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Functions of Media Management	4
In the previous chapters, the general conditions of media and various elements of the value creation system of media enterprises have been presented. In the next step, the action parameters of media management shall be pointed out. Therefore, atrst, strategic management will be addressed. Afterward, procurement management, production management, and marketing of media enterprises will be presented in more detail. This is followed by an overview of organizational management,nance management, and human resource management.1


	Strategic Management

In the context of strategic management, corporate leaders have to make fundamental decisions on the intermediate and long-term goals and enterprise’s activities. Strat- egy formation thereby is preceded by a process that traverses the development stages of vision, mission statement, and goals.
The enterprise’s vision describes the ideals that are based on actions and consti- tute the justication for its existence. The vision is a simple, comprehensible picture clarifying the ideas behind the enterprise for all of its participants. A characteristic
example for the media sector in this context is The Walt Disney Company, whose vision is“to make people happy”(O’Shaugnessy 1995, p. 40).
A mission emerges on the basis of this vision and denes the long-term goals of
the enterprise. Within the context of the mission statement, an operationalization
takes place about which path will lead toward a realization of the vision. For example, dening the strategic business units in which the enterprise is operating or intends to become active is part of this process. Building on the mission, the enterprise’s intermediate to long-term goals can be developed. Although these

1See also for the following chapter Wirtz (2011b, 2019b).

Ⓒ The Editor(s) (if applicable) and The Author(s), under exclusive licence to	73
Springer Nature Switzerland AG 2020
B. W. Wirtz,Media Management, Springer Texts in Business and Economics, https://doi.org/10.1007/978-3-030-47913-8_4
 

development stages cannot always be clearly delineated from one another, they still indicate the foundation for the strategic management of media enterprises.


	Strategic Development

The development and implementation of strategies usually follows a system based on the enterprise’s goals. Built on this understanding, an in-depth analysis of the enterprise’s situation takes place. Only then can a company strategy be developed based on the gainedndings. This system is illustrated in Fig. 4.1.
An important step of strategy development pertains to the situation analysis. This analysis includes a company’s environment, market analysis, competitor analysis, and competence/resources analysis. The competitor analysis and the competence/ resources analysis are integrated into a strengths/weaknesses analysis. This
strengths/weaknesses analysis, together with the environment analysis and market analysis, in turn, is included in an opportunity/risk analysis. The approach is explained in more detail below (see Fig. 4.2).
Within the framework of the situation analysis, an environment analysis takes placerst. It portrays the general conditions in which the media enterprise operates. At this point, particular problems resulting from the technical and regulatory developments discussed above arise for the media sector. Furthermore, other
inuencing factors, such as the sociopolitical environment, also have to be taken into consideration. Thereafter, a market analysis is necessary. Thereby, regarding the media sector, the structure of the advertising and recipients markets, including the
analysis of consumer behavior, has to be closely analyzed.
In the media sector, however, the analysis of the procurement markets is of likewise major importance. In this context, the content constitutes a considerable bottleneck, so that there is strong competition, e.g., for movies, sports, and cultural events, or authors. In the next step, a competitor analysis has to be carried out. This
analysis involves identifying all actual and potential competitors. This is difcult for the media sector since new competitors previously active in other markets are

entering this market as a result of the increasing convergence. Thereby, sectors with relatively high market entry barriers–primarily in the area of TV and radio–can focus on existing competitors. In sectors with low market entry barriers, such as in the Internet, the anticipatory observation of potential competitors is difcult. If competitors can be identied, their behavior in the market needs to be studied. Afterward, the competitors’resources need to be analyzed.
Analogous to the competitor analysis, the own competencies and resources need
to be examined. Naturally, this must be carried out in a much more detailed manner than the competitor analysis. Here, core, complementary, and peripheral abilities need to be delineated from each other. The mandatory resources the enterprise requires for service provision in an internalized form are denoted as core abilities.
Complementary abilities are the necessary resources that can also be acquired from a cooperation partner. Finally, the peripheral abilities do not constitute any necessary resource capital. They can rather be obtained from the market. It becomes clear that in this early stage of strategy development, an integration of market-based and resource-based views is already possible and reasonable.
On the basis of the competitor analysis and the abilities/resources analysis, a strengths/weaknesses analysis is carried out, in which a comparison between the media enterprise and one or more of its competitors is drawn. This involves identifying existing advantages and disadvantages toward the most important
 

competitors and deriving scopes of action of both an offensive and a defensive nature. The conclusion of this strengths/weaknesses analysis, together with the conclusion of the environment analysis and market analysis, is taken into account through the opportunity/risk analysis.
In this regard, the external situation of the media enterprise is compared with its internal situation. The goal is to timely identify development tendencies of the enterprise’s environment and markets and to subsequently elicit whether future developments will impact strengths or weaknesses of the enterprise. Hence, indications of potential needs for strategic action can be derived from this analysis.
Based on the results, a strategy can be developed for the media enterprise.


	Strategy Options

The strategic options of media enterprises can be classied according to various criteria. For example, a strategic orientation to sales markets, procurement markets, products, or customers is conceivable. In this section, the strategy options are
developed by means of the media value chain. Therefore, strategic options are developed from two positions: the position an enterprise occupies in the value chain and the position it strives to occupy in the future (Küng 2008).

Focusing Strategies
Within the framework of a focusing strategy, the media enterprise restricts itself to a stage of the media value chain and attempts to achieve a prominent position in that area. A focusing strategy allows cost or differentiation advantages to be gained in one step of the value chain. TV production enterprises specializing in the production of news items are an example of focused enterprises. A focusing strategy can also make sense in complex and innovative markets if the core competencies of the enterprise facilitate a leading position in the corresponding stage of the value creation chain.
In the case of media enterprises, however, it becomes obvious that focusing strategies are rather inappropriate for gaining a prominent position in international media markets over the long term (Wirtz 1999). This strategic option should thus be viewed as a transitional stage for enterprises that have recently entered the media sector or are divesting themselves of unattractive business units in the course of a reorganization. Examples of such reorganization can be found in the initial phases of
many Internet enterprises. Yahoo! was atrst merely a search engine specialized in Internet navigation. However, the services offered expanded quickly to include
content services (e.g., news) or communication services (e.g., email service).

