Aligning Accommodation Strategies | Processes Dutch public broadcasters
Aligning Accommodation Strategies | Processes Dutch public broadcasters P5 Report
Name: Michiel Vis Student number: 1368133 Address: Delfgaauwstraat 45A 3037 LH Rotterdam Email: [email protected] Telephone: +31610966436 Date: 31-01-2014 Institution: TU Delft Faculty: Architecture Master: Real Estate And Housing Graduation Lab: Real Estate Management (REM) Main mentor: Prof.ir. H. de Jonge (CREM) Second mentor: Ir. A.J. van Doorn (DCM) External mentor: Drs M.C. Schuring (NPO) Examinator: Dr.ir. A. Straub (OTB)
2 Preface
This document contains the results of the graduation research at the Faculty of Architecture of the Technical University in Delft. The graduation research has been conducted within the master Real Estate and Housing and the Graduation ‘Lab’ Real Estate Management. It is the final step of me as a student towards a career in practice.
The subject of this thesis is a strategic decision making process with many involved actors, leading towards a desired end result. The organizations for the case studies are the Dutch public broadcasters. The Netherlands has a unique system for public broadcasting organizations and is therefore an interesting subject to study. Currently some of the Dutch public broadcasters are planning to merge due to reorganisations and need to reorganise their current real estate situations. The goal of this thesis is to test whether the process model strategy-as-force can add value to these types of projects.
Both the strategies of the broadcasters as well as this thesis presented to you are the result of a difficult process. Many people have participated in this research. Therefore I will first of all thank all the interviewed Directors at the Dutch public broadcasters and the NPO for helping me in gaining more insight in the processes within the Dutch broadcasting system. A special word of gratitude must go out to Marije Schuring for her constant preparedness to help and support me as an external mentor.
At the TU Delft I have experienced many patient and helpful people along the way. First of all I want to thank Tom Daamen for his insightful criticism on the way in which I have interpreted Strategy-as-Force. Then aligning accommodation strategies is one thing, but aligning the agenda of Hans de Jonge with a graduation calendar is another; thank you Laura for all the help. Most of all, I would like to thank Alijd for teaching me the essential rules of researching and academic writing and Hans for the sharp questioning and ability to reduce theoretical and practical problems in the short amount of time available during each conversation. Both of you have helped me in gaining more insight into my own process and the required resources for graduating and receiving a master degree.
Finally my love goes out to my sister and mother who have always supported me to complete my study. You were always there for me when studying went a bit slow and items were lost or damaged along the way. I would like to dedicate this thesis to my father, who passed away during the writing of it. “You can check out any time you like, but you can never leave.”
Michiel Vis Rotterdam, January 2014
3 Management Summary
Research Introduction
Organisations have to use innovative strategies to survive in these economic difficult times. One of the possibilities of these strategies is collaboration in the form of sharing facilities. To analyse the strategy making processes of aligning accommodation strategies in order to collaborate, this thesis will make use of the cases of the Dutch public broadcasters. The broadcasters operate in a political environment due to the subsidies they receive from the government. They are not owned by the government though as they are owned by the so called Broadcasting Associations, which are mostly originated from ideological conceptions. The public broadcasters thus consist of a broadcasting association and a broadcasting company. They operate under the same name and present one combined annual year report. In 2016, the national public broadcasters of the Netherlands (currently holding twenty-one broadcasters) may only consist of eight broadcasting companies and a coordination body (NPO), according to the new Media Act. All the tasks and responsibilities of the broadcasters are specified in this Dutch Media Act. The proposal for the eight broadcasting places is the following so called ‘3-3-2 model’:
Merger VARA and BNN Standalone broadcaster VPRO Task Broadcaster NOS Merger AVRO and TROS Standalone broadcaster EO Task Broadcaster NTR Merger KRO and NCRV Standalone broadcaster Max Table. The proposed reorganisation of the Dutch public broadcasting system
The broadcasters must reorganize their total accommodation situation to physically realize the mergers and realize the budget cuts. They are now forced to collaborate with other broadcasters. The Boston Consulting Group (BCG) has formulated possible strategies and an optimal situation for all the public broadcasters together. With the changing real estate market and extra budget cuts from the government the research by BCG lost some of its value as a leading document for decision making. Besides the reduced usefulness of the research it has been no motivation for the broadcasters to realize the reorganization of the accommodations. The reasons for the difficult process of the case studies lead to the problem statement of this research, summarized in the following, more abstract, statement; a difficult process of aligning the accommodation strategies of multiple actors with diverging interests and goals, within a dynamic political environment.
A similar problem statement can be found in the Strategy-as-Force publication of Daamen (2010). The first similarity is that the Rotterdam CityPorts project in the research of Daamen is also about aligning multiple organizations striving towards a desired end result (aligning strategies of multiple actors with diverging interests and goals). Next to this the political forces that influence the projects are comparable (dynamic political environment). The project of the CityPorts in Rotterdam is governed by the mayor and aldermen of the municipality of Rotterdam. In this project the ministry of Culture, Science and Education is the political body responsible for the Dutch public Broadcasting system and thus the reorganisation project. The results of Daamen’s research will therefore be used in this thesis. Daamen’s answer to this problem statement of an ineffective process is given in the form of a strategy-as-force model by which projects like these can be evaluated upon. Daamen states that by an evaluation and better understanding of the practice one can improve the practice as well. The main research question of this thesis therefore reads as follows;
Is the Strategy-as-Force model a useful tool for improving a complex multi actor process of aligning accommodation strategies?
4 The research will be conducted in three parts. First a literature review will be done on measuring accommodation strategies and analysing strategy processes. These two subjects will form the core of the theoretic framework (see image). For analysing the content of the strategies this thesis will use the added value theory of real estate for organisations to show their goals and interests. The processes behind the formulation of the strategies is analysed by using the Strategy-as-Force model (Daamen, 2010).
After this part an empirical research will be done by conducting nine case studies. The case studies selected for this research are nine of the public broadcasters (see the blue marked broadcasters in the overview of the 3-3- 2 model). These broadcasters are thus the VARA, BNN, TROS, AVRO, KRO, NCRV, VPRO, EO and NTR. These nine case studies are selected as they are crucial actors in the various strategies of the BCG report. The desired end result therefore depends on the actions and decisions of these broadcasters. Hence it will provide a sufficient overview of the accommodation strategies in political environments and the strategy processes behind it. By conducting interviews, empirical evidence about the added values of the accommodation plans and the resources mobilized during the process, will be collected.
The results will then be combined in a synthesis where conclusions will be drawn about the relations between the accommodation strategies and the strategy processes of the Strategy-as-Force model. This part will propose a way to apply the Strategy-as-Force model in real estate management practice. A second empirical research will evaluate the value of using this model in practice to improve the process. From this point general conclusions can be drawn to answer the main research question described on the previous page.
Figure. The research design of this thesis
5 Added value
If the accommodation wants to contribute to the organizational performance it needs to add value to the core business. Hence organizations are mainly interested in the value that the real estate can add to support their business strategies. According to Lindholm et al. (2006) the added value of real estate is mainly focused on maximizing the wealth of shareholders, who together with the vision and mission of an organization create the business strategy. The seven added values of De Jonge (1996) are used for this part of the thesis; Increase productivity, reduce costs, control risks, increase value, advance flexibility, support culture and support PR/Marketing. Empirical research was done firstly to analyse the important added values of the accommodation strategies of the broadcasters. During the empirical research it has become clear that under current circumstances the most important added values for the public broadcasters are Increase productivity, Control risks, Advancing Flexibility and Supporting Culture. This was found by analysing the accommodation strategies both through document analysis as well as interviews.
