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Transformation of business models in terrestrial TV broadcasters in South Korea
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Transformation of business models in terrestrial TV broadcasters in South Korea
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Content
TRANSFORMATION OF BUSINESS MODELS IN
TERRESTRIAL TV BROADCASTERS IN SOUTH KOREA
by
Jiewoon Jeannie Jo
Rossier School of Education
University of Southern California
A dissertation submitted to the faculty
in partial fulfillment of the requirements for the degree of
Doctor of Education
December 2021
iii
© Copyright by Jiewoon Jeannie Jo 2021
All Rights Reserved
iv
The Committee for Jiewoon Jeannie Jo certifies the approval of this Dissertation
Corinne E. Hyde
Eric A. Canny
Emmy Jungwon Min, Committee Chair
Rossier School of Education
University of Southern California
2021
iv
Abstract
This study examined why the terrestrial TV broadcasters are not proactively adaptive to the
market changes through the gap analysis in the management group of the XBS and how the
group has affected the organization’s decision on the business model transformation. Using the
Clark and Estes (2008) gap analysis conceptual framework, the study leveraged qualitative
interviews to analyze knowledge, motivation, and organizational influences. Findings from the
study indicated that the management group needs to address procedural and metacognitive
knowledge gaps related to assessing the current business model, developing an alternative model,
and implementing and monitoring the alternative business model. From the motivational
perspective, the findings indicated that the management needs to see the utility value and
increase self-efficacy in transforming the current business model. Regarding the organizational
influence, the study found four factors influencing the organizational resistance: the trust issue
with the leader, the organizational complacency, the result-driven culture causing fear of failure,
and the long decision-making process. Specific recommendations for addressing these gaps are
provided. This study provides the complexities involved in developing an alternative business
model and explicit recommendations for addressing each organizational challenge in various
contexts.
v
Dedication
To my husband Jungwook and my sons, Ryan and Nathan.
To my parents, Dr. Byung Wook and Kyung Shim Jo.
vi
Acknowledgments
Pursuing a doctorate is by no means a product of an individual effort, and I was no
exception. I would like to express my appreciation to my dissertation chair, Dr. Emmy Min, for
her thoughtfulness, kindness, and consistent support throughout this process. Dr. Eric Canny,
thank you for your affection toward your students. I enjoyed every moment of your lecture, and I
knew I wanted you on my committee from the very first semester. Dr. Corinne Hyde, thank you
for your insightful feedback on my drafts. Your questions and comments were truly valued.
To my parents, Dr. Byungwook Jo and Kyungshim Oh, thank you for your endless love
and support. Your words of wisdom had motivated me to move forward. You have always been
my inspiration, and you will always be my role model.
To my husband, Jungwook, to whom this dissertation is dedicated, words cannot express
my gratefulness for everything you have done to support me over the past years. Thank you for
taking extra care of our kids, for proofreading my drafts, and for encouraging me when I suffered
through this process. To my loving sons Ryan and Nathan, thank you for trusting me even when
I didn’t feel confident about myself. All the dishwashing you’ve done when mommy was busy
with her dissertation was a great help. Without the love and support of these three men, this
journey would not have been possible.
vii
Table of Contents
Abstract ..........................................................................................Error! Bookmark not defined.
Dedication ......................................................................................Error! Bookmark not defined.
Acknowledgements ........................................................................Error! Bookmark not defined.
List of Tables ................................................................................................................................. ix
List of Figures ................................................................................Error! Bookmark not defined.
Chapter One: A Study of Limited United States Observation Units ........... Error! Bookmark not
d
e
f
i
n
e
d
.
Organizational Context and Mission .................................................................................. 3
Importance of Addressing the Problem .............................................................................. 3
Purpose of the Project and the Questions ........................................................................... 5
Stakeholder Group of Focus ............................................................................................... 5
Stakeholder Group's Performance Goals ............................................................................ 6
Methodological Framework ................................................................................................ 6
Organization of the Study ................................................................................................... 8
Definition of Terms............................................................................................................. 8
Chapter Two: Review of Literature ................................................................................................ 9
Background of Terrestrial TV Industry .............................................................................. 9
Rise of Streaming Services and Cord-Cutters .................................................................. 13
Consumers Avoid Advertising .......................................................................................... 16
New Norm, New Media Behavior, and New Business Model ......................................... 19
Trial and Error of Broadcasters’ Efforts to Transform ..................................................... 21
viii
Confucianism Culture and Autonomy of the Organization .............................................. 25
Transformational Leadership ............................................................................................ 26
Conceptual Framework ..................................................................................................... 28
Knowledge, Motivation, and Organizational Influence .................................................... 29
Conclusion ........................................................................................................................ 45
Chapter Three: Methodology ........................................................................................................ 45
Participating Stakeholders ................................................................................................ 46
Data Collection and Instrumentation ................................................................................ 48
Data Analysis Methodology ............................................................................................. 49
Credibility and Trustworthiness ........................................................................................ 50
Ethics................................................................................................................................. 51
Limitations and Delimitations ........................................................................................... 51
Chapter Four: Results and Findings .............................................................................................. 52
Participating Stakeholders ................................................................................................ 53
Research Question One ..................................................................................................... 55
Results and Findings for Knowledge Influences .............................................................. 55
Results and Findings for Motivation Influences ............................................................... 64
Research Question Two .................................................................................................... 73
Results and Findings for Organizational Influences ......................................................... 73
Summary ........................................................................................................................... 80
Chapter Five: Recommendations .................................................................................................. 81
Knowledge Recommendations ......................................................................................... 81
Motivational Recommendations ....................................................................................... 85
Organizational Recommendations .................................................................................... 88
Limitations and Delimitations ........................................................................................... 94
ix
Recommendations for the Future Research ...................................................................... 95
Conclusion ........................................................................................................................ 96
References ..................................................................................................................................... 98
Appendix A: Interview Questions .............................................................................................. 116
List of Tables
Table 1: Summary of Knowledge Influences, Types, and Assessments for XBS’s Organizational
Gap Analysis 32
Table 2: Summary of Motivation Influences, Types, and Assessments for XBS’s Organizational
Gap Analysis 37
Table 3: Summary of Organization Influences, Types, and Assessments for XBS’s
Organizational Gap Analysis 43
Table 4: Overview of Participant Profiles 54
Table 5: Position Breakdown of Primary Participants 55
Table 6: Validation of Knowledge Findings 57
Table 7: Breakdown of the Suggested Alternative Business Model 63
Table 8: Validation of Motivation Findings 66
Table 9: Validation of Organizational Resistance Factors 74
Table 10: Summary of Knowledge Influences and Recommendations 83
Table 11: Summary of Motivational Influences and Recommendations 86
Table 12: Summary of Organizational Influences and Recommendations 90
x
List of Figures
Figure 1: Conceptual Framework 7
Figure 2: Active Subscriber Number of Netflix in South Korea 23
Figure 3: Interactive Conceptual Framework: Knowledge, Motivation, and Organizational
Influences in Business Model Transformation at XBS 29
1
Chapter One: Introduction of the Problem of Practice
The TV broadcasting stations have traditionally been depending on advertising and
carriage fees as their core revenue. However, the entrance of subscription-based over-the-top
(OTT) streaming services has disturbed the TV industry that has been dominated by the
traditional multichannel terrestrial TV providers (Park, 2018). Consumers are now streaming TV
shows and video clips through OTT services, which often leads to unsubscribing terrestrial TV
stations (Arolovich, 2015).
Global OTT service providers, such as Netflix, Amazon Prime, and Hulu, are
transforming the relationship among media companies in the broadcasting industry. According to
Park and Kwon (2019), global OTT companies have survived various mergers and acquisitions
to gain market share in the industry. In many countries with extensive TV markets, these service
providers have been adopting different strategies to differentiate their contents through
localization and partnership. As a result, the increase in broadband subscriptions has
substantially impacted the pay-TV market and the cord-cutting phenomenon, while OTT service
revenues have not been enhanced (Park & Kwon, 2019). With the increase of various streaming
services and digitalization of media network systems, consumers’ media consumption pattern has
evolved into unsubscribing of traditional TV services, described as cord-cutting (Benerjee et al.,
2014). Some terrestrial TV providers have started experimenting with new services to defend
their market share, such as providing online TV packages or hybrid broadcast/broadband
services (Song, 2013) in partnership with telecom companies. However, the market has been
penetrated by players like Netflix, YouTube, and Hulu, who had already established the market
positions or have proactively responded to the market (Park, 2017). Ham’s survey (2016)
2
showed that Netflix takes up the top US streaming service provider spot, outperforming its
competitors with two-digit annual growth.
According to the PwC survey (2016), US viewers’ pattern of canceling their TV
subscriptions increases every year. In the survey, 16% of respondents responded that they
stopped their TV services a year before, and 20% said that they were willing to discontinue their
traditional TV service. A recent survey showed that the overall revenue of terrestrial TV has
started to decline since 2018 (Jo et al., 2020). For example, NBCUniversal's income worldwide
had a steady year-by-year increase until 2018, followed by a sudden drop in 2019, generating
33.97 billion dollars, down from 35 billion in the previous year. Meanwhile, the same survey
shows more than 64% of television’s revenue in 2018 came from advertising and this percentage
is an increase from 54% in 2010. Although traditional content providers have tried alternating
screen strategies, providing online pay-TV packages on OTT services, the success of transition
has been far behind the global OTT players, such as Netflix and Hulu (Song, 2013). This
phenomenon reveals that the business models of television service providers are at risk in many
countries (Banerjee, Rapport, & Alleman, 2014), and terrestrial TV broadcasters need to
transform their traditional business model for the organization’s agility and adaptability, as well
as their strategic drive in the fast-changing environment, and ultimately for the organization’s
sustainability. Although traditional content providers have tried alternating screen strategies,
providing online pay-TV packages on OTT services, the success of transition has been far behind
the global OTT players, such as Netflix and Hulu (Song, 2013).
Therefore, this study explores the reasons why the terrestrial TV broadcasters are not
proactively adaptive to the market changes through the gap analysis in the management and how
it has affected the organization’s decision on the business model transformation.
3
Organizational Context and Mission
XBS is a terrestrial television and radio broadcasting company located in Seoul, South
Korea. The Company produces and broadcasts programs, such as news, sports, weather, music,
movies, and television drama series. XBS dramas have been part of the "Korean Wave,"
exported to many countries worldwide. XBS airs various entertainment programs ranging from
informational, comedy, music, reality, talk shows, and auditions. Convergence in the broadcast
industry and the emergence of streaming platforms have rapidly transformed the media
landscape. With the rapid changes in the South Korean TV industry, it is inevitable for XBS to
diversify its portfolio and business model to expand globally. The company’s challenge is to
venture out of the TV and become a truly global media company, providing entertaining and
healthy TV content.
Importance of Addressing the Problem
With the dynamic growth of global OTT streaming service providers, consumers are
adapting to a new media consumption behavior, seeking more convenience and less advertising,
resulting in traditional TV broadcasters' departure (Park, 2018). As Snyman and Gilliard (2019)
claimed, the future of TV seems to be streaming. In 2017, Netflix reached over 50 million
subscribers in the US, surpassing the total subscribers of Comcast and DirecTV, both of which
had been strong companies in the TV market. The subscriber number exceeded 57.38 million by
2018, while the number of subscriptions to major cable providers has declined (Watson, 2020).
The entrance of OTT companies has been increasing tension with terrestrial TV and broadband
network operators (Park & Kwon, 2019). Evens and Donders (2013) claimed that the current
broadcasting industry is being forced to transform due to the increase of competition between the
internet and OTT streaming providers, which diminishes TV’s position in the market. Creating
4
partnerships among broadcasters is also noticeable, as the collaboration can provide, focus,
secure, and supply popular content as part of their content differentiation strategy. Original
contents that have been proven to be marketable overseas and the alliances are successfully
reflected on their revenue. Park and Kwon (2019) studied that OTT firms enable real-time
feedback from the viewers, such as likes, shares, and comments, and the data can be utilized for
making better decisions to meet viewers’ needs and demands. In addition, OTT contents run on
mobile devices, which will enhance the number of OTT subscribers as the technology advances
and introduce better digital devices. Generation Z is likely to be a large cohort of cord-nevers,
loaded with their accounts of Netflix, Amazon Prime, and YouTube Premium (Tefertiller, 2018).
The launch of 5G will allow consumers to watch TV content on mobile devices without using a
wi-fi connection in multiple regions. National TV networks need to reconsider their breadth of
content, relationships with audiences, and partnerships. The advancement of technology and
platforms has put consumers in control of TV in a completely new way – whether it is through
installing ad-blocking software, cutting the cord, streaming, sharing, or commenting on the
content in real-time on social media (Tefertiller, 2020). The trend is throwing the traditional
model on its head and pressuring traditional players to make quicker strategic moves. This
phenomenon will affect the organization’s agility to transform into something more adaptive to
the new environment. The importance of transformation for an organization is also reflected in
adjusting the new business strategy (Bharadwaj et al., 2013). The new strategic transformation
process will involve evolving a vision, goal, and implementation of the organization (Matt et al.,
2015). For that reason, it has become more imperative to adjust its business model. Otherwise,
traditional TV broadcasters, such as XBS, will have to face a problem in the subscription battle
against their emerging competitors. Ultimately, their business sustainability will be at risk.
5
Purpose of the Project and the Questions
The purpose of this research is to analyze whether XBS strategies will allow the
organization to meet its goal of transformation to become a global media company by 2023. The
TV may not expand at the speed it did 20 years ago (Stewart, Casey, & Wigginton, 2019), and
the organization’s expansion strategy of going global seems inevitable. Furthermore, this study is
intended to learn more about how leadership in the traditional media company maintains
motivation to obtain the company’s goal to generate a well-organized business model that grasps
new revenue sources, such as streaming services. This transformation will empower the company
to engage more with the audiences, as they have been adapted to TV streaming content
(Tefertiller, 2018). The analysis focuses on Clark and Estes (2008) framework of knowledge,
motivation, and organizational influences related to achieving the corporate goal. The
stakeholder group is the management group at XBS, which influences the organization’s
decision-making process. The research questions for this study addresses knowledge and
motivational/psychological factors for the stakeholder group:
1. Does the XBS’s management team have sufficient knowledge and motivation to
transform the organization to meet the market trend and consumers’ needs?
2. What resistance/obstacles in the organization makes it harder to transform its
business model?
Stakeholder Group of Focus
The stakeholder group review is substantial to analyze XBS's ability to transform the
organization (Pacheco & Garcia, 2012). The stakeholder group of focus for this study is the
management of the XBS, which has the authority to create and change the organizational goal
6
and direction. Focusing this group will help transition the organization’s traditional business
model to the new one that fits the market trend and consumer change.
Stakeholder Group’s Performance Goals
The stakeholder group’s goal is to increase the revenue by 15% by expanding its digital
contents business portfolio to 25% by 2023. In order to achieve this goal, the management group
has to be the stakeholder group of focus for the authority it has on the organizational goal and
direction, which suits the purpose of planning, implementing, and evaluating the study.
Methodological Framework
To make practical changes, the research needs to analyze the gap between individuals and
organizations. The analysis tool that served as a conceptual and methodological framework for
this study will be the Clark & Estes KMO gap analysis (Clark & Estes, 2008). The research will
examine three critical factors during the analysis process: 1) individuals’ knowledge and skills;
2) their motivation to achieve the goal; and 3) organizational barriers. The gap analysis aims to
identify whether the management has adequate knowledge, motivation, and organizational
support to achieve essential work goals.
7
Figure 1
Conceptual Framework – KMO Gap Analysis (Clark & Estes, 2008)
This study’s motivation and psychological element will use the expectancy-value Theory
(Eccles et al., 1983). The expectancy-value theory postulates that motivation for a given behavior
is determined by a combination of two factors: one’s expectations for success and subjective task
value in a particular area. According to Vroom (1964), the two core factors are integrated
through multiplication, such as “motivation = expectancy x value.” Motivation is significant
when both expectancy and value are high but may disappear when one of these factors equals
zero. Furthermore, both factors predict one’s achievement-related outcomes. Expectations for
success are more strongly tied to performance, and task values are more strongly linked to
achievement-related choices (Wigfield & Eccles, 2000). Eccles et al. (1983) indicated that
expectancy and value are affected by task-specific beliefs and individuals' goals, which in turn
8
are influenced by other peoples' thoughts, socialization, and personal past experiences of
accomplishment. The expectancy-value theory will be used in this study to examine the “missing
middle” between the broadcasters’ management (decision-makers) and the organization’s desired
long-term goals for them to occur.
Organization of the Study
Five chapters are written to organize this research. Chapter One provides the fundamental
concepts for this research, such as the organization’s mission, goals, stakeholders, and
framework. Chapter Two provides a review of the current literature surrounding the problem of
practice. Chapter Three explains knowledge, motivation, and organizational influences to be
analyzed and methodology for selecting participants, data collection, and analysis. Chapter Four
features a discussion on the data collection, and Chapter Five provides solutions, based on data
and literature, for closing the organizational gaps and recommendations for its evaluation plan.
