STAR TV - AN ASIAN TV SERVICE COMPANY BASED IN HONG KONG
STAR TV
Primary Business
STAR TV is an Asian TV service company based in Hong Kong and owned by M News Corporation. News Corporation is a diversified international media and entertainment company with operations in eight (8) industries or segments namely: filmed entertainment; television; cable network programming; direct broadcast satellite television; magazines and inserts; newspapers; book publishing; and other. The activities of News Corporation are conducted principally in the United States, Continental Europe, the United Kingdom, Australia, Asia and the Pacific Basin.
Further, STAR TV is a pan-Asian satellite network that broadcasts five (5) 24-hour television channels to 38 countries stretching across seven (7) hours of time zones from East Asia to the Middle East. It is based in Hong Kong, with programming offices in India and Australia, as well as in other south Asian countries. The significant growth of STAR since its launch in 1991 is seen through the opening and broadcasting of five (5) television channels, thus putting it in the position as Asia’s leading media and entertainment company. At present, STAR provides viewers across Asia a variety of choices as served through 60 television services that are broadcasted in nine (9) languages. The company guarantees quality in their services to uphold a maximum audience share. They extend its outstanding services using STAR’s satellite footprint that facilitates the coverage of 300 million people in Asia and beyond. With the demands and opportunities of technological innovations, STAR and its management plans to expand their services to reach viewers not only at home, but anywhere and whatever circumstance they are doing. STAR TV businesses extend to filmed entertainment, television production, cable systems and wireless and digital services among others.
Corporate Mission and Strategy
Due to the strategic move to extend their audience share, STAR centers its growth on the choices provided to every viewers particularly paying attention to breath and depth as well as offering a number of languages and in all genres from movies to news, documentary to sports, and music to kids’ programming. This strategy is supported by the concept of Porter’s differentiation. According to Porter, the differentiation strategy can achieve competitive advantage through creating unique value for customers and outperforming competitors who have less unique products or services. The Differentiation strategy emphasizes on innovation and the need to closely monitor customers and markets that requires implementation tools characterised by external focus, adaptiveness, flexibility and organicity.
Applying this differentiation strategy and achieving competitive advantage, STAR produced local programming on different locations, such as Taiwan, China and India. Channel [V] was also STAR’s major attempt at localization. It reached its profitability in various locations and the widespread popularity of Channel [V] is attributed to good programming and its charismatic and witty hosts. Today, this differentiation strategy through localization of content is recognized by Murdoch as successful and the main driving force to the eventual growth in both ratings and revenue.
Asian market is very different. STAR’s strategy, based on localization, is a source of sustainable competitive advantage as it recognizes the diversity of global markets in terms of individual cultural, moral, and social values among others. Soon after, we embarked on an expensive localization program in the key markets of India, China, Taiwan, and Indonesia. We did this by seeking out key strategic and economic partners who understood and operated effectively in these markets.
[p1]Size of the Organization
STAR TV is considered to be a large organization as it employs approximately 700 workers in Hong Kong Headquarter alone and further 2000 workers in other Asian regions. Size is quite directly related to structure. Robbins (1990) summarizes that complexity and formalization are positively related to size.
Given that STAR operates in various locations and as organization, it is expected to grow, both the opportunity and need for work division and coordination (Pugh and Hickson 1976).
Life of Cycle Stage
STAR is in elaboration-of-structure stage. The organization has reach large size and its two revenue streams of subscriber fees and advertising had to be more balanced in order for STAR’s business to attain maturity.
Nearly half of the world’s population resides within STAR’s footprint in Asia. In order to connect with these billions of potential viewers to maintain the momentum of expansion, STAR has made several strategic investments in pay-TV platforms throughout the region. These pay-TV platforms have become invaluable assets to STAR, strengthening our ability to deliver our content to consumers. In addition, organization has established a close working relationship with thousands of other platforms operators in Asia and beyond. STAR has also been expanding its reach beyond television broadcasting, by setting up some departments to offer its content via wireless and online-based services. Whether in front of the TV, surfing the web, or on the go with a mobile phone, viewers connect with STAR. These new departments established to make the organization structure becomes more complex and elaborate.