The first added value productivity is used in the accommodation strategies by introducing innovative workplace design and focusing on the satisfaction of employees. Increasing the productivity has been found in almost all the accommodation strategies as an added value for the organizations. The second important added value of real estate for the broadcasters is to control the risk for the organization. Most of the broadcasters are staying in the current accommodation and are therefore not taking the risk of losing equity or structural double accommodation costs due to vacancy. All strategies included advancing the flexibility of real estate. In the case studies is shown that all broadcasters increase the technical flexibility of the accommodation. AVROTROS will have a rented accommodation with large open spaces. VARA-BNN, KRO-NCRV, EO and VPRO include flexible workplaces in their currently owned accommodation to advance the flexibility. The other important added value for these organizations is to support the culture of the organization. In the analysis of the accommodation strategies this added value has proven to be of high importance for the organizations involved. According to the broadcasters, the production of high quality programs within the values and image of the organization can only be realized if the workplace culture and image of the accommodation reflects this. Some of the organizations are merging and a new accommodation must support the start of a new culture.
Increase Reduce Control Increase Advance Support Support productivity costs risks Value flexibility culture PR/Marketing
VARA
BNN
TROS
AVRO
KRO
NCRV
VPRO
EO
NTR
Table. The added values mentioned in the accommodation strategies of the case studies
6 Strategy as Force
Daamen has researched the strategy formation processes of an urban area development project in the harbour of Rotterdam. The end result of his research consists most importantly of a model which explains the strategy alignment processes of the project; the Strategy-as-Force model. He states that the intent to align different organizations can be accompanied with disagreement. Strategy therefore becomes a capacity to link actors with diverging interests and goals (Daamen 2010:28). To enhance this capacity the actors enter into so called Force Relations; interactions through which certain resources are added to the capacity to affect or effect the realization of the project.
The model is firstly divided by a vertical axis which consists of the term deliberative (left side of the model) and emergent (right side of the model). The term deliberative means that the resources are used in a stable environment, so the organizations can formulate strategies for a long term period. The opposite of this stability is the emergent side of the model. The emergent resources can be found in an unpredictable, uncertain environment in which decisions and actions need to be made on a short term base.
The horizontal axis divides resources into allocative and authoritive ones. These terms are used by Daamen according to a theory by Giddens (1984) who states that actors try to influence others by mobilizing particular resources which he divides into allocative and authoritive. The allocative resources at the upper half of the model are used by actors to directly effect the actions and decisions of others in the process. Using authoritive resources is done by obtaining a powerful position to coordinate or affect actions and decisions of others.
When certain resources are added to the capacity to align actors the Force Relations between actors arise. The formation of a strategy with these force relations is then qualified by the model in four development processes. These strategy formation processes are placed in the model in between the resources (see figure). Daamen states that for a successful alignment of actors, all quadrants need to be considered. The elements of the model are summarized in the table below and visualized in the Strategy-as-Force model by Daamen.
Strategic Resources Force Relation Strategy Process Property, Finance Material relations Strategic Venturing Expertise, Information Knowledge relations Strategic Learning Legitimacy, Commitment Deliberative Relations Strategic Visioning Time/Result, Instruments Planning Relations Strategic Planning
The strategy-as-force model (Daamen, 2010)
7 For the NPO and ministry the desired end result has initially been the optimal situation of the BCG research conclusion; selling the NET-3 complex. The case studies have demonstrated some actions of mobilizing strategic resources mentioned in the Strategy-as-Force model, to force the project towards this desired end result. The material relations are mostly mobilized during this process. Financial resources are important for the broadcasters, hence the NPO and ministry have tried to influence the organizations with (threat of withholding) subsidies and bonuses. Property is used by the municipality of Hilversum and NPO to try and bring the project forward by offering low cost property. Though financial and property resources were not attractive enough for an effective force. The knowledge relations between broadcasters and ministry existed through both expertise as well as information. The most important knowledge resource has been the Boston Consulting research. Some broadcasters have also hired experts in the field of real estate. Deliberative relations did not exist during the project of the public broadcasters. No actor during the process had true power or capacity with a legal prerogative to coordinate actions and decisions of others about the real estate. Next to this the actors could not be easily aligned due to their focus on culture and image which eliminated the mobilization of commitment. Only the ministry and NPO were committed to realize the reorganisation but could not force this upon the broadcasters. The planning relation existed only in the form of a BCG research which could no longer be used along the way. It can therefore be concluded that the NPO and ministry tried to mobilize resources for the realization of the project, though the resources and adjacent force relations were not sufficient to effect an efficient alignment.
The actors which have mostly used the resources of the model in order to steer the total project are the ministry and NPO as they felt responsible for realising this project. Using strategy as a force also requires deliberate strategy processes while the theory of Daamen states that for an effective process of aligning actors, every part of the strategy-as-force model needs to be passed. Both the table and model show that this deliberate part of the model could not be filled with strategic resources by the actors involved; the processes during the case studies are clearly deficient. Concluding it can be stated that the NPO and ministry did not have the capacity to align the broadcasters towards a desired end result.
Relation Resource Case study results Mobilized by Material relation Property Offering attractive property NPO alternatives Municipality Hilversum Finance Media budget : merger bonus Ministry Media budget: Licence NPO Friction costs subsidy Reallocation temporary fund Knowledge relation Expertise Boston Consulting Group Ministry Rudy Stroynk, Brink Groep Real estate broker, real estate VARA/BNN expert, Twynstra Gudde AVRO Bureau Rietmeyer KRO/NCRV Real estate brokers TROS KPMG/PWC EO Information BCG results: Ministry Financial/organisational facts of the broadcasters Deliberative relation Legitimacy Moral force/ethics All actors involved Commitment Planning relation Time/Result Instruments (BCG-report) (Ministry) Resources mobilized in case studies
8
Resources mobilized in case studies (Daamen, 2010)
Synthesis
The accommodation strategies of the Dutch public broadcasters are the result of a difficult strategy making process. Summarizing it can be stated that the added values showed the different interests in the strategies of the broadcasters while the strategy-as-force model showed that a desired end result could not be strategically forced by mobilizing resources. Some added values can be explained by (lacking) resources/strategy processes of the model while other added values have determined the deficient strategy process.
The synthesis showed that there are obvious relations between the added values of the accommodation strategy and the strategy processes of the Strategy-as-Force model. As De Jonge et al. mentioned, a strategy design process is often a combination of an inside-out approach and outside-in approach (2009:34). The environment of an organisation is important for designing an accommodation strategy using an outside-in approach. This means that the influences of the environment (outside) determine aspects of the accommodation or business strategy (in). In other words, an accommodation strategy is a response to two sets of demands; those imposed by the external strategic environment of the company and those which serve the internal structure and culture of the company (O’Mara 1999).
The synthesis concluded that such an urban area development model could in itself be applied in these types of projects as well, though with adjustments. The main difference between the results of the strategy processes has, as already concluded, been the lack of deliberate resources. The strategy processes of the urban area development project have been deliberate as well as emergent. The Dutch public broadcasters, though in a similar political environment, did not show this. Therefore the characteristics of both projects and practices need to be closely reviewed to identify why these strategy processes are not present, to show in what way the model needs to be adjusted to add value as a management tool for improving processes. These main differences for real estate management projects are put in the overview on the next page where both projects are placed next to each other.
