growing up in most of his business, Murdoch has tremendous strength, and can destroy competition and then buy them. For example, He can afford a price war or buy bankrupt businesses financed by the profit of the others businesses until it can give profit for itself.
Threat of Substitution: Part of Murdoch's strategy is to control the world media and He is the one who gives different way of doing things, For instance: when He adopted new technology to printing or introducing computers to transfer data to newspapers. Moreover, when he thought that satellite television would be the key to survive in the media, he acquired satellite TV channels.
Threat of New Entry: Murdoch has favourable position and strong protection of his businesses and constantly market research, which means, any possible threat would be in control before it gets successful. According to reading Murdoch's vision was to make and own every form of television content news, sports, films and entertainment.
There is no doubt that Rupert Murdoch has a competitive power and all the financial analysis will result as a attractive investment. According to Forbes Murdoch is ranked 13th most powerful person in the world in the 2010, and He is ranked 117th wealthiest person in the world. But is all about "Money Talks" or has He really got the right leadership style?
It is widely known that Murdoch has several business in different industries, such as: Technology. Entertainment, Publishing and Newspaper, and to cope with all of them he seems to use a radical approach of management. Most of the time it seems as an autocratic leadership and using Taylor's theory, such as: ignores human factors; - Considers them as machines. Ignoring human requirement; want and aspirations and stresses only on efficiency. That could work in a way for money purposes, but what about employees commitment and satisfaction.
As a successful businessman Rupert Murdoch has went through all the phases that Greiner describes on his Growth Model for organisations. According to the model after each phase of stable growth there is a "crisis", when major organisation change is needed if the company is to carry on growing. Is it there where Murdoch has showed his leadership?
Phase 1: Growth Through Creativity
Here, Murdoch had showed his passion at his early years for newspapers business. Maybe influenced by his father, who ran a local newspapers in Australia, or just natural born interest.
After university he worked for the "Daily Express", where he developed his interest and was inspired by the success of the "Daily Mail". At this phase Murdoch was convinced that creativity through news content, coverage, editorial and advertising would be the key to conquer a relevant position at the market share. Murdoch started showing his leadership by giving new concepts and ideas and some respect for colleagues.
Phase 2: Growth Through Direction
After Murdoch inherited the Adelaide News and Sunday Mail from his father, he started showing his revolutionary ideas and created a new way to catch up more readers through scandalous headlines and content. At this phase he was in control of the all business and his approached to the employees was more radical.
Phase 3: Growth Through Delegation
Murdoch acquired several local newspapers and his first television channel and launched The Australian, where he could have some political influence. At this phase he drove his businesses personally and started giving some delegations.
Phase 4: Growth Through Coordination and Monitoring
As he started his venture to new countries, such as: United States, where he bought New York Post. His businesses bureaucracy had relevant increased, A new culture and structure where introduced and here where Murdoch had a crucial circumstance to deal with. And it bring us to the next phase:
Phase 5: Growth Through Collaboration
In 1980, Murdoch established the News Corporation in New York, where he can control all his media emporium and started multiply his businesses into different industries. If we look at the board of directors of News Corp. we can see notable people, such as: the former of Spain Jose Maria Aznar, as well as some of Murdoch's family, that means that he prefer to be around of people who sympathize with his ideas.
Phase 6: Growth Through Extra-Organizational Solutions
The last phase is to be involved in different scenarios outside of his core business. Could be political or educational. Such as: FAES - Foundation for Social Studies and Analysis or an annual management conference, discussing media issues related to geopolitics. Also, it is widely knows his contribution to the Republican Governors Association or United States Chamber of Commerce. With off course criticism by Democrats.
It is clearly known that Murdoch has an Autocratic or Authoritarian style:
But, how can someone be a triumphant businessman without being a perfect leader? Is it all about management? Management people and resources ?
It is widely known that Murdoch's method of people management does nor apply to the general assumption of fair HR, so lets analyse his organisations in terms of the seven internal aspect that need to be aligned for his successful, based on the Mc Kinsey 7s Model.