Integration Strategies
In contrast to the focusing strategies, integration strategies are directed to expand of the service range. Given the lack of uniformity in the use of the term“integration,”in the following,“integration”should be understood as the expansion of the range of services. Yet, distinctions need to be drawn between horizontal, vertical, and lateral
 

integration strategies, depending on the value creation chain and stage. In this process, integration strategies can be pursued by independently developing new services (internal expansion) and through additional acquisition from existing suppliers (external expansion).
Within the framework of a horizontal integration strategy, media enterprises attempt to expand their service range within existing value creation stages. Here, they aim to occupy new markets or market segments. Further causes can be found in the realization of synergy effects, for example. Horizontal integration tendencies can be observed in all media sectors. The TV sector, in which the major broadcast television networks (e.g., NBC, Fox, etc.) cover different market segments, can be taken as an example.
In contrast to horizontal integration, the focus of vertical integration is on the expansion of the service range by upstream or downstream stages of the value creation chain. For the integration of upstream stages (backward integration), the media enterprise becomes proactive in business areas that deliver input factors for its previous business processes. In this context, again, the TV sector can be cited as an example.
Suppliers of TV programs are increasingly running their own productionrms that they acquire or independently develop. The integration of downstream value-
chain stages (forward integration) follows the opposite direction and expands the business activities toelds that use the enterprise’s previous service range as input. Lateral integration refers to the integration of value creation stages that belong to outside or newly created medial value creation chains. An enterprise’s existing core competencies should be exploited, and its dependency on a market should be
minimized. Sony’s entry into the video game console business is an example.
Network Strategies
Aside from focusing and integration strategies, the option of a network strategy is also available to media enterprises. It is comprised of the formation of enterprise groups that jointly and cooperatively work on a value creation process. In the media sector, these network strategies can be observed on horizontal, vertical, and lateral levels (Albarran 2010). Here, cooperative efforts with a horizontal orientation are called strategic alliances, whereas cooperative efforts with a vertical or lateral orientation are termed strategic networks.
In the context of network strategies, the enterprises maintain their legal indepen- dence and are merely connected by their common goal. Media enterprises are in a position to couple the advantages of focusing strategies and integration strategies by means of network strategies. On the one hand, they facilitate concentration on the
enterprise’s previous value creation stage and development of its core competencies. On the other hand, many advantages described within the context of integration
strategies can be realized. Both the complexity of the media markets and the increasing pace of innovations make it more and more difcult for enterprises to offer marketable products by their own means. By use of network strategies, enterprises are more likely to keep pace with the increasing rate of innovations and under certain circumstances, to appear as the leading innovators. However, this
strategy is associated with risks of losing know-how to competing enterprises or of free-riding by cooperating partners (Albarran et al. 2006).
Moreover, networks tend to be unstable. In the case of larger networks, there is often a core group of enterprises that has long been afliated with the network and a much broader group of associated enterprises participating only intermittently. This lack of stability constitutes an essential uncertainty for the participating enterprises and not infrequently complicates their smooth collaboration, which overrides the
advantages.
A further disadvantage of the network strategy can be seen in the loss in sales arising from relinquishing value creation stages, since the increase in sales resulting from specialties performed in the network often compensates for only a fraction of the turnover relinquished. Figure 4.3 provides an overview of the strategies pursued by media enterprises.
The external procurement of content is of considerable importance for a major portion of media enterprises. For example, procurement management is closely connected to marketing strategy because a strategic positioning is frequently possi- ble only with the help of externally procured content. Strategic behavior in the
procurement market is a necessary component of long-term strategic product and program positioning. Thereby, it is primarily the inuencing factors in procurement management that are especially important. In the following, procurement strategies will be presented that media enterprises use for external sourcing of content.


	Influencing Factors

The procurement management in media enterprises is primarily inuenced by six factors. They concern the costs for content acquisition, revenue expectations, content attractiveness, contract conditions, behavior of the competitors, and government regulations. Figure 4.4 portrays these inuencing factors.
The above-named inuencing factors are discussed below. Initially, this is a
general observation which is valid for the majority of the considered media branches.
Characteristics specic to the media branches are explained in the respective branch chapters. At this juncture, it has further to be noted that the inuencing factors exhibit interdependencies. For example, anticipated high revenues for content lead to
increasing demand and thus increase the procurement price.

Costs
The costs for content procurement constitute an important inuencing factor in procurement management in media enterprises. This can especially be attributed to the intensive competition for content in the procurement market. Basically, there are
two components of costs that need to be considered: the procurement price which is paid for content and the transaction costs for concluding a contract.
The procurement price is essentially determined by quality and exclusivity of the content. Thereby, the price usually rises with increasing quality and content exclu- sivity. Furthermore, the price of the content is also inuenced by the extent of the utilization rights.

Revenue Expectations
The potential revenues for content tend to increase with greater attractiveness of the content. However, the attractiveness of media content is difcult to assess since there are hardly any sound indicators for judging attractiveness. Attractiveness indicators, such as currentness and correctness, are subjective and do not generally concur with
consumer preferences. Hence, for certain content only expected values can be formed for revenue expectations.
However, in the context of procurement, the formation of revenue expectations is an important task for media management. This concerns the revenue in the recipient market as well as the revenue in the advertising markets. Thereby, one can distin- guish between indirectly and directly acquired revenue. Direct revenues are generated by an immediate effect in the recipient and advertising markets.
 

For example, higher salesgures and larger scopes are associated with the publication of attractive content in theeld of general interest magazines (e.g., exclusive interviews). Indirect revenues are acquired through effects that need to
be determined in the longer term, e.g., a continuously improved market position of a medium with regard to a relevant target group.

Contract Conditions
The contract conditions, i.e., the terms and conditions under which an assignment of rights and licenses for content occurs, likewise constitute an important inuencing factor for procurement management. Content does not usually exhibit rivalry in consumption. Accordingly, rights and licenses can be sold multiple times by their owners to interested media enterprises.
Hence, the attractiveness of the content decisively depends on the moment of its utilization. In this context, the criterion of the publication’s currentness or the availability of its content is crucial. Thus, the largest recipient potential is usually achieved with therst publication of TV broadcasts or the availability of current or innovative content in the Internet. This applies to both entertainment content and
information. Repetitions, however, only seldom garner an attention level from recipients that is as high as it was for therst publication or broadcast. In order to eliminate the risk of value loss, it is contractually possible to agree on exclusive acquisition of rights and licenses. This acquisition can be comprehensive and
exclusive, but it can also exhibit boundaries in space, time, or substance. It can be further seen that the acquisition of content property is not possible in all areas of the media. In these cases, the buyer instead is granted a more or less restricted right to use the content, which is usually subject to temporal and other restrictions. More- over, in the context of contractual provisions of procurement management, media enterprises do not tend to acquire rights and licenses to individual content anymore. Rather, complete rights, as well as pre-sales contracts, package, and output deals, are being increasingly agreed upon.

Competitors
Regarding the area of media in general, a continuously increasing competitive situation can be ascertained. This intensifying competition occurs both between competitors within a particular media sector and between the various types of
media. Thus, attractive content is considered a scarce resource in the procurement market. Moreover, in the remarks on contract conditions, it was specically said that the behavior of the media enterprises in the content procurement markets is primarily aimed at guaranteeing exclusive access to the content.
Consequently, on the one hand, it is very important for individual media enterprises to observe the behavior of competitors within their sector. On the other hand, it is also important to observe the entire media market, since the danger of market entry of enterprises from other media sectors exists.
 