Definition of Terms
Terrestrial TV Broadcasters (or stations) – A type of TV broadcasting in which the
television signal is transmitted by radio waves from the terrestrial transmitter of a television
station to a TV receiver. This type of broadcasting is considered a traditional TV broadcaster,
compared to the streaming service providers that entered the market recently.
Over-the-top (OTT) service – A streaming media service offered directly to viewers via
the internet. OTT bypasses broadcast, cable, and satellite TV platforms that traditionally act as
distributors of such content.
Cord-cutters – Consumers who stop their traditional television services and start relying
on internet-based streaming services to watch online videos, including TV shows.
9
Cord-nevers – Consumers who never subscribed to cable TV, terrestrial TV, or satellite
TV.
Chapter Two: Review of Literature
The world is turning digital faster than ever, and the audiovisual industry is not an
exception. Terrestrial TV stations’ revenue has dropped since 2018, and the total digital
advertising budget has surpassed total TV advertising revenue since 2016 (Shaban, 2019). The
multimedia service paradigm is shifting from the conventional single source to multimedia
source, and the source has gotten considerably diverse. However, the terrestrial TV stations are
not being as proactively adaptive to the changes as the customers are, which has negatively
impacted the company’s continuity. As the paper focuses on why terrestrial TV broadcasters are
not adaptive to the transformation, this review of the research addresses how consumers’
avoidance of advertising and the entrance of streaming services has triggered the increase of
cord-cutters (Benerjee et al., 2014). Then the review shifts attention toward the trial and error of
the terrestrial TV providers’ transformation and how they have responded to this new threat by
experimenting with new services (Park, 2017). Following the general research literature, the
review references Clark and Estes’ gap analysis (2008) in knowledge, motivation, and
organizational influences.
Background of Terrestrial TV Industry
In many countries, viewers within the coverage area have the option to receive free-to-air
TV (terrestrial TV) or to subscribe to a pay-TV for linear television service. Terrestrial TV
stations provide free-to-air TV channels on terrestrial networks, allowing audiences to watch TV
without any subscription. In contrast, pay-TV broadcasters provide TV channels to their
subscribers through private networks (Kim, Mo, & Kim, 2019). In many cases, broadcasters
10
license the pay-TV to retransmit their programs in return for licensing fee (Eisenach, 2014;
Korea Communications Commission, 2016).
In South Korea, terrestrial TV broadcasters are vertically integrated firms producing TV
programs and distributing them on the terrestrial broadcasting network (Kim, Mo, & Kim, 2019).
In order to assess the characteristics of TV broadcasters, it is necessary to understand how TV’s
business model has been coordinated. In South Korea, the top three nationwide terrestrial
broadcasters are Korean Broadcasting System (KBS), Munhwa Broadcasting Corporation
(MBC), and Seoul Broadcasting System (SBS), and the revenue structures of the three
broadcasters all varied (Kazuma, 2005). Being the nation’s public broadcaster, KBS relies
heavily on a subscription fee and partly on advertising revenue, while most of MBC’s income
comes from advertising, and SBS entirely on advertising. Despite the heavy dependence on
advertising revenue, MBC is often considered a public broadcaster because 70% of the
company’s equity is owned by the Foundation for Broadcast Culture, an organization operated
entirely from government funds. The subscription fees that KBS collects are stated in Article 64
of the Broadcasting Act that anyone with a TV set should register and pay a TV broadcaster
subscription fee (Kazuma, 2005).
Terrestrial broadcasters sell advertising slots to advertisers (Godes et al., 2009). They
make profits from selling advertising airtimes on their TV programs, and the advertising revenue
is proportional to the total viewership watching the terrestrial TV programs regardless of the TV
service they choose (Kim et al., 2019; Evens, 2014), and viewers’ decision on a TV service is
mostly based on satisfaction from the TV programs served (Nissen, 2016).
Considering that most viewers tend to avoid advertising while watching TV shows, OTT firms
providing no-advertising service in return for the subscription fee have intimidated the
11
broadcasters, threatening their traditional business model (Ansari et al., 2016). According to
Korean Broadcast Advertising Corporation’s research (Kim, 2019) that surveyed 2,200 media-
related businesses across the nation to identify advertising spending and market projection from
2018 to 2020, total advertising spending in South Korea was expected to rise by 4.8% in 2019
from 2018. Among this budget, smart media, such as the internet and mobile, was expected to
increase by 9.6%, while less than a 1% increase was projected in broadcasting. Watson (2020)
released the terrestrial TV advertising revenue in South Korea from 2016 to 2020, and the
revenue has decreased from 1,769.27 billion South Korean won in 2016 to 950.96 billion won in
2020, dropping nearly 54% in four years.
The digitization of television has disrupted the dynamics of the audiovisual industry.
Digitization has created opportunities for innovative video services and has enabled firms to play
a much significant role in the industry. Kim et al. (2019) found that higher revenue from
advertisers is often a strong motivator for the broadcasters to expand the coverage. For example,
adapting in-program advertising breaks is under consideration in South Korea, where the
advertising revenue has significantly decreased. The broadcasters’ ability to attract audiences
grants them a powerful position in the relationship with the advertisers (Evens, 2014). As
audience segmentation continues, popular TV channels that can successfully capture consumers’
attention may take advantage of rarity and maintain gatekeeping power. However, the emerging
online distribution platforms are looking for opportunities to remove the existing hegemony of
pay-TV platforms (Park & Kwon, 2019). In her research, Choi (2013) stated that the
consumption of traditional TV programming has decreased as viewers began using digital
devices and smartphone applications to watch TV shows and user-created content and videos on-
12
demand. She also found that the more consumers perceive online media platforms differentiated
from the TV in the way they are satisfied, the more likely they will favor using online platforms.
Logan, Bright, and Gangadharbatla (2012) identified that the cost of delivering
advertising messages to a mass audience has become expensive. Advertisers are moving away
from the exclusive selection of television and exploring alternative media, such as social media
sites, to reach their target consumers. Several studies on the advertising effectiveness suggested
that consumers’ overall response to TV advertising is negative as they become more doubtful
about the values of offline advertisements (Cho, 2003; Cho & Cheon, 2004), which is why social
media advertising has become increasingly popular for marketers to experiment as their online
marketing mix. Advertisers have adopted social media platforms as tools to build relationships
with young consumers. In 2009, 43% of the 500 fast-growing companies in the US reported that
social media is “very important” to their marketing strategies and 68 percent of them said they
tracked their brands and products on the social media platforms (Barnes & Mattson, 2009). In
2011, US marketers were projected to spend $3 billion on social media advertising, which
represents a 55% increase from the previous year with a prediction that social media advertising
expenditure will more than triple over the next five years (Hof, 2011). Facebook, for example, is
attractive to marketers because it offers a variety of advertising options, such as driving traffic to
the advertisers’ websites or promoting events. In addition to these benefits, social media
platforms provide viewers to “like” the link, allowing them to post immediate feedback and
“share” the sites in real-time (Logan, Bright, & Gangadharbatla, 2012).
When OTT service providers first entered the Korean market, the leading content
providers, such as terrestrial TV networks and cable TVs, were hesitant to distribute their
contents to them, thinking that these OTT platforms might take away their advertising revenue
13
(Shimura, 2014). Having a highly competitive OTT market, there has been a more diverse set of
OTT providers in South Korea, including telecom providers, mobile carriers, and streaming
services (Park, 2017). According to Park (2017), terrestrial TV networks collaborated to make
OTT service providers, such as POOQ, Tving, and EveryoneTV. Added to this competitive
landscape are the TV set manufacturers, such as Samsung and LG, and main portal sites, such as
Naver and Daum, which forced the decrease in the share of terrestrial broadcasting. While
traditional audiences appear to be declining in South Korea, the broadcasters have been trying to
adopt the OTT TV services as extensions of their pay-TV services (Park, 2017), which will be
reviewed in detail later in the literature.
Rise of Streaming Services and Cord-Cutters
As Lin (1994) argued, when a new medium is considered as more preferable to the old
one, the audience may dump the old medium and replace it with the new one. The introduction
of new technology has been demonstrated to affect viewers’ expectations and uses of traditional
media, just like when video cassette recorders altered the viewers’ use of conventional media,
such as TV and theatrical film viewing (Henke & Donohue, 1989). Over the years, internet
services and network technology have enabled consumers to stay connected 24/7 resulting in the
transformation of information and entertainment (Shankar & Balasubramanian, 2009). With the
increase of various streaming services and digitalization of media network systems, has the
consumer media consumption pattern evolved? Traditional TV service providers are
experiencing severe revenue losses and a decrease in viewership due to increased consumers
using streaming long-form video programs, resulting in discontinuing conventional TV services,
described as “cord-cutting” (Banerjee et al., 2014). Cord-cutting is disconnecting a cable or pay-
TV subscription service in favor of other alternatives, such as OTT streaming service (Crawford,
14
2015). He stated that consumers become cord-cutters when they cut the cords of their traditional
TV set and rely on online streaming services for their entertainment, including TV shows. For
example, consumers may be motivated to become cord-cutters to watch programs on devices
other than their TV set, including devices like smartphones, tablets, and computers. This cord-
cutting phenomenon indicates that the business models of traditional TV service providers are
under threat (Banerjee et al., 2014).
The number of cord-cutters switching from pay-TV to streaming services was 16.7
million in 2016, and the number is expected to exceed 40 million in 2021 (Park & Kwon, 2019).
The number of cord-nevers, describing the viewers who have never subscribed to pay-TV and
only used digital platforms from the start, reaching 32 million in 2016, is expected to reach 41
million in 2021. According to Convergence Research Group (2021), US cable subscribers were
reduced by 1.13 million in 2015, compared to 283,000 subscribers in 2014. Furthermore, the
survey stated that there were 2.1 million cord-cutter households in 2015, up from 1.27 million
cord-cutter households in 2014. Nielsen (The Nielsen Company 2016) published that 40% of
Generation Z (ages between 15 and 20), 38% of Millennials (ages between 21 and 34), and 30%
of Generation X (ages between 35 and 49) plan to cut their cable subscriptions. Thirty percent of
both Generation Z and Millennials subscribe to online streaming services, such as Netflix or
Hulu, and 24% of Generation X are online OTT subscribers. Industry experts suggest possible
reasons for the surge of cord-cutting: the rise of streaming services, a direct substitute to
traditional TV viewing (Wallenstein, 2013). Global streaming services, such as Netflix, Hulu,
and Amazon Prime, have offered users feasible alternatives to watching television content
through traditional TV, and consumers are turning into cord-cutters more rapidly than before
(Tefertiller, 2018).
15
The dissemination of mobile devices such as smartphones and tablets, enabling
consumers to access unlimited online video content anytime and anywhere, is another critical
factor influencing the cord-cutting phenomenon (Kim, Kim, & Nam, 2016). Cha (2013) studied
the predictors of TV and digital device use and found that the more consumers distinguish digital
devices as different tools from TV regarding how these devices meet their needs, the more likely
they will favor digital devices over TV. She argued broadcast TV stations could use online video
platforms in response to consumers’ increasing demand of watching online video content. Still,
consumers migrating from TV to online video platforms, and falling ratings of TV programs, as
a result, can potentially hurt broadcast TV firms through further lower advertising prices.
Consequently, traditional pay television service providers are undergoing significant revenue
losses, and the ones in South Korea are not the exception. This phenomenon suggests that the
business models of traditional TV service providers are under threat.
Ham’s survey (2016) shows that Netflix became the top US streaming service provider
spot, outperforming its competitors with two-digit annual growth. Netflix surpassed its
forecasted domestic streaming subscription by 45.7 million subscribers in the first quarter of
2016 (Ham, 2016) and exceeded 57.38 million by 2018. British Broadcasting Corporation
(BBC), the UK’s public service broadcaster, launched iPlayer that enables access to the OTT
streaming service of BBC’s TV and radio contents in 2012 (Karamshuk, Sastry, Seckter, &
Chandaria, 2015). IPlayer captured a 40% market share of the UK’s OTT market in 2014 but
eventually declined to 15% once Netflix and other streaming services entered the market with
exponential growth (Waterson, 2019). In the interview with Waterson (2019), BBC admitted that
the iPlayer had lost the battle with Netflix in the streaming services due to lack of content and
inconsistent practice of limiting the duration of content online.
16
Consumers Avoid Advertising
While the rise of streaming services and smart devices have induced consumers to leave
TV subscriptions, their avoidance of advertising is another big reason for their migration. The
average American is exposed to anywhere between 4,000 and 10,000 advertising per day
(Bakhtiari, 2019), but the amount of exposure is not the only problem. Tanyel et al. (2013) found
that consumers view television advertising as more irritating, offensive, silly, and trivial than
other forms of advertising. Their research showed that consumers hold negative attitudes toward
TV advertising because advertising interrupts their purpose of television viewing, which is to be
entertained and informed. Consumers had no option but to watch what advertisers had to say on
a handful of TV stations in the past. With the emergence of digital platforms, they are now
choosing when, where, and how they interact with brands and even avoiding the brands they
don’t share the value with (Bakhtiari, 2019).
It is also essential to understand how susceptible audiences are to advertising messages.
Larkin (1979) found that audiences in different age groups have clear ideas about advertising in
other media. Generation Y (also known as Millennials), born between the 1980s and early part of
the 1990s, are the first generation to use digital media more than traditional media (Reisenwitz &
Iyer, 2009). They are connected on their phones, computers, and tablets, while constantly
checking their emails and sending instant messaging (Cheng, 1999). While Millennials generally
find traditional advertising annoying, they tend to be inclined to digital advertising when certain
rewards are associated (Smith, 2011). Generation Z, who were born between the mid-1990s and
early 2000s, is also spending a reasonable amount of time using mobile devices while spending
less time watching TV, listening to radio stations, and reading newspapers, hence less receptive
to advertising on these platforms (Speck & Elliott, 1997; Southgate, 2017). However, the study
17
showed that Generation Z consistently had more positive attitudes than older generations to the
newer and more interactive online-advertising formats. They prefer what happens after they
make any decision online. Surveying the three generations, Generation X, Y, and Z, Southgate
(2017) concluded that audiences tended to appreciate the innovative and interactive features of
digital advertising, while they admit the highest visual quality of TV and cinema commercials, as
the generation gets younger. Hence, he suggested advertisers approach the emerging Generation
Z cohort with a wider boundary of insights into their media strategy.
It has become easier than before to avoid advertising. Audiences used to avoid TV
commercials by ignoring them or switching channels in the past (Speck & Elliott, 1997). Still,
the new generation does not have to be passive in their advertising avoidance. It has become and
such change in consumer media habits have caused advertisers to depend less on traditional
media and more on other marketing communication activities, including buzz marketing,
advergaming, or product placements (Tanyel et al., 2013). Researchers have suggested that
advertisers shift their advertising budget from traditional pay-TV to streaming services due to
increased cord-cutters (Fuderic et al., 2018). Tefertiller (2020) studied how advertising affects
cord-cutting behavior that usually influences the audiences’ adoption of the new technology. He
emphasized the critical concept of “perceived ease-of-use” of a technology, which refers to the
perception that the use of the latest technology should be almost effort-free (Davis, 1989). His
research found that the more audiences are discontented with their TV viewing experience, the
more they will perceive online streaming as an easy-to-use service, affecting their perception of
OTT services’ advantages, which ultimately leads to their cord-cutting behavior.
However, consumers’ negative perception of digital advertising is not much different
from traditional advertising since they started using ad-blockers and ad-free platforms (Smith,
18
2011). Research reveals that consumers have adopted newer media technologies to fulfill their
entertainment needs and have become goal-oriented in their media use (Katz et al., 1973; Kang
& Atkins, 1999). The online environment allows users to provide interactive feedback with the
media, controlling what they view and when they view it (Sundar & Limperos, 2013). OTT
service providers have threatened broadcasters’ traditional profit model where advertising
revenue accounts for the largest share by allowing audiences to skip advertising, and TV
broadcasters are facing a decrease in their advertising revenue as a result (Park & Kwon, 2019).
OTT subscription also has influenced the audiences to get used to no-ad viewing experiences as
the subscription number increases every year (Tefertiller, 2020). Consumers have shown a
resistance to TV commercials, choosing to avoid TV ads (Clancey, 1994). Budzinski and
Lindstadt (2018) divided the VOD (video-on-demand), a synonym for OTT, into the advertising-
based VOD (AVOD) and the subscription-based VOD (SVOD). In the AVOD model, audiences
watch free streaming video content for watching advertisements. YouTube has employed this
model. SVOD, on the other hand, is a model that audiences pay to subscribe to OTT services and
not have to watch advertising. Netflix and Amazon Prime Video have launched their services on
the SVOD model, and YouTube has also adapted this profit model and created YouTube
Premium in 2014. Since the SVOD model allows consumers to skip or not have to watch
advertising on OTT platforms, the pay-TV broadcasters’ advertising revenue is on a descending
trend (Hoelck & Ballon, 2016).
Aside from consumer’s advertising avoidance, OTT services provide multiple benefits to
the advertisers that are distinct from broadcast TVs (Budzinski & Lindstadt, 2018): 1) OTT
creates an environment where content creators can reach audiences in a much simpler way, 2)
OTT allows its audiences to make real-time feedback, such as comments and likes, and 3) OTT
19
promotes mobile devices as channels for watching video contents. These advantages of OTT
services drove advertisers to try connecting with consumers in their social media platforms and
various search engines to capture the consumers’ attention (Simmons, 2008). Not having the
luxury to interact with audiences, TV broadcasters losing advertising revenue seems inevitable.