There are seven independent elements, which are categorised into Hard or Soft elements:
"Hard" elements are strategy statements; organization charts and reporting lines; and formal processes and IT systems. influenced by management.
"Soft" elements are less tangible and more influenced by culture.
The plan that Murdoch uses is to maintain a competitive advantage over their competition is to control the media as much as possible.
News Corporation has a line of authority as a management structure, where the board committees reports to the board of directors as Murdoch as Chairman and Chief Executive Officer, who has the final decision.
Most of the activities are planed ahead and has to follow a minimum standard of production. According to the reading, Murdoch stressed on performance and people who did not perform well were sack.
There are the core values of the organisation that we can see in the corporate culture and work ethic.
Author Edgar Schein states "Culture is both a dynamic phenomenon that surrounds us at all times, being constantly enacted and created by our interactions with others and shaped by leadership behaviour, and a set of structures, routines, rules, and norms that guide and constrain behaviour." (Schein, 2004, p.1), at this point Murdoch has created or forced his own culture organisation, for instance: integrate different cultures of the acquired companies easily into New's culture, by employing his own manager from News Corp. group. That give us an idea of how Murdoch treats his employees and what sort of leadership He has.
Talking about ethics, Foster says that -right and wrong, good and bad, virtue and vice, benefit and harm, propriety and impropriety. So too is it about principle-fixed, universal rules of right conduct that are contingent on neither time, nor culture nor circumstance. (Foster, 2003). there are lots of discussions whether personal ethics and business ethics are unrelated or there is not fundamental separation, but all agreed with that ethics has been influenced by religious beliefs and it makes a relative point of view. For the media sector where the way to manage information could be the key to be successful or a weapon, ethics does not apply at all, it is more about the moral responsibility, consequences and regulations. Recently we have been told about the unethical way that News Corp. acquired some information by phone-hacking celebrities or famous people, which represents for News Corp. bad image or reputation and compensations.
As we discussed previously Murdoch has an Autocratic or Authoritarian style of leadership adopted.
In terms of staff we van see that Murdoch hires suitable people according to his expectations, if we look at the board of directors, we can see familiar people such as: one of his son James Murdoch as Deputy Chief Operating Officer News Corporation and Chairman and CEO, International News Corporation and Lachlan Murdoch as Executive Chairman Illyria Pty Ltd. Just mentioned some. And takes us to next element:
The skills and competencies of the those employees, does the fact to have a Murdoch's surname mean that they are good enough to be at that position? Did they have to go through all the steps at the recruitment stage? May be not, and that could affects enormously to others employees, based on i
Can you define this case in terms of hard of soft approaches to HR, you may or may not be able to?
Also do the models of HR fit successfully with this approach and if not why not?
how Murdoch's style affects his employees . Positive and negative ????
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Some of his businesses were in the beginning incurred losses but financed by profits from his others companies.
John Malone of Liberty Media had built up a large
Prince Alwaleed bin Talal al-Saud of Saudi Arabia, through his Kingdom Holding Company, owns 7% of News Corp.'s shares, making Kingdom Holdings the second largest shareholder
management provides leadership, and leadership contributes to management. In real life, some manager cannot lead and some leaders cannot manage.
Management vs leadership myth can be better understood when we outline that while leaders create new directions to influence team members to change. Management focuses on implementing these directions by managing the team members' tasks and focusing on planning, communications and organizational skills, to name a few.
To conclude, management do things as per the directions of the leaders (who could have appointed them in the first place).
The following table outlines the high level differences of management vs leadership
Implement ideas without challenging them.
Characterized by being classic imitations of leaders
Reports routinely to work
How and When focused
Day to Day focused
Environment Looking in
Organization rules and regulations focused
Based on current facts and constraints
Current situation focused
Challenges ideas to innovate
Characterized by innovation
Innovation mandates looking at the horizon
What and Why focused
Strategic Directions focused
Always looking our the boundaries of the current environment
People and innovation focused
Based on philosophy and ideology
New situation focused