Government Regulations
The inuencing factor of government regulations has a different relevance for various media sectors. While in the area of Internet and multimedia, government regulations have only little inuence on content procurement, they must be more carefully taken into consideration by enterprises, e.g., in the areas of TV and radio. For example, the government inuences programming and thereby indirectly inuences procurement management both through meritorious aims for public suppliers and regulations pertaining to the composition of programs by private
suppliers.
Aside from national law, international law is becoming an increasingly important inuence factor on procurement behavior. For example, the television policy of the European Union allows individual states to designate programs of national interest that must be made accessible to the recipients via broadcasting free of charge.


	Procurement Strategies

Based on the inuencing factors in procurement management, the following basic procurement strategies relevant to media enterprises can be identied: direct contracting, cooperation or partnership, and syndication strategies. Figure 4.5
illustrates different procurement strategies.
At this juncture, the procurement strategies shall be described in a general and abstract manner. In the context of direct contracting strategy, the content-enquired enterprise directly contacts the copyright holder, in order to enter into a bilateral agreement. Especially the exclusive procurement of high-quality content is a prior-
ity. In theeld of TV management, for instance, direct contracting is of paramount importance.
Cooperation or partnership strategies involve an exchange of already existing content between the partners. Cooperation takes place on both national and
 
international levels. In theeld of radio management, for example, radio broadcasters exchange some of their content with each other. A major goal of this strategy is to use synergy effects and reduce material and human resources expenditures that are incurred with outsourcing at the enterprise’s expense or with
in-house content production.
A further strategy in this context is the syndication strategy. With this strategy, the enquired enterprise contacts a content intermediary, the so-called content broker. The broker is usually supplier-independent and collaborates with content suppliers on the procurement side. Content brokers bundle the supplies of third-party enterprises. On the sales side, they operate as content suppliers toward the media enterprises interested in procurement. For remuneration, the enterprises can procure the desired content that content brokers have compiled.
The goal of this strategy is to reduce transaction costs. The aggregation of the procurement volume with one supplier reduces the initial costs of content searching. It further reduces the need to have contracts with numerous content suppliers, which in turn leads to an overall reduction of transaction costs.

	Production Management

The production of media goods is closely related to the respective branch and its brand-specic characteristics. Here, technical production, such as pressing of sound storage mediums or printing of newspapers, is usually not a top priority compared to the development of content.
Content production is a central task of media management. The content produced constitutes the core service of the media product and considerably inuences the brand image of the media enterprise. In order to portray the demands on the production management of a media enterprise, the inuencing factors in media production are exploredrst. Subsequently, an overview of the strategic action alternatives for media production is presented.


	Influencing Factors

The term“production”is generally understood as the combination of production factors according to certain procedures. Inuencing factors in production are the production process, production factors, and structure of production costs. For pro- duction costs, it is primarily the media-specic characteristics of the production process that are important.

Production Process
A schematic portrayal of the production process for media is shown in Fig. 4.6. The starting point for media production is usually formed by an idea for a certain media
product. This idea frequently results from the recognition of trends or–especially in the information area–of current events. The basis for a concept can, however, be an
already existing content. For example, a book can trigger the idea for a television production. The initiative need not necessarily originate with media enterprises themselves. Rather, it often originates from external persons such as artists, agents, or producers.
In therst step, an idea is formulated as a concept. In the selection process, not only the qualitative congruence of the concept and the requirements of the media
enterprise are examined but also the economic reasonableness on the basis of the expected costs and revenue. Only after selecting a promising concept does the production phase begin in the narrower sense of the word.
In this phase, the creative and technical processes necessary for creation of the actual work take place, i.e., in this subprocess a news item, a manuscript, a movie, or a sound recording, for example, is created. In the last phase of the production process, duplication and distribution take place.

Resources
A further inuencing factor in production management is the resources that are necessary for content production. Therefore, material and human resources should be divided. The area of physical production resources includes the technical equip-
ment that content production requires. Its importance for production varies according to the type of media. For example, far fewer material resources are needed to generate a newspaper article than to produce a television show. The availability of material resources is usually not problematic in the mediaeld. However, the picture differs in the area of human resources. Here, it is primarily creative employees and
artists who are of paramount importance. In all areas of the media sector, such people determine the quality and attractiveness of the content. Authors, actors, musicians, or radio presenters are examples. In contrast to material resources, the human resources usually constitute a bottleneck in content production.

Production Costs
The structural characteristics of media production also inuence production man- agement. An essential feature can be seen in the structure of the production costs.
 

The production of content is associated with highxed costs. These are primarily caused by the allocation of human resources. Furthermore, concerning some media
sectors, a high proportion of material resources can be validated. The production studio business in the areas of television, radio, or music can be cited as an example. Aside from the high share ofxed costs, the production of media products is primarily characterized by a high degree of uncertainty. Media productions exhibit project character since unique copies are usually produced and the production
processes are rarely subject to regularity. It is precisely in the creative environment of content production that the production planning proves itself to be extremely uncertain.
Thus, in all areas of the media sector, unforeseeable events frequently occur in content production, causing the production costs to exceed those originally planned. However, the project character of media production simultaneously leads to the situation in which the utilization of a media product is only possible upon a
nalization of the project. If production is terminated prematurely, the parts pro- duced until this point usually cannot be used, and thus the accrued costs turn into
sunk costs.



	Production Strategies

In the production of content, the media enterprise has to reach a make-or-buy decision. This means that the enterprise has to decide whether the content should be created in-house or by an external supplier in outside production. Regarding in-house production, the media enterprise undertakes the implementation of the production processes itself. In outside production, the production processes are carried out by a legally and commercially independent content producer.
In this process it is not essential that the entire production process be outsourced. Rather, it is usual that only subprocesses of the production, primarily the production in the narrower sense, are given to external service providers.
Media enterprises usually strive to reduce their production costs through external content production. However, due to the project character of media production, the allocation of subtasks of content production to external service providers does not
automatically lead to economies of scale. For instance, economies of scale are created if thexed costs of production result in a considerable share of material resources, such as production studios, and the utilization of the supplier’s capacity is increased due to outsourcing. However, the major share of thexed costs usually originates with human resources that uniquely accrue for each production project. External productionrms, however, realize learning-curve effects through a targeted specialization in certain content, which can reduce production costs over time.
Media enterprises can attain cost and capital structure effects by outsourcing content production. The downsizing of human resource and material production capacities reduces thexed costs of production that can be transformed into variable costs in purchasing individual content contributions (cost structure effect).
 