New Norm, New Media Behavior, and New Business Model
The TV industry is rapidly moving toward OTT or streaming services. Millennials and
traditional TV viewers are becoming cord-cutters as they discontinue bundling their television,
internet, and landline phone services (Snyman & Gilliard, 2019). They started subscribing to
streaming services that provide the content they are interested in, and binge-watching has
become the new norm (Prastien, 2019). The OTT industry is rising rapidly, and Netflix, one of
the largest OTT service providers, is constantly outperforming Wall Street’s expectations
(Poletti, 2018).
The introduction of new technology has been verified to influence viewers’ media
consumption behavior and traditional media. For example, the start of cable television altered
viewers’ experiences of conventional television (Krugman, 1985), and the introduction of video
cassette recorders (VCRs) affected viewers’ use of traditional media, such as TV or film viewing
(Henke & Donohue, 1989). New technology replaces older technology when it provides a means
to deliver more efficient and beneficial content to the customers than the older one. People’s
technical capabilities also have been influencing media substitution (Lim, 2004). Research has
confirmed that consumers’ perception of online viewing being more meaningful than traditional
viewing options also correlates with the decline in traditional television viewing demand.
According to the Piper Jaffray Generation Z survey (Steensland, 2020), Generation Z
consumers spend most of their time watching videos on YouTube (37%) and Netflix (35%).
20
Seventy-three percent of Generation Z audiences watch videos on their smartphones, and 70%
watch more than 3 hours of mobile videos a day. These teenagers shoot vertical 9:16 ratio videos
to make it easier to manage on phones and create mini-series referencing current events (Kim et
al., 2016). The generation’s new media consumption habits appear to be very distinctive from the
boomers or Generation X (Smith, 2011).
The business model is a system made of a firm's codependent activities that identify
revenue sources, customer base, and products and expand their boundaries in connecting them
(Zott & Amit, 2010). Kim and Min (2015) state that a potential new business model influences
an organization’s performance. The business model generates value creation that is often
determined by consumers and, consequently, leads to more willingness and demand from the
customers (Sohl et al., 2020). Many airline companies have added no-frills carrier models to
their current full-service carrier models (Markides & Charitou, 2004). Many newspaper
companies started adopting ad-sponsored models to provide newspaper content for free to
consumers in addition to subscription-based models (Casadesus-Masanell & Zhu, 2010).
Walmart runs multiple models, including supercenters and online stores, to increase its
performance.
Terrestrial TV stations have depended heavily on their advertising revenue. Such
revenue/business model is a risk because the broadcaster has seen its viewers leave, and the
decrease in the viewership will influence the advertisers’ media buying budget (Shaban 2019).
As Berman (2012) argued, industry trends have triggered an exponential explosion in available
consumer data, which requires compelling business analytics to interpret the information and
take full benefit of it.
21
Trial and Error of Broadcasters’ Efforts to Transform
Some terrestrial TV providers have responded to this threat by experimenting with new
services, such as monetizing TV content beyond the subscription, providing fully streaming TV
packages, giving access to an application on smart TV sets, and beginning to provide hybrid
broadcast/broadband services (Song, 2013). In the US, OTT streaming services were developed
by startup companies not known in the market. By the time dominant TV stations started to
respond to market change, they had provided their own OTT service platforms. CBS began CBS
All Access in 2014, HBO launched HBO NOW in 2015, and The Dish Network started Sling TV
in 2015 (Lee, 2016). However, the market was already dominated by players like Netflix,
YouTube, and Hulu, who had already established the market positions and penetrated deeply into
the market (Park, 2017).
In South Korea, on the contrary, terrestrial TV stations partnered with telecom companies
to proactively adopt OTT streaming services. Much of South Korea’s OTT TV adoption was due
to the government’s investment in the communications infrastructure since its economic crisis in
1997 and its dedication to establishing world-class internet infrastructure throughout the nation
(Crawford, 2015). Song (2013) argued that the advanced infrastructure enabled a more diverse
set of OTT providers to serve in the market, including telecom companies, mobile network
carriers, terrestrial broadcasting stations, and cable TVs. Even TV manufacturers like Samsung
and LG have joined the OTT streaming competition. Consequently, the market share of
terrestrial broadcasting has been declining, from 20% in 2012 to 27.2% in 2014 (KISDI, 2015).
While traditional TV audiences appear to be in a gradual decline in South Korea, the broadcast
companies have not been significantly impacted by the entrance of OTT services. This is due to
22
the collaboration of traditional broadcasters and telecom companies to rapidly adopt the new
technology of streaming services (Park, 2018).
Thus, South Korean OTTs have emerged as extensions of or partnerships with existing
terrestrial broadcasters (Kim et al., 2016). OTT firms like YouTube have triggered traditional TV
stations to launch their OTT platforms, such as “Pooq” and “Tving.” Major terrestrial TV
stations in South Korea, such as MBC and SBS, launched Pooq in 2012, and it acquired 2.4
million subscribers in just 17 months (Kim et al., 2014). Kim et al. (2016) argued that the power
of OTT service providers comes from the quality and quantity of the video content it offers its
subscribers. Yet, the only sources of the Pooq’s content library are the terrestrial TV stations, and
it became difficult to secure the content diversity compared to its biggest competitor, Tving.
Tving, on the other hand, receives additional content from a major cable TV, CJ HelloVision,
which launched the Tving OTT service in 2010. Although Tving charged a higher subscription
fee, the OTT provider obtained 6 million subscribers. Park (2017) studied that when Tving began
the N-screen service, which allowed audiences to catch up on the TV programs they missed, the
benefit gained popularity. Telecom companies like SKT, KT, and LG Uplus started launching
the N-screen service soon after. She also found that Pooq increased subscribers by utilizing the
original contents and various services, including continuous relay watching, program download
reservation, and individualized favorite channels register.
However, these local OTT service providers have been outperformed by the global OTT
players, like Netflix and YouTube, despite the terrestrial TVs’ efforts toward digital
transformation. According to Lee (2020), Netflix took as much as 40% of the OTT market share
in South Korea as of August 2020, which is higher than the top two Korean OTT services,
Wavve (20%) and Tving (14%), combined. Netflix's subscription number in Korea also
23
increased from 2 million in January 2019 to 2.5 million in only a month, then the number tripled
within a year (Kang, 2019). By September 2020, Netflix acquired as many as 8.03 million
subscribers in South Korea, as shown in Figure 2. This was primarily due to the partnership with
the local OTT providers and local network carriers, the same way terrestrial broadcasters have
approached without the first-mover advantage.
Figure 2
Active Subscriber Number of Netflix in South Korea (Statista, 2019)
877.87
1720.17
2483.66
3187.99
3850.76
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2016 2017 2018 2019 2020
Number of subscribers (in thousands)
Year
24
Netflix attracted local audiences by producing the original content in South Korea, which
was welcomed by Korean content creators (Doyle, 2019). It launched Okja, Bong Joon Ho’s
2017 film, Busted in 2018, and Kingdom, the first Netflix original K-drama, in 2019. The
subscription number tripled per day following the release of Kingdom, which indicated that its
original content creation has successfully appealed to the local consumers (Jeon & Kim, 2019).
Netflix offered an aggressive pricing strategy by offering a cheaper mobile-only plan that allows
the subscribers to watch only on their mobile devices at a low monthly fee of approximately
$5.70 per month, which is 30% cheaper than Netflix's lowest plan (Lee & Kim, 2019).
Some of Netflix’s original content has been produced in collaboration with smaller cable
TV stations to air simultaneously on both platforms. Hospital Playlist, for example, was an
original K-drama series that was produced in partnership with Netflix and TvN, a South Korean
TV network (“Hospital Playlist,” n.d.). The first season aired in 2020 became the ninth highest-
rated Korean drama in cable TV history (Kim, 2018). While smaller cable TV stations have
adapted the transformation of their business model, the terrestrial TVs’ OTT consortium has not
shown remarkable agility towards the new trend.
There were various ways for terrestrial TV broadcasters to distribute their contents
before. TV programs have been syndicated to multiple channels to maximize profit. DVD
packages were created after the TV series was over and reproducing popular TV dramas and
documentaries were also done in the past (Chae, 2020). However, they were still within the
fundamentals of their traditional profit model. Unless their business model changes or
diversifies, further decline in its media dominance is expected, potentially allowing broadcasters
like XBS to be at risk.
25
Confucianism Culture and Autonomy of the Organization
Aside from the new trend happening industry-wide, it is essential to review the
organizational culture of the XBS in this study. It becomes critical in the current management
leadership research to conceptualize different leaders and their behavioral traits in various
cultural settings and their contribution to organizational performance (Greenwood, 1993;
Yammarino, 2013). Researchers have found the importance of Confucian culture in determining
the shared cultural attributes found throughout East Asian countries, including China, Hong
Kong, Japan, and South Korea (Taka & Foglia, 1994). These cultural traits found among the
leaders in these regions include modesty, face-saving, and integrity, and are advantageous to
employee morale toward innovation and performance enhancement (Kim, 2019).
Kim (2019) argued that although the Confucian cultural traits may work well for
successful companies in diverse industries, some studies have tended to neglect the negative
consequences of culturally predetermined leadership styles. She claimed that the environmental
uncertainties often lead to appalling candidates as corporate leaders. Therefore, the ecological
circumstances in these companies failed to support cultural factors, such as diversity and
innovation. The negative consequences include the particular cultural factors that give advantage
to CEOs from male pools, which may have been essential for successful companies in Korea to
disfavor CEO candidates from female or culturally diverse candidates (Pfeffer, 1973).
According to Pfeffer (1973), it is interesting to see how many companies elect their
CEOs regardless of their relevance to the growth. It has failed to equipoised diversity, gender, or
minority in East Asian culture. It is also observed that most CEOs graduated from a few well-
known schools or shared similar career paths due to an equalizing cultural factor of building
human networking, and it is usually assumed that the similarity naturally generates success. At
26
the same time, diversity is suppressed (Kim, 2019). For this reason, traditional male-dominant
CEOs with homogenous backgrounds within the Confucian boundary have cleared both cultural
and organizational barriers to obtain leadership positions in their organizations, including the TV
industry (Cho, 2003; Kitley, 2003). Ironically, the external threat preferred homogenous male
CEO candidates, and the Confucian male dominant leadership has helped reduce external
uncertainties for the company (Kim, 2019).
Jung and Hong (2018) studied KBS, Korean Broadcasting System, the nation’s public
broadcaster, and stated that the company had not gained independence. Their study found that
much of the firm’s growth and the CEO appointment is in the control of the government, which
often does not consider meritocracy and professionalism. Similarly, other terrestrial TV
broadcasters find their leadership challenging to gain individual autonomy compared to other
organizations. This may have led the firms to deal with external threats with traditional methods
rather than innovative ones (Kim, 2019). They face new threats and opportunities in the global
broadcasting market that started to be overwhelmed by global OTT content platforms.
Transformational Leadership
Transforming a business model at a company is difficult and often requires a specific
type of optimized leadership: transformational leadership. Many researchers have confirmed that
transformational leadership is essential given recent developments such as fast-paced change,
escalating pressure to innovate, and intense global competition, all of which contribute to
increasing levels of uncertainty (Bass et al., 2003; Lim & Ployhart, 2004). Transformational
leadership is different from transactional leadership, which reinforces the role of supervision and
group performance and focuses on using rewards and punishments to motivate employees
(Howell & Aviolio, 1993). On the other hand, transformational leaders go beyond the
27
supervising relationships by developing, stimulating, and inspiring subordinates to transform
their personal goals for a higher collective goal, mission, or vision (Howell & Avolio, 1993).
Bass and Avolio (1993) described that transformational leadership is involved with
emotions, values, and goals. It includes assessing subordinates' motives, satisfying their needs,
and treating them fairly. Transformational leadership requires a distinctive influence that moves
followers to accomplish more than what they are usually expected to achieve (Northouse, 2016).
Hence, it often integrates with charismatic and visionary leadership. Northouse (2016) pointed
out that charismatic leaders often have a strong desire to influence others and have self-
confidence. Another essential trait in transformational leadership is the ability to read the trend
and seek innovative ways to solve the problem in the organization.
Droege and Marvel (2009) introduced “the presence of perceived strategic uncertainty,”
which related to the disruption and the innovation in the development process. The perceived
uncertainty that creates fear and conflict within the organization to adopt the most appropriate
strategy may decrease the clarity of the organization’s strategic focus (Droege & Marvel, 2009;
Kaplan, 2008). When employees are uncertain and suspicious, they may choose the strategy
based on the highly engaged actors in the political frame. Transformational leaders overcome
uncertainty by converting crises into challenges to encourage problem-solving by looking
beyond their self-interest and stimulating respect (Kaplan, 2008).
Kodak withdrew from the market in 2011 after many decades of its success in a
traditional camera-related product industry because the company’s leadership missed business
opportunities in the digital camera technology that it invented a decade ago. The management
did not want its disruptive technologies to destroy their own traditional camera-fueled Kodak
moments, which was more profitable at that moment. This misstep was the direct cause of
28
Kodak’s demise in digital photography and eventually terminated its film-based business model
(Mui, 2012).
Conceptual Framework: Knowledge, Motivation, and Organizational Influences of
Business Model Transformation at XBS
In order for any observable changes to arise, the study needs to conduct a gap analysis of
individuals and the organization. The conceptual framework is the system of concepts,
assumptions, expectations, beliefs, and theories that assist, inform, and advise research and
present ideas you hold about the phenomena studied. The conceptual framework combines the
information to lead research in developing research questions, methodological approach, and
data analysis after data is collected. The analysis tool for the conceptual framework in this study
will be the Clark & Estes KMO gap analysis (Clark & Estes, 2008). The research will examine
three critical factors during the analysis process: 1) individuals’ knowledge and skills; 2) their
motivation to achieve the goal; and 3) organizational barriers. The purpose of the gap analysis is
to identify whether the management has adequate knowledge, motivation, and organizational
support to achieve essential work goals.
This study will utilize the framework to analyze possible gaps that interfere with the
organization’s goal and its growth potential. As Figure 3 illustrates below, the stakeholder group
of focus is affected by knowledge, motivation, and organizational influences and is
interconnected with these variables as they interact to improve the stakeholder’s performance.
The management team’s motivation influences are connected to the knowledge. The
interconnectivity is from the organization's need to find a different revenue source, affecting the
current business model. The management team’s motivational influence includes the expectancy-
value theory and is also interconnected with the organization. The organization develops a
29
strategy that affects the knowledge and motivation required by the management team. The
management cannot achieve the goal of revenue growth if they cannot define a precise strategy.
The stakeholder decides the organization's choice and the future that will be directly affected by
choice.
Figure 3
Interactive Conceptual Framework: Knowledge, Motivation, and Organizational Influences in
Business Model Transformation at XBS
30
Knowledge, Motivation, and Organizational Influence
The Clark and Estes (2008) Gap Analysis Framework is used to highlight the knowledge,
motivation, and organizational influences within XBS. The Specific attention focused on
assessing the management team’s knowledge, motivation, and organizational influences can
address performance gaps and implement solutions that can achieve its organizational goals. An
organization needs to see its employees from an investment perspective and provide them with
relevant knowledge, improved motivation, and well-assisted company culture to achieve its goal
(Clark & Estes, 2008). According to Clark and Estes (2008), it is essential to determine whether
employees know how to obtain their performance goals. These prospects of knowledge
immediately correlate with organizational success. Sharma et al. (2007) argued that knowledge
variables dictate 50.2% of the firm’s performance. Therefore, it is critical to study the pertinent
aspects of knowledge as a necessary element in the XBS’s transformation. The literature in this
section highlights knowledge influences that are essential for the XBS’s management team to
accomplish the organization’s goals as they relate to transforming its business model.
Knowledge and Skills Influences
Knowledge, motivation, and organizational influence are the three components that can
improve organizational performance (Clark & Estes, 2008), and these are the factors that are
closely related to the organization's success. Clark and Estes (2008) stated that job performance
requires knowledge and skill enhancement under two conditions: 1) when not knowing how to
achieve the performance goals, 2) when expecting future challenges to require innovative
problem-solving. It is essential to assess whether employees have the knowledge to achieve their
performance goals. According to them, knowledge is a crucial element when an organization is
accountable for accomplishing its goal. Employees need to learn how to identify the new
31
opportunity and create and implement strategies that can engage consumers efficiently (Campo
& Breugelmans, 2015), which will eventually impact the financial stability of the organization.
The literature in this section focuses on knowledge-related influences that support XBS to
achieve its transformational goals as they directly relate to the revenue. The literature relevant to
the management team is with a special emphasis on 1) the knowledge about the changes
happening in the market, including consumer behavior, new TV content format, and the
technology that is required to be adaptive to a new media environment, and 2) the knowledge
about diversifying their business model in the digital era. Table 1 describes the organizational
mission, organizational performance goal, stakeholder goal, knowledge influences, type, and
how the influences will be assessed.