9 Urban Area Development Real Estate Management project project
CityPorts Rotterdam Dutch public broadcasters
Main actors Mayor and Alderman municipality Ministry of Education, Culture and Rotterdam Science Port City Administration Nederlandse Publieke Omroep (NPO) Port Authority Dutch public broadcasters Strategy processes/resources Strategy processes/resources Difference Strategic Visioning Strategic visioning Legitimacy Legitimacy In the CityPorts case legitimacy Accountability, ethics, acquiescence (No) power to steer provided stability through the Justification towards general public mobilization of legitimacy by for example the mayor. In the broadcasters case there was no use of legitimacy to provide stability. Only the use of moral force through media, which is more a use of an emergent resource, was used by actors involved. There is no formal power to steer the project. Commitment Commitment The CityPorts case consisted of actors Belief, trust, persuasiveness Willingness to collaborate, share willing to collaborate and realize an facilities end result, only needing commitment Willingness to combine cultures, of key decisions makers to provide identities stability. Public broadcasters consisted of actors not willing to collaborate and realizing a total reorganization due to the nature of reorganization and added emotions. This resource has thus a different character for aligning accommodation strategies. Strategic Planning Strategic Planning Time/Result Time/Result The CityPorts case contained Time and Opportunity, momentum, procedure Result as a pressure resource mobilized by politicians. There was thus more certainty about the future of the CityPorts project. In the Public broadcasters case the actors could not mobilize this resource due to the dynamics and uncertainty Instruments Instruments CityPorts case is driven by economical, Contracts, plans, presentations, Fluctuating laws and regulation rational processes (supply and websites, press (Media Act) demand). The business cycle of the Dutch public broadcasters is driven by subsidies that are issued by the government. While the budget cuts cannot be predicted by the broadcasters through the use of economic models, strategic planning has a total different character.
Table. Differences between projects in strategy-as-force and this thesis
10 Strategic Planning
The broadcasters cannot change the environment of the fluctuating level of subsidies and other regulations imposed by the government. Leaving the Dutch public broadcasting system will be very difficult for these organizations as they rely both on the subsidies as well as the image of being a public broadcaster. The past decades there have been many shifts in the structure of the public broadcasting system. It can be expected that the organizations will endure more of these changes. For a successful project the model states that strategic planning needs to be a part of the strategy processes. There are planning methods that anticipate to future changes. One of these planning methods for dealing with an uncertain environment is scenario planning; a strategic planning method to make flexible long term plans (DeWulf et al. 1999:18):
1. Formulating possible portfolio or accommodation strategies on the base of a discussion about strategic choices
2. Formulating possible futures by using scenarios
3. Determining the consequences of different strategies in terms of political, practical and financial efficiency by crossing the strategies with the formulated scenarios
If the broadcasters or comparable organizations dependent on fluctuating subsidies and other regulations can formulate different options for the future, they can adapt quicker and more efficient to changes. If instruments and a clear timeframe do not provide enough stability, the planning relations can thus be realized by using these types of planning techniques for organizations in highly uncertain environments.
Commitment
The commitment of key decision makers provided stability for the actors involved in the CityPorts case. Though aligning accommodation strategies requires more than only the commitment of key decision makers. This is a delicate matter when workplace culture and organizational values are an important aspect of the strategy processes. The cases of the Dutch public broadcasters showed that soft criteria’s also need to be considered in the strategy processes of trying to align organizations. Kaats and Opheij (2012) proposed necessary indicators/resources which include the more ‘soft criteria’ for a coherent view on collaboration between organizations. These indicators are visualized in the model below.
Figure. Indicators for a coherent view on collaboration (Kaats and Opheij, 2012)
The model implies a central role for formulating a shared ambition. This is due to the fact that the formulation of a meaningful ambition has been the key success factor for successful collaborations (Kaats and Opheij, 2012). The essence of collaboration is to create something together which separately could not be created. This creation of something new firstly needs to be formulated in the shared ambition. Ambition is a first resource or indicator necessary for this coherent view. From there on other indicators need to be mobilized in order to realize a successful strategic visioning for a collaboration. If these collaboration indicators cannot be mobilized
11 there will be no strategic visioning possible. Without the mobilization of these indicators for a coherent view on collaboration, it is difficult to realize such a real estate management project. If organizations can mobilize the collaboration indicators of this model it will positively affect a reorganization project towards realization or, in other words, increase the capacity to align accommodation strategies. Collaboration to create an urban area development project is a total different strategy process than collaboration in sharing accommodation and business. Commitment according to the Strategy-as-Force model consisted only of trust, belief and persuasiveness. The model will therefore be included into the strategy-as-force model instead of commitment.
Using the model in practice
Daamen (2010) states that the model is a descriptive tool for reflecting with practitioners. Though this does not imply that such a model could improve processes by using it as a management tool. During this thesis the model has been used as an evaluation tool to gain more insight into the strategy processes that occur in these types of real estate management projects. Organizations could gain more insight in the strengths and weaknesses of their practice and from there on improve where possible. The question remains whether it can add value to the real estate practice by using the model as a management tool, not only to evaluate afterwards.
Steering such a project of several accommodation strategies can be more effectively realized if all resources within the model are present. For the NPO and ministry it means that such a project is difficult to effect or affect with such little amount of strategic resources available. During the initiative phase of the project the organizations could have located the available resources on the basis of the (now adjusted) strategy-as-force model. This way, instead of a tool to analyse the processes afterwards, the model can serve as a continuous inventory tool. As Daamen stated, a successful process needs a constant consideration of all the quadrants of the strategy-as-force model. If one quadrant is missing during the process this could be a major stumbling point and a reason to quit steering prematurely and save time and money. If an organization can add all four relations it will have the necessary capacity to affect or effect the realization of the total project. Aligning the actors is impossible if a strategy-as-force model looks like the one of the broadcasters case studies, with only half of the resources in the model available.
Figure. Identifying available force resources for aligning accommodation strategies (based on Daamen, 2010, Kaats and Opheij 2012)
12 Reflection
Henk Hagoort, chairman of the board of Directors at the NPO, confirms that the strategy-as-force model can act as an evaluation tool. He states that with the knowledge of the difficult process beforehand, the NPO would have saved time and money by not having the ambition to try and steer the project.
“It definitely works as an evaluation instrument. I shows why these types of projects don’t work here and one could apply the model next time or in a different environment. It would have certainly, as we are now talking about why the process was not successful, helped if that difficult process was known beforehand. Then we would not have had the ambition to steer the project.” (Henk Hagoort 2014)
The statement of Hagoort is an indication of using the strategy-as-force model in real estate management practice. The insight into the insufficient amount of resources available to effect or affect the project, could have prevented the NPO from having an ambition to try and advance it. However refusing to enter into these types of processes does not imply anything about the usefulness of improving these processes as well. In order to be able to improve processes the model needs to serve as a management tool, instead of only as an evaluation tool. The experts have also reflected upon the model about it being a management tool, where the strategic resources need to be available in order to have a good process. Marije Schuring, Director of Finances at the NPO states the following about the applicability of the model as a management tool:
“We could have chosen to address the issue more often in group meetings and consciously fill in the ‘white’ spots in the model. If it concerns the accommodations I don’t think using this model would have led to a better result because the power and interests were too fragmented at the time. In a later phase, and probably if the governance would change, then it could be used for real estate management issues at the Public Broadcasters as well.” (Marije Schuring 2014)
According to the experts the strategy-as-force model would not have been useable as a management tool in this particular real estate management project. First of all the experts state that the governance structure does not allow the mobilization of legitimacy. There is no formal power that provides deliberate stability to be able to bring the project towards realization. Next to this mobilizing commitment is a very difficult issue in the cases of the Dutch public broadcasters. The goals and interests are too fragmented and there is therefore no shared ambition to collaborate. Using the strategy-as-force model would not have positively influenced this process.