Even with respect to the balance sheet, outsourcing of content is advantageous for media enterprises. Production capacities are categorized in the balance sheets as
xed assets, so that dismantling production capacities positively affects the balance sheet ratios, such as the return on investment (capital structure effect).
Moreover, the risk of sunk costs is reduced by outsourcing; as with acquisition of content at primarilyxed prices, the risk is almost completely on the external producer’s side. While the motives for outsourcing of content primarily lie in the area of production costs, the reasons for an enterprise’s own production are found in other areas.
An essential reason for in-house content production is securing the desired quality. Since the content decisively inuences the media enterprise’s brand image, above all, the content to position the enterprise’s brand in the market has to continuously meet the highest quality standards.
In the context of media production, quality is a dimension that is extremely difcult to measure or control. If content is outsourced, the enterprise takes a risk that the product quality will not reach the desired level. Outsourcing of production can lead to adulteration of the media enterprise’s brand image. This danger is especially great withxed purchase prices because the producer can only improve his or her margin by reducing costs. There is a principal-agent problem.
Furthermore, especially up-to-date content often has to be created rapidly, so that a continuous quality control of outsourced content is practically impossible. The reason for in-house production lies not only in an improvement of quality but also in the reduction of transaction costs. Aside from the costs for quality control, transac-
tion costs are understood as those costs that are justied by the need for adaption due to frequent and current changes.
For example, it can be observed that media enterprises with daily products, such as newspaper publishers, tend to have a larger share of content produced in-house than other media enterprises, such as book publishers. But even within the individual media categories, the current content tends to be produced in-house (e.g., news), whereas external content producers tend to be commissioned with content that is less current, such as entertainment articles.
As in all sectors, media enterprises are also exposed to the risk of losing core competencies by outsourcing the production process. The selection of externally produced content accordingly has to be oriented to retaining in-house production ability for important contributions.
In order to combine the advantages of outside and in-house production, media enterprises increasingly select hybrid strategies of production. In such a strategy, the commissions for content production are allocated to external service providers who are legally independent but commercially dependent on the media enterprise to a greater or lesser extent. This commercial dependence is usually achieved through equity participation.
Hence, the media enterprises are given a share of potential prots from the production. But simultaneously, they considerably inuence the determination of and compliance with quality standards and thus reduce the risk of sunk costs.
Furthermore, the media enterprise can keep its core competencies in its own sphere

of inuence and take advantage of its specialization. Figure 4.7 provides an over- view of the production strategies used by media enterprises.


	Marketing

Marketing constitutes a special challenge for media enterprises. The reasons for this are varied. On the one hand, marketing concepts need to be developed for the recipient, as well as for advertising markets and hence for customers with differing, and to some extent opposing, requirements. On the other hand, these markets are more profoundly interdependent on one another, which is expressed in the circulation-ad spiral, for instance. As a result, these concepts cannot be developed separately but have to be integrated into an entire concept.
The marketing policy instrument provides elementary action parameters. It is usually divided into the areas of product and program policy, price policy, distribu- tion policy, and communication policy (see Fig. 4.8). This division is pursued further in the following discussion, although the focus is on the media-specic aspects of the marketing instrument.
A central task of marketing is customer relationship management. A goal of customer relationship management is to maintain customer relations in order to induce customers that have already acquired the same or similar products. The customer relationship process can be portrayed as a sequence of various individual phases (see Fig. 4.9).
The most important individual phases are contact, order acquisition, purchase, use, new order acquisition, attrition, and reclamation. The marketing instruments are used to a varying extent in each individual phase in order to achieve the overriding goal of maintaining customer relations. Against the backdrop of the customer
relationship process, the concept of“customer”is understood as both individuals and customer target groups. During the contact phase, the initial contact with the
customer is established. To accomplish this, potential customers and their needs
mustrst be identied in order to allow the enterprise to address them selectively, for example, through communication policy measures.
In a successfulrst contact, during the course of the order acquisition phase, services adapted to their needs are presented to potential customers. This is primarily a function of product and price policy. If the customer is induced to purchase, the
delivery of the product to the customer must be ensured during the purchase phase. Subsequent to the transaction, actions must be undertaken in order to induce the customer to repurchase. To this end, a dialogue between the media enterprise and the customer should take place during the time that the product is being used by the customer (use phase). Customer satisfaction should be checked through customer feedback in order to prevent possible attrition. If these actions are successful, the new order acquisition phase can be initiated. However, if it comes to attrition, targeted measures should be initiated in the reclamation phase to prevent losing
the customer.


	Product and Program Policy

Product and program policy can be designated the core of marketing, as the service packages are furnished for revenue acquisition in the sales market. Only if the enterprise aligns itself to the optimal satisfaction of customer needs within the framework of product and program policy can the long-term survival of the enter- prise be guaranteed through sustained revenue acquisition.
Therefore, the market adequacy, i.e., the orientation to the demands of the market, has to be the starting point for all performance-related planning measures. In this context, a package of various useful characteristics that is marketed by enterprises as a unit is designated as a product. In contrast, the program designates the entirety of all products that an enterprise offers.
The impact of the program, however, cannot be equated with the sum of the impacts of all the products. In fact, additional effects occur through the program policy as there is usually interdependence between individual products. For this reason, the program policy plays an important role in media enterprises’marketing and is considered to be an equal part of an integrated product and program policy.
Since the recipient and advertising markets are relevant regarding sales markets, the product and program policy has to be analyzed from various angles. In order to
explore media-specic scenarios, the terms“product”and“program”have to be explained in more detailrst. In the advertising markets, this is possible by means of the abovementioned denition.
According to the denition, products can be dened as the individual advertising
spaces, e.g., advertising spots, banners or commercials, and all other advertising
activities. The program is composed of all the various advertising spaces that are offered by the respective enterprise.
In contrast, the denition of product and program in the recipient market is more difcult. A newspaper, an Internet service, or a television program consists of various partial services, rendering the demarcation between product and program
 

problematic. For instance, it is possible to consider a TV station’s informative program or a movie as a product.
However, in the context of a broadcasting group, even the entire station can have a product character, although, in the printing area, the entire newspaper or magazine, but not the individual article, always constitute the product. It becomes obvious that the demarcation depends to some extent on the context. Considering the design of product and program policy, different action parameters are available. They are usually divided into the areas of performance core, packaging, brand policy, and other services.

Performance Core
The performance core forms the enterprise’s actual marketing object. In the media sector, this is on the one hand the content and on the other the various types of advertising spaces. Within the framework of the content structure of the program, the
media enterprise has to make various decisions. Therefore, it is primarily a basic orientation for the program policy that needs to be set. This results from the denitions of the market and business area that are predetermined by corporate management.
Furthermore, the structure and extent of the service range have to be set. Here a distinction can be drawn between the program range and depth. In the media sector, the content-related diversity of the service is designated as the program range, and the number of products within the content-related program line as the program depth. Regarding newspapers and magazines, for example, one can speak of a broad service if the service covers a comprehensive assortment of special interest titles aside from general interest titles. A deep service can often be found in computer
magazines for PC games, Xbox games, and PlayStation games, for example.
Even in the advertising markets, the design of the core performance is quite important, primarily because the advertising space in media products is frequently limited. This means that the share of TV broadcasters’advertising duration cannot be considerably increased. Hence, the marketing management has to explore new pathways and possibly redene its core performance. Here, expanding the service
range, e.g., through sponsorship, is the focus.