32
Table 1
Summary of Knowledge Influences, Types, and Assessments for XBS’s Organizational Gap
Analysis
Organizational Mission
XBS’s mission is to become a truly global media company, providing delightful
and healthy TV content.
Organizational Goal
XBS’s goal is to transform the organization to become a global media company by 2023.
Stakeholder Goal
XBS will increase its revenue by 15% through the expansion of its digital contents business
portfolio to 25% by 2023.
Knowledge Influences Knowledge Type
Knowledge Influence
Assessment
The management needs
knowledge about the new
norm in the media industry.
The management team needs
knowledge about diversifying
the business model.
The Management Team
Needs the Knowledge to
Implement, Monitor,
Evaluate, and Adjust the
Alternative Business Model
for Optimization.
Factual knowledge
Procedural knowledge
Metacognitive
knowledge
Interview:
1) Describe how the media
industry has been changing in the
past five years?
2) What are the main differences
in the customer’s needs?
Interview:
1) Many data have shown that the
terrestrial TV station’s revenue
has been decreasing. What are
your thoughts on the
organization’s current business
model?
2) If you feel there needs to be a
chance, how should the
organization diversify its current
business model?
Interview:
1) Once the alternative business
model is decided, do you feel you
have a good understanding of
implementing, monitoring and
evaluating the model to optimize
it?
33
Knowledge Types
To analyze the knowledge gap, it is helpful to review Krathwohl’s (2002) overview on
Bloom's Taxonomy that outlined knowledge types, which are metacognitive, procedural, and
factual knowledge. Factual knowledge refers to the basic knowledge that people must obtain to
accomplish the task, while procedural knowledge is the way one takes to achieve it.
Metacognitive knowledge is the knowledge about cognition and understanding by thinking
through them and becoming aware through learning (Krathwohl, 2002).
Factual knowledge is the essential knowledge that people must obtain to accomplish the
task. In contrast, procedural knowledge refers to the modes of inquiry and principles of using
skills (Krathwohl, 2002). Metacognitive knowledge includes evaluating one’s own knowledge,
applying different strategies to implement the plan, monitoring the progress, and adjusting and
restarting the cycle as necessary (Ambrose et al., 2010).
In other words, factual knowledge is “knowing what”; procedural knowledge is “knowing
how”; and metacognitive knowledge is “knowing self” (Krathwohl, 2002). The knowledge that is
needed for the XBS’s management group is analyzed in the following section.
Knowledge of the New Norm: The Management Team Needs Knowledge About the New Norm
in the Media Industry
OTT service platforms have transformed the media environment, and consumers are
consuming their OTT TV services for convenience and a broader selection of video content
(Park, 2017). As Park (2017) argues, the TV market is transitioning to streaming, and the OTT
service providers are surpassing the pay-TVs regarding their subscription number and
advertising revenue. Suppose XBS’s management group can build upon the factual knowledge to
understand how their audiences are behaving toward the media, what technology they need to
34
adapt, and how they need to reform themselves to meet the needs of current consumers. In that
case, the new norm can be turned into an opportunity for the organization.
Knowledge of Business Model: The Management Team Needs Knowledge about Diversifying
the Business Model
Applying conceptual knowledge and procedural knowledge will help the management
team to make changes to the business model. A business model is a company’s core strategy for
profit generation (Zott & Amit, 2010). Business models usually consist of information on the
products or services, the business plans to sell, the target market, and any anticipated cost
associated with it. Kim and Min (2015) claimed that a new business model affects the
improvement in an organization’s performance. XBS has been heavily dependent on advertising
revenue, and the decrease in viewership has significantly dropped the TV advertising budget
(Shaban, 2019; Tefertiller, 2018). The new trend in the industry has produced a large amount of
consumer data, and business analytics are required to a certain extent to interpret the information
correctly (Berman, 2012). The management team should obtain knowledge to determine and
design the business model from the data and deliver a new business model to achieve the
company’s goal. Only companies with a cohesive plan for integrating the appropriate
components of operations can successfully transform their business models (Berman, 2012).
Knowledge of Business Model Optimization: The Management Team Needs the Knowledge to
Implement, Monitor, Evaluate, and Adjust the Alternative Business Model for Optimization
To increase the sustainability of the alternative business model, the XBS management
team needs the knowledge to implement, monitor, and evaluate the new business model to
optimize the model for the organization. Ambrose et al. (2010) introduced five steps of basic
metacognitive processes: assessing the task, evaluating the current knowledge, planning the
35
approach, applying diverse strategies, and reflecting on the current approach. Chesbrough (2010)
claimed that it is essential to design maps of business models and try alternative combinations.
MacInnes (2005) argued that it is necessary to adjust different stages in the development of the
technology and the hurdles to overcome accordingly, including technical and environmental
problems. Implementation and optimization of the alternative business model are the crucial
knowledge that the XBS management group is expected to possess. As Cavalcante (2014)
asserted, business model change deserves attention from the management because managers
frequently focus only on the development of innovation and avoid adapting the firm's business
model (Cavalcante, 2014).
Motivation Influences
In this section, the literature focuses on the motivation-related influences that could
support the management team with a guide to attain the organizational goal. Clark and Estes
(2008) stated that motivation is the cognitive process that keeps us working and helps us get our
tasks completed. They stressed that intention is needed when assessing an organization's
performance, and it must be supported by an individual's willingness to start a task. They also
claimed that the most critical thing in motivation is the experiences and beliefs about oneself and
the anticipation of the future. In fact, people are happier if their beliefs about themselves are
more optimistic than the candid assessment of their capacity (Clark & Estes, 2008). Bandura
(1997) also confirmed that positive people achieve considerably more than those who are
capable but have doubts (Bandura, 1997).
It is mostly the leaders who determine the ability to redesign the business with a clear
strategy and reinvent the new. Kane et al. (2015) found that the uniqueness of the transformation
in the digital era is that risk-taking has become a norm as a significant number of digitally savvy
36
companies now seek new competitive advantages from a whole new level. The transformation
strategy requires the collaboration of leaders, resources, and employees to ensure successful
implementation. Sow and Aborbie (2018) claimed that organizational leaders must partake in
creating an organizational culture that grasps the change and offers stability that will make a
lasting impact on employees. To support the effort while remaining adaptive, leaders must
recognize that their main strength may not cater to the transformation (Sow & Aborbie, 2018),
especially if they lack the necessary technical knowledge, as mentioned previously. Leban and
Zulauf (2004) also argued that organizational management must display the willingness to
change and motivate employees to participate in the transformation. Table 2 describes the
organizational mission, organizational performance goal, stakeholder goal, motivation
influences, type, and the influence assessment.
37
Table 2
Summary of Motivation Influences, Types, and Assessments for XBS’s Organizational Gap
Analysis
Organizational Mission
XBS’s mission is to become a true global media company, providing entertaining
and healthy TV content.
Organizational Goal
XBS’s goal is to transform the organization to become a global media company by 2023.
Stakeholder Goal
XBS will increase its revenue by 15% through the expansion of its digital contents business
portfolio to 25% by 2023.
Motivation Influences Motivation Type
Motivation Influence
Assessment
The management team needs
to value the benefit of
business model
transformation.
The cost is an important
factor in the management
team’s decision.
The management team needs
to feel efficacious in their
ability to transform the
organization’s business
model.
Expectancy-Value
Theory/Utility Value
Expectancy-Value
Theory/Cost-Benefit
Self-Efficacy
Interview:
1) What benefits would you
receive from the new business
model?
Interview:
1) What kind of personal
sacrifices or effort do you foresee
in the process of setting a new
business model?
2) What would it cost to go
through the entire process?
Interview:
1) Do you feel confident that your
organization is capable of
transforming the business model
to satisfy the rapidly changing
demand of the audience? If so,
how?
38
Expectancy-Value Theory: The Management Team Needs to Value the Benefit of Business
Model Transformation
Atkinson (1957) originally defined the expectancies for success as how one believes
about how well they will perform on a task currently and in the future. The theory proposes
“expectancy” and “value” as the two most immediate predictors of one’s performance and choice
(Eccles & Wigfield, 1995; Wigfield & Eccles, 1992, 2002). Eccles and colleagues suggested that
the expectancy-value theory holds the choices related to one’s accomplishment, which are
directed by multiple factors (Eccles et al., 1983). Their research focused on how expectancies
and values have shaped people’s choices, persistence, and performance. The ability in the Eccles
model is differentiated from self-efficacy in that Eccles ability is often measured at the level of
specificity, and people think of their ability relative to others. In contrast, self-efficacy is defined
as beliefs about one’s competence to perform a particular task and measures the level of
confidence one has about the task (Bandura, 1977, 1997; Schunk & Pajares, 2009). Eccles et al.
(1983) identified four elements of achievement value, including attainment, intrinsic, utility, and
cost. In this section, the literature will focus on the utility value and the cost-benefit, as they are
related to the lack of motivation in the XBS management team.
Utility Value. Utility value or usefulness refers to the task corresponding to one’s future
plans (Wigfield & Cambria, 2010). It is the perception that completing a task will be
advantageous for meeting forthcoming goals, for example, taking a French class to get a job in
France. Utility value has to do with the perceived usefulness of different activities, and those
activities can reflect significant personal goals. Utility value can be similar to extrinsic
motivation because the activity is a method to an end rather than an end in itself, but the value
connects to personal goals and ties to intrinsic motivation if the activity reflects eminent personal
39
goals (Ryan & Deci, 2009). Husman et al. (2004) claimed that the utility value measures
primarily on immediate usefulness rather than long-term usefulness. Wigfield and Cambria
(2010) found that utility value often has positive valence and finds rewards that are desirable to
individuals.
With the majority of the members retiring in anywhere between two to eight years until
the company’s official retirement age, the XBS management team’s lack of utility value may
have to do with the team nearing retirement age. The majority of the team has anywhere between
two to seven years until the official retirement age that has been set by the organization. Gupta-
Sunderji (2014) claims that the usual incentives to motivate managers to achieve their
performances, such as promotion or bonus, simply aren’t effective anymore when they are close
to retirement. He argues that it is possible that employees get less interested in exploring new
opportunities due to less growth potential in the organization. For that reason, public
broadcasters tend to have less motivation to adopt disruptive innovations, as their businesses do
not involve the profit motive to the same extent as the commercial broadcasters in the US (Park,
2017). For the leaders of XBS, acknowledging the value in transforming the existing business
model may be essential for their performance.
Cost-Benefit. Cost is an essential factor in the management's choice. Cost can be defined
as how much one must sacrifice to accomplish a given task (Flake, 2012). It refers to what one
has to give up completing a task, as well as the estimated effort one needs to invest into
completing a task (Wigfield & Cambria, 2010). Is my working after hours to get promoted worth
it? Eccles et al. (1983) stressed that the cost factor is particularly significant when making a
choice. All choices are associated with one’s cost because the choice often removes other
opportunities. For example, choosing to major in science may imply that one cannot major in
40
another subject that also has value to the individual. Depending on how much effort needs to be
invested to pursue the task, including the possible cost of failure, an individual may choose not to
make an effort to complete a task (Elliot & Friedman, 2017). In other words, it refers to one’s
perception of negative consequences of engaging in a task and captures motivation that is more
negative than one’s capability and task value (Wigfield & Eccles, 1992). Battle and Wigfield
(2003) found that utility value is a positive predictor of college students’ intentions to apply for
graduate school, but the perceived cost of graduate school was a negative predictor; hence, when
the activity is seen as too much of a cost, people are less likely to engage in it.
According to Jiang et al. (2018), individuals might engage in behaviors to stay away from
the negative consequences they perceive regarding a task. This suggests that cost might influence
multiple types of behavior than the task value. They identified that an individual might not want
to engage with a task if the cost associated with the task is perceived to be too high (Jiang et al.,
2018). XBS management’s cost may generate from the time invested, increased demands of
endeavor, loss of alternatives, negative psychological experience, such as stress, or it can
develop from the cost of failure. For example, the management may fear that the new business
model may not achieve the organizational goal after all their time, money, and effort invested
into the change. It is difficult to assess the cost associated with the transformation because there
have been few success cases in the industry so far. Setting the overall utility value and cost of
seeking out the change will impact the future and decision-makers of the XBS.
Self-Efficacy Theory: The management Team Needs to Feel Efficacious in Their Ability to
Transform the Organization’s Business Model
Self-efficacy refers to an individual's belief in their capability to obtain a specific
performance goal (Bandura, 1997). It reflects confidence in an individual's ability to control
41
one’s own motivation. Rueda (2011) argued that increasing one’s belief in their ability to
complete the task will give additional confidence as one completes future tasks. Employees’
beliefs that they will be successful in assigned tasks can motivate them with behavioral intention
to accomplish new performance (Bandura, 1978; Cheng & Chu, 2014).
A few terrestrial TV broadcasters in South Korea have been monopolizing the market to a
certain extent for many years that their profit has not been sensitive to external changes (Kim et
al., 2019). Kim et al. (2019) argued that these broadcasters’ business models have mainly
depended on the advertisement sales and moderately on the retransmission fee. Schumpeter
(1942) claimed that innovation happens when firms have surpluses to invest in R&D. However,
the disruptive innovation that upswings traditional business models often occurs outside the
established industry leaders (Park, 2017). Consequently, established companies tend to avoid
disruptive innovations and tend not to change their business models even when facing threats
(Park, 2017), and the lack of change experience may have caused the management to feel less
self-efficacious about the transformation. It is essential for the XBS management to feel that it
can direct efforts toward initiatives by nourishing a sense of self-efficacy rooted in its ability to
transform the business model. The management must embrace their employees' confidence to
advance their organizational goals as well.
Organizational Influence
Clark and Estes (2008) state that if knowledge and motivational factors have been
undertaken, but the organization is still not achieving its goal, organizational barriers should be
examined. They recommended assessing the organization’s work processes and culture as part of
the organizational analysis (Clark & Estes, 2008). To achieve lasting impact, the organizational
culture must be aligned with the business goals, commutation must be constant, and leaders must
42
be deeply involved in the process. Culture is usually the most critical work process in
organizations because it imposes how employees work together to complete their tasks (Clark &
Estes, 2008).
It becomes essential in the current management study to conceptualize different leaders
and their behavioral traits in various cultural settings and their contribution to organizational
performance (Greenwood, 1993; Yammarino, 2013). Droege and Marvel (2009) introduced “the
presence of perceived strategic uncertainty,” which related to the disruption and the strategy
development process. The perceived uncertainty that creates fear and conflict within the
organization to adopt the most appropriate strategy may decrease the clarity of the organization’s
strategic focus (Droege & Marvel, 2009; Kaplan, 2008). When employees are uncertain and
suspicious, they may choose the strategy based on the strength of the highly engaged actors in
the political frame (Kaplan, 2008).
Having an organizational culture that is adaptive to the change is pivotal in achieving its
goal. The performance gap identified to be less adaptive to new technology and trends is an
organizational barrier that can be eliminated through the management team’s initiatives. For
XBS to accomplish its overall goal of diversifying its business model to be digital, the company
can conduct essential training to support general employees and the stakeholder group of focus.
Literature in this section will highlight culture as it is the key that ties the employee and
employer relationship with a set of shared beliefs (Gallimore & Goldenberg, 2001). Table 3
describes the organizational mission, organizational performance goal, stakeholder goal,
organization influences, and the influence assessment.
43
Table 3
Summary of Organization Influences, Types, and Assessments for XBS’s Organizational Gap
Analysis
Organizational Mission
XBS’s mission is to become a truly global media company, providing delightful
and healthy TV content.
Organizational Goal
XBS’s goal is to transform the organization to become a global media company by 2023.
Stakeholder Goal
XBS will increase its revenue by 15% through the expansion of its digital contents business
portfolio to 25% by 2023.
Organization Influences Organization Type
Organization Influence
Assessment
The organization needs to
identify the factors that resist
its business model
transformation.
Cultural model/
Cultural setting
Interview:
1) With your role, what type of
training have you been offered in
the past 12 months that was
related to the industry change?
2) Despite the estimated
cost/budget associated with the
transformation, would your
company still make an investment
to transform the business model?
If not, why?
3) Tell me the value associated
with creating a new business
model as it relates to increasing
revenue.
4) What resistance/obstacles do
you see in altering the current
business model?
5) How important is the concept
of “legacy media” in the
resistance/obstacles?
44
The Organization Needs to Identify the Factors That Resist Its Business Model
Transformation
The resistance to change means the unwillingness to alternate the environment or culture
in this study. Heathfield (2021) claimed that employees might not want to change what is
familiar to them but instead resist changes, which can be very disruptive in the transformation
process. She indicated that employees could resist changes by ignoring to take actions to move
towards the new direction, skewing to what they are accustomed to as always, disengaging their
attention, and staying away from the discussions where they are asked to input. In this study, the
organizational resistance factors are analyzed through the lens of cultural models and cultural
settings.
Gallimore and Goldenberg (2001) introduced a framework for analyzing organizations
based on the structures, processes, and dynamics of culture. According to them, culture can be
explained in a more practical manner in two key concepts: cultural models and cultural settings.
