Company issues and leadership challenges

Company Issues and Leadership

For any leader, be it in business or politics, his or her key mandate remains meeting the wide range of demands put across by various groups of stakeholders. Most particularly, organizational leaders today must ensure that they restructure and reengineer the entities they are in charge of in a way that makes them more responsive to the needs of not only clients but the marketplace as well. In this text, I take into consideration the media giant, News Corp, which has in the recent past met the wrath of shareholders over a mobile device hacking saga that also saw the company come under intense public scrutiny. Given recent happenings at the media company, it is clear that the shareholders of News Corp feel that the company has not been vigilant enough to protect their interests.

News Corp: A Brief Background

An American media company, News Corp is (in revenue terms) one of the largest media and entertainment companies in the world. Today, the conglomerate has in its fold quite a number of enterprises which it has taken control of since the mid 1950s. Some of the earliest acquisitions News Corp made under Rupert Murdoch's stewardship after his father's death were the acquisition of Sunday Mirror, Cumberland Newspapers and the Sydney Daily. Throughout the 1960s and the 1970s, Murdoch concentrated on building an empire through more acquisitions of businesses which included transport and airline firms like ATI and TNT. The 80s saw News Corp train its sights on satellite television and publishing with the acquisition of the likes of William Collins and Sons Publishers and Satellite Television PLC. It can however be noted that in the mid 90s, the company experienced some financial setbacks that forced Murdoch to give up much of his shareholding in the media company in an ensuing restructuring effort. This effectively reduced the significant influence Murdoch had in the firm. Since the late 90s going forward, News Corp has been concentrating on establishing a worldwide dominance in the cabal network, satellite, television and entertainment industry. Today, News Corp is essentially a diverse media holding firm with diverse interests in a wide range of segments including but not in any way limited to Publishing, Television, Film Entertainment, Cable Network Programming etc. Robert Murdoch remains its CEO and Chairman. The company's most fierce competitors include Viacom Inc. And Time Warner Inc.

In recent times, News Corp has been in the headlined for all the wrong reasons. Sometimes in July 2011, the media conglomerate was forced to shut its operations of the UK newspaper, News of the World. What brought about this closure was the disclosure of the phone hacking scandal citing the company against certain individuals including Gordon Brown and Milly Dowler. This has since set the shareholders of News Corp on a collision course with Rupert Murdoch. The challenge in this case is how to restore the confidence of shareholders. The second problem the company is currently grappling with is declining profits. In its 2011 third-quarter report, the media conglomerate said that its profitability had decreased by approximately 24% (Pulley, 2011).

Addressing the Challenges: Proposed Organizational/Structural Changes

News Corp's organizational structure can be taken to be largely functional and decentralized. In this case, the employees of the media conglomerate appear to be organized around skills. Under Murdoch, we have seven executives who are in charge of the company's various functions including but not limited to investor relations. In my opinion, this organizational structure has a number of flaws. Though I don't advocate for the same to be changed in its entirety, I am convinced that several changes (minimal) would come in handy in so far as addressing the challenges I identify above is concerned. To begin with, I am of the opinion that we should have fewer individuals reporting to the Chairman and CEO, Mr. Rupert Murdoch. In this regard, I am convinced that some of the functions are essentially duplicated and hence redundant. Hence in my view, this could help stop the decline in profitability. Further, it may have a positive impact on response time.

Next, I would propose that the company enhances the link between its functional units and services. As things currently are, it is quite difficult to correlate individual units' spending with individual services' profits. Of concern in this case is that the various units which are viewed as vital components to the smooth running of the organization and which avail support to the organizations functional units including but not limited to IT and HR do not make revenue contributions (at least directly). Hence in that regard, the need for News Corp to enhance the link between its functional units and services cannot be overstated.

Next, I am of the opinion that several executives and board members should be replaced in an attempt to demonstrate to shareholders the organization's commitment towards reversing the damage caused by unethical business practices that effectively endangered the interests of shareholders. Currently, the board of the company comprises of fifteen board members. Given that a third of these directors are appointed by stockholders each year, making the necessary changes in regard to the composition of the board lies squarely on the shareholders themselves. However, when it comes to the key functional managers, the leadership of the company should consider injecting new life into the media conglomerate by instituting major reshuffles. This in addition to enhancing the confidence of shareholders and other stakeholders could also have the effect of seeing the fortunes of the company turn around especially in regard to the declining profitability.

