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Master of Business Administration

Module: Managing the Human Resource
Chioma Nwamaka Momah Word Count:

From a Human Resource Management perspective, provide a reasoned and academically underpinned critical analysis of the leadership style of Rupert Murdoch. The response should include detailed analysis of the approach taken to the management of people within the Murdoch group. Further recommendations should outline suitable changes to the HR strategy and practice in the future, these should be adequately justified.

INTRODUCTION: Rupert Murdoch was born in Melbourne, Australia on the 11th of March, 1931. He attended the prestigious Oxford University in the United Kingdom. After working briefly at the Daily Express newspaper, he took over the Adelaide News from his father, and from there grew his quest to acquire companies and grow them, as well as to create new companies. Murdochs rise to dominate the media world resulted in a lot of controversy and outrage, because of his ruthless management style and desire to succeed. In an attempt to flush out the corruption, waste, overstaffing and theft that flourished in his London-based operations, Murdoch had to confront the workers union. His actions caused many protests and petitions against Murdoch and his companies and this according to The Economist in a magazine article earned him the nickname of "The Dirty Digger", but his commitment to cut costs and increase profits did eventually win out in the end. His global media empire now covers television, filmed entertainment, cable network programming, book publishing, direct broadcast satellite television, magazines and newspapers operating across Europe (especially the United Kingdom), the United States, and his home country, Australia.

This paper will attempt to provide a reasoned, critical analysis of Murdochs leadership style, from a Human Resource Management (HRM) perspective. Before going any further, one must note that HRM has a very wide definition, with varied interpretations provided by different authorities on the subject. This may be due to the fact that HRM is a behavioural science and as such difficult to define since it deals with human intangibles such as perception and motives (Lundy 1996). According to Guests (1987), HRM focuses on maximizing organisational absorption, employees commitment to work, integration or fit of personnel practices within themselves and with the overall business strategy, and assumption of superior employee performance. Another definition given by Keith Sisson of the International Journal of HRM posits that HRM refers to the policies procedures and processes involved in the management of people in world organisations (Blyton and Turnbull 1994 p3). According to Monir H. Tayeb, HRM is mainly seen along two perspectives: the soft and hard (Monir H. Tayeb 2005 p6). These two HRM models were developed in 1984 and 1985 by Fombrun, Tichy and Devanna at Michigan University in 1984, and Beer and others at Harvard University in 1985 (Carol Gill 1999)Working Paper Series). While in practice most organisations tend to apply a bit of both hard and soft HRM, organisations

can usually be differentiated along these lines because they lean towards one more than the other. The soft model of HRM focuses on ensuring that the organisations employees are treated as valuable assets which should be nurtured. In this HRM model, employees are carried along in the organisations core processes, and they are viewed as and encouraged to be proactive agents who are worthy of trust and capable of continuously developing their skills and capabilities (Legge 1995), Working Paper Series, 1995, p.6667). Also, as defined by Blyton (1989 p 2), the soft HRM model is seen as a method of unleashing employees commitment, participation and involvement in the organisation. As a model, it focuses on the total person and gives room for work-life balance and the employees psychological needs, and therefore flexible working conditions are provided where deemed necessary. It is a balanced model that ensures that human resources are given room to develop to their full potential in a nurturing environment. A good example would be where an employee who has recently given birth to a child is provided the option to work from home or close earlier than her contemporaries. Hard HRM, on the other hand, is viewed by many HRM practitioners including as utilitarian instrumentalism (Monir Tayeb 2005 p6). Seeing the employee chiefly as a contributor to the success or failure of the organisation, it lays greater emphasis on whether employees have the skills the organisation requires, and not on developing the individual as a whole as noted by Drucker et al, (1996). This model is also seen to treat employees as an input that can be discarded in line with business cycles (Blyton & Turnbull, 1994).

Murdochs HRM Style According to Crainer (2002)Rupert Murdochs philosophy is to think of tomorrow today, as this to him is the only way in which he can make it in the business world (cited by Furst 2003). While he is well known for his successful business skills, he is also criticized for being opportunistic because he uses his employees to build his empire while paying little attention to them beyond their expected output. The HRM model that he employs can thus be described as hard. In addition to reflecting a hard HRM model, Murdochs leadership style is similar to the Michigan Model, developed at the University of Michigan. As pointed out by S.K. Sharma (2009 p.82), the Michigan Model is one in which employees are resources and as such should be managed in a similar manner to any other resources. According to him they must be obtained as cheaply as possible and exploited as much as