Cole (1985) described cultural models as shared ways of perceiving and responding to
challenges and making changes in the organization. Rueda (2011) further explained that cultural
models are structures of behavior that differentiate one culture from another and are influenced
by individual interaction and sharing. Cultural settings, on the other hand, are defined as settings
that occur “whenever two or more people come together, over time, to accomplish something”
(Gallimore & Goldenberg, 2001, p. 47). Cultural models and settings offer a framework for
evaluating and comprehending organizational behavior. Hence, this study focuses on both
cultural models and settings that are directly influencing the factors that withstand the
organizational transformation later in Chapter Four.
45
Conclusion
This chapter reviewed how XBS’s goals are impacted by knowledge, motivation, and
organizational influences. The KMO conceptual framework is utilized to analyze possible gap
analysis that interferes with its potential growth. The management team’s knowledge influences
include the knowledge of the new norm in the media industry and the diversification of their
current business model. The stakeholder’s motivational influences include expectancy-value and
self-efficacy. The organizational influence includes the cultural traits of uncertainty. As the
interactive conceptual framework in Figure 3 shows, these influences are interconnected with
one another. The interconnectivity of the three influences is due to the organization's need for a
new business model to improve the organization’s goal and stakeholder’s performance. The XBS
management team needs to see the long-term value in setting up a new business model to be an
adaptive organization in this fast-changing environment that satisfies the distinct interests of the
customers and ultimately sustains its profitability.
Chapter Three: Methodology
The purpose of this research was to understand why terrestrial TVs have not been
proactively responding to the current market changes. This research examined the key
knowledge and motivational influences (Clark & Estes, 2008) that the management in the
terrestrial television stations has in the decision. The world is turning digital faster than ever, and
the audiovisual industry is not an exception. Terrestrial TV stations’ revenue has dropped since
2018, and the total digital advertising budget has surpassed total TV advertising revenue since
2016 (Shaban, 2019). The multimedia service paradigm is shifting from the conventional single
source to multimedia source, and the source has gotten considerably diverse. However, the
terrestrial TV stations are not being as proactively adaptive to the changes as the customers are,
46
which has negatively impacted the company’s continuity. The literature suggested that the
possible gap can be found in the knowledge and motivation of the management team. This study
focused on the following research questions:
1. Does the XBS’s management team have sufficient knowledge and motivation to
transform the organization to meet the market trend and consumers’ needs?
2. What resistance/obstacles in the organization, if any, makes it harder to
transform?
Participating Stakeholders
The stakeholders for this research were primarily the management group of XBS and a
few outsiders who have been closely related to the organization. Many of these top-level and
middle-level managers had significant years of experience across a wide variety of functions in
the organization and were often part of the company’s decision-making process that sets the
organization’s goal and direction. In addition to the stakeholder group, a CEO of an OTT
streaming service provider distributing the contents from XBS and two content creators were
interviewed to assess the stakeholder group’s knowledge and motivation gap through the lens of
the outsiders. The total sample size was twelve.
Interview Sampling Criterion and Rationale
Criterion 1
The participants from the stakeholder group included executives and top-level managers
who had years of experience working in the terrestrial broadcasting industry in South Korea. The
study’s participants were employed at the XBS for more than five years. The managers with less
than five years of experience at XBS were excluded, as they may not possess sufficient
47
knowledge about the organization and its culture. The sample size of the participants from the
stakeholder group (primary group) was nine.
Criterion 2
The participants from the stakeholder group had experience partaking in the executive
level decision-making meetings, including but not limited to the organization’s quarterly
performance meetings, yearly strategic planning meetings, and the board of directors’ meetings.
Criterion 3
The second group of participants included a CEO of a global OTT company that was
distributing TV programs of the XBS on its platform for several years and two freelance content
creators who were working closely with the organization to understand the dynamics of the XBS
to triangulate the data. The sample size of the second group was three.
Interview Sampling Recruitment Strategy and Rationale
Purposeful sampling and snowball sampling (Creswell, 2014; Patton, 2002) was utilized
to identify and select information-rich interviewee for the effective use of limited resources. The
researcher’s former colleague, who was working at the top management level in one of the
Korean terrestrial TV stations, was the starting point. Considering the main stakeholders being
the top management of a company, the initial participant was able to help recruit acquaintances
in the management group with similar experiences and influence in the organization (Goodman,
2011). Since the participants from the primary group were in the management positions,
snowball sampling made it more accessible to find qualified participants as they were asked for a
reference from people known to each other (Johnson & Christensen, 2015). This specific
segment of the target population was hard to reach, and the snowball sampling method benefited
the research as additional participants were recruited from a primary source.
48
Once the participants were recruited, they were contacted by phone, email, and video
conferencing software to solicit interest in the interview. The interviews adopted an emergent
design methodology, which allowed the new ideas or findings that arose while conducting
interviews (Crewell, 2014). The interview was a semi-structured approach, as the researcher
planned to ask a set of premeditated questions in order to gather information about the research
topic with some flexibility while conducting the interviews that allowed the researcher to ask
follow-up questions spontaneously (Merriam & Tisdell, 2016).
The interview questions were asked at the beginning of each interview, but questions
were modified or adjusted based on each response of the participants. The goal of these in-depth
interviews was to assist the progress of each interview question and identify information that had
not been obtained during the research design.
Data Collection and Instrumentation
Qualitative research was utilized, and video conferencing interviews were conducted as
the primary method of data collection for this study. According to McEwan and McEwan (2003),
qualitative research can lower the chance of reaching false conclusions because the research is
based on analyzing evidence such as interviews and observations. Interviews were appropriate in
this study as a one-on-one conversation structure could provide participants with an open
atmosphere to discuss the research topic (Creswell, 2014; McEwan & McEwan, 2003). Through
interviews, information was obtained to evaluate the knowledge, motivation, and organizational
influences in achieving the corporate goal of becoming adaptive in the current market changes.
In the next section, the method for this study is analyzed.
49
Interviews
The research took a semi-structured approach because it allowed the researcher to
maintain a standardized structure while being flexible to maintain spontaneity and ask follow-up
questions to gather more detailed information (Merriam & Tisdell, 2016). There was an initial set
of 14 open-ended questions, which were created to investigate their knowledge and motivation as
a manager, in each interview. The estimated interview time was between 55 and 80 minutes
each. There was a mock interview with a person of similar experiences with the stakeholder
group as a test-run before the actual interviews started. This provided a good overview of how
interviews would run with the senior management. As a protocol to comply with the COVID-19,
the interviews were conducted over video conferencing software, Zoom, and emails were utilized
for the follow-up questions for the best access of these overseas participants. All interviews were
recorded with participants’ permission and transcribed for use in the data analysis. Since most of
the interviews were done in a non-English language, verbatim transcription was created in
Korean and then translated into English later. There was a test run before the actual interviews,
and an experienced translator proofread the translation for validity purposes.
Data Analysis Methodology
Five phases were completed during the data collection and analysis of this study:
1. Interviews were conducted through Zoom initially. Phone and email were used for
follow-up questions depending on the participant’s availability and preference.
The duration of each interview was between 55-80 minutes.
2. Interviews were transcribed using Zoom and Vrew. Interview transcription was
cleaned for accuracy by the researcher.
50
3. Notes were taken by the researcher during the interviews and additional memos
were created for missing data after the transcription.
4. Interviews were coded using MAXQDA 2020. Industry terminologies and key
phrases were highlighted.
5. Data were processed through axial coding to identify similar patterns and ideas
that could be grouped to formulate the findings.
Credibility and Trustworthiness
To be accepted as trustworthy, the research must demonstrate that the data collected are
precise and consistent. Merriam and Tisdell (2016) stated that there are a few ways to ensure
credibility and trustworthiness in the qualitative study, which was also applied in this research:
1. The interviewees were provided with copies of the interview to confirm the
accuracy.
2. After the data analysis phase, the interviewees were contacted to schedule follow-
up interviews of their choice to discuss the initial findings.
3. Since most of the interviews were done in Korean, the verbatim transcript was
produced in Korean and translated into English.
4. To increase the credibility of the translation, a Korean-English translator
proofread and confirmed once the initial translation was done.
5. Different data sources were triangulated by cross-checking multiple participants
and using them to build coherent justification.
Additionally, adapting the emergent qualitative research design limited the researcher’s
bias, which increased the credibility and trustworthiness of the study (Creswell, 2014; Maxwell,
2013).
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Ethics
The organization that this research highlighted was the current workplace of many
participants in this study. Especially in Korean culture, it is still considered disrespectful to a
certain extent to speak negatively about their boss and workplace in public. Hence, it was
essential to protect the participants during and after the study by maintaining utmost
confidentiality. Every effort was made to protect the research notes. All audio and video
recordings of interviews were kept confidential in a password-protected format. Notes produced
during and after the interviews were locked with passwords as well. The information was not to
be shared without participants’ permission, and pseudonyms were used to indicate the names of
the participants, the management, and the departments. The interviewees were told that they
would be notified immediately in the event that makes research artifacts accessible for any
reason.
Relationship to Participants
A few of the participants in this research were former supervisors and colleagues of the
researcher. While the researcher is not a current employee of XBS, it was essential to notify the
researcher’s role to the participants as a reliable and trustworthy data collector (Merriam &
Tisdell, 2016). The open-ended questions were asked to each participant to portray their
knowledge of the research topic casually, which helped the researcher prioritize those responses
with a more insightful understanding of the topic.
Limitations and Delimitations
Some limitations and delimitations needed to be recognized by the researcher.
Limitations are influences and conditions that cannot be controlled by the researcher that may
restrict the findings. Some limitations that existed for this research were the following:
52
● The research was entirely dependent on the honesty and truthfulness of the
participants.
● The leadership of the organization was changed recently, which might have
already influenced the organization’s culture.
● The research was done during the pandemic, where face-to-face interviews or on-
site observation was not permitted. This may have limited the data that the
researcher could have obtained while being on-site.
Delimitations were the choices and the boundaries that the researcher made for the study.
This study had several delimitations:
● Data were collected through interviews only and did not include quantitative data.
● Data were collected only from the management group of different organizations.
● Data were primarily collected in Korean, considering participants’ native
language.
Chapter Four: Results and Findings
This study aims to assess the knowledge and motivation influences of XBS’s
management group to transform its traditional business model and the resistance to the change in
the organization. Chapter Four reviews the stakeholder participants in the study and then outlines
the findings and results from the qualitative interviews with the management group of the
organization. Leading the evaluation study were two research questions that addressed
knowledge, motivation, and organizational influences for the XBS’s stakeholder management
group:
53
1. Does the XBS’s leadership/management team have sufficient knowledge and
motivation to transform the organization to meet the market trend and consumers’
needs?
2. What resistance in the organization makes it harder to transform?
First, this chapter will review the background of the participants. Then it will present the
results and findings of each research question. Factors identified for each research question will
be further discussed as supported by the participants’ responses. Finally, this chapter will
conclude with a summary of findings for the three research questions.
Participating Stakeholders
To answer these research questions, interviews were conducted with participants from the
upper management of the terrestrial TV broadcasting companies in Korea, where XBS is located.
A total of twelve participants were selected, and nine out of the twelve were selected from the
management group (primary participants), where each participant has years of experience
working in the industry and is currently employed at their respective company for more than ten
years. The nine interviewees’ pseudonyms are P1, P2, P3… to P9. The three participants from
outside the company (secondary participants) were selected to triangulate the data: a VP of a
streaming service provider, a TV content creator, and a format creator. Their pseudonyms are S1,
S2, and S3. These identifiers were selected to protect the participants’ privacy and the
organizations they represent.
The sample size of interviewees was small due to their corporate ranks and managerial
positions in their respective companies. Personal demographic information, such as age and job
titles, will not be identified to maintain their confidentiality. Table 4 is an overview of the study
participants’ profiles.
54
Table 4
Overview of Participant Profiles (N=12)
Public
Broadcasting
Commercial
Broadcasting
Neither
(Secondary
participants)
n 7 2 3
% of N 58% 17% 25%
The nine participants in the interviews were a broad cross-function of roles, job position
titles, and educational backgrounds. Over half were the vice presidents or executive directors
representing their departments. While the participants’ identities were protected, their
background information can be presented generically. 100% of the participants are male because
it was challenging to find female executives in these corporations.
55
Table 5
Position Breakdown of Primary Participants (N= 9)
Executive VP
/Senior VP
VP/Executive
Managing
Director
Executive
Director Director
n 2 3 3 1
% of N 22% 34% 22% 22%
The interviews were virtually conducted using the Zoom platform. The interview
questions were asked at the beginning of each interview, but they were modified or adjusted
based on the responses of each participant. Each interview lasted an average of 60 minutes,
answering 14 interview questions, with additional follow-up questions asked after the initial
interviews as necessary. All interviews were recorded with their permission and were transcribed
for the data analysis. Interviews were conducted in Korean; hence verbatim transcription was
created in Korean.
Research Question 1: Does XBS’s Management Team Have Sufficient Knowledge and
Motivation to Transform the Organization to Meet the Market Trend and Consumers’
Needs?
Results and Findings for Knowledge Influences
Participants were asked a series of questions related to RQ1. Three categories of
knowledge influences were explored in this research: factual, procedural, and metacognitive
knowledge. Factual knowledge, the knowledge that is essential to a specific discipline, such as
terminology and explicit details (Krathwohl & Anderson, 2010), is identified as the knowledge
of the changes in the industry. Procedural knowledge is the knowledge of how to do things
56
(Krathwohl & Anderson, 2010), such as evaluating the current business model and designing the
alternative business model. Finally, metacognitive knowledge refers to knowledge of thinking
processes and information about how to manipulate these processes (Bloom, 1956), such as the
management group’s processes in planning, monitoring, and evaluating.
Knowledge Findings
The factual knowledge assessment includes the participants’ knowledge of the market
trend, competitive landscape, and consumer's media consumption behavior changes, which is
considered a primary reason for the decline in the terrestrial TV stations’ advertising revenue.
The analysis revealed that the management group was proficient at identifying the market
changes and historical events, such as the inception of streaming services and the general
programming service providers, such as JTBC or TvN. However, the analysis also identified two
critical procedural knowledge gaps among the research participants. The procedural knowledge
gap was related to the participants’ knowledge in assessing the current business model and
designing and developing an alternative business model. The metacognitive gap was related to
the participants’ knowledge and ability to implement and monitor an alternative business model
reflecting one’s own thinking. Table 6 presents an overview of the knowledge findings from the
research, which will be discussed further in detail in this section.
A type of validation was assigned to each type of knowledge, based on the number of
participants who appeared to have the particular type of knowledge. If six or more of the nine
participants have a particular type of knowledge, asset validation was assigned. If three to five
people have the knowledge, limited validation was assigned. For the knowledge with two or
fewer people, need validation was assigned. Numbers in the parenthesis in Table 6 indicate the
number of participants with the specified knowledge.
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Table 6
Validation of Knowledge Findings
Knowledge Type
(Factual, Procedural,
or Metacognitive)
Validation
(Asset,
Limited, or
Need)
The management group has knowledge of the market
trend and competitive landscape
Factual Asset (9)
The management group has knowledge of the
changes in the audience’s media consumption
behavior
Factual Asset (9)
The management group has knowledge of how to
assess, design, and develop an alternative business
model as a strategic solution
Procedural Limited (4)
The management group has knowledge of how to
implement and monitor an alternative business model
to optimize it for the organization’s sustainability
Metacognitive Need (2)
Factual Knowledge: Participants Demonstrated Factual Knowledge Regarding the Trend of
the Market and the Changes in the Consumer’s Media Consumption Behavior
The participants had knowledge about the changes in their industry of the past years.
Most of them were aware of the history of the industry, including the entry of low-cost, viewer-
tailored, subscription-based OTT video streaming services that have shaken up the vertically
integrated TV industry that has been dominated by the traditional pay-TV providers. Participants
were also aware of the fact that the loss of audience share was not exactly following the speed of
decline in advertising revenue. All primary participants (9) stated that the emergence of
58
streaming platforms, both domestic and global, general programming channels, and IPTVs as the
biggest threats to their organizations’ sustainability.
P2 indicated,
OTT services have transformed the media industry, and consumers’ cord-cutting
trend has become stronger. Terrestrial TV stations had to create their own
streaming service outlet, such as POOQ, that can distribute network TV shows in
real-time. Cable TV providers’ platforms, such as Tving, are also part of this
competition. Therefore, it is not surprising to see the decline of the terrestrial TV
market share since the early 2010s.
Most of the primary participants (7) were able to identify the exact percentage and
amount of the advertising revenue decline that their respective companies have experienced in
the last ten years. Furthermore, out of these seven that could verify the percentage in the decline,
three participants could demonstrate the specific breakdown of the total revenue decline. P5
responded,
In the past ten years, the total revenue has declined from $500 million to less than
$200 million a year. This is almost 1/3 of what the company used to generate.
Instead, the total revenue generated from the content sales is now double the
advertising revenue.
All participants in the management team (9) answered questions regarding the changes in
the competitive landscape. Many (6) were well aware of the market’s shift from terrestrial-
centric to general programming channels, then to OTT streaming services. Their responses
indicated that the management group has factual knowledge about the market and the changes it
has been going through.
59
Another factual knowledge explored in the research was the knowledge of the consumers.
