Global News Ltd is a UK-based privately-owned news channel distributed on satellite, cable and on-line. At present it employs 1,000 personnel in a news gathering and editing capacity. This includes reporters, camera operators and editors. A further 450 staff work in the head-office and support functions. The company regards itself as having a progressive editorial style and has tried to reflect this in operational decisions, including a focus on maximizing the diversity of its workforce in all areas and emphasizing this approach in its branding.
The company is owned by the founders, Arlo and Manfred, with a 20% share each, a number of senior executives with a total of 20% between them (none with more than 5%), and 40% by Stox, a private equity fund. There are 20 million shares in issue and, according to a recent presentation given to the company by an investment bank the equity is worth £210-230m. The company paid dividends last year of £1.32 per share. The company has debt as follows:
Last year the company had revenues of £156m million, Operating Profit of £15m and Net profit of £8m. Margins have been falling and the management are coming under pressure from Stox to improve performance.
The Director of Operations is concerned that the technology currently employed by the organization is aging and does not operate at a level of security or efficiency suitable for a company of GNL’s scale. He has been in discussions with a broadcasting IT designer, NBED, to carry out a preliminary analysis on how the systems could be upgraded.
NBED estimate that designing or licensing new software would cost £5m per year for the next 5 years. It would also require an investment of £60m in new hardware throughout the organisation. It would also require an increase in the training budget of £8,000 pa per employee in the first year and £2,000 pa thereafter.
The hardware would depreciate on a reducing balance basis of 30% per year for the first two years and 20% thereafter. The introduction of the new technology would mean a significant change in working practices and a significant reduction in the size of the workforce. This would be mainly amongst front line journalists, editors and camera operators, since much of the work can now be done by junior reporters using news feeds which are directly accessed through their computers.
It is thought that up to 650 staff could be made redundant at a cost of 50% of their annual salary. Average salaries throughout the company are £45,000. A certain number of new staff would need to be hired (10 in year one and 5 in each of the following two years) to support the change.
You are required to prepare a report, using the information provided above covering the following areas:
You are reminded that the learning outcomes for the module are as follows and your answer should be prepared throughout with these in mind.
On successful completion of this module the student will be expected to be able to: Knowledge and understanding
Intellectual, practical, affective and transferable skills
Detailed assessment criteria and guidance are as follows:
Your analysis must be supported by relevant academic theories and concepts. The paper must be in a report format and comply with Harvard referencing guidelines. The report must not be descriptive in nature; it should provide clear evidence of understanding of the issues under consideration with an applied review of the business provided in the task scenario. It is essential you apply theories and concepts and not just explain them.
The majority of the marks will be awarded based on your ability to define, analyze and apply the key concepts; without any analysis or evaluation you may struggle to pass the module.
There is no correct number of academic references to be utilized as you must draw as many references as required to provide a high quality answer. However, a minimum of 12 academic sources are expected, and a majority of these should be current, internationally peer reviewed articles/journals or accredited textbook references. Sources such as Wikipedia/Investopedia and the like are not acceptable. Any sources available only online should be avoided. As you are producing a report in a business context you may, for this module, include references as footnotes.