Environmental Factors (Internal / External) that are relevant to the analysis
In all its markets, STAR maintained close relationships with government officials and understood local operating requirements, both explicit and unwritten. Media, particularly TV broadcasting, were salient politically because of their potential influence on public opinion and their importance to local artists. They therefore remained subject, around the world, to extensive state control—a reality that STAR managed carefully.
(pg.266) By Duncan theory, an
unstable environment combined with low levels of complexity leads to
moderate to high uncertainty. In this environment, there are only few elements,
but each element changes in an unpredictable manner. As there is a heightened
need to process information and respond to it, management is decentralized.
Teamwork is emphasized in order to facilitate communication. There is extensive
use of boundary spanners and intensive coordination devices to enable the
organization to respond to environment pressures. However, production processes
are more stable and tend towards being mechanistic.
Structural elements:
· Decentralized with an emphasis on teamwork
· Constant environment monitoring by boundary spanners
· High levels of coordination in order to promote imitation and innovation
· Production facilities often mechanistic
Burns and Stalker (1961) distinguished organic and mechanistic organizations. They believed that the most effective structure is one that adjusts to the requirements of the environment, which means using a mechanistic design in a stable, certain environment and an organic form in a turbulent environment. Large firms may even have some parts which are organic and others which are mechanistic. For instance, Operations & Engineering department may apply largely mechanistic practice in….…..,but Network Production & On Air Promotion Departments, which develop the programme contents and package the…….. (Pg.261)
India
India, with its British colonial legacy, was somewhat easier in programming perspective in contrast to Taiwan where STAR experienced resistance to English content. As it was still in an embryonic stage, India’s television market was largely unregulated, at least compared with other Asian markets. India had only two television channels in 1991, both operated by government broadcaster Doordashan. STAR later formed a joint venture with native Indian media conglomerate Zee Telefilms. Under the agreement STAR was precluded from developing Hindi programming, and instead was limited to broadcasting exclusively English-language content.
Not only must the cultural differences be recognized, but there is also skill in knowing how to organize the programming; for example, when to insert the commercial breaks. Television ventures can be killed by managers who don’t know programming, especially if they believe ‘good programming’ is what they like personally. As case provided, a quiz show would be successful because India is a nation of very intelligent quizzers.
Structure of the organization
High Complexity : Localization of programs and operations caused an expansion of personnel out of Hong Kong and into the country organizations. The other regions had grown to almost 2,000 employees; in most regions local teams covered human resources and cash management as well as programming and advertising; in some regions local teams also handled broadcast operations and standards of practice.
Localization of programs and operations caused an expansion of personnel out of Hong Kong and
into the country organizations. By 2002, the country organizations had grown to almost 1,000
employees; in most regions local teams covered human resources and cash management as well as
programming and advertising; in some regions local teams also handled broadcast operations and
standards of practice. Local staff was often less expensive than equivalent Hong Kong staff.
for some departments such as Operations & Engineering are high formalization,
Decentralization : In the early stage, decision-making was located with the corporate functional managers in Hong Kong. For example, the head of advertising sales in Taiwan reported to the corporate head of advertising sales.
Murdoch also recognized that success depended on outstanding execution of strategy, which in turn depended on strengthening the organizational systems. Centralization provided control, but would it hinder risk-taking and active debate in cultures that were traditionally hierarchical? “In this market, there certainly is no shortage of risk,” observed Murdoch. “I ask my people to take risks, but I don’t tell them what risks to take. You get fired for not taking risks. Sitting on the status quo for two years will get you fired.” However, were the country organizations sufficiently strong to assume full responsibility? Murdoch mused, “One of the most difficult decisions is knowing when to let go; a judgment call that is never easy.” How best to balance the triad of profitability, innovation/growth, and control?
Mintzberg (1979) who introduces five structural configurations ranging from a ‘simple structure’ to a ‘divisionalised form’.
[p3]Technology
The most important thing to think about is the fundamental importance of making good TV shows and selling them to our customers: our consumers in living rooms across Asia and advertisers and cable distributors. Everything flows from that, and that is [the position] from which one can really set the agenda for our industry. We can talk about new kinds of services, new technologies, and we can talk about cable versus DSL versus satellite; but none of it really adds up to much if you don’t have the ability to put families in their living rooms in front of your programming on a nightly basis. It’s about taking the steps to move an industry forward so that we can start shaping the industry to be the kind of industry we want to be a player in, five or ten years.[p4]
Culture / Power
STAR has penetrated deeply into key markets with mass appeal general entertainment channels, produced locally in local languages, by local talent. These channels help organization achieve a genuine resonance with audiences, and uniquely position STAR as the leading media company in Asia. Murdoch could hardly have been happier with the successes of “Crorepati” in India and Xing Kong in China, STAR’s two most important markets.