Respondents verified their knowledge of the changes in consumer’s media consumption
behavior. Five respondents stated that consumers were increasing their consumption of OTT
streaming services, driven by flexibility and affordability, in addition to a broader content list.
Consumer’s continuing trend of cord-cutting was also considered as one of the reasons for the
terrestrial TV’s market share fall. As stated by P6,
Consumers don’t sit in front of the TV set waiting for their favorite TV shows to
start anymore. They have adopted the technology fast and migrated over to new
platforms that could bring the contents at a time and place of their convenience
and preference. The new demand of the consumers has started to frame the TV
contents, which is what’s leading the changes in the content platforms. I can see
how these needs dictate content production and distribution and even the required
technology in this industry.
P4 and P8 described the consumer’s current media consumption behavior as “I watch what I
want when I want.” P4 noted,
The media industry has been transforming based on a consumer’s taste for on-
demand media. It means that a media distribution system would allow audiences
to watch videos without traditional devices. People don’t have the pressure of
following a fixed broadcasting schedule. Our historically top-rated 9 o’clock
national news program was rated at 20% viewership on average and is now down
to a low 10% in 2021.
This response is consistent with Park’s research (2018), where she claimed consumers
were increasingly streaming or downloading TV shows and movies through OTT platforms and
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often unsubscribing traditional TV services. This phenomenon, described as video cord-cutting
or OTT bypass, suggests that the standard TV service’s business models are under threat
(Banerjee, Rappoport, & Alleman, 2014). While the management group can identify the factual
knowledge required to understand the characteristics of the current market, questions still remain
about how to assess the traditional business model and discover alternative business models for
the organization, which lead to the assessment of their procedural knowledge. It should be noted
that the conceptual knowledge was not discussed separately in this section because interview
questions on factual knowledge already touched many aspects of the conceptual knowledge.
Procedural Knowledge: Participants Have Limited Procedural Knowledge on How to Develop
an Alternative Business Model
Despite their awareness of the change in their industry, the management group has
limited knowledge on how to assess the issues in the organization’s current business model in
order to develop an alternative that could improve the business condition. The participants were
asked questions regarding a new business model that could replace the traditional model, which
relied on advertising revenue. Participants mentioned that the solution was to focus on the TV
content rather than the platform now that it has lost popularity. They had different responses as
to what they meant by “focusing on the content.” Their intended solutions (4) varied from
content production, to content distribution and marketing, and to content licensing. One
participant stated all of the above, while two others said it’s hard to tell at this point since
terrestrial TVs suffered from a lack of budget, which made it difficult to create high-quality
content. One senior director argued that the organization had lost the competitive advantage on
either the platform or the content and it had to diversify the business model from a much broader
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perspective. P9, who strongly believed that a completely new service has to be adopted as an
alternative business model, stated,
We can’t sustain with the traditional ecosystem. Many executives in terrestrial
TVs still do not understand the concept of hyper narrowcasting. It is a specific
approach to transmitting information to a niche group of audiences, and I believe
it should be the new standard that we need to take on.
P5 demonstrated a good example of his procedural knowledge that involved the modes of
inquiry and the knowledge of how to perform a task:
At first, there was a tremendous amount of worry about losing advertising
revenue in the terrestrial TV outlets. However, after a while, we started to realize
there could be an alternative source of income in this new business marketplace
and started to invest more in developing and distributing content libraries to other
media distribution companies, including global and local OTT service providers.
In our company, the management thinks that high-quality content creation and
distribution is the only way to survive in and adapt to this new world. As part of
content development, a well-defined distribution system is a must. We are really
hoping our new approach will bring a significant increase to our future revenue.
Another respondent suggested a very similar perspective on the alternative business model
focusing on content distribution and sales:
We need to establish an innovative paradigm. Advertising revenue is generated
from the platform. We should work on enhancing our content strategy and
improving its global distribution, which requires pre-investment. We prioritize the
ratings of adults in the 20 to 49 age group because they are still the largest group
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of viewers influencing the popularity of the content. Our TV shows have been
rated high in that segment, and we feel that they will continue to have dominance
in the market.
While most of the respondents highlighted the content as an alternative business model,
P2 drew a grim picture of the business future:
Honestly, I don’t see the future of terrestrial TV broadcasters. I don’t think we
have a competitive advantage either on the platform or the content. It’s probably
more profitable to expand into the investment business, such as leasing building
space for coffee shops, using our real-estate assets. You may ask why we venture
into an investment business, but what could be a better option for this company to
choose when it has to feed several thousand employees.
Lastly, P7 commented on the realistic limitation as a terrestrial broadcasting company:
We’ve been suffering from a lack of budget in the content productions.
Blockbuster TV shows have been produced by the general programming TVs,
such as JTBC and TvN, that have been emerging since 2011. TvN spent $80
million on their drama content in 2018, and they were able to line up some of the
highest-rated blockbusters on their programming. Besides, TvN’s dramas are also
distributed globally due to their partnership with Netflix. For us, there is a
systematic hurdle to relying on content creation as the alternative business model.
Despite their average tenure of 29 years in the companies, there was weak evidence to
indicate the confidence in the management group’s knowledge of an alternative business model
as a strategic solution to their current problem. The management group had revealed limited
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procedural knowledge to cope with the change in their industry. Table 7 presents the breakdown
of the alternative business models that the management group suggested.
Table 7
Breakdown of the Suggested Alternative Business Model
Suggested Alternative Business Model n
High-quality content production and distribution
4
Creating OTT platform/VOD
2
Real-estate/Merchandise business
1
Hard to tell
2
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Metacognitive Knowledge: The Management Group Needs to Improve Their Metacognitive
Knowledge on How to Implement, Monitor, and Optimize an Alternative Business Model to
Improve the Organization’s Sustainability
Based on an analysis of interviews, the management group needs to develop cognitive
strategies to build up an alternative business model to achieve targeted performance and know-
how to implement it. While some participants (2) suggested their implementation plans, it did not
appear that the respondents currently had specific implementation plans in place or plans to
optimize the new business model through monitoring. S1 from the secondary participant group
confirmed the finding from the outsider’s perspective:
I feel that the management’s perception of the current organizational problem and
an alternative solution remains at the surface level. I didn’t get the impression that
they have a fundamental understanding of the issue, not to mention a full plan for
a new business model implementation.
One interesting observation in the interviews was that many respondents repeatedly
referred to the task of finding a solution as a “CEO’s task.” While the management group was
knowledgeable about the factual information, there was a lack of evidence in the respondent's
willingness to evaluate and apply their own knowledge to implement different strategies. Instead,
many (7) failed to connect their factual and procedural knowledge to the metacognitive
knowledge in addressing the alternative solution and monitoring and adjusting the solution for
optimization.
Results and Findings for Motivation Influences
Both expectancy-value theory and self-efficacy were acknowledged as presumed
influences in this research. The influence of expectancy in the utility value and cost-benefit ratio,
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and self-efficacy on the XBS’s management group in transforming the current business model
was explored through interviews. The findings of these influences revealed that, while the
management group did not see the cost of their expected sacrifice as a hurdle to transform the
business model, the group saw low utility value in the new business model. These motivational
influences had an impact on the managers’ self-efficacy. The managers did not think that they
were efficacious enough to transform the business model. Table 8 presents a summary of the
findings related to the XBS management group’s motivation across the three motivation
influences explored in this study.
A type of validation was assigned to each type of motivational factor, based on the
number of participants who made direct or indirect comments on the factor during the interview.
If six or more of the nine participants have agreed with the factor, high validation was assigned.
If three to five people have agreed, medium validation was assigned. Low validation was
assigned when two or fewer people agreed. Numbers in the parenthesis in Table 8 indicate the
number of participants who validated the motivational factor.
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Table 8
Validation of Motivation Findings
Motivation
Influence Type
(Self-efficacy,
Expectancy-Value)
Validation
(High, Medium,
or Low)
Management group sees the utility value of the
business model transformation.
Expectancy-value
(utility value)
Medium (4)
Management group perceives that the cost of
engaging in the business model transformation
influences their motivation.
Expectancy-value
(cost-benefit ratio)
Low (0)
Management group feels efficacious in their ability
to transform the organization’s business model.
Self-efficacy Low (2)
Motivation Findings
Utility Value: Lack of Reward and Recognition Makes It Difficult for the Management Group
to See the Utility Value in Transforming the Business Model
Expectancy-value theory (Eccles et al., 1983; Eccles & Wigfield, 2002) focuses on the
outcome of an individual's expectation. Based on the analysis of the interviews, the management
team members did not see enough utility values in transforming the business model because they
did not necessarily think it would work to their advantage. Of the nine primary participants,
seven specified that recognition was one of those not-too-well-handled functions in the
organization. They indicated that the lack of rewards and recognition had been one of the main
reasons employees have considered leaving the job. P3 explained,
Terrestrial TV stations in South Korea are either public companies or treated as
public entities that operate in a very similar manner as government organizations.
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There is an official pay schedule for their employees, and it goes up by the total
number of years of their employment at the company. There are two things that
can motivate employees: pay increase and promotion. In this company, you
cannot expect to receive either one that appropriately reflects your performance.
While performance-reflected incentives are not expected at work to promote good employee
performances, the corporate personnel procedure allows less flexibility in staffing workers based
on their performance either. Two respondents said it is almost impossible to fire poor-performing
managers from the organization.
One of the management team members revealed that, while they would do their best to
support the organization, many feel that it was also necessary to be sensitive about workplace
politics in the organization. When a CEO is replaced, the management team changes promptly.
P9 argued that managers’ ability to make politically safe decisions was often more critical to
sustaining their positions longer in the organization, which is why they seem to focus less on the
performance. Wigfield and Cambria (2010) found that utility value often finds rewards that are
desirable to individuals. Desirable rewards should be perceived as fair and should satisfy
different employees’ diverse needs. Pintrich (2003) stated that while some people get motivated
through their self-efficacy beliefs, others may get motivated through their beliefs in values,
which leads to their behavior.
The management group believed that their chances of getting promoted would be
lessened if they were overly exposed to the organization. While some respondents (2) said the
transformation of the business model would be crucial for the company’s survival, others saw
less value from the transformation process as they were likely to reach their retirement age by the
time it was to be implemented entirely. The qualitative interviews with the management group
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showed evidence that participants saw limited value in the usefulness or the relevance in the
business model transformation in the future.
All the participants cited the flawed reward system as one of the biggest obstacles to
boosting the employee’s motivation. P1 indicated the sentiment in the following example:
A director producing a popular TV show can generate millions of dollars a year.
Yet, the incentive he receives at the end of the year seems minimal compared to
other broadcasting companies, including platform service providers. Lack of a
reward system ultimately increased the turnover rate in our company, and we’re
losing our talented employees.
Lack of consensus among the employees and upper management was another reason they
did not see the utility value in the business model transformation. While all the participants said
they understood the problem of the current state of the organization, none of them said that the
issue was explicitly discussed in the official meetings of the management group. They casually
talked about it in the personal gatherings over drinks after work hours, but it was never brought
up in the management meetings to bring forward officially.
Cost-Benefit: The Management Group Does Not Strongly Associate the Transformation with
the Relative Cost
Wigfield and Eccles (1992) defined cost as what one has to give up undertaking a task or
the endeavor required to achieve it. Elliot and Friedman (2017) asserted that an individual would
not perform a task if it costs too much. Depending on how much effort has to be invested and
how much emotional costs of pursuing the task are necessary, an individual’s desire may even be
discouraged. However, the XBS management group did not necessarily perceive that the cost of
engaging in the business model transformation influenced their motivation. Of the nine primary
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participants, five have mentioned that the cost, such as loss of time, extra working hours, or
negative psychological experiences, such as stress, was not influencing their motivation. While
they expected limited utility value in the transformation, they didn’t think their expected cost or
sacrifice was a factor that demotivated them. Rather, their motivation came from other intangible
factors, such as accountability. One respondent stated,
I feel that my motivation stems from my accountability as a manager and my
desire to make the organization a better working environment for my colleagues
and subordinates. I don’t consider working extra hours or getting stressed from
work a sacrifice or a mandatory effort, but rather as something I should do for the
people I work with. My biggest fear is whether the strategy I implemented does
not produce successful results and hinders my team members’ efforts and
intended performance.
Other respondents indicated that their reputation and their expected role in the
organization were considered more important than their cost. Two of the respondents have
expressed that their motivation comes from their willingness to make a better organization since
it is going to be their lifetime employment. P3 responded,
There is still consensus in the management group that this is our lifetime
employment. I can’t speak for everyone, but I personally think that we should
make our organization a better place for our subordinates and even for the next
generation of employees.
Wigfield and Cambia (2010) stated that the cost of engaging in a task influences motivation, and
the evidence showed that the management group did not strongly associate the business model
transformation with the relative cost, such as their effort or lost alternative opportunities.
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Self-Efficacy: Management Group Members Are Uncertain about Their Self-Efficacy in
Initiating the Business Model Transformation and the Implementation Plans
While the management group expressed concerns regarding the current business model,
they lacked self-efficacy in leading the organization to transform. Bandura (1977, 1997) defined
self-efficacy as an individual's belief and expectations about one's own capability to perform a
specific performance. Self-efficacy reflects confidence in the ability to control one's motivation,
behavior, and social environment. Pajares (2006) stated that a high level of self-efficacy is
essential in driving choice, persistence, and mental effort: the core components of motivation.
Based on an analysis of the interviews, the management group's lack of self-efficacy was
primarily due to the foreseen failure. Of the nine primary participants, only two managers
indicated confidence in their ability to initiate the development of the alternative business model
they have suggested in their procedural knowledge questions. The management group did not
believe they were capable of developing the new business model that they had suggested earlier.
When asked about their reasons, the most common answers from the managers were fear of
failure (2), lack of resources (2), and lack of support from the CEO (3). These challenges will be
exhibited in the organization’s resistance in the RQ2.
Fear of failure may have come from the fear that they cannot create and distribute high-
quality TV content. This challenge is also discussed as the resistance in the organization later in
the RQ2. Fear of failure was mentioned a few times by two managers in terms of the
accountability issue. P1 stated,
When an SBU (strategic business unit) launches a project and does not work out,
a manager is accountable for the failure. If the manager doesn’t initiate anything,
he/she is simply considered idle. But once they take up a project and fail, you will
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not be given a second chance for a long time. It is a safer choice for the
management to choose not to do anything than risk failure, not to mention the
time and effort you put in.
In addition to the fear of failure, the organization’s lack of resources was another reason
that the management group considered as a factor of demotivation. One of them expressed
concerns about the lack of budget as the main deficiency, followed by other resources, such as
the organization’s capabilities of language translation, subtitling, and local adaptation of the
contents that would be distributed globally. Respondents (3) stated that the content business
could not expand without a sufficient budget, and they have been suffering from a lack of
budget. P7 indicated,
Motivation ultimately comes from money. If you have enough budget, everything
is possible. When a producer proposes a new content idea, the upper management
will be asking if this will attract advertisers and who will be responsible if the
new content can’t break even. On the other hand, the risk is minimal even if you
don’t initiate a new program. Staying silent usually is a safer option.
The lack of resources is a solid organizational component here which will be addressed in the
organization section later.
The company leader, mainly referred to as a CEO, was the one whom the management
group believed would decide whether to transform the business model. All the participants have
experienced the job rotation due to the leadership changes and have either discontinued what
they were working on or been sent to another department without compliance. One of the
respondents explained,
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The CEO must have a solid vision to pull the entire organization in a desirable
direction. Transforming a business model is not something we as management can
initiate in our organization. When the CEO is replaced every few years,
everything changes. I have attempted to create our own OTT platform channel. It
took a lot of preparation and employees’ effort to start the service. Long story
short, the service lasted for about six months and had to stop. There were
workplace politics around the ownership of the service, taking away the initiative.
If the CEO does not endorse the program, it can never last.
The CEO’s approval is what makes the project or program continue. The management
group believed that their political stance was very important in continuing their tasks. P6 shared
a similar experience.
A few years ago, I proposed a digital academy training program for the
employees. I had invested extra working hours in structuring the program and
operating it. The executives approved it, and employees' responses were great too.
Guess what? The training program lasted a year. Then the new C-suite shortened
it to a two-month program. We were just about to start the changes, and then
everything changed when the new CEO came on board. When the next CEO gets
appointed, I guarantee 95% of the management group will have to rotate the
departments.
This evidence is also supported by the interviews of secondary participants. S1 said,
The management group is trying to take a risk and make a commitment, but it
seems the change is very minimal. If they want to focus on the content business
instead of the ad revenue, they need to show something noticeable. The global
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OTT platforms are in this game with a much bigger budget. Netflix has spent over
$680 million producing 80 pieces of original Korean content, including films and
TV series, for global audiences in the past five years and will invest another $500
million this year only in South Korean content.
One interesting research finding that was not assumed in the literature review was that the
two participants who indicated strong belief in their ability to develop a new business model and
sustain the organization were the managers from the commercial broadcasting companies, where
the organizational rewards and recognition is generally more visible than public TV stations. The
two participants both had an experience of having their proposal accepted by the executives in
the organization. They both answered that they believed their organization could transform its
business model and increase its sustainability and agreed that their biggest motivation was
recognition in the organization or from the people they work with. In contrast, most managers
from the public TV expressed their skepticism about the organization's future success. It showed
evidence of how organizational rewards and recognition influence building employees’ self-
efficacy.