possible. The Michigan Model has also been referred to as the matching model and the best fit model. Freedom of expression is not usually encouraged in this model, and this can be seen in Murdochs people management style where according to the case study he was a control freak who laid down the parameters with which his employees were expected to operate. He has been said to even go as far as critiquing what his staff wear to work. While Murdoch leans more towards the hard model, it is important to note that no organisation is entirely soft or hard in its HRM. This is a view expressed by Storey (1992), where while mapping the diverse meaning of HRM, he noticed the contradictions as well as areas of overlap between the hard and soft models of HRM Also, in the view of Birgit Bernkhoff (1997) most organisations that seem to practice the soft approach of HRM also tend to ultimately accomplish the requirements of the hard model. In effect, HRM that engenders employee commitment is also able to develop human potential among employees. Applying this to Rupert Murdochs management style, irrespective of how much of a people user he is branded the truth is that while his organisation gains from the employees, the reverse also takes place. This is because no employee can go through News Corps rigours without also developing more skills and gaining enormously in terms of experience and exposure. Murdochs employees are in effect developing their own career skills and building their capacity. Despite his hard HRM style, he is able to extract outstanding levels of performance from his employees, and this is rewarding to both News Corp and the individual career paths of his employees. However, Murdochs habit of micromanaging issues have made working for him difficult for his employees, and this is why one would say his style is more utilitarian and therefore hard, especially when one notes his impatience with non-performing staff. He emphasizes more on the calculative and the strategic part of managing business than the soft aspect which is more humane. Murdoch is a hard task master but he rewarded you well: Peter Mukerjea, Former CEO, Star India (the Hollywood reporter ). This statement by a former employee, as well as the case study, indicate that Murdochs HRM style is more controlbased than commitment-based. He keeps a tight rein on his businesses and ensures that his management decisions and requirements are strictly complied with. Rupert Murdoch may thus be viewed as a dictator with a firm grip on his Empire. The table below (Lundy, 1994) describes the characteristics of control-based HRM (hard HRM) versus commitment-based HRM (soft HRM):

Policy Area Job design principles

Control-Based HRM sub-division of work; specific job responsibility - with accountability; planning separate from implementation top-down control and coordination; hierarchy; status symbols fair days pay for a fair days work; job evaluation and appraisal; individual incentives Unionised (damage control, bargaining); Non-unionised (attitude surveys)

Commitment-based HRM broader jobs; combined planning and implementation; teams flat structure; shared goals for coordination and control; status minimized reinforcing group achievements; pay geared to skill and other contribution criteria; profit sharing mutual mechanisms for communications and participation; mechanisms for giving employee voice on issues mutuality; joint problem-solving and planning fulfilment of employees needs is a goal rather than an end

Management Organisation Compensation

Employee Voice

Labour Management Relations Management Philosophy


the boss dictates; management obligated to stakeholders

Source: Lundy O (1994) From Personnel Management to Strategic Human Resource Development, International Journal of Human Resource Management Vol 5 pp. 687720 Accessed from on 16th April 2011.

Organisational Culture: One noteworthy and positive aspect of Murdochs leadership is that he is mindful of the varying cultures of the companies he acquires. This is stated on page 5 of the case study which states: Murdoch has the ability to integrate different cultures of the

acquired companies easily into News Corp internal divisions were not seen because he was fast at blending cultures well. This is commendable when one notes that in most mergers and acquisitions, one of the hardest issues to deal with is culture clash, as well as internal conflict between old and new employees. In the view of Halibozek and Kovacich (2005) culture clash can easily unravel any gains of mergers and acquisition and is thus an obstacle that must be conquered for any successful merger and acquisition. It should be noted that the strong performance-driven organisational culture of News Corp is part of its winning formula for success, as several HRM practitioners such as have linked a strong organisational culture to high levels of performance (Scott et all 2003 p 2) Healthcare and Organisational Culture by Tim Scott et al, p.2, Radcliffe Medical Press Ltd, 2003). This is why many multinational companies expend a considerable amount of their resources on developing and maintaining the culture of their organisation. The organisational culture promoted by Murdoch is also very performance-driven and ambitious. He works hard at achieving success in new markets while maintaining an enviable success record in existing ventures, and expects his organisation and employees to be equally driven in this regard. The culture at News Corp is one that constantly seeks new opportunities and leverages on existing ones. It is a culture that seeks to use mass media in new and innovative ways to appeal to people in varying environments on a very strong and direct level. While a strong performance-driven culture can be very positive, it also has some negative effects that must be guarded against. The organisations values may be skewed to the extent that the need to achieve high performance outweighs ethical considerations, leading to an end justifies the means culture. This can lead employees within an organisation to take morally dubious decisions that could conflict with their internal moral codes and affect their well-being, lead to excessive unhealthy competition within News Corp, and due to the slippery slope effect could also ultimately lead to the organisation falling foul of applicable laws and regulations, especially since many business-related and media-related laws have a strong ethical and moral component. As previously mentioned, the culture at News Corp is also one that stresses top-down control, and the boss is king. It is a one that stresses hierarchy and in which the word of the boss is law, with Murdoch keeping a tight rein of affairs. While it can be valuable to organisations to maintain clear lines of structure and control, there is also a great deal of value to be found in encouraging employees at all levels to present creative ideas that will help the organisation achieve and maintain strong performance levels in a competitive environment.