Conclusion o Useful evaluation tool for improving reorganization processes
Process improvement can be realized by gaining more insight into existing processes. The original strategy-as- force model has been developed for this purpose. The first application of the strategy-as-force model is therefore to use it as an evaluation tool. Only if the evaluation tool creates more insight into the existing processes it will add value for the organizations involved. The main challenge therefore was to analyse whether this insight could be created in the reorganisation project of the Dutch public broadcasters by using the strategy-as-force model. Both the case studies as well as the reflection with experts have proven that the strategy-as-force model was successfully applied and useful for this purpose. The different parts of the model have suited the strategy processes of a temporary reorganization project in a political environment as well. The model clearly showed to the actors involved why the existing processes were not effective enough to align accommodation strategies of autonomous organizations with strong corporate values, cultures and identities. The deficiencies that the model has exposed could be a handgrip for the ‘responsible’ organization for process improvement if or when a next reorganization occurs. It can therefore be concluded that the strategy-as-force model is a useful tool for improving these types of reorganization processes.
13 o Less useful management tool for improving reorganization processes
Another option has been to use the strategy-as-force model as a process management tool. To serve as a management tool, organizations must be able to mobilize the resources of the strategy-as-force model in order to create a successful process. The model firstly needed an adjustment to fit reorganisation projects like these, while a different interpretation of commitment was found during the empirical research. Commitment to share facilities with other organizations namely has a total different character than commitment to participate in an urban area development project. Creating this commitment therefore requires more attention to the ‘softer’ criteria, instead of focusing on the commitment of key decision makers. For that reason the strategic resource commitment has been replaced with the collaboration model of Kaats and Opheij (2012). The adjustment of the strategic resource commitment has not been sufficient for a successful use of the strategy-as-force model as a management tool for these types of projects. First of all the cultural aspects of the organizations (mostly derived from ideological conceptions) are too diverse in this particular process. A shared ambition cannot be mobilized when the culture and identity differences of organizations are this large.
NPO board members also stated that the autonomous organizations and their real estate cannot be aligned by using legitimacy as a strategic resource. The absence of this crucial strategic resource prevents the ability to mobilize another resource of the strategy-as-force process management tool. If a reorganisation project is done within the governance structure of a holding company, it could be a more useful tool for process improvement. This is due to the fact that a holding company has a final authority over the different parts of its organization. These organizations can therefore always mobilize legitimacy as a strategic resource to force the project towards realization. Most holding companies will also try to mobilize the other resources of the strategy-as-force model in order to create more support, instead of only using authoritive force. Though a changed governance structure, with an organization having a true power or legitimacy to coordinate actions and decisions of others, could affect the usefulness of the strategy-as-force model in general. The core of the model namely states that organizations are influencing each other by mobilizing strategic resources in order to affect or effect a project towards realization. If there is a clear hierarchical structure this process of influencing other actors will change; it will become a different process with a top-down steering approach.
Recommendations o Strategy-as-Force
The strategy-as-force model cannot be further applied to the cases of the Dutch public broadcasters. The process has already been evaluated on the basis of the model. The model has served as an eye-opener and the organizations involved can try and improve the existing processes. The model could have a similar function beyond the Dutch public broadcasters cases. If a comparable difficult process of aligning accommodation strategies has occurred, the organizations can evaluate the process on the basis of the model and from there on try to improve it.
There is no possibility to use the model as a process management tool for the Dutch public broadcasters, while the governance structure and cultural differences do not allow the mobilization of deliberative resources. The strategy-as-force model could be applied in other businesses if the governance structure allows this and if an intention or ambition is shared to realize the project. This means that businesses such as health care, universities or organizations in complex environments could benefit from the knowledge of the strategy-as- force model. In the initiative phase the organizations can make an inventory on the available strategic resources. If there are sufficient resources available, there is a capacity to steer the project towards realization, in a signifying process. Further research must show whether this is actually possible.
14 o Dutch public broadcasters
1. Dealing with uncertainty
The past decades there have been many shifts in the structure of the public broadcasting system. It can be expected that the organizations will endure more of these changes. This expectation is stressed by statements made in the political arena. Trying to mobilize strategic planning resources could be considered as wasting time. One way to deal with the uncertain and dynamic environment is to optimize the emergent organizational strategy; this also includes the accommodation strategy of the organization. One option is to maximize the flexibility of the organizations, the financial contracts or the technical flexibility of the accommodations. Currently the organizations are focusing on this strategy already to some extent. Another option to deal with high uncertainty is the use of scenario planning; a strategic planning method to make flexible long term plans. If the broadcasters can formulate different options for the future they can adapt quicker and more efficient to changes.
2. Collaboration
Another recommendation for more efficient strategies at the Dutch public broadcasters would be to stimulate collaboration. A first requirement for these types of collaborations is a shared ambition. Though this research has once more showed that it is difficult to formulate a shared ambition when the cultural and identity differences are this large. The organizations could share facilities and realize a cost reduction; thus create more budget for other parts of the organization such as programming. Secondly the cooperation between employees could increase the productivity as the producers and other employees could benefit from knowledge spill over. Though it has to be noted that this requires an immense paradigm shift in the way the broadcasters operate; in the current view the cultural differences cannot be aligned well. Changes in the broadcasting system towards a less fragmented system can be expected to happen in the future. The broadcasters are now in the position to stimulate collaboration without being forced. A forced collaboration will add far less value to the broadcasters compared to a bottom-up initiated collaboration.
3. Proper PR/Marketing
The productivity and workplace culture are important aspects of the creation of TV and radio programs. Even the location can be considered as important due to the travel distance of employees, which is strongly connected to productivity. Though the outside image of these buildings cannot be expected to have much added value for the organizations involved. PR/Marketing projects such as Het Glazen Huis have a much stronger impact on the image of broadcasters. Creating interaction between accommodations of broadcasters and citizens will demand a lot of thinking about the location and access of this particular building, if it is even possible to realize this. The added value of this interaction is also difficult to translate into programmatic quality. It would therefore be advisable for the broadcasters to focus on another aspect of their accommodation, which adds most value to their core business of creating high quality programs; the interior/workplace culture.