Research Question 2: What resistance in the organization makes it harder to transform?
Results and Findings for Organizational Influences
In addition to the knowledge and motivation influences, this study evaluated the factors
that could resist the changes in the organization. The assumed organizational influence was
assessed into two categories: cultural models and cultural settings (Gallimore & Goldenerg,
2001; Schein, 2017). The analysis of the organizational resistance was explored through
interviews, and their findings are presented in Table 9 by the assumed organizational influence
type. A type of validation was assigned to each type of organizational resistant factor, based on
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the number of participants who made direct or indirect comments on the factor during the
interviews. If six or more of the nine participants have commented on the factor, high validation
was assigned. If three to five people have commented, medium validation was assigned. For the
resistant factor with two or fewer people, low validation was assigned. Numbers in the
parenthesis in Table 9 indicate the numbers of participants who mentioned the specified factor.
Table 9
Validation of Organizational Resistance Factors
Organizational Influence Type
(Cultural model or
Cultural setting)
Validation
(High, Medium, Low)
Trust issue with a leader Cultural model High (7)
Sense of complacency/
pride as a legacy media
Cultural model High (9)
A result-driven culture causing
fear of failure
Cultural model Medium (4)
Long decision-making process Cultural setting Medium (3)
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Organizational Findings
Trust Issue with the CEO: The Management Group Feels That There is a Trust Issue with the
CEO
A key challenge to the transformation that the XBS’s management group thought was the
lack of trust in the CEO. The leadership in their present organization is appointed by the board of
directors selected by the President of South Korea (Kazuma, 2005). The appointee serves as the
CEO of the company for the average duration of three years, which can vary depending on the
political climate at the time. The participants have specified that due to the CEO’s limited-term,
it is often challenging to articulate and communicate his/her vision with employees. The results
of this interview indicated that most of the respondents (7) did not have a strong trust in the
current CEO’s leadership and agreed the leader did not carry enough vision and strategy for the
organization. The other two thought their CEO had the leadership to some extent. Three
participants had specified that due to the limited-term, communicating his/her vision with the
employees was not an easy task. P1 stated,
Our company’s life depends on which administration wins the national election. If
the other party takes over next year, we’ll have the new CEO. All the past CEOs
were aware of their limited, relatively short-lived term. Some important company
decisions they have made were based on their strategic moves to extend their
terms.
P6 shared a very similar opinion about the political climate of the organization:
Our company’s life depends on which administration wins the election. If the
other party takes over next year, we’ll have the new CEO. It’s a precarious
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position. I could see how their decisions were made based on their strategic
moves to maximize their tenure in the organization.
While the management group understood how fast the industry was changing, they did
not think the CEO had a specific and concrete strategy to gain the organization’s competitive
momentum. There was no evidence to indicate that this was due to a communication issue. P8
indicated,
We simply do not see the current CEO having the expertise in setting the strategic
moves to gain the competitive edge. Sadly, he does not have the experience to
perform the task. It seems like our only goal this year is simply not to make
additional losses in the yearly revenue.
The management group’s consensus was that they had minimal impact on the decision-making
process regarding the company’s structural decisions, like business model transformation.
Organizational Complacency: The Management Group Perceives That the Employees Have
Become Complacent in the Organization
Another factor that resists the changes in the organization is the employees’
complacency. Ali (2014) claimed that complacency is not only a personal trait but is commonly
found among corporations. The management group observed that the employees, including the
management group, were not challenged to improve or outperform due to their long-lasting pride
as a legacy medium. Nygren et al. (2018) have defined legacy media as media organizations
developed in traditional public service media, including terrestrial TV stations, used in the
context indicating the opposite concept from the new media, mainly utilizing online platforms.
All nine participants expressed that there is a sense of pride that employees have as legacy media
to a certain extent. P9 said,
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This has a lot to do with the fact that terrestrial TV broadcasters have
monopolized the market for the past 30 years. We’ve been positioned as a market
leader in the market for so long that employees are not quite anxious about the
current situation. The reality is that there are a number of YouTubers who make
more revenue than the total ad revenue of this company, and we still think we’ll
be fine, just like how we have been in the past.
P7 argued that legacy media’s digital transformation would be complex because their
successful experience was within the offline business, and the existing leadership cannot break
out of that frame. Denning (2006) claimed that when employees become complacent in their
tasks, organizations become too easy to forget about what their competitors are doing and what
their challenges are in meeting their goals. Furthermore, employees’ morale will decline, and the
entire organization runs the risk of falling behind in the competition. P5 remarked,
We have tried to stay away from the complacency, but the culture of legacy media
is still maintained mainly in the organization. Our organization is used to
imitating the old tradition, and that’s why it’s difficult for us to adapt to digital
technology rapidly. Luckily, we’ve noticed the differences in the younger
employees.
This organizational complacency has a direct impact on organizational inertia (Graetz &
Smith, 2010). One participant responded that the management group had a strong tendency to
stay away from what was unfamiliar. He specified that the employees who were willing to
change the organization have moved on to other companies, including the ones in the new media.
“They were the outperformers in the company,” he added.
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Godkin and Allcorn (2008) believed that organizational inertia is one of the most crucial
factors for resistance against the organization’s change. Moradi et al. (2021) stated that
organizational inertia is a barrier to accepting new information, and it prevents innovation and
makes it hard for the organization to adopt changes in the business world.
Result-Driven Culture: The Management Group Believes That XBS’s Organizational Culture
Is Result-Driven, Which Causes Fear of Failure
As identified in RQ1, fear of failure was a crucial motivational influence in XBS. The
management group associated this with the organization’s result-driven culture, where
employees seldom received a second chance after the first disappointing performance. P1
specified,
Taking the risk of failure in the organization is challenging, and it’s
understandable. However, it’s the organizational culture that does not allow
employees to make mistakes.
Fear of failure often manifests in resistance to change in the organization (Wennberg et
al., 2013). In such organizational culture, employees are unwilling to try new ways of working,
and their fear of failure constrains reluctance to learn and adapt, and they will ultimately agitate
to resist changes (Kuyatt, 2011). The management believed that in the XBS, the work was
evaluated by the outcomes it would drive. The result-driven culture was confirmed by four
respondents. P2 revealed,
When a manager proposes a new program or a project, the first question from the
executives is usually, “do you think this program will generate sufficient ad
sales?” The next question will be, “if this program doesn’t, who will be
responsible for the shortfall?”
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The culture had an instant effect on the employees’ motivation, which was previously
discussed under the motivation influence. Another respondent pointed out that the “what if you
fail” type of questions made it difficult to boost employees’ morale, and managers who were
being critical and strict with employees’ performances created low self-efficacy. Bandura (2012),
who introduced self-efficacy as a component of social cognitive theory, suggested that people’s
efficacy could be developed through their experiences in overcoming hurdles through
perseverance. Self-efficacy can also be built through learning to manage failure, so it becomes
informative rather than discouraging.
Long Decision-Making Process: Management Group Recognizes the Lengthy Decision-
Making Process in the Organization
Respondents perceived that the decision-making process at the XBS was much longer
than its competitors, and it was causing delays in many aspects of the company. P9 expressed
concerns that “things are moving at a faster speed than ever, and we’ve already lost many
opportunities because of the delays.” This was confirmed by S2 and S3, who brought outsiders’
perspectives. S3 said,
What would typically take three months to finalize in the terrestrial TVs takes as
short as two weeks in the general programming TVs or the OTT platforms,
probably because their organizations are on much smaller scales? The final
decision is coming from the very top, meaning C-suites, and these people are still
interpreting the situation with the analog lenses they are accustomed to.
One of the vice presidents in the management group identified that ambiguity was usually the
leading cause of delay in the decision-making process in many organizations, and XBS is not an
exception. He added,
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Those delays cause the organization to lose valuable opportunities, including
developing new content, updating current content to meet changing consumer
demands, and entering new markets with their content.
Filippov and Iastrebova (2010) observed that the critical challenges in the decision-
making process include information overload, or having insufficient information, or
misidentifying the problem. Having much information is often viewed as beneficial, but when
overloading, processing it can become overwhelming. A leader should be prepared to access the
data that is important in the decision-making.
Other Resistance
There was another minor factor that was mentioned during the interviews, which was a
lack of resources in the organization. As stated in the motivation section, participants indicated
the organization’s lack of resources as a demotivating factor in the transformation process, and it
falls under both motivation and organizational influence. Two participants mentioned
insufficient budget for the excellent quality content. Puleo (2021) noted that a lack of resources
affects the employees’ performance negatively. She argued that employees would become
frustrated and likely interpret this as a lack of organizational caring, resulting in disengagement.
While many resources are associated with a financial cost, Puleo (2021) suggested that throwing
money at the problem will not solve the problem. Managers should have the flexibility in
responding to the needs.
Summary
The XBS’s management group has acknowledged the need to transform its traditional
business model since the mid-2010s. However, the organization has not shown significantly
visible performance in the market. While the group was aware of the factual knowledge, they
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had limited procedural knowledge to assess the traditional business model and limited
metacognitive knowledge to plan, monitor, and evaluate the alternative business model. Based
on the findings from the interviews, the management group did not see enough utility value in
the process of business model transformation. Although they did not mind the cost of investing
the extra working hours and enduring negative mental stress, they were not self-efficacious
enough to initiate the process to assess the new business model highlighting the production and
the distribution of high-quality TV content. Each of the assumed influences was validated.
The factors of organizational resistance were explored through the research study. The
first factor was the trust issue with the leader. The management group believed that the decision
was to be made by the CEO, and there was not much they could do in the decision-making
process. The second resistant factor was the organizational complacency as a legacy media,
followed by the result-driven culture, which was indicated as a primary reason to establish the
employee’s fear of failure in the organization. Finally, the management group pointed out the
long decision process as the last factor of organizational resistance. The recommendations for the
knowledge and motivation gap and the organizational resistance found in Chapter Four will be
addressed in Chapter Five.
Chapter Five: Solutions and Recommendations
This study aims to assess the knowledge and motivational influences of XBS’s
management group to transform its traditional business model and the resistance to the change in
the organization. Individual interviews from the primary group and the secondary group were
utilized to validate the assumed knowledge, motivation, and organizational influences of the
XBS’s management group. Addressed in this section are the proposed solutions and
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recommendations that can be implemented to minimize the knowledge, motivation, and
organizational gaps in transforming the organization’s business model.
Knowledge Recommendations
According to Clark and Estes (2008), knowledge is required for job performance under
two conditions: when employees do not know how to attain their performance goals or expect
future challenges to require problem-solving. The three assumed knowledge influences discussed
in Chapter Four were factual, procedural, and metacognitive knowledge. The research found a
knowledge gap in procedural and metacognitive knowledge among the participants from the
management group. Table 10 summarizes the knowledge influences and recommendations
identified based on the review of the literature and the qualitative research through individual
interviews with the XBS management group.
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Table 10
Summary of Knowledge Influences and Recommendations
Assumed
Knowledge
Influence
Knowledge
Type
Validation
(Asset,
Limited,
or Need)
Priority
(Yes, No) Recommendations
XBS management
group has factual
knowledge
regarding the
trend of the
market and
changes in the
consumer’s media
consumption
behavior.
Factual
knowledge
Asset No No further action is needed.
XBS management
group has
procedural
knowledge on
deciding an
alternative
business model
and developing it.
Procedural
knowledge
Limited Yes Provide training that utilizes the
analysis of the different
alternative business models and
their SWOT (strengths,
weaknesses, opportunities, and
threats, and assess each model’s
return on investment for the short
term and long term to measure
the suitability.
Once the new business model is
decided, the training should
provide the next step to develop
the implementation plan.
XBS management
group has
metacognitive
knowledge on
implementing,
monitoring, and
adjusting the
alternative
business model.
Metacognitive
knowledge
Need Yes Provide training to obtain
metacognitive knowledge, such
as monitoring, monitoring,
reassessing, and adjusting the
alternative business model.
Workshop for the management
group to brainstorm, outline,
organize, review, and revise the
implementation plan.
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XBS’s Management Group Needs to Enhance Its Knowledge of Designing and Developing
an Alternative Business Model
The results of the research data analysis indicated that the participants had excellent
factual knowledge but showed limited procedural knowledge. Ambrose et al. (2010) described
procedural knowledge as knowing how and when to apply various procedures, methods, and
approaches. The analysis indicated that there could be a gap in procedural knowledge for the
participants in the management group. Therefore, a solution to minimize the gap in procedural
knowledge should be suggested.
According to Clark and Estes (2008), training is one of the tools that can aid employees
to acquire “how-to” knowledge and skills and receive corrective feedback to help them
accomplish specific work performance goals. Four out of nine primary participants in this study
had a consensus that the new business model should be the production and distribution of high-
quality TV content, and the responses of the rest were scattered. Two respondents said it was
difficult to tell at this point. The organization should provide this training to design and develop
an alternative business model. The training should analyze the alternative business models and
their SWOT (strengths, weaknesses, opportunities, and threats) and assess each model’s return
on investment for the short term and long term to measure the suitability. Once the new business
model is decided, the training should provide the next step to develop the implementation plan.
The Management Group Needs to Increase Its Ability to Monitor and Optimize the
Alternative Business Model
The data indicated that the management team needed knowledge on implementing and
optimizing the alternative business model to focus on the content business. McEwan (2002)
suggested that it was essential for employees to establish their own goals, review their progress,
85
and assess their progress against the set goals. The managers would benefit from using
metacognitive approaches to select and evaluate the plans to improve their instructional practices
and promote higher achievement. To accomplish this result, the recommended strategy entails
developing a workshop where the management group can intensely discuss the subject matter in
depth. In their study, You and Joe (2001) found that people could attain their metacognitive
knowledge through brainstorming, outlining, organizing, pausing to think, reviewing, and
revising to complete their required tasks. The training initiative recommended earlier to obtain
procedural knowledge for the management group would enhance their metacognitive experiences
too. Bandura (2005) suggested that mastery of complex procedural understanding would require
metacognitive strategies, and procedural knowledge without metacognitive knowledge was
insufficient for solving complex problems. XBS management group would gain more procedural
and metacognitive knowledge in the alternative business model through training and workshops
that would enable them to implement the model successfully in the organization.
Motivational Recommendations
This study’s two assumed motivational influences were expectancy-value theory (Eccles,
1983) and self-efficacy theory (Bandura, 1995; Pajares, 2006). The expectancy-value theory
proposes “expectancy” and “value” as the two most immediate predictors of one’s performance
and choice (Eccles, 2014). Out of the four elements of achievement value, including attainment,
intrinsic, utility, and cost, the study explored the utility value and the cost-benefit for the
management group. While the management group does not strongly associate the transformation
task with the cost, the study found a possible gap in the group’s utility value in the
transformation process. Self-efficacy refers to an individual’s belief in their capability to achieve
a specific performance goal (Bandura, 1997). The study found that the management group was
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not confident about transforming the current business model to the alternative model and
implementing the new strategy accordingly. The following section outlines motivational
solutions and recommendations for XBS’s management group to improve their utility value and
self-efficacy to reach the organizational goal. Table 11 reflects the motivational influences and
recommendations identified based on the review of the literature and the individual interviews
with the XBS management group.
Table 11
Summary of Motivational Influences and Recommendations
Assumed
Motivational
Influence
Motivation
Type
Validation
(High,
Medium,
or Low)
Priority
(Yes,
No) Recommendations
Management group
sees the utility
value of the
business model
transformation.
Expectancy
-Value
(utility
value)
Medium Yes Provide performance-based rewards
that could enhance employees’
overall performance.
Offer incentive pay, public
recognition, and profit-sharing to
reward team performance.
Management group
perceives that the
cost of engaging in
the business model
transformation
influences their
motivation.
Expectancy
-Value
(cost-
benefit)
Low No No further action is needed.
Management group
feels efficacious in
their ability to
transform the
organization’s
business model.
Self-
Efficacy
Low Yes Leadership to communicate a clear
vision based on essential values
with the management group.
Provide support with verbal
encouragement and necessary
resources.
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The Management Group Needs to Feel the Utility Value in Transforming and Adopting a
New Business Model
According to the data analysis in this study, the XBS management group saw limited
utility value in the business transformation tasks. While the group did not consider their sacrifice
a demotivating factor, some did not particularly see the value in the transformation process.
Utility value or usefulness refers to the perception that completing a task will be advantageous
for meeting future goals (Wigfield & Cambria, 2010). The managers indicated that the
employees at the XBS lack motivation primarily due to a lack of reward and recognition. The
findings highlighted the importance of rewards and recognition. Mehmood et al. (2013) studied
that the rewards were proven to be tools to increase performance and change behaviors in
unsatisfied employees. They claimed that providing performance-based rewards could enhance
employees’ overall performance, and a fair reward system could build their job satisfaction and
productive behavior. Bolch (2007) suggested that implementing a compensation plan that the
rewards for successful teamwork provide great synergy with the organizational model. It is
recommended that XBS offers incentive pay, public recognition, and profit-sharing to reward
team performance.
