Based on your research and study in this course, is Rupert Murdoch best described as a manager or a leader? Give reasons for your answer.
WARNING This material has been reproduced and communicated to you by or on behalf of RMIT University in accordance with section 113P of the Copyright Act 1968 (Act). The material in this communication may be subject to copyright under the Act. Any further reproduction or communication of this material by you may be the subject of copyright protection under the Act. Do not remove this notice CASE STUDY 1.3 Rupert Keith Murdoch - Chairman, News Corporation Rupert Murdoch is arguab ly the most influential Australian business leader of all time. As Chairman and CEO of News Corp oration (News Corp) and Executive Chairman at 21 Century Fox, Murdoch p resides over a vast media empire with intere sts throughout Europe, the United States and the Asia- Pacific region. Murdoch's unique approach to business and to leadership has attracted significant attention internationally over the past five decades. A polarising figure, Murdoch has been variously described as a b rilliant corp orate strategist , an entrepreneurial leader with an acute understanding of markets, a manipulative demagogue, a highly directive and detail-oriented autocrat , an amoral op inion leader and even a lib erta rian (Wolff, 20 10). Born in Melbourne in 1931, Murd och was educated at Geelong Grammar and Worcester College, Oxford, where he read Philosophy, Polit ics and Economics. At Oxford, Murdoch was never q uite accepted by many of his wealthier peers due to his colonial roots, and felt ostracised at t imes. This was an experience that shap ed his anti- estab lishment sentiments, and led him to supp ort the Lab our Party as well as running for secretary of the University's Lab our Club. Following his father's death, Murdoch returned to Australia at the age of 21 to assume control of the family business, News Limited, which he successfully and aggressively exp anded by p rogressively buying newsp ap ers in Western Australia, New South Wales, Q ueensland and the Northern Territory. In the 1960s, Murdoch began to turn his attention to international markets. In 1964, at the age of 32, Murdoch p urchased The Dominion, a New Zealand daily newsp ap er. Later that year, he launched Australia's first national newspaper, The Australian, which quickly gained a wide readership and proved to be influential in shap ing public op inion on political matters at the time. Murdoch's foray in the UK b egan in 1968 with his purchase of News of the World, a pop ulist tabloid . The following year, he acquired The Sun,which he quickly converted into another low-brow newsp aper in tab loid format. With these two acquisitions, Murdoch dramatically cut p roduction costs by using the same printing facilit ies for both p apers (Shawcross, 1992). The sensationalist nature of these two papers ap p ealed to the masses, which boosted read ership significantly. This p opular commercialisat ion heralded a shift in the newspaper industry in the UK, which bore testimony to Murd och's willingness to adopt an iconoclastic app roach to p roduct marketing. Since then, Murdoch has continued to build his media empire in Australia and the UK, while also expanding into the US. In 1973 he bought the San Antonio Express News and in 197 6 he acquired the New York Post. In 1981 he acquired b oth The Times and The Sunday Times in Britain, and in 1984 he purchased a controlling inte rest in 20th Century Fox (Shawcross, 1992). In 1986, Murdoch b egan to roll out revolutionary electronic p roduction technology throughout his printing p resses in Australia, the UK and the US. The increased levels of automation enabled d ramatic reductions in the number of employees required to operate the p resses. In the UK, d ismissals resulted in job losses for more than 6000 permanent full- time employees and p rovoked street riots and demonst rat ions which d rew the Thatcher government into a b itter face-off against the British Trade Union Movement (Wolff, 2010). The sacked emp loyees eventually won £60 million in settlements, b ut the dispute deep ly C h a p t e r 1 In t r o d u c t io n I 19 d ivid ed p ublic op inion in Britain. Conservatives viewed the Murdoch sackings as a b old , courageous anti-union move, while lab our sup porters saw the whole affair as evid ence of a ruthless fore ign mogul costing honest p eople their job s, and vilified Murd och as a callous 'd irty d igger'. Indep endent commentators at the t ime noted the op portunistic shift in p olitical allegiance, p ointing to Murdoch's strong allegiance to the labour movement as a stud ent at Oxford. In the US, Murd och launched Fox Broad cast ing Comp any in 1986, an entity which found enormous commercial success with TheSimpsons,TheX-Fi le sand Fox News. Fox News was launched as an antid ote to the left-leaning b ias Murdoch p erceived in CNN and other comme rcial networks in the Unite d States (Arsenault & Castells, 2008). It quickly gained a strong and loyal audience for its right-of-centre p olitical views. O ver the years, Murd och has never shied away from using his med ia interests to supp ort p articular p oliticians at b oth ends of the p olitical sp ectrum (McKni ght, 20 12). In the UK his newsp ap ers have been p articularly sup p or tive of p rime ministe rs Margaret Thatcher (Conservative, 1979- 90), Tony Blair (Lab our, 1997- 2007) and David Cameron (Conservative, 20 10- 16). If nothing else, Murdoch is ce rtainly a highly determined and self-assured decision maker who op erates effect ively in extremely high-p ressure situations. Throughout the late 1980s, Murdoch cont inued to b uild his empire by b orrowing heavily from no less than 146 b anks across four continents. During the recession of the early 1990s, Murdoch's highly leveraged News Corp b ecame vulnerab le, having accumulated over S7 billion in d ebt (Wolff, 20 10). Several internat ional cred ito rs b egan hound ing Murd och - overextend ed financially, and with his British Satellite Broad cast ing Comp any (BSB) exp eriencing enormous losses - to make good on overdue interest p ayments. By early 199 1, News Corp was facing the p rosp ect of bankruptcy. The corp oration was unab le to p ay its $2.3 b illion d ebt, and needed an immed iate cash inject ion of $600 million to stay afloat. Through a series of quite harrowing and intense negotiations sp anning several months, Murdoch held his nerve and p ersuaded his cred itors to forestall his overdue p ayments and lend him the add itional cap ital needed to keep News Corp viable (McKni gh t, 20 12). Having made significant inroad s into b oth the US and UK markets, Murdoch's next expansionary phase led him to focus some of his attention on the Asian region. In 1993, with the worst of the early 1990s d ownturn b ehind him, Murdoch acquired Star TV, a Hong Kong b usiness ent ity found ed by Richard Li.This has since p rovided a p latform for News Internat ional to b roadcast from Hong Kong to Jap an, Ind ia, p arts of China and more than 30 other countries in the region. In 2004 , Murd och shifted News Corp's headquarters from Ad elaid e, South Australia to the United States, effectively making the comp any a US-b ased firm, thus op ening up share t rad ing and investment opp ortunit ies for US-domiciled intere sts. In 2007, Murdoch bought Dow Jon es & Company, p ublishers of the Wall Street Journal, for $5 billion. In 20 14, Murd och's 2 1" Century Fox mad e a serious bid for the Time-Warner Corporation, which was ultimately unsuccessful. Today Murd och's b usiness emp ire includes over 170 newsp ap ers around the glob e, television stat ions on five cont inents, rad io stat ions, magazines, book p ub lishers, satellite television comp anies, sp orts teams, sport ing arenas and movie stud ios. Admirers describe Murdoch's lead ership as ambit ious, engaged , d ecisive and op inion- shap ing. In Novemb er 20 15, he re ceived the Hudson lnstitute's Glob al Leadership Award . Never one to shy away from expressing his own view to an international audience , Murd och referred to Britain's exit from the Europ ean Union in 20 16 as 'wond erful', comp aring the 20 I Le ad e r sh ip move to 'a p rison b reak' (Martinson, 20 16). As a leader, Murdoch has b een intense ly loyal to a small numb er of long-serving sen ior executives, while also creating perp et ually high leve ls of executive turnover in many of his b usinesses. He d escrib es his best d ecision as retaining control of News Corp through a network of family t rusts, a move that has attracted significant crit icism from those who se e this ap p roach as a p urp oseful atte mpt to d iminish accountab ility from a corp orate governance p ersp ective. Ult imately, Murd och's ap p roach to lead ership is at once d irect ive, d emand ing and op p ortunist ic. A p rolific international networker, at 85 years of age Murdoch remains one of the most influential b usiness leaders of our t ime . Crit ical thinking quest ions 1. Is Rupert Murd och best d escrib ed as a manager, a lead er or an entrep reneur? Give reasons for your answer. 2. Some crit ics have argued that Murdoch has gone too far in attempting to shape p ublic op inion through his med ia hold ings. Should business leaders refrain from trying to influence p ub lic op inion? Exp lain your resp onse . 3. Is Rup ert Murdoch a p ositive role mode l for lead ers today? Give examples from the case study to sup p ort your answer. REFERENCES Arsenault , A. & Cast ells, M. (2008). Switching power: Rupert Murdoch and t he global business of media polit ics - A sociological analysis. Internat ional Sociology, 23(4), 488- 513. Bass, B.M. (1985). Leadership and p erformance bey ond expectat ions . New York, NY: Free Press. ( 1990). Handbook of leaders hip: A survey of theory and research, 3rd edn. New York, NY: Free Press. (1998). Transform ational leadership: Indus trial, military and