Currently, News Corp is categorical that though the Annual Meeting of Stockholders can be attended by all shareholders holding common stock, voting privileges remain with those stockholders having class B stocks. Those with class A stocks do not have the privilege to vote. In my opinion, this is a discrepancy which effectively brings about unbalanced stockholder control. In that regard, some stockholders are effectively denied the ability to hold to account company directors. Allowing all stakeholders equal say in the running of all the affairs of the company could cool tempers fraying between shareholders and the board.

It can also be noted that News Corp lacks a definitive policy that commits to evaluate the organization's environmental and social impact. In addition to that, publicly available information shows that staff members are not provided with any training on the impact various practices have at the social and environmental front. The enactment of such a policy should be a top priority for the company so as to make its employees more responsive to ethical concerns going forward.

The Change Model to be Utilized

To implement the changes I have indentified in the above section, I would utilize John Kotter's change model. According to Shapiro (2010), John Kotter is of the opinion that the relevance of leadership in guiding and bringing about organizational change cannot be overstated. Indeed, according to the author, a vast majority of companies fail in their quest to achieve required transformations due to the failure by managers to identify as well as recognize their stellar roles when it comes to championing change. It is on this platform that Kotter recommends eight main steps which leaders should follow so as to enhance their chances of successfully leading change. This is the change model I would embrace.

Establishment a sense of urgency

In this case, the main issue of concern would be to ensure that the whole company identifies that change is indeed inevitable. This may call for the management to educate, motivate and guide the workforce on the need for change. In the case of News Corp, the various problems inherent in continuing with the status quo can be highlighted to create that need and urgency for change.

The formation of a powerful coalition

This according to Shapiro (2010) involves the formation of a team that in addition to working together also has sufficient power to offer guidance to efforts aimed at bringing about change. For instance, in the case of News Corp, there could be a need to convince key individuals i.e. those in key leadership positions that change is indeed necessary and inevitable. Hence from this, the 'change agents' can work as a team.

Creation of a change vision

In this case, the focus is on where the organization sees itself in the near future and how it wishes or intends to get there. In the case of News Corp, such a vision for change can be created and presented to the individuals in a format, presentation and language that is easy to grasp, comprehend and recall.

Communication of the vision

In this step, Kotter suggests that every available means be utilized in the communication of not only the vision but the strategy as well. In this case, it is recommended that the vision be communicated regularly.

Elimination of obstacles

This fifth step seeks to ensure that all the obstacles to the change process are eliminated while ensuring that individuals are emboldened to work on the identified and well communicated vision.

Short-term wins creation

In this case, the insistence is on the enhancement of credibility for change through demonstrating gains made. In the case of News Corp, those who excel in change related initiatives could be rewarded and recognized going forward.

Building on Change/Consolidation of Gains

Here, quick wins should be taken as a beginning and not as an end. Hence in a way, victory must not be declared before the whole change process is over. When it comes to News Corp, efforts could be undertaken to ensure that each success or failure is taken as an opportunity to learn.

Institutionalization of New Approaches

Lastly, change should and must be made to stick. Hence effectively, change should be made part and parcel of the organization by anchoring the same on the corporate culture. In regard to News Corp, to embed change on the culture of the organization, efforts may be undertaken to ensure that change is seen in every aspect of what is done within the organization.

Leader Role, Style and Skills Required

According to Hiatt and Creasey (2003), change is taken to be a process and hence in that regard, its implementation does not take place in a single phase or moment. The authors further note that the role of a leader in this case should hence be visible throughout the change process. One of the key roles of a leader in the change process is the identification of threats and opportunities. Indeed, it is through the identification of the various threats and opportunities to the change process that a leader adjusts the course of the process so as to mitigate failure. Secondly, it remains the role of a leader in this case to a put together a change team that will help in the management of the change initiative. Further, the creation of the change vision as well as the communication of the need for change remain two duties of the leader as far as the change process is concerned. Also, it may be noted that the leader may be required to ensure that progress is directed in stages so that the end results can be seen to be more realistic. Lastly, it is upon the leader to ensure that progress is rewarded and empowered.

For leaders to be able to see the change process to its conclusive end, they should also possess certain skills and capabilities. The skills in this case could include but may not be limited to superior communication and negotiation skills. Further, leaders in this case should have superior persuasion skills and the ability to work as part of a larger team. The ability to motivate and influence individuals towards the accomplishment of goals in this case is another plus on the part of the leader. When it comes to the specific style, I am of the opinion that the leader in this scenario should have a democratic or participative leadership style as opposed to the other leadership styles i.e. autocratic and delegative. The democratic or participative leadership style is common with those leaders who seek and incorporate the opinions of employees in decisions. I am of the opinion that this is the most appropriate leadership style based on the need to motivate employees to act as change agents.