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16 Table of contents
Management Summary 04
1 Research Introduction 19 1.1 Background 20 1.2 Problem statement 24 1.3 Research questions 28 1.4 Research design 29 1.5 Reader’s Guide 32
2 Strategy Content 33 2.1 Added value of real estate 34 2.2 Case studies; results 37 2.2.1 VARA 37 2.2.2 BNN 38 2.2.3 TROS 39 2.2.4 AVRO 41 2.2.5 KRO 43 2.2.6 NCRV 44 2.2.7 VPRO 45 2.2.8 EO 47 2.2.9 NTR 48 2.3 Conclusion 49 2.3.1 Added values compared 49
3 Strategy Process 52 3.1 General strategy 53 3.2 Strategy-as-Force 56 3.3 Case studies; results 63 3.3.1 VARA 63 3.3.2 BNN 65 3.3.3 TROS 67 3.3.4 AVRO 70 3.3.5 KRO 72 3.3.6 NCRV 74 3.3.7 VPRO 76 3.3.8 EO 78 3.3.9 NTR 80 3.4 Conclusion 82 3.4.1 Resources compared 82 3.4.2 Deficient processes 87
17 4 Applying Strategy as Force 89 4.1 Synthesis 90 4.1.1 Strategy-as-Force and Added Values 90 4.1.2 Urban Area Development versus Real Estate Management 92 4.2 Using Strategy as force in real estate management practice 94 4.3 Reflecting on the model in practice 98
5 Conclusion & Recommendations 102 5.1 Conclusion 103 5.2 Recommendations 104 5.3 Epilogue 106
References 108
Appendix I List of terms and abbreviations 110 Appendix II Accommodations 112 Appendix III List of Interviewees 121 Appendix IV Newspaper Articles 122
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1 Research Introduction
Due to the economic situation of the past years, many organizations are forced to shrink to be able to reduce the costs. The employment will decrease in 2013-2014 even further than it already has (CPB 2012). Organisations have to use innovative strategies to survive in these economic difficult times. Organizations are collaborating more often than before. One of the possibilities of collaboration is sharing facilities. The organizations can share their facilities and reduce costs but also, if possible, share knowledge and benefit even more from this strategy. In this research there will be a focus on a forced collaboration due to budget cuts. To analyse the strategy making processes behind these types of accommodation strategies, this thesis will make use of the cases of the Dutch public broadcasters. This chapter will serve as an introduction, both for the outline of the total research as well as a background of the case studies in chapter 2 and 3.
19 1.1 Background
In this part the public broadcasting system in which the Dutch public broadcasters operate will be explained as a background to provide insight on the relations that exist between these broadcasters and within the organizations of these broadcasters as well. All the tasks and responsibilities are specified in the Dutch Media Act of 2008. For this research it is not necessary to fully elaborate on this Media Act. To explain the roles of the different actors in this process though, the Media Act could serve as a substantiation. The public media task of the Dutch public broadcasters is described in the Media Act 2008 (Article 2.1) as follows:
“Providing media services on national, regional and local level, by offering media content in the fields of information, culture, education and scattering through all available channels. And providing public media services whose media supply is intended for Dutch people who reside outside the country's borders.”
Compared to the commercial broadcasters, the task of public broadcasters is to provide media content that is not only focused on reaching a mass audience, but also the interests of a smaller audience. The task of the public broadcasters therefore is to provide television, radio and internet for all groups in society, independently of commercial influences. The TV programs are provided on three channels, available to everyone and is even available in other countries. These channels are named Nederland 1, Nederland 2 and Nederland 3. The system in which these broadcasters operate is explained more extensively below. Some actors are left out in this scheme to provide a clear overview of the most important flows of money and policy issues, relevant for this research. In this research the actors that are of most importance are the public broadcasters (bottom of the scheme), the NPO (middle) and ministry of education, culture and science (top). The STER, the advertisement organization, is included in the scheme to explain money streams of the media budget in more detail. The case studies consist of the public broadcasters.
Figure 1. The public broadcasting MINISTRY system (own image) (EDUCATION, CULTURE AND SCIENCE) € Advertising Subsidy € Law (Media Act)
STER NPO
Basic budget Extra budget Subscription (Status ) € (Programming) Programming
€
PUBLIC BROADCASTERS
20 Ministry of Education, Culture and Science
The political actor involved in the system in which the broadcasters operate is the Ministry of Education, Culture and Science. To be able to provide programming that is meant for all groups in society the ministry subsidizes the broadcasters. This subsidy is generated by two main money flows. First of all the ministry receives a budget by the ministry of finance. This amount of money is determined by the Dutch government. Another part of the budget is received from advertisement money from the public channels. This task belongs to the advertisement organization STER (STichting Ether Reclame).
The Ministry is responsible for the implementation of the governmental policy. Because of the involvement of the ministry (and therefore the government) the broadcasters operate in a dynamic and uncertain environment. The democracy of the Netherlands states that every four years political parties are chosen to govern the country, the so called coalition. However, the cabinet Rutte I (named after the prime minister) has not sustained for four years. After one and a half year the political party PVV quit during the negotiations about the governmental budget cuts for 2013, which meant that the coalition did not have a majority anymore. In September of the year 2012 new elections were planned and new parties were elected to govern (PvDA and VVD). Before the end of the year these two parties (Rutte II) presented the new coalition agreement. For this research the political events were of important influence for the organizations that are studied during the case study. This is due to the fact that the governmental policy determines the media budget and Media act, with which the broadcasters are dealing with. The broadcasters are now dealing with a double budget cut by the government. The first media budget cut was determined by the temporary coalition at the end of April 2012, after the PVV resigned. This so called Spring Agreement stated that a total amount of €127 million Euro needs to be saved in 2015, by having a stepwise lower media budget for the public broadcasters. The second budget cut came at the end of October 2012 with the presentation of the coalition agreement. This agreement stated that the broadcasters need to save an extra €45 million by the end of 2017. This means that the broadcasters are dealing with a shrinkage of the media budget of €172 million within a period of approximately four years. Next to these budget cuts the policy of the new coalition has changed the terms of the media budget. The broadcasters are used to receive a full media budget that is based on the amount of members they have. The new policy of the government is to give a minimum basic budget independent of the amount of members (50% of the media budget) . An extra budget can be earned by producing quality programs. The NPO (see next section) divides this extra budget based on the quality of the programs and if these programs are within the targets they have set.
The role that the government plays is therefore crucial for the policy of the public broadcasters. In the case studies this will be explained further but it is clear that the broadcasters depend on the policy of the government, concerning their budget and policy. The ministry executes this policy and are in a constant ‘battle’ with the broadcasters that are studied for this research. The actors that are relevant within this ministry are the current minister of the department Jet Bussemaker and the current state secretary Sander Dekker.
The Dutch public broadcasters
The Dutch public broadcasters consist of the broadcasters and a coordination body. When the competition of commercial broadcasters began to increase a coordination body emerged, led by the broadcasters; the NOS (Nederlandse Omroep Stichting). The tasks of the former NOS are now adopted by the more powerful and more independent NPO (Nederlandse Publieke Omroep). The NPO forms, on ground of the Media Act, the board of directors and determines the strategy and programming in cooperation with the broadcasters. In the Media Act 2008 (Article 2.2) the description of the NPO states:
“The Dutch Public Broadcasting Foundation is the cooperation and coordination body for the implementation of the public media assignment at national level, as referred to in Article 2.1.”
21 The Article above states that the NPO is a cooperation and coordination body, hence not a holding company. It therefore has no direct power over the businesses of the separate broadcasters. The NPO determines the composition of the programming that is offered to the Dutch citizens. To act as a continuous organization the NPO has formulated priorities in terms of programming themes. These themes are as follows (NPO 2013):
- Art and Culture - Innovation - News and Opinion - Diversity
The public broadcasters, mostly situated on the so called Media Park in Hilversum, fulfil a task for the society and therefore receive a subsidy. The broadcasters are not owned by the government though. The public broadcasters in the Netherlands are essentially in the hands of ‘Broadcasting Associations’. These associations are mostly originated from ideological conceptions, which were a reflection of the pillarization of the Dutch society at the start of the 20th century (van den Brande, 1999:339). The pillarization has determined a big part of the history of the Dutch public broadcasting system. In the case studies we will elaborate further on these ideological conceptions per each individual broadcaster.