Packaging
With the exception of newspapers and magazines, as well as the book and music sectors, product packaging is not as signicant in the media sector as it is in the area of physical goods. In the latter case, the packaging must have certain characteristics in order to fulll the needs of the producer, the retail market, and the consumer. In the individual media branches, the question of product packaging takes on varying degrees of signicance.
Packaging is mainly relevant for media products that are dependent on a storage
medium. This includes music CDs, DVDs, Blu-rays, or video and computer games, for example. For these products, the wrapping plays a major role in protecting the product during transport and for customer perception during purchase. TV or radio
 

programs, however, are not dependent on a storage medium, and therefore, the issue of packaging is non-existent.

Brand Policy
Brands are distinctive images of a product or service that are anchored in a consumer’s mind. The brand is not merely a name or symbol, but should rather communicate product characteristics such as high quality, superior advantages, or the product personality. By signalizing positive product characteristics, the uncer- tainty of the customer should be reduced prior to purchase.
This is especially important for media products that in large measure represent experience and credence goods. Since recipients are not able to sufciently examine the quality of the media before consumption, the signaling function of the brand plays a signicant role in the consumer’s purchase decision, respectively, intention to use the product.
In the media branches, brand policy has developed in different directions. Whereas in particular the newspaper and magazine sector began relatively early with brand formation due to the largely liberal market, for a long time, it has been restricted in the TV or radio sector due to strict regulations. With the deregulation of the broadcasting markets, private broadcasters have slowly begun to develop a uniform brand concept. In the Internet sector, however, these delays in brand formation did not occur. In this case, a strong brand orientation was present right from the beginning.
The establishment of a brand is associated with considerable expenditures, especially for communication measures. However, these expenditures are accompanied by major advantages in the recipient and advertising markets. Uniform standards with respect to the product quality can be communicated to the recipients through the signaling function of the brand.
This reduces the recipients’uncertainty and increases their commitment to the corresponding medium. In this manner, the scope and composition of the customer
base in the recipient market (reach) are stabilized. Furthermore, a change in the structure of the customer base can be achieved by altering the brand policy.
A stable reach simultaneously offers the media enterprise advantages in the advertising market. The stability in the scope and composition of the customer base that is achieved through brand formation facilitates a precise ascertainment of the qualitative reach and thus clear positioning in the advertising market. This has a positive effect on the advertising revenue.
The brand management can pursue various brand strategies. Brand strategies differ in their depth, i.e., the number of marketed products under one brand name, and in their breadth, i.e., the number of brand names in one service area. The options include a single- or multi-brand strategy, a brand family strategy, or an umbrella brand strategy.
The concept of the brand family consists of offering various products under one uniform brand name; thus, the positive image of one brand name is transferred to several products. In contrast to the umbrella brand strategy, it is not the enterprise’ s name itself that constitutes the brand, but rather the product group or product line.
 

The expenditures for the establishment and maintenance of the brand are borne by various products and facilitate the realization of economies of scope.
Moreover, new products encounter greater acceptance by consumers and retail market participants. The disadvantages are primarily negative spillover effects in case the products have vastly different positioning or one product has quality problems. Apart from that, repositioning opportunities for individual products are limited, since the brand core continuously has to be taken into account.
In contrast to brand family strategies, in which several brands can exist within one enterprise, umbrella brand strategies limit the product offers to one uniform umbrella brand–the name of the enterprise. This allows an allocation of the brand budget to all products, but this is only possible if the target groups for the individual products do not vastly differ. If this is not the case, the identication of a client-specic brand
prole is extremely difcult.
Services
The offer of purchase- and use-related services constitutes a further product policy action parameter. These services allow for better differentiation from other enterprises and products. The mere distribution of the core product is frequently
insufcient to satisfy customer needs. Therefore, in the area of physical goods, secondary services are often offered in addition to the tangible product, e.g., in
terms of advice, and support or delivery services, in order to support the customer before, during, and after the purchase. In this context, a trend can be observed in that the scope of the secondary services increases with the complexity of the primary product. Thus, for example, the necessity of training to use individual software is considerably greater than for established standard software.
The concept of secondary services can be transferred to the media sector. Due to extensive supplies, recipients are frequently offered information services in order to facilitate their use of media products. For this reason, TV broadcasters regularly inform their viewers in teletext messages about the current program, news, and sports events. Pay-TV broadcasters (e.g. Showtime) send their customers an indi- vidual program magazine. Even in the advertising markets, secondary services are offered depending on the complexity of the product. Thus, the private advertising customer of a daily newspaper hardly requires advice, whereas detailed advice about
what actions to take with a concluding efcacy analysis is very important for the commercial customer in the context of a comprehensive advertising spot campaign. In order to document advertising efcacy, market studies are conducted by organizations and media enterprises at regular intervals. These studies describe the
media usage pattern by means of various indicators. The indicators are primarily of a quantitative nature. Research on media use, however, has recently begun to employ qualitative approaches allowing for considerably more economically priced data collection and providing information about the quality of customer contact that is of central importance for the advertising industry.
 
	Price Policy

Price policy involves the setting and comparison of alternative prices for potential customers as well as their enforcement, while making use of the full scope of decision-making, which is limited by internal and external factors. Using the price as a marketing action parameter has various advantages. Price policy measures have minimal lead times and can often be implemented more quickly than other marketing measures. Furthermore, consumers or demanders react quickly and comparatively strongly to price changes. However, competing companies can also react to these measures for the same reasons and without major delay.
Due to the highly divergent revenue structures, the importance of price policy for media and Internet management has to be considered dependent on the branch and markets affected. Internal pricing can take place according to various criteria. One can distinguish between cost-oriented, demand-oriented, and competition-oriented pricing.
In cost-oriented pricing, information about costs is used as the basis for pricing. Both total and partial cost approaches can be employed in this context. Hence, on the one hand, it is possible to set prices that cover costs in the long term and, on the other, to determine short-term lower price limits at which a positive contribution margin is still being generated.
Demand-oriented pricing, in contrast, is based on the concept of the price-sales function. The price-sales function describes all price-quantity combinations on the sales market and thus allows conclusions to be drawn about the demand behavior in the event of price changes. Of crucial importance is the price elasticity of demand, which expresses the relationship between relative changes in sales volume and relative price changes. The price decision is thus based on the likely reaction of the buyer.
Competitive pricing focuses on the behavior of competitors on the relevant markets. The supplier does not use autonomous pricing and instead follows a price leader. Another possibility is the adoption of prices customary in the industry.
Cost-oriented pricing does not seem to make sense for media that are at least partiallynanced by advertising. But cost orientation is also not always appropriate for mediananced purely by fees (such as pay TV). In this case, a technical device, the decoder, is necessary for media access. A necessary purchase of the device will
discourage many customers from participating, so that the amortization of the device must take place via the subscription fees.
Internal pricing will then be demand-oriented or competitive. The decisive inuencing factors are the pricing of the competition and the price elasticity of demand. It should be noted here that as the recipient becomes more familiar with the service, price elasticity decreases. In the newspaper and magazine sector, for exam- ple, this phenomenon is referred to as reader-paper loyalty.
Media companies regularly use price differentiation as a price policy instrument on the recipient markets. With the help of price differentiation, identical services are sold at different prices. For this purpose, the demand side can be subdivided according to different criteria. Personal characteristics of the buyer (e.g., age,
 

