Quite often matrix organisations fail due to lack of clarity in responsibilities and accountabilities (Goold M. & Campell A, 2002) and clearly it was the case with BBC. BBC’s structure failed virtually all of the nine tests (Phillips, 2012) that are recommended as a framework to build a successful organisational structure.
For example BBC was not only struggling to survive in a competitive landscape but its core services were also falling apart (BBC1 was losing audience share and production of children’s program was about to be moved to a competitor). This shows how terribly unfit BBC’s organisational structure was at that time and how it failed to gain any ‘market advantage’.
BBC at that time desperately needed a ‘digital portfolio’ to expand its market share and gain a competitive edge. BBC’s senior management could have tried building it by leveraging ‘BBC’s brand name’ but obviously failed. Hence BBC’s organisational design failed to gain any ‘parenting advantage’.
BBC employees were extremely unhappy and deeply demotivated. In contrast a good organisational design is supposed to capitalise on its people strengths and weaknesses etc. Therefore it can be concluded BBC’s organisational design failed in ‘people’s test’ as well.
It was also very clear from the case that BBC was failing under ‘difficulties link’ test. There was a loss of trust between the centre and divisions. Approach to
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money was problem and divisions were competing to get a larger share of the available pot of cash (IMD286, 2006).
Greg’s approach to change did take into account of the ‘redundancy hierarchy test’. Greg inherited 168 business units. Surely such large and overly complex structure contributed to 24% overheads and inefficiencies that existed at that time in the organisation. Therefore it was important for him to review the structure and remove any unwanted layers of management.