The public broadcasters thus consist of a broadcasting association and a broadcasting company. They operate under the same name and present one combined annual year report. Due to the fact that the broadcasting company is owned by the association , the latter has many different voting rights on the business of the company. The broadcasting associations have large financial reserves that they use to finance programs and employees that have not been sufficiently subsidized. Some of the associations have put the large reserves in stocks and bonds (ThePostOnline 2013). The real estate where the broadcasting company operates is one of the assets that is owned by the associations (if owned). The association is represented by the Association Council or Members Council. This body decides on the budget, appoints directors and judges the long term policy on programming. The members of the associations have played another important role in the policy of the public broadcasting system. The airtime that was appointed to the different broadcasters used to depend on the amount of members the associations had. The more members they had, the more airtime the broadcasters received and the more subsidy they received as well. If a new broadcaster wanted to enter the public broadcasting system it had to hand over the membership base with the minimum amount of members specified by the government. Hence many expenses were spent on recruiting new members to obtain a strong position within the system. As explained in a previous section the ministry is changing this policy to produce quality programming for the whole society.
The directors of the company are the Board of Directors and the Supervisory Board. The Board of Directors is responsible for the daily policy of the company and the Supervisory Board checks if the policy is carried out well. For the Board of Directors it means they have to justify their important decisions towards the Association Council. The members of the Association have to make sure that the core values of the Association are carried out in the policy of the daily businesses. Finally the employees of the broadcasting companies are represented by the Employee Council. This Council has influence on the policy of the organization and congregates with the Board of Directors for important policy issues. The organizational charts of the broadcasters are very similar and summarized in the chart on the next page.
22
Broadcaster/Organization
Broadcasting ‘Company’ Broadcasting ‘Association’
Appoints SUPERVISORY
BOARD Accountability
Appoints/supervises Accountability
EMPLOYEE BOARD OF ASSOCIATION ASSOCIATION COUNCIL DIRECTORS COUNCIL MEMBERS
Daily management MANAGEMENT
Figure 2. General organizational chart (own image)
The image above summarizes all the different parts of the broadcaster as an organization. The image shows that there is a formal division between the company and the association. Though the company carries out the association related tasks and is usually referred to as ‘Broadcasting Association’ as well. Hence many times the broadcasters are described differently but with the same meaning. This thesis therefore makes no division between the company and association but only uses the terms broadcaster and organization. These terms describe the total organizational chart shown above. The terms also contain the influences of the association council and association members, as the company carries out the core norms and values. The business strategy of the whole broadcaster organization reflects the company and association combined.
23 1.2 Problem statement
Reorganising the broadcasting system
The unique public broadcasting system of the Netherlands that has been described in the previous paragraph is now changing due to governmental policies. The broadcasters are dealing with budget cuts and therefore receive a reduced subsidy by the government. In 2016, the national public broadcasters of the Netherlands may only consist of eight broadcasting companies and a coordination body (NPO), according to the new Media Act. Currently the system still includes no less than twenty-one broadcasters and the coordination body NPO. The NOS and NTR (broadcasters with a statutory public service mission) already occupy two of these places . The broadcaster NOS has the statutory task programs on news and sports. The programs of broadcaster NTR must contain topics on minorities, art, culture and education. The Minister of Education, Culture and Science has asked the broadcasters to come up with a proposal for the other 6 places and the proposal is the following (Rijksoverheid 2012):
• Merger KRO and NCRV • Merger VARA and BNN • Merger AVRO and TROS
The broadcasters EO, MAX and the VPRO remain independent and a number of smaller broadcasters must adhere to these eight channels. In the spring of 2013, a proposal for the new accommodation situation must be presented to the House of Representatives of the Netherlands (Rijksoverheid 2012).
Reorganising the broadcaster accommodations
The broadcasters must now reorganize their total accommodation situation to physically realize the mergers and thus realize the budget cuts. This reorganization should be carried out as efficiently as possible, in order to achieve maximum cost savings and add value for the integration of different organizations. The figure below visualizes the complex situation, where the thin line between two broadcasters stands for the existing accommodation and the thick lines for the new ones. The NPO is a special stakeholder, while it has both the task of controlling the broadcasters and at the same time has to deal with its own accommodation strategy as well. As we can see in the figure below, the project holds many different organizations with both existing accommodations and plans for new accommodation. The broadcasters are now forced to collaborate with other broadcasters in order to realize a desired end result.
Figure 3. The accommodation relations between the broadcasters
24 Boston Consulting Group strategies
The Boston Consulting Group (BCG) has formulated possible strategies for all the public broadcasters together. The aim of the BCG research is to show possible future situations of the accommodation with additional cost savings. The BCG has collected all the financial facts of the broadcasters and their accommodations. Next to these financial facts, the BCG has also collected the wishes of the broadcasters. Both the financial facts and the wishes of the broadcasters form the most optimal overall accommodation situation (see figure 4). The end result of the BCG study showed that selling the ‘NET 3 complex’, where VARA, NTR and VPRO are housed, would realize the biggest saving; 6.9 million a year (BCG 2012). The NPO stated that this was the most optimal accommodation situation for the broadcasters. Initially the NPO tried to realize this optimal situation. Though with the changing real estate market and extra budget cuts from the government the research by BCG lost some of its value as a leading document for decision making. The NPO confirmed that the strategies given by the BCG document are currently outdated while the conditions have changed compared to the time of the initial research. The BCG research is now used as additional information to show the broadcasters the costs of the accommodations and the possibilities of saving on accommodation. Besides the reduced usefulness of the research it has been no motivation for the broadcasters to realize the reorganization of the accommodations. The BCG document will therefore be used in this thesis as an information source about the current accommodation finances, as a background for the decisions that are currently being made.
Figure 4. The BCG research design (BCG, 2012)
Problem statement
The described process in the paragraphs above is summarized in the figure below. The process has started with a reorganization of the broadcasting system, followed by an intent for the reorganization of the accommodations. Some optimal accommodation situations have then been described by the Boston Consulting Group. Though the process has slowed down after this and one and a half years later, the broadcasters still
25 haven’t formulated an official plan for a new accommodation situation. The reasons for this slowed down process lead to the problem statement of this research.
Reorganising Intent to reorganise Proposed strategies No official plans for broadcasting system accommodations by BCG reorganizing accommodation
The complex situation of multiple broadcasters and accommodations is evidently the first stumbling block of this process. From origin the broadcasters are all competitors operating in the same market. Now these broadcasters have to collaborate with their accommodation and have diverging interests and goals which have to be aligned. As already described, most of the broadcasters have also emerged from ideological beliefs which differ among the various broadcasters. These cultures and identities could be important causes for these diverging interests and goals. The dynamic and uncertain political environment in which the broadcasters operate is the another obstacle of this process. The decisions and actions of the broadcasters are constantly influenced (and therefore changed) by decisions made by the government. The problem can thus be summarized in the following, more abstract, statement; a difficult process of aligning the accommodation strategies of multiple actors with diverging interests and goals, within a dynamic political environment.
Strategy-as-force publication
A similar problem statement can be found in the work of Daamen (2010). He has researched the urban area development project Rotterdam Cityports for several years. The first similarity is that the Rotterdam CityPorts project in the research of Daamen is about multiple public organizations striving towards a desired end result, just as we have seen in the Dutch public broadcasters case. In the Rotterdam case there is a huge amount of actors involved in the development project, as shown in the image below. Also, the political forces that influence the projects are comparable. The project of the CityPorts in Rotterdam is governed by the mayor and aldermen of the municipality of Rotterdam. In this project the ministry of Culture, Science and Education is the political body responsible for the Dutch public Broadcasting system and thus the reorganisation project.