The Management Group Needs to Believe That They Can Develop and Monitor the
Alternative Business Model and Implement the New Strategy Accordingly
Self-efficacy theory refers to an individual’s faith in their capability to behave necessarily
to generate specific performance fulfillment (Bandura, 1977, 1997). Self-confidence reflects
confidence in exerting control over one’s motivation. The data findings showed that the
management group had less confidence in transforming the business model and implementing
the corresponding strategies. This information highlighted the importance of providing the
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management group an opportunity to develop a new business model, in addition to the
previously discussed rewards system initiatives. Bandura (2001) stated that individuals might
acquire mastery in a limited number of areas, but it would be unachievable to attain proficiency
in all aspects. Tims et al. (2011) discovered that leaders could boost self-efficacy by showing
confidence in their subordinates’ capability to perform tasks. In this case, a CEO can increase the
management group’s self-efficacy by communicating a clear vision based on essential values
(Shamir et al., 1993).
Interventions to enhance leadership behavior could create a positive climate where
employees have high self-efficacy. While mastery experience is a critical factor in establishing
self-efficacy (Bandura, 2001), employees can be convinced to believe that they have the skills
and capabilities to succeed and getting verbal encouragement from colleagues helps them
overcome insecurity and focus on giving their best effort. Consider Eden (1988), following
Bandura’s guideline, introduced another way to increase employees’ self-efficacy: expressing the
expected outcome in terms of an individual’s competence relative to peers. With the training
session scaffolded, the management group will acquire the confidence to perform the task.
Organizational Recommendations
Clark and Estes (2008) highlighted the importance of aligning organizational goals with
stakeholder goals to accomplish performance results, noting that the gaps between business goals
and performance goals bring opportunities for organizational improvement. The study found four
influences that the management group considered organizational resistance using the cultural
models and settings framework: trust issue with a CEO, employees’ sense of complacency,
result-driven culture causing fear of failure, and long decision-making process. Cultural models
are defined as the understanding of how the world ought to work within an organization. In
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contrast, cultural settings describe the interactions between two or more individuals within a
given organizational setting (Gallimore & Goldenberg, 2001). This section addresses the
recommendation for the organizational resistance in reconstructing XBS’s current business
model.
90
Table 12
Summary of Organizational Influences and Recommendations
Assumed
Organizational
Resistance
Organizational
Influence Type
Validation
(High,
Medium,
Low)
Priority
(Yes,
No) Recommendations
Trust issue with
a leader
Cultural
model
High Yes The leadership needs to show the
managers that they are trusted by
recognizing their jobs well done and
listening to the group with
appropriate and prompt feedback.
Empower the management group to
help them feel more challenged and
trusted.
Sense of
complacency/
pride as a
legacy media
Cultural
model
High Yes The leadership and managers need
to articulate the expected results to
the employees and grant them the
autonomy to do their jobs in the way
that works for them.
Have them take ownership of their
areas of accountability and check
their progress regularly.
A result-driven
culture causing
fear of failure
Cultural
model
Medium Yes Open up the communication channel
in the organization. The leadership
can create a safe location where
employees feel they can be honest
without being judged by others.
Long decision-
making process
Cultural setting Medium Yes Conduct research to receive
additional data and speak with
internal or external experts to
identify the problem and shorten the
decision-making process.
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Trust Relationship Should be Built Up Between the Management Group and the CEO to
Improve the Trust Issue
Trust is the basis of any successful relationship, and it is tough to repair when broken.
When employees feel they cannot trust leadership, they feel unsafe and use more energy on self-
preservation than performance. Without trust in leadership, employees are not willing to give
extra effort to create a high-performance organization. Lack of faith in a leader interferes with
employees’ engagement in high work performance (Sharkie, 2009). A leader’s lack of trust leads
to low innovation and lack of agility in changing the organization. When employees lack
confidence in leadership, they often avoid communicating with them either due to fear of
retaliation or simply because they cannot trust leadership to be transparent with them.
The trust issue with the CEO was explored in the motivation section earlier. Participants
mentioned that whenever new leadership emerges in the organization, their motivations were
significantly affected by the likely change in the company direction and unwanted reorganization
of staff and employees. The most effective and immediate solution to this issue may be the
change of the current leadership. While it may not seem realistic, the fundamental solution has to
revolve around making changes in the appointment process of a CEO and the explicit approval
of one’s tenure. However, the aforementioned solution is not likely due to the organization’s
systematic hurdles; hence the following suggestions are recommended.
First, the XBS’s leader needs to show the management group that they are trusted by
recognizing their jobs well done and listening to the group with appropriate and prompt
feedback. Sharkie (2009) suggested that if the organization wants to support its business goals
during uncertainty, they need to know that leadership listens to them. The XBS’s leader needs to
understand how employees can be encouraged to engage in the discretionary extra-role efforts of
92
the management group and the employees. In addition to that, empowering the management
group will make them feel more challenged and trusted in completing their tasks.
XBS Needs to Reduce the Organizational Complacency
Although it is common to find organizational complacency among big corporations,
complacency has taken place in diverse forms. Because of that, corporate complacency is often
overlooked by the existing members of the organization. Organizational complacency can lead to
disengagement, such as not being actively engaged in their work or not working collectively in
the projects. Ali (2014) indicted that complacency often disables the executives to counter the
emerging crisis. Hence it could have a disastrous impact on organizations and put their market
position in jeopardy. He suggested that the companies need to analyze their culture, rejuvenate it,
and confront complacency periodically.
XBS management group indicated the organizational complacency among employees due
to their long-lasting pride as a leading legacy medium. To solve the issue, XBS needs to clearly
communicate the problem and its negative consequences to the employees. The management
group needs to articulate the expected results to the employees and grant them the independence
to do their jobs in the way that works for them. Then have them take ownership of their areas of
accountability. Check in regularly to see it is progressing, and the behavior of the employee
improves.
XBS Needs to Create a Culture That Can Embrace Failure
Organizations with results-driven cultures measure success not by input or outputs but by
what is being accomplished. In many ways, a results-oriented work environment sounds ideal.
The culture holds employees and managers responsible for success. However, result-driven
cultures can lead to employees going with whatever strategy that would have worked in the past,
93
rather than pursuing what individuals think is an innovative way to be a better option for the long
term. XBS’s result-driven culture has created the fear of failure among the management group
that their fear constrains reluctance to learn and adopt the changes.
Kuyatt (2011) stated that fear of failure constrains innovation by having employees hide
failures, conceal new ideas, and avoid complex concepts. He argued that leadership must
encourage innovation by allowing risk, taking failure as a learning process, granting enough time
for innovative ideas to develop, and helping stakeholders find the resource to implement the
ideas. XBS needs to learn to embrace both good and bad outcomes. Simultaneously, the
management group should resist the urge to think they made a mistake when they end up on the
undesirable side. Managers need to learn that they make the best play and lose the hand.
Successful businesses will have a failure in the process. The organization needs to change those
failures from a feeling of fear or punishment into a learning process to enhance innovation
(Kuyatt, 2011). The XBS needs to create a culture that employees can learn to live with and be
comfortable with the failure. One recommended solution is to open up the communication
channel in the organization. If employees think their workplace shuns failure, they will be
reluctant to speak up and even try to cover it up. The leadership can create a safe location where
employees feel they can be honest without being judged by others. It is not about finger-pointing
but discovering an issue, addressing it, and adjusting it for the better.
XBS Needs to Shorten Its Decision-Making Process
Effective decision-making is crucial in any business. Every business has a set of
challenges related to this particular aspect, which goes for fleets. Sound decision-making means
solving problems by examining different solutions and deciding how to go, though the path is
often not smooth. The management group at the XBS perceived that the organization’s long
94
decision-making process was causing resistance to the business model transformation. Vroom
(2000) claimed that the resources consumed are costs, which usually indicates the hours used in
decision-making.
Malacarne (2019) observed that the critical challenges in the decision-making process are
information overload, or having insufficient information, or misidentifying the problem. Having
a lot of information is often viewed as beneficial, but processing can become overwhelming
when overloading. A leader should be prepared to access the data that is important in the
decision-making. Not having enough data is even worse, and the leader should be up to date with
the relevant information to develop the best solution for the issues. In many cases, a decision is
complicated, and it is unclear what the main issue is. Conducting research to receive additional
data and speaking with internal or external experts depending on the issue could diminish the
problem and shorten the decision-making process at the XBS.
Limitations and Delimitations
Some limitations and delimitations needed to be recognized by the researcher.
Limitations are influences and conditions that cannot be controlled by the researcher that may
restrict the findings. Limitations in this research described in Chapter Three were the following:
● The research was entirely dependent on the honesty and truthfulness of the
participants.
● The leadership of the organization was changed recently, which might have
already influenced the organization’s culture in one way or the other.
● The research was done during the pandemic, where face-to-face interviews or on-
site observation was not permitted. This may have limited the data that the
researcher could have obtained while being on-site.
95
In addition to the limitations described in Chapter Three, one additional limitation was
noted during the research. The primary group of participants, who belonged to the management
group, did not include any female participants. There were only a few female managers in
Korean terrestrial TV broadcasting companies, and it was highly challenging to find female
participants in the management group for the research interviews.
Delimitations were the choices and the boundaries that the researcher made for the study.
The delimitation set in this study included the following:
● Data were collected through interviews only and did not include quantitative data.
● Data were collected only from the management group of different organizations.
● Data were primarily collected in Korean, considering participants’ native
language.
Recommendations for Future Research
The outcome of this research study on the knowledge, motivation, and organizational
influence on the XBS’s management group offers significant opportunities for future research.
Three opportunities for future research are presented in this section.
According to the findings in Chapter Four, there was a clear difference in self-efficacy
between the staff from public stations and those from commercial stations. Generally, during the
interviews, the staff from commercial stations exhibited more confidence in business model
transformation in their respective companies. Future research into the organizational limitation of
public stations in business model transformation and the organizational culture of commercial
stations that is more open to accepting the transformation should be recommended. Additionally,
further research into the types of motivations and incentives that this difference between the two
types of organizations could bring to the company constituents is recommended.
96
A second recommendation involves a reward system. More research is needed to evaluate
how much utility value is being created through the reward/recognition system mentioned in
Chapter Five. The degree of impact that this reward/recognition system could bring to the
motivation of the management should be researched. Considering that the trainee group consists
of managers, seeing how the reward/recognition system could affect their motivation will be
interesting.
Lastly, research on how gender diversity could influence motivation is recommended. It
was rather difficult to find female members in the management group for research interviews. In
the media companies that were contacted for this research, there were either very few or no
female upper managers. Therefore, gender diversity has been achieved for this research. Any
follow-up research should incorporate more gender diversity into the formulation of research
findings.
Conclusion
While the research study was in the process, a Korean TV series had its biggest series
launch on Netflix, watched by 142 million viewers globally within the first month, according to
Tong (2021). Squid Game, Netflix’s hit survival drama series on a contest where 456 players risk
their lives to play a series of games to win, cost Netflix $21.4 million to produce, increasing
$900 million impact value. The series is now the most-watched original series on Netflix,
reaching the #1 position on the platform in 94 countries (Sherman, 2021). The Korean TV show
boosted the Netflix stock’s market value by $19 billion since its launch in September 2021. The
show’s writer and director, Dong-hyuk Hwang, came up with the script of Squid Game in 2009
but was rejected by the TV broadcasters and studios in Korea for nearly ten years until Netflix
97
produced. “I was told the script was too extreme and unrealistic,” the director said in his
interview with Kirkland (2021).
Korean terrestrial television broadcasters are now starting to focus more on high-quality
content creation and distribution, rather than relying on the advertising revenue, which has been
their traditional business model. Still, this incident demonstrates the current state of the TV
industry in Korea. In response to the gaps in knowledge, motivation, and organizational
influence, solutions were recommended in several aspects: appropriate training, recognition and
reward system, clear goal-setting and communication, and a culture that embraces failure. The
solution’s objective is to design and implement the alternative business model to increase the
organization’s profitability and enhance its sustainability in the long term.
If, 15 years ago, someone asked whether to invest in Blockbuster, a nationwide video
rental franchise, and Netflix, a new but fast-rising DVD rental company that depended upon a
traditional postal service for delivery at the time, it probably was not difficult to answer the
question. In 2021, Blockbuster may even require a younger generation to Google search to weigh
in on the same investment question. After the fourth industrial revolution brought technical
advancement to our daily lives, TV broadcasting would probably be one of the most impacted
industries. In order to assimilate into a new paradigm and find a new business model to keep up
with changes, broadcasting companies would need to change themselves. Furthermore, the
change needs to start with the fundamental aspects of the company core. This research found
various gaps in the organization. If each company does not embrace the call to change, terrestrial
TVs of today may become another Blockbuster in the next 15 years.
98
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Appendix A: Interview Questions
Type of
Influence
Interview Questions
Knowledge 1) Describe how the media industry has been changing in the past five years?
2) What are the main differences in the customer’s needs?
3) Many data have shown that the terrestrial TV station’s revenue has been
decreasing. What are your thoughts on the organization’s current business
model?
4) If you feel there needs to be a change, how should the organization
diversify its current business model?
5) Once the alternative business model is decided, do you feel that you have a
good understanding of implementing, monitoring, and evaluating the model
to optimize it?
Motivation 6) What benefits would you receive from the new business model?
7) What kind of personal sacrifices or effort do you foresee in the process of
setting a new business model?
8) What would it cost to go through the entire process?
9) Do you feel confident that your organization is capable of transforming the
business model to satisfy the rapidly changing demand of the audience? If so,
why?
Organization 10) With your role, what type of training have you been offered in the past 12
months that was related to the industry change?
11) Despite the estimated cost/budget associated with the transformation,
would your company still make an investment to transform the business
model? If not, why?
12) Tell me the value associated with creating a new business model as it
relates to increasing revenue.
13) What resistance/obstacles do you see in altering the current business
model?
14) How important is the concept of “legacy media” in the
resistance/obstacles?
Abstract (if available)
Abstract
This study examined why the terrestrial TV broadcasters in South Korea are not proactively adaptive to the market changes through the gap analysis in the management group of the XBS and how the group has affected the organization’s decision on the business model transformation. Using the Clark and Estes (2008) gap analysis conceptual framework, the study leveraged qualitative interviews to analyze knowledge, motivation, and organizational influences. Findings from the study indicated that the management group needs to address procedural and metacognitive knowledge gaps related to assessing the current business model, developing an alternative model, and implementing and monitoring the alternative business model. From the motivational perspective, the findings indicated that the management needs to see the utility value and increase self-efficacy in transforming the current business model. Regarding the organizational influence, the study found four factors influencing the organizational resistance; the trust issue with the leader, the organizational complacency, the result-driven culture causing fear of failure, and the long decision-making process. Specific recommendations for addressing these gaps are provided. This study provides the complexities involved in developing an alternative business model and explicit recommendations for addressing each organizational challenge in various contexts.
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Asset Metadata
Creator
Jo, Jiewoon Jeannie
(author)
Core Title
Transformation of business models in terrestrial TV broadcasters in South Korea
School
Rossier School of Education
Degree
Doctor of Education
Degree Program
Organizational Change and Leadership (On Line)
Degree Conferral Date
2021-12
Publication Date
12/13/2021
Defense Date
12/09/2021
Publisher
University of Southern California
(original),
University of Southern California. Libraries
(digital)
Tag
advertising revenue,business model,legacy media,management’s self-efficacy,media consumption behavior,media in South Korea,OAI-PMH Harvest,organizational complacency,public TV stations,reward system,sustainability,terrestrial TV,trust relationship
Format
application/pdf
(imt)
Language
English
Contributor
Electronically uploaded by the author
(provenance)
Advisor
Min, Emmy (
committee chair
), Canny, Eric (
committee member
), Hyde, Corinne (
committee member
)
Creator Email
jeannie0407@gmail.com,jjjo@usc.edu
Permanent Link (DOI)
https://doi.org/10.25549/usctheses-oUC18367101
Unique identifier
UC18367101
Legacy Identifier
etd-JoJiewoonJ-10297
Document Type
Dissertation
Format
application/pdf (imt)
Rights
Jo, Jiewoon Jeannie
Type
texts
Source
20211216-wayne-usctheses-batch-904-nissen
(batch),
University of Southern California
(contributing entity),
University of Southern California Dissertations and Theses
(collection)
Access Conditions
The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the author, as the original true and official version of the work, but does not grant the reader permission to use the work if the desired use is covered by copyright. It is the author, as rights holder, who must provide use permission if such use is covered by copyright. The original signature page accompanying the original submission of the work to the USC Libraries is retained by the USC Libraries and a copy of it may be obtained by authorized requesters contacting the repository e-mail address given.
Repository Name
University of Southern California Digital Library
Repository Location
USC Digital Library, University of Southern California, University Park Campus MC 2810, 3434 South Grand Avenue, 2nd Floor, Los Angeles, California 90089-2810, USA
Repository Email
cisadmin@lib.usc.edu
Tags
advertising revenue
business model
legacy media
management’s self-efficacy
media consumption behavior
media in South Korea
organizational complacency
public TV stations
reward system
sustainability
terrestrial TV
trust relationship