membership of a certain group) are often applied here, but also local, temporal, and quantitative differences regularly serve as criteria for price differentiation.
Price differentiation usually serves to skim the purchasing power of different groups of buyers. In the media sector, however, another goal can also have priority. Especially in the case of media that is mainlynanced by advertising, price differ- entiation serves to bind certain buyer groups, such as students, to the media product at an early stage. In advertising-nanced media companies, internal pricing for the
advertising markets is predominantly based on cost orientation.
However, due to the very transparent markets and standardized products, demand and competition considerations are also necessary. Media companies are faced with relatively price-elastic demand and intense inter- and intramedia competition. Dif- ferent pricing strategies can be pursued here.
Since advertising space service is not storable as a service, but a certain market- compatible capacity must be maintained, the pricing policy can be used for active demand management. Accordingly, prices are differentiated over time, leading to a leveling of demand.
Examples of personal differentiation include newspapers and magazines that charge different prices for private and commercial advertisements. Here, the buyer groups have different price-sales functions, so that the purchasing power of both groups can be optimally utilized through price differentiation.
In addition to price differentiation, price bundling is also a widespread instrument in this context. Several products are bundled as a product package and sold at a price below the sum of the individual prices. Depending on whether the products can also be purchased individually or exclusively in a bundle, one speaks of mixed bundling or pure bundling. In the context of media management, the bundling of attractive and less attractive advertising space on TV or the bundling of several regional offers in newspapers can be cited as examples. Here, too, the objective is to skim purchasing power and utilize free capacities. In some cases, however, price bundling is also used to reduce market transparency and thus to differentiate the company from its competitors and ultimately achieve a higher price.


	Distribution Policy

Distribution policy concerns the issue of how a product or a service can be made available for use or consumption. In the context of distribution policy, decisions must be made regarding the structure of the distribution channel (acquisition-driven distribution) and the logistical systems. The distribution channels encompass the relationships of all the people who participate in the distribution process, whereas with the logistical system, the physical transfer of the product is the focal point of consideration.
Within the framework of the structure of distribution channels, marketing principles distinguish between direct and indirect distribution. Direct distribution is viewed as a traditional instrument of services marketing, through which direct contact between the supplier and consumer takes place. This results from the
 

provision of the service to a subject or object. However, regarding indirect distribu- tion, at least one additional level of distribution is interposed between the two participants. These are selected primarily if the provision of the service involves derivative distribution tasks (e.g., ticket sales for concerts).
In structuring the distribution system, marketing pursues different goals. Aside from the overall marketing goals, the target variables primarily are the distribution costs, the degree of distribution, the image of the sales channel, the duration of development, theexibility, and control of the sales channels. The importance of distribution policy for the marketing of media enterprises, however, varies
depending on the branch.
For example, the distribution costs for TV, radio, and Internet enterprises in the recipient markets can be neglected as a target variable as they are primarilyxed and dependent on the technology rather than on the distribution channel. However, the newspaper, magazine, book, and music sectors have to take the distribution costs much more closely into consideration due to the physical storage medium.
In the areas of TV, radio, and the Internet, the derived distribution tasks have only a minimal volume. For this reason, distribution is primarily direct. The TV broad- caster disseminates his program, without additional distribution steps, via cable or satellite to the recipients. Likewise, the content supplier in the Internet also makes his services directly available. Both branches might avail themselves of external trans- mission technology, which, however, cannot be viewed as an individual distribution step. In contrast, indirect distribution systems are typical for the newspaper, maga- zine, book, and music sectors. This is related to the physical characteristics of the storage medium.
Regarding directly distributed media, it is basically possible that therst access may also require special technical prerequisites or advisory services. Therefore, the
distribution of the media products is free from derived services, while the establish- ment of media access may suggest an additional distribution step. For example, the necessary hardware for pay TV is marketed to some extent in the television retail market.
Even in the advertising markets, different distribution channels are encountered. In the newspaper/magazine sector, direct distribution prevails. The enterprises in this sector usually sell their advertising spaces to their end clients without the involve- ment of sales intermediaries. It is irrelevant whether the advertising customer is an enterprise or an agency commissioned by an enterprise because the agency acts as a customer vis-à-vis the print enterprise. In the TV or radio sectors, advertising agencies are frequently used which book advertising space quotas from various broadcasters and sell them in packages to advertising companies or to agencies. The advertising agencies receive a commission for this service.
Decisions must be made not only about distribution channels but also about physical distribution. Physical distribution is concerned with the issue of how the product is physically sent from the supplier to the consumer. In this process, both the advertising and recipient markets can be simultaneously portrayed, because with the distribution of media products to the recipients, the advertising service is provided at the same time. In the newspaper, magazine, and book sectors, problems primarily
 

arise in the area of storage and transport as well as concerning the quality of the delivery service.
This consideration also applies to Internet enterprises that offer tangible products to their customers. For them, the logistical system is of fundamental importance because the transfer of the products frequently constitutes an essential criteria of demarcation vis-à-vis traditional enterprises. In other media sectors, the problem is to a large extent reduced to the decisions about the use of certain technologies. For example, in TV enterprises, the issue whether the program will be transmitted via satellite or cable may arise. It becomes clear that the considerations about the general distribution policy cannot be simply transferred to the media sector. It is primarily
the use of technology and the product“content”that are responsible for the unique features of distribution in the recipient markets. On the one hand, technology
facilitates completely novel distribution channels. On the other hand, the distribution itself has effects on the characteristics of the product.
Especially in the information area, the speed of the delivery determines the value of the product. Therefore, the distribution policy goals cannot usually be analyzed independently of the overall marketing strategy goals. Moreover, there are often dependencies on other instruments. From this basis a strategy regarding the distri- bution channels and the logistical systems has to be derived.


	Communication Policy

For media enterprises that compete in the advertising and recipient markets, it is not sufcient to merely make the product available there. Rather, the existing and potential customers must be provided with information about the products and the enterprise. Thus, communication policy has the task of inuencing the respective audience in compliance with these goals and hence causing behavior that directly or
indirectly corresponds to the highest goals of the enterprise.
The strategic part of communication policy primarily concerns itself with the communicative positioning in the respective markets. Here, it is especially a posi- tioning by means of topicality, emotion, or factual information that is suitable. However, in the context of operative communication policy, these positioning goals must be operationalized, which can occur in terms of awareness levels. It is precisely the fact that media products have a service character that makes communi- cation important since it is charged with the task of making visible the special competencies for problem-solving.
In the media sector, no general conclusions can be drawn considering applications of communication instruments. Even here, a differentiated analysis of the individual sectors and their relevant markets is necessary. In the recipient markets, various positioning goals are possible. In general, emotional positioning prevails, especially when media enterprises have to convey certain experience categories.
Advertising plays the largest role as a communication instrument. In this context, it is primarily advertisements and commercials in mass media that are relevant.
 

