PESTEL Analysis of the BBC

Introduction
The British Broadcasting Company (as it was originally named) was established in
1922 and started its national broadcast coverage throughout the UK by 1925 without
any political influence. The organisation was named as British Broadcasting
Corporation in 1927, when it was granted its first Royal Charter. The organisation
earned its reputation of “honesty and accuracy in the news broadcast” during World
War II. The BBC is a public funded organisation which is funded by a license fee
charged by all UK house holds, the 1970s was a golden era for the organisation due
to a high number of sales of television sets. The 1990s was the year of
technologically advancements for the BBC with the launch of its digital services such
as ‘BBC news online’ which was one of the leading websites across Europe (The BBC
story 2009).

Political
The BBC is an independent and self-regulated organisation. The organisation’s public
sector responsibilities, functions and financial operations are stated by a Royal
Charter. The Royal Charter is reviewed by the respective governments every 10 years.
However, governments have used the ‘review of Royal Charter’ as a process of
application of control over the broadcasted content; in particular the news and
current affairs. As a result of which, the Thatcher government proposed an absolute
privatization of the BBC in 1986. This proposal was inspired by the regime of
“liberalization, market competition and media convergence” (Harris and Prosser
2007, p.292). However, in the 1990s it was ruled out in favor of independent
producers contributing towards 25% of the broadcasted output. On the other hand,
John Major’s government supported the BBC’s retention of public funding for the
organization’s entrance into the competitive market (Harris and Prosser 2007).

Economic
By the mid 1980s, British market saw a shift in market and economic trends. The
organisational structures were changing from ‘centralised’ to ‘decentralised’ in favour
of mitigating the bureaucracy that was normally exercised in the organisations in
those days. The reformation of organisational structure was now seen as radical to
economic management, and was dominantly dictating the public sector. In order to
save the organisation, the response was phenomenal. The BBC decided to inherent
an organisational cultural change with an aim of responding to environmental,
political and regulatory shifts of the times. Decentralisation of the BBC was identified
to be the pivotal factor for its survival, where cultural change was central towards
achieving a decentralised structure (Harris and Prosser, 2007).
Socio-Cultural
Political gains were targeted towards the BBC that doubted the continuation of
public funds. Decentralisation of the organisation was then considered as an
immense significance to reduce the bureaucracy. The British public was aware of the
highly bureaucratic organisational structure and analysts had their doubts that the
public funds could be discontinued upon which the organisation is mainly
dependent. Post-bureaucratic organisation also meant the BBC will prove itself to be
the eligible recipient of public funds (Harris and Prosser, 2007). The BBC had always
maintained its reputation as an honest news broadcaster with a significant number of
viewership. (See SWOT analysis)

Technological
The mid 1980s saw a radical shift in technology. Internet then was dominantly an
American defense technology that was designed for the purpose of communicating
messages if a nuclear weapon or an atomic bomb went off. At this point of given
time i.e. mid 1990s, John Brit was the Director General of BBC who took an initiative
of taking BBC online, though it was a little too late to grasp the implications of
technology as he said. The BBC was a highly bureaucratic organisation, therefore
there was a fight for resources. Brit was also the key person who provided the
leadership to bring in the cultural change. In order to broadcast the BBC’s digital
services, the resources have to be put in to technology, where as the producers and
managers would support the investments made in TV and Radio programs at that
time. Along with airing its digital services, the organisation also went under other
business technologies such as Business Process Reengineering (BPR) for reducing the
cost of doing business to support the agenda of decentralisation of the organisation
and capitalising on the allocated resources (Connor, 2007 BBC internet blog).

Environmental
The technological, political and regulatory changes that influenced the cultural
change in the organisation were followed by “globalisation of infotainment
industries”. This means growing dependence of businesses on alliances and “flexible
form of digital production” (Harris and Prosser 2007, p. 293). Under Brit’s leadership,
the environmental influences were managed through earning the bid for programme
funding. This decision liberated the TV producers and more job accountabilities were
formed. The environmental changes implied the concepts of ‘marketisation’ or
creating an internal market and a new trading system. An internal market was formed
by reducing subsidiaries, reconstruction of organisational structure, decentralisation
of the structure and so forth. The new trading system was formed by programs
bidding for the resources for the production by offering competent and agreed
strategies and practicing managerial controls on programme commissioning.
Legal
The organisation is self-regulated and independent of political or government
influence. Nonetheless, due to the deregulatory environment that surfaced in the mid
1980s, the BBC needed to adjust its internal environment / culture to meet the
market shift.