Figure 5. The actors of the Rotterdam Cityports project (Daamen, 2010)
26 The incentive for Daamen’s research was the ineffectiveness of Dutch urban development practice. He describes the aim of his research as “to provide a useful understanding of the real strategies behind contemporary urban development projects” (Daamen, 2010:1). As the problem statement shows, this real estate management project also holds an ineffective process. Daamen’s answer to this problem statement of an ineffective process is given in the form of a strategy-as-force model by which projects like these can be evaluated upon. Daamen states that by an evaluation and better understanding of the practice one can improve the practice as well. The aim of this research is therefore to build upon the knowledge of the strategy- as-force model, designed for strategy formation processes behind an urban area development project.
In this research the Cityports project will be replaced by the Dutch public broadcasting project, where multiple stakeholders (Dutch public broadcasters) need to realize a desired end result; reorganisation of accommodations of the Dutch broadcasting system. The analysis will use the strategy-as-force theory that is provided by Daamen, to have a better view on the strategy formation processes of organization involved. Thus the hypothesis is that this model could serve as a tool for improving the multi actor decision making processes of this particular project.
27 1.3 Research Questions
The research problem statement is the difficult alignment of the accommodation strategies of multiple actors with diverging interests and goals (including strong corporate identities and cultures) within a dynamic political environment. The hypothesis is that the strategy-as-force model can serve as a tool for improving these processes. From this problem statement and hypothesis the following main research question can be formulated for this thesis:
Is the Strategy-as-Force model a useful tool for improving a complex multi actor process of aligning accommodation strategies?
The main research question will be answered by 9 sub-questions divided throughout the research. The questions are clustered into groups, according to the literature used to answer them. The clustering of these questions will be explained in the next paragraphs.
. How can an accommodation add value for the business of an organization? . Which added values are focused on in the accommodation strategies of the organizations?
. What is the general meaning of a strategy? . How does the Strategy-as-Force model explain strategy processes? . Which resources are mobilized by the organizations? . What are the strategy processes that shape this project?
. What is the relation between the Strategy-as-Force model and accommodation strategies? . Can the strategy as force model be used for the real estate management practice? . Does the model add value for a project like the Dutch public broadcasters case?
28 1.4 Research design
Literature analysis
The research will have a literature review and this part will form the theoretical framework for the empirical part of the thesis. The literature review will bring clarity and focus to the research problem that has been formulated in the introduction part (Kumar 2011:32). It will also broaden the knowledge base around the subject of study and helps to contextualize the findings of the empirical part of the research (Kumar 2011:33). The theoretical framework will first discuss theories about measuring the content of accommodation strategies. Secondly the theoretic knowledge will be based on the strategy processes behind it, especially the Strategy-as-Force theory. Together these two literature analyses will provide the framework for the empirical part of the research. These two main literature reviews can be seen in the figure below.
Figure 6. The research design
Case studies
The empirical research uses the case study research method. The case study approach is most suitable while the contextual conditions of the case are important (Yin, 2003). Nine broadcasters are included in the
29 empirical research to provide a full overview of strategy processes within a similar environment. These nine case studies are selected as they are crucial actors in the various strategies of the BCG report. The desired end result therefore depends on the actions and decisions of these broadcasters. The nine selected case studies should therefore provide information that should add knowledge to the existing knowledge of the theoretical framework.
The first case study is the public broadcaster VARA. In the new Dutch public broadcasting system the VARA will be merging with the broadcaster BNN. The accommodation strategy of the VARA and other merging broadcasters is therefore a nested strategy of two organizations. The original accommodation strategy of the VARA-BNN was to move from Hilversum to an old office building in Amsterdam Bijlmer. Recently they have decided to both accommodate the existing office of the VARA. The second case study is the BNN. While the VARA and BNN are merging, their accommodation plans are identical. The BNN case study will therefore most likely show many similarities with that of the VARA case study. The third case study describes the public broadcaster TROS. The TROS has indicated to merge with the broadcaster of the fourth case study AVRO. The accommodation strategy of the TrosAvro is to move from their current accommodation to the Wereldomroep building. This building is located just north of the Media Park in Hilversum. The Wereldomroep building is the old accommodation of the worldwide broadcaster RNW, a broadcaster that aired in many countries all over the world. The broadcaster (and case study) KRO will be merging with the broadcaster of case study number 6 NCRV. The accommodation strategy of the KRO-NCRV is to stay in the current accommodation; the AKN- building. The building was partly owned by the KRO, together with the (leaving) AVRO and NCRV. While the KRO and NCRV organizations are now both accommodated in the same building, the new strategy will be focusing on the facilities of the current property.
The next case study VPRO will remain a standalone broadcaster in the new broadcasting system. The organization’s identity and programmatic content turned out to be hard to match with another broadcaster. The broadcaster is therefore also planning to stay in the same accommodation. The current accommodation still matches the demand of the organization. The EO, case study number 8, has indicated to to stay in the current accommodation at the Oude Amersfoortseweg. The EO accommodation is housed outside the Media Park in Hilversum. The property is situated within short walking distance from the Hilversum Sportpark train station. The last case study NTR is the only broadcaster that doesn’t have any plans concerning the accommodation. The current accommodation situation is sufficient for the organization and its identity. Unlike the other organization staying in the same accommodation, the NTR is not even planning to refurbish the current office and studio.
The case studies consist of observation, document analysis (if available) and interviews with the general management. The interviews within the case studies are focused on a strategic level. Per organisation the function of the interviewee differs but they are all within the general management perspective of corporate real estate management (De Jonge et al., 2007:32). The interviewees have their focus on both the strategic focus as well as the business perspective (De Jonge et al., 2007:32). Therefore the results should be comparable. In the appendices more information about the accommodations of the broadcasters can be found.
Merger VARA and BNN Standalone broadcaster VPRO Merger AVRO and TROS Standalone broadcaster EO Task Broadcaster NTR Merger KRO and NCRV Figure 7. Case studies of the empirical part
30 A cross case analysis will then be done in order to compare the results and draw conclusions from it. In the cross case analysis the empirical findings of the nine cases will be combined. The figure below shows the multiple case study approach according to Yin (2003:50). The cross-case analysis is thus the result of individual case study reports and the base of the theory modification and policy implications.
Figure 8. Multiple case study approach (Yin, 2003)
Reflection in practice
The final part of the research starts off with this theory modification and policy implications. The Strategy-as- Force model will be modified according to the results of the cross-case analysis, to suit the field of Real Estate Management. The model will also be reflected upon to measure its applicability in practice. An expert panel of several different involved actors will reflect on the proposed model for a real estate management project such as the Dutch Public Broadcasting reorganisation. This part will then be able to answer the main research question of this thesis; Is the Strategy-as-Force model a useful tool for improving a complex multi actor process of aligning accommodation strategies?
31 1.5 Readers guide
The thesis is structured according to the themes of the literature analysis. Instead of a theoretic part followed by an empirical part, the thesis is structured into two main clusters that have been used in this research. The main chapters (2 and 3) are divided according to the two different theories of the literature analysis; added value and strategy as force. In chapter 4 these theories will come together in a synthesis of results. Each chapter will thus be a coherent presentation of a theory and adjacent empirical results from practice. An abstract overview used as a simple reader’s guide, showing the core of the thesis, is provided below.