Thereby, media products themselves act as advertising media and can be used for communication. Dependent on media types, either the product itself is used as an advertising medium, e.g., in the TV sector, or other media from the same proprietary network are used.
Self-advertising, for example, makes sense in the context of a customer loyalty strategy provided that already existing recipients use the product anew or should be introduced to other product parts. However, to win new customers, communication via other media is necessary. An approach using a competing medium is an obvious alternative but is usually refused by competing enterprises.
Therefore, it makes sense to place advertisements in media that, to a large extent, address the same target audience, but that do not directly compete with the advertiser’s own product. For example, supra-regional newspapers regularly place advertisements in student magazines. Another example is that business magazines advertise via TV spots in news networks.
Also sales promotion is a frequently used instrument, although even in this case there is the problem that measures undertaken to increase prots are frequently propagated via one’s own medium. Thus, such sales promotion is minimally ade- quate to acquire new customers. However, temporally limited special offers can only
be offered for media products that are distributed against payment. Hence, it is not surprising that in recent years, public relations has considerably grown in importance in the area of electronic media. It is primarily sponsoring and event marketing that can be cited here.
In the advertising markets, the strategy of achieving positioning through factual information is the most prevalent. On the one hand, factual information allows better objective quality assessments. On the other hand, such positioning takes place due to the structure of the markets, in which it is primarily enterprises that act in an economically rational manner that are encountered. Hence, advertising and direct marketing, but also personal forms of communication, are used as communication elements in many market segments.

	Organizational Management

Essential characteristics of successful enterprises, such as high transparency,at hierarchies, clear responsibilities, short decision-making processes, distinctive mar- ket orientation, and high employee motivation and satisfaction, can be denitely traced back to the organizational structure.
Especially with regard to media enterprises, the importance of organizational management is reected, e.g., in the necessity of clearly regulated competencies and responsibilities within the editorial ofce in order to react quickly to unexpected events or, rather, in the closely market-oriented organizational structure of large
media enterprises, as a prerequisite for the customer-oriented focus of their product lines.
It becomes clear that the terms“organization”and“organizational management” primarily concern the creation of rules and guidelines, with whose help a concerted
 

and thus efcient daily business routine and business operation can be guaranteed. These rules restrict the employees’individual scopes of action and so ensure organizationally consistent behavior that corresponds to the enterprise’s goals.
At the same time, organizational rules may have negative repercussions on the enterprise’sexibility and on employee motivation. Hence, the organizational structure should be coordinated to the internal and external demands on the respec- tive enterprise. Consequently, the optimal structure for achieving the enterprise’s goals, such as for a newspaper publisher with a rather stable assortment and market
environment, can be completely different than that for an online enterprise in a turbulent market environment.
An expedient service provision in the context of media management requires the arrangement and combination of individual activities in addition to specic qualications. This means that following the necessary division or splitting of labor for service creation, a corresponding combination or unication of the individ- ual work steps has to take place.
Hence, the terms“differentiation”and“integration”are frequently designated basic elements of organizational management in the relevant literature. However, the
fundamentally sequential and opposing course of both of these management functions should be noted: the more intensively the differentiation of an organization is practiced, the more difcult the implementation of subsequent integration is. Both
of these fundamental principles of the management function“organization”are
addressed below, although the specics of media enterprises need to be carved out.

	Organizational Differentiation

Since generally the necessary activities for achieving the enterprise’s goals cannot be accomplished by an individual person, the optimal division and allocation of orga- nization members’work steps form the starting point for each systemically implemented organizational differentiation. As a result, there are formally set enter-
prise structures whose differentiation level depends on the degree of specialization in the departments or areas.
A prerequisite for the organizational division and allocation of work steps is a detailed task analysis that can take place by means of theve dimensions of performance,   objects,	rank,	phase,	and   mutual	relationship. Thereafter, corresponding organizational units can be carried out within the framework of a task synthesis. In business practice, it should alternatively be resorted to various organizational standards, such as the difculty, variability, interdependence, com- plexity, novelty, and structure of the tasks.
If the enterprise’s overall task isnally subdivided by means of these criteria, the determinedelds of activities have to be allocated to particular positions or departments. Within the framework of horizontal job creation, two structural
principles are differentiated: centralization, i.e., the compilation of similar subtasks into one job/department, and decentralization, i.e., separation of similar tasks and allocation to several jobs/departments. In contrast, vertical job creation distinguishes
 

between line authority, i.e., direct command of the superior over the subordinates, and staff authority, i.e., professional support of the line and other jobs.
Centralization of advertisement sales in the online area in comparison with decentralized sales of printed advertisements, for example, is typical for media enterprises for which the location of the customer often dominates over spatial bundling opportunities. Altogether, the process of job creation, however, should
not be static, but ratherexibly set up, since the individual jobs can be subject to considerable changes over the course of time.
While in the past, technical knowledge and know-how did not necessarily constitute prerequisite qualications for an editor, today they are considered basic qualications. As fundamental principles of organizational differentiation, the func- tional and the object-oriented structure can be distinguished.

Functional Organization
According to the basic idea of functional organization, all competencies necessary for a homogeneous task spectrum are pooled into one decision unit, i.e., the formation of the organizational units follows the performance principle. The func- tional organization is primarily found in small- to medium-sized enterprises that
often operate in only one single businesseld with a relatively homogeneous production program and are not exposed to major environmental changes.
Even initial efforts at internationalization are often organizationally embedded in the establishment of the enterprise’s own export department. The advantages of efcient service creation and the achievement of productivity gains through func- tional specialization are accompanied, however, by considerable disadvantages.
These are fragmented work processes and departmental egotism, a lack of trans- territorial coordination (especially with the increasing size of the enterprise, differ- entiation of the product range, and regional expansion), and slightly distinctive
exibility and customer orientation. Within the media sectors, functional organiza- tional structures can be found primarily in regional enterprises that are focused on specic formats. This is claried further in Fig. 4.10 with respect to a cable television enterprise. 
On the positive side of this organizational structure is the bundling of the respective specialists and the avoidance of resource duplication. A criticism is the strengthening of the traditional rift between the business administrative and primar- ily journalistic motivated interests within a publishing house. Aside from
inefciencies in the work processes, these possible communication barriers between the editorial and advertising/sales departments can prevent an integrated customer
orientation.