Performance Management: Even bearing in mind Murdochs hard HRM style, it is indeed an anomaly that News Corp has no annual reviews of staff performance and no process by which talented people could be promoted or moved within the organisation. The above statement is highly unusual, even for the Michigan model of HRM, and it is surprising that News Corp is able to operate effectively in this way. What indeed is HRM without a proper, formal appraisal system in place? Staff appraisals evaluate staff and give them hope for their future in any corporation (Pratt and Bennett 1989 p159). Effective performance management should always involve carrying out periodic employee assessment in order to measure progress and identify areas requiring improvement. The absence of periodic reviews of staff performance at News Corp indicate that performance is only measured in informal ways, and is possibly directly linked to the organisations financial performance, which would be consistent with Murdochs generally hard leadership style. Murdochs assumption is likely to be that when News Corps bottom line is positive, the employees must be performing their role, and likewise when News Corp is not performing optimally in financial terms, the companys employees are not performing optimally. However, while there is indeed a correlation between employee performance and the financial success of an organisation, the relationship is not as direct as Murdoch might think. There are a wide range of variables other than employee performance that could affect an organisations financial performance, including environmental factors (from the legal and regulatory framework in places to the prevailing economic climate), the efficacy of organisational processes, the popularity of the products and services offered, the public perception of the organisation, and indeed, the management style of the organisation. Consequently, it is possible for an organisation to experience significant financial success even when its employees are not performing at maximal levels, and the reverse is also true. It is therefore important for companies to continually monitor and review employee performance so as to promptly identify and deal with areas that require improvement, while also noting areas where employees are performing well, so as to continue to support their efforts effectively in those areas.

HR Planning:

HR planning can be defined ensuring that individuals that can move an organisation forward are selected and employed to perform key roles. In the area of HR planning, News Corp has indeed mastered the science of recruiting the right staff to do the right jobs. This is evidenced by the high level of success that the organisation has achieved, as well as the high calibre of its ex-staffers; people such as Piers Morgan, who was the youngest ever and most successful editor of News of the World, and has now gone on to achieve considerable international success as a television personality and interviewer (The Observer). This shows that Murdoch is able to recognise talent when he sees it, especially when recruiting new staff and deploying his managers to lead his acquired companies. However, what is less clear is whether Murdoch is equally adept at recognising existing talent within the companies that he acquires, and placing those employees in roles that best utilise, develop and maximise their potential. In the area of HR management, Murdoch is not an employer who believes in putting people first. For him, the organisation comes first, and its people are only significant as long as they contribute directly towards the organisations success. This is a direct contract to the leadership style of many such as Richard Branson CEO of Virgin Conglomerate who believes in putting people first (Pfeffer 1998 p 295) The termination policy of News Corp is not publicly known, but from information in the public sphere regarding Murdochs leadership style, he is a hardliner who is likely to have little or no patience for non-performing staff. Employees that do not perform at the expected levels would probably be terminated and not given further chances to improve upon their performance. While this allows Murdoch to replace such individuals with higher performers, there are other consequences for News Corp. A culture where staff performance is driven by fear of termination (calculated terror as it was put in the case study), rather than the desire for growth, development and high performance, could exist, and as seen in the case study, has indeed been said to exist at News Corp. Also, staff loyalty may be affected; in an environment where they are fearful of termination, they may constantly seek opportunities elsewhere, which may in turn affect their performance at News Corp.

CONCLUSION / RECOMMENDATIONS Despite the flaws inherent in News Corps HRM model, as analysed above, one cannot but give credit to Murdoch for being a driven leader. This is clearly seen in the statements below by some of his most notable ex-employees: Ruperts intrepid leadership, boundless energy and entrepreneurial spirit have been an inspiration throughout the past 20 years. He has consistently encouraged innovation and boldness in both business and filmmaking, and his unwavering support on projects

such as Avatar made that and other very ambitious undertakings possible. Jim Gianopulos Co-chairman and CEO, Fox Filmed Entertainment Murdoch is a hard task master, but he rewarded you well. I was petrified when we first met. I prepared this presentation for him on India, which was about 25 pages. He flipped through the whole thing in about five seconds, looked me in the eye and said, How many villages are there in India? I had no clue because my presentation was more about the economy, the state of the Indian currency, the media environment and so on. So I just took a complete shot in the dark and said, In excess of 500,000. He said, What will it take to get television into each of them? I was stumped and said, Most of those villages dont have electricity. He said, Maybe we can get them a generator set. That was Murdoch thinking miles ahead of anybody. Peter Mukerjea Former CEO, Star India ( Despite the laudable success and achievements of News Corp using Murdochs current HRM model, my analysis also throws up some areas of possible improvement, and to this end the following recommendations are made:

Implement a regular performance review system: A formal performance review system that periodically assesses staff performance based on parameters that are appropriate for News Corps business activities and culture would have the following advantages:

Enhancing planning by identifying the strengths and weaknesses of key staff, thereby enabling management to plan its HR strategies effectively. Improving performance by demonstrating to employees that their performance is continuously monitored and that the results of such assessments form the basis for the allocation of certain rewards, e.g. performance-related bonuses. This benefit would be further enhanced by ensuring that the performance review system is one that is clear, fair and allows each employee to participate and contribute to their assessment. Achieving organisational objectives by assessing the level of focus of employees on the organisations goals, while also ensuring that employees strengths are built upon and used to drive the company forward, while weaknesses are also mitigated.

Succession planning: A performance-driven culture such as News Corps tends to experience high employee mobility for a number of reasons. One is that the organisation will usually let low performers go, replacing them with people with

the potential to perform better. Also, high-performing employees who have imbibed the News Corp culture of constant leverage will usually seek opportunities elsewhere when they feel they can no longer grow and develop within the organisation, and, armed with the confidence and skills learned from their previous assignments, they will usually go on to excel even further in their future roles. The success of Murdochs ex-employees, such as Piers Morgan, is demonstrative of this fact. For organisations with a performance-driven culture, succession planning is vital. By putting the right people in the right roles, it ensures that organisational growth is nurtured and sustained. Effective succession planning continually assesses resources within the company and seeks to ensure that employees are placed on a career path that will ensure progress and growth for both the employee and the organisation. This reduces the high risk and cost inherent in constantly recruiting from outside the organisation to fill vacant roles, and also improves employee loyalty by giving them the assurance that their future within the company is secure. Recently one of his employees For a performance-driven organisation like News Corp, it is clear that effective succession planning will help its management adequately deal with the effects of high staff mobility. This also has the valuable effect of mitigating the effects of the fear of termination that can exist among employees in performance-driven organisations, by enhancing employees desire to continuously improve their performance in order to achieve the desired growth and progress within the organisation.

Building strong ethical values: Building strong values that stress the need for employees to operate within ethical and moral boundaries is very important for performance-driven organisations like News Corp. It is essential that employees are aware of the need to take decisions that are fair, equitable and ethical. This will engender a positive outlook among employees of their organisation and their role within it. It will also help to ensure that competition among staff, which usually exists to some extent in performance-driven cultures, does not become unhealthy and does not begin to affect employee performance negatively. The divide and rule policy said to be used by Murdoch can be counterproductive as it can encourage employees to turn against other and seek to continuously sabotage one another, instead of focusing on building the organisations brand and staying ahead of the organisations external competition. It would be more productive to build strong values of fairness and equity within the organisation, as this would inspire staff to work together towards the companys goals, knowing that their work is valued on its own merits and that

they do not need to work in an atmosphere of fear that their efforts will be sabotaged by others. Apart from the internal benefits, strong ethical values will also help News Corp deal effectively with its external business environment, especially regulators and competitors, especially in view of the allegations that the media empire is now tending towards monopoly. The industry in which News Corp operates, mass media, is built around mass appeal, and it is therefore important that the organisation projects an image to the public that it can be trusted to not only report the news in a largely unbiased manner, but also to act in a manner that most people would consider right, fair and appropriate.

Encouraging employee feedback: In an organisation like News Corp, which stresses hierarchical, top-down control, there is a risk that the valuable contributions of employees at all levels can be neglected to the organisations overall detriment. At the end of the day, the teams within News Corp cannot exist or succeed without the output of regular office workers and field workers who, while they may not be in leadership positions, are directly responsible for the organisations day-to-day activities, and without whom there would be no News Corp. They are also the people with the most direct knowledge of the nuts and bolts workings of News Corp and the environment in which it operates. Their opinions and feedback is valuable and should be encouraged, not crushed. One way in which the valuable feedback of employees could be encouraged and harnessed for the benefit of News Corp would be to build stronger teams within the organisation that give employees direct access to their direct supervisors so that they can make useful suggestions and input which can then be implemented at the team level, either directly in the teams operations or indirectly by passing the suggestions on to the relevant team. Another good strategy for encouraging employee feedback, especially where it concerns sensitive matters, is to set up an anonymous suggestion system where employees can send their suggestions without fear of rejection or other negative consequences.


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