Asian companies that were setting up satellite broadcast channels aroused fewer political and cultural concerns in their target markets and often had closer connections with local governments. Foreign broadcasters valued them as partners for this reason as well as because of the access that they often afforded to local programming.
Invest huge capital to produce “Crorepati’…..
A large degree of STAR’s success in India and other STAR markets stemmed from taking risks such as launching “Crorepati.” At the height of “Crorepati’s” popularity, India Today featured Mukerjea on the cover with the headline, “The Big Gamble.” According to a senior STAR manager, STAR reflected News Corp.’s culture of “Sink or swim, just do it . . . Within News Corp., there is a lot of swashbuckling.”4 News Corp. was known as an organization that advocated taking risks and swift decision-making with minimal formal structure. In fact, neither News Corp. nor STAR had official organizational charts that were circulated internally. In the early stage, decision-making was located with the corporate functional managers in Hong Kong. For example, the head of advertising sales in Taiwan reported to the corporate head of advertising sales. (Figure A shows the corporate functional managers in Hong Kong.)
As Asia's largest television network watched by approximately 100 million viewers every day, STAR's reach is unmatched. The breadth and scale of our operations across Asia position us uniquely as a powerful communication vehicle that can be leveraged for the good of the communities we reach.
We recognize this and have incorporated social responsibility in the day-to-day operations of our business. We build relationships with the community we serve by contributing our time, expertise and resources to support local initiatives. From India to Mainland China, Taiwan, Hong Kong and every other region, these initiatives cover a wide range of concerns from health to education for children and equal opportunities.
STAR also benefited from the huge purchasing power of News Corp., which spent $3 billion annually on sports and movie rights.
Power Rupert Murdoch
[p5]Evaluation of organizational effectiveness
Literally, performance measurement is the process of quantifying past action (Neely, 1998). Performance measurement systems historically developed as a means of monitoring and maintaining organizational control, which is the process of ensuring that an organisation pursues strategies that lead to the achievement of overall goals and objectives (Nanni et al.,1990).
The balanced scorecard is not an end in itself, it exists only to show the way to future action. This requires interpretation of the results and the identification of what is good, what is bad, and what needs changing.
Neely, A. (1998), Measuring Business Performance, Economist Books, London.
Nanni, A.J., Dixon, J.R. and Vollmann, T.E. (1990), ``Strategic control and performance measurement'', Journal of Cost Management, Summer, pp. 33-42.
Conclusion
The organizational structure determines where formal power and authority are located. It comprises the organizational components, their relationships and hierarchy. It channels the energy of organization and provides a “home” and identity for employees. The structure of organizations refers to the formal way in which people and work are grouped into defined units. Grouping activities and positions into organizational units establishes common focus by creating standard processes, access to information, and a common chain of authority. It allows for efficient use of organizational resources and provides employees with an identifiable “home” within the larger organization (Galbraith, 2001).
According to Galbraith (2001), no one structure is best for every organization. The best structure is the one that helps organization to achieve its strategy. Choosing the right structure depends on the particular focus of the strategy, complexity of the business, and size of the organization. The objective in choosing a structure is to maximize as many of the strategic design criteria as possible, while minimizing negative impacts (Galbraith, 2001).
[p1]Cut this part shorter and pply porters strategy such as Differentiation
[p2]Apply Duncan theory and describe the environment using stable/certain, instable/uncertain. Simplex, complex
[p3]Need write more on this part that is quiet important for this subject. Pls apply (Complexity, Decentralisation, Formalisation, span of control) and Mintzberg Theory
[p4]I am not sure how to apply theory. Pls choose either Woodward, Perrow or Thompson theory to elaborate
[p5]Apply French & Raven theory, Ouchi’s types of control, and write more positive or negative impact
[p6]Try apply Balance Scorecard and contingency approch