Object-Oriented Organization
The difference between functional and object-oriented organization can usually be seen in the second level of hierarchy, although the decision for a performance or object structure can basically be made on each hierarchy level and neither organiza- tional principle can mutually exclude the other.
While the former is structured along the value creation chain according to the functions, the latter’s constituting criteria that shape the organization are products/ services, customers, regions, or markets. In contrast to functional organization, with which similar performances are pooled together, a bundling of all those (dissimilar) performances that are necessary for the realization of the respective object takes
place in the consequent implementation of the object-oriented principle.
The most prominent characteristic of the object-oriented structure is reected in the establishment of independent business units as prot centers that lead the area of responsibility with a high degree of independence and with the goal of maximizing the prot or prot contribution. If the prot centers additionally become legally independent, an afliated company is created. In this process, the prot centers themselves become subgroups if they spin off (legally independent) subsidiaries.
The parent company then often assumes the function of a holding company, which is limited to mere leadership tasks and intervenes only indirectly in the operative business.
The Walt Disney Company is an example of a management holding company that is organized as independent prot centers. The service program and the enterprise functions constitute the central structuring criteria. Only the corporate areas of human resources, global security, corporate strategy, corporatenance, and corpo- rate communications are delineated according to functional criteria. Through this
process, a globally uniform distribution of the products is achieved. A worldwide line responsibility on the business unit level results. The organizational structure of The Walt Disney Company is portrayed in Fig. 4.11.


	Organizational Integration

The jobs and departments set up within the framework of organizational differentia- tion result in inevitable friction in the service process due to their human resources, temporal, geographical, and material separation. Therefore, it is not surprising that organizational integration is often seen as the more complex and more important task of organizational management. Three important mechanisms for the solution of
organizational integration, namely, hierarchy, guidelines and plans, and self- determination in groups, are introduced below, whereupon the main focus shall be clearly directed at hierarchical coordination.

Integration Through Hierarchy
The purpose of forming a hierarchy is to organize the jobs and departments, created through an asymmetrical division of power in the course of the organizational differentiation, into a system of superior, subordinate, and commensurate entities, with the aim of being better able to coordinate and control them. For meaningful task performance, the competencies (i.e., the rights and authorities of the job or depart- ment) should correspond to the respective tasks or responsibilities according to the congruence principle.
The organizational hierarchy is usually portrayed in a line drawing, with lines representing the chain of command (running from up to down) and lines representing reporting, communication, and complaints (running from below to above). If a subordinate job is connected with only one line to only one superior job, it represents a so-called one-line system.
 

However, if there are connections to several hierarchically subordinate jobs, one speaks of a multi-line system. The line-and-staff organization seeks to combine the advantages of a one-line system with a functional specialization. In this context, the line entity that is overburdened with daily business is supported by a staff position that concerns itself with conceptual and strategic tasks. However, the combination
often proves to be extremely conictual in practice due to the superior know-how and the lack of managerial authority in the staff unit.

Matrix Organization
A matrix organization is a multi-line organization that combines the functional and object-oriented structural criteria. Even if arbitrary combinations are basically con- ceivable, the vertical dimension is usually functionally oriented, whereas the hori- zontal is object-oriented. Matrix organization can be applied as a general structural principle on each hierarchical level of an enterprise. However, one speaks of a tensor organization if the two-dimensional structure is supplemented by additional dimensions.
The clear delineation of the decision-making and directive-issuing authorities has proved to be critical for the matrix organization. Advantages of shorter communica- tion channels, consideration of various perspectives in problem-solving, and the precedence of professional expertise vis-à-vis the hierarchy are indeed attributed to the matrix organization. However, these advantages are countered by serious
disadvantages, namely, a great potential for conicts and power struggles, the lack of accountability for success or failure, a great need for communication, protracted
decision-making processes, and the danger of the implementation of suboptimal compromises.
In the media industry, the matrix organization is to some extent employed by book publishers, for which the editorial ofce acts as product management. A typical matrix organization in a book publishing house is shown in Fig. 4.12.

Project Organization
The formal organizational structure of enterprises, the so-called primary organiza- tion, is often superimposed from secondary organizational structures to handle new or time-limited issues. Precisely for the short-term concentration of activities and measures, project organization has proved its value for the process in which
specialists from variouselds are brought together in the organizational structure for the duration of the project.
In the media industry, project organizations can be found as a secondary struc- tural characteristic in a cross section of all media. However, project organizations, being primary organization, are typically applied for movies. In particular, major movie productions resort to numerous freelance workers and service providers for
the duration of the project. This is because of the highly specic prole of requirements and the temporally limited action, aside from an infrastructure of
administrative activities within the production enterprise.

Integration Through Guidelines and Plans
Primarily in larger organizations, guidelines in the sense of rules and programs, as well as plans to help with integration, are additionally used aside from the hierarchy in order to guarantee homogeneous task performance and coordinated relief of the line organization. Thereby, it should be noted that rules and programs that have a long-term orientation and are recorded in writing, i.e., they do not require personal communication, can only be meaningfully used in the sense of support for if-then decisions for problems with a high degree of standardization.
Aside from routine programs (predetermined reactions to specic initial situations) and aim-oriented programs (the aspired goal is declared binding), the
literature distinguishes between so-called policies (principles and guidelines, e.g., for product or purchasing policy), procedures (detailed provisions for a subdivision, such as order processing), and rules (concrete directions for action in the form of allowed or prohibited). This division is made in dependence on the remaining scope of action.
Guidelines and plans tend to be oriented to the enterprise or the sector. Thus, a particular connection to the media appears merely enterprise-specic, for example, regarding certain guidelines for the selection and production of movies (e.g., restric- tive handling of adult content, etc.), the requirements of a certain political focus, and
a narrow journalistic style for research and writing in a newspaper publishing house, or a predetermined quota of music titles for a radio broadcaster.
 

Integration Through Self-Determination in Groups
Self-determination has established itself as a third mechanism for integration in enterprises. It is primarily focused on the direct coordination of unforeseeable problems related to deadlines or functions between the involved departments and assumes a superiority of teamwork over line guidelines. While spontaneous (hori- zontal) self-determination does not manifest any institutional anchor, in the mean- time there are numerous formally organized, horizontal self-determination efforts such as committees and workgroups, department leadership conferences, as well as coordination and integration units.
A high degree of integrative power and qualitatively high-caliber decision- making, as well as efcient decision implementation, is attributed to self- determination by its proponents. Self-determination’s detractors, in contrast, desig- nate it expensive and time-consuming. Moreover, they see the risk of disadvanta-
geous compromises and rejection of minority opinions. In addition, it appears critical that self-determination subliminally imputes a high degree of autonomy to the coordinating parties and their goals, which in reality are found only infrequently. Furthermore, this integration mechanism requires a strong identication with the
enterprise’s in-house goals and ideals, along with a pronounced willingness to
cooperate in order to be able to override rules, programs, and hierarchical
constraints.