The Remaking of Television New Zealand

This case study highlights the transformation of Television New Zealand (TVNZ) from a division of
the Broadcasting Corporation of New Zealand (BCNZ) into a commercialized state-owned
enterprise (SOE) operating in a competitive market with new strategic direction. The main theme
of case study revolves around the shift in strategic direction, and changes in structure,
management process and human resource practices accordingly.
Television New Zealand (TVNZ) is a government-owned national broadcaster and digital media
company operating in New Zealand and Pacific region. It operates in television broadcasting and
signal distribution & transmission business. Currently TVNZ is operating six channels including TV
ONE, TV2, Kidzone, Duke and TVNZ on demand; it has air viewership of average 3.8 million
peoples per month on all channels. TVNZ is fully commercially funded network with 90 percent of
revenues coming from commercial advertising; it has reported revenue of $360.6 million in 2014.
To successfully compete and evolve within a complex and dynamic industry, TVNZ focuses on
attracting and developing highly engaged and capable people who are committed to deliver
outstanding results; currently it employs 823 employees.
The story of television broadcasting in New Zealand starts in 1962, when New Zealand
Broadcasting Corporation (NZBC) was established by the government to develop and manage
the public radio and television. This corporation was dissolved in 1975 to form two independent
television corporations and one radio corporation, but this structure was criticized for duplication
of expensive services in two TV corporations; thus in 1976 national government decided to give
control of TV and radio corporations to newly established Broad Casting Corporation of New
Zealand.

It was 1980, when TV ONE and TV2 was merged to form Television New Zealand

(TVNZ), as a division of BCNZ.

The continuous social and political pressure to allow private companies to enter New Zealand
broadcasting market coupled with huge investment required for technological advancement in
state owned networks, pushed government to completely deregulate the broadcasting and
telecommunication industry in late eighties. As a result; TVNZ was formed as commercialized
SOE with two TV channels (TV ONE and TV2) to operate in a competitive market environment.
There was two level of competition in broadcasting industry these days; one from potential entry
of new competitors and other was from technological advancement. Thus; top management at
NZTV decided to radically change the strategic direction, organizational structure and related
management processes accordingly. The first phase strategy was to retain the current market
share and secondly to look for new opportunities in broadcasting and telecommunication.

Under the notion of radical change, the core business strategy was consisted of two parts; first
part was to retain maximum audience share and revenue from broadcasting activities through
acquiring and producing top-ranging programs which their competitors dont have. Moreover;
programs on two TV channels were realigned ( TV ONE and TV2) in order to make them
complementary rather competitive. The second part of the strategy was to reshape existing
business model for greater efficiency through downsizing. At the same time; top management at
NZTV was searching actively for new growth opportunities to take competitive advantage of the
technological and market changes. As the company was involved in broadcasting and signal
distribution & transmission business; the objective of growth strategies was to align with
complementary businesses. At first stage NZTV made alliance with new pay-TV company called
Sky Network Television Limited; unlike free-to-air television which relies primarily on advertising
for its income, pay-TV relies on viewer subscription. TVNZ entered into a strategic alliance with
three Canadian and American telecommunication companies to establish CLEAR Communication
Limited. The purpose of the CLEAR was to form a telephone company that can provide a full
range of competitive toll, private lines and specialist network services. TVNZ used its existing
signal distribution & transmission division to operate both television broadcasting and
telecommunication business.
As per government directions TVNZ had to accept the same staff they were having as a division
of BCNZ. The new strategic direction at NZTV demands flexible and innovative employee
behaviors; contrary to this most of the managers and employees were change resistant. In the
early days of its formation; TVNZ was characterized with rigid and bureaucratic personnel
structure

reflecting the old public service

model

with

multiple job

designations and

classifications, inflexible job demarcations, multiple pay rates and special payment structure
based on seniority. Managers had little discretionary power regarding salary determination, hiring
and firing decision, and placement of employees. This situation presented a challenge for top
management to change organizational culture, employment structure and employees behavior
towards change.
CEO of TVNZ changed 50 senior managers who were against the change in organization.
Similarly; management downsized the permanent employee base and include more temporary
employees for the sake of flexibility. CEO himself gave speeches and conducted organization
wide training program to create sense of ownership of change in employees.

So; the rigid

personal structure was gradually transformed into a more flexible structure. Flat rates, flexible
working hours; multiskilling, pay for performance and fewer job description were the main
features of new personal system. Moreover; day-to-day human resource management were
devolved to line managers for the sake of flexibility and accountability.
2

The current human resource strategy at NZTV based on the following principles:

Proactively identifying and developing key leadership talent;

Providing appropriate learning and development opportunities and events across the

organization;
Encouraging and supporting employee-led initiatives to grow engagement;
Designing a transparent performance review process which encourages regular two way

feedback and coaching;

An interest-based bargaining

employment agreement;
Reviewing salary bands against the external market and ensuring all employees are fairly

remunerated;
A robust health and safety plan;
A future-proof, contemporary, open plan work environment.

approach

to

successfully renegotiate

the

collective

Discussion Questions:
1. Which type of strategy adopted by TVNZ? And Why?
2. How the shift in strategy impacted employee role behavior?
3. Based on the above specified principles of HR strategy at NZTV, what type of HR

practices do they need?