2 Added Value
3 Strategy as Force
4 Synthesis
The added value theory in chapter 2 will analyse the content of the accommodation strategies. By using the theory of De Jonge (1996) the seven added values of the accommodation strategies can be analysed. Chapter 3 will then discuss both general strategy making process theories as well as the Strategy-as-Force model. After the theoretic part the results of the case studies will be presented. It will show to which extent resources have been used in order to effect or affect the outcome of the project.
A synthesis of both theories in chapter 4 will show the relation between adding value through real estate and using strategy as a force. The result of the two chapters will then be presented in the form of an adjusted model for improving these types of real estate processes. A reflection at the end of the chapter will discuss the value of such a model in practice. After this chapter 5 will provide a conclusion whether the strategy-as-force model is a helpful tool for improving these types of strategy processes.
32
2 Strategy content
This chapter will focus on how the accommodation strategies can add value for the business of the organisations of the case studies. The added value theory discusses the content of their existing accommodation strategies and together with the outcome of chapter 3 will determine the processes that have shaped this project. In this chapter a short description of the added value theory will first be given from the point of view of different authors. The case studies results will be presented after this theoretic part. The results are given in the form of an overview of added values for each broadcaster. The separate results are then combined into a cross case paragraph where conclusions will be made concerning the content of the different strategies. The driving forces of the business strategies can then be defined to show the influences on the strategy making process.
33 2.1 Added value of real estate
An important aspect is to how the actual content of existing accommodation strategies can be measured. If the real estate strategy wants to contribute to the organizational performance it needs to add value to the core business. Hence organizations are only interested in the value that the real estate can add to support their business strategies. This part will shortly discuss on exactly which aspects an accommodation can add value to an organization.
Lindholm et al. present a framework on how real estate strategies can support strategies and core objectives (2006:42). The added value of real estate is mainly focused on maximizing the wealth of shareholders. The business strategy together with other functional strategies determine the real estate strategy. The shareholders together with the vision and mission of an organization create this business strategy. Hence the added value of real estate is part of the cyclic process of an organization. Understanding the business strategy is thus one of the core issues of a real estate strategist.
Figure 9 . Added value (Lindholm et al., 2006)
The different aspects of this added value is given by De Jonge (1996). He states that there are seven main added values of real estate for an organization (see table). The added values cover a wide range of real estate aspects that could influence the performance of an organization. This theory has transformed corporate real estate from being a cost item to a valuable corporate asset. When designing an accommodation strategy the organization can integrate the accommodation strategy and business strategy by focusing on as much added values as possible. Designing such an accommodation strategy is first of all focused on matching (current) supply and (future) demand. De Jonge et al. have created a DAS-Frame (Designing an Accommodation Strategy) which can be used by organizations to design such a strategy (2009). This tool shows that alternative future accommodations need to be weighed and selected in order to bridge the existing mismatch between future demand and current supply. The added values can be used in this process to determine whether these alternative accommodations could provide a successful accommodation for the core business of the organization.
34 (1) Increase Productivity (1) Location selection (2) Workplace innovation (3) Retention human capital (2) Reduce costs (4) Workplace costs (5) Accommodation costs (6) Facility costs (7) Benchmarking (8) Corporate finance (3) Control Risks (9) Inflexibility real estate portfolio (10) Choice of location (11) Value risk (12) Work environment (13) Environmental aspects (14) Development process (4) Increase Value (15) Acquisition and sale real estate (16) (Re)development real estate (17) Market analysis (5) Advance flexibility (18) Organisational flexibility (19) Financial flexibility (20) Technical flexibility (6) Support Culture (21) Workplace innovation (22) Communication (7) Support PR/Marketing (23) Image (24) Sales points (25) Sales strategy
Figure 10. 7 added values of real estate (De Jonge, 1996)
Joroff (2007:37) states that before one can prove how an accommodation strategy adds value, one has to look at the organization and its business objectives and processes. The business strategies need to be linked to the real estate (or accommodation) strategies. Though some aspects of real estate strategies are more important for an organization than others. The focus on certain added values can be explained through the presence of driving forces of organizations (Scheffer et al. 2006). Driving forces of organizations are the internal and external factors that influence the decisions and policies of an organization to stay competitive. By linking these specific drivers to specific real estate strategies it provides a context for balancing competing interests and increases the likelihood that a specific property decision connects with the overall real estate strategy (Singer 2008:4).
35 Conclusion
The main conclusion from this paragraph is that the accommodation strategy of an organization needs to be aligned with the main business strategy or core business. In order to do so successfully, when designing an accommodation strategy, the (future) supply needs to add value for the organization. In the process of designing the accommodation strategy, the added values of alternative options will decide the success for the core business strategy. Though the driving forces behind the core business activities differs quite a lot between organizations. Every organization has different driving forces and thus different added values of real estate for the organization. It provides a possibility to determine driving forces of organizations by analysing the accommodation strategies. The added value model can serve as a framework for the already designed strategies in the case studies. It can show on which values the organization has emphasized on while determining the future supply of the organization. The process of designing an accommodation strategy is important to analyse for further research about strategy formation processes. The first part of the results of the case studies will be presented in the next paragraph. The added values are mentioned in interviews or analysed in documents.
36 2.2 Case studies; results
2.2.1 VARA
The added value productivity, is to create an environment where employees are most productive. The production process of organizations is to create or produce programs. Hence increasing productivity is to have an environment in which the employees can produce higher quality programs. The VARA will try and stimulate this by creating a modern and suitable office space in the current property. The business director emphasizes the fact that sharing property will have sufficient lower costs. Because the costs are shared between two organizations this will give a structural saving. Due to this sharing of facilities cost reduction is an added value of the new accommodation strategy. The flexibility value is mentioned in the interview with the business director.
“We are planning to sort parts of the accommodation flexible. For the people of the VARA this will mean a change but that must be possible within are organizational culture.” (Mark Minkman 2013)
The cultural aspects of the refurbished accommodation must ensure a mix of accommodating new and old cultures. This way the VARA hopes to be able to add maximum value with the current accommodation for the merged organization and its cultures. The added value culture is thus divided into two parts that the organization focuses on:
- Workplace changes due to innovative workplace design - Workplace changes due to integrating two different cultures
The PR/Marketing ambitions are concerned with the location of the property of the original plan. The adjusted strategy does not reflect the PR/Marketing strategy of the organization and therefore does not add value for the organization. The added values of the of the new accommodation strategy are crossed in the table below. The most important part of the adjusted accommodation strategy is to control risks due to the current market situation. The fact that VARA is not risking costs of a double accommodation indicates that there is focus on risk control. Selling or letting a property under these market conditions entails a certain risk, especially the property of a media organization which limits the possible buyers or tenants. The organization is focusing on a more flexible property with new ways of working which especially has to support the culture of the merging organizations.
Increase Reduce Control Increase Advance Support culture Support productivity costs risks Value flexibility PR/Marketing
X X X X X
Refurbished Facility sharing No New ways of Innovative workplace interior structural working design/new VARA- vacancy or BNN culture as a new book loss start
Table 1. Added values of the VARA strategy
37 2.2.2 BNN
The added value productivity will be very difficult to add in the accommodation strategy of the BNN. The BNN will try to realize this by refurbishing the inside of the VARA according to their preferences, together with VARA. It is not the start of a new culture in a different building and can thus affect the productivity of BNN employees, if not done right. The organization realises a big saving by sharing facilities with this broadcaster. Because the new accommodation has lower costs than the current accommodation cost reduction is also an added value of the new accommodation strategy of BNN. It is strange that the Director states that the option of moving in with the VARA is more expensive, while this is the new strategy of the organization.
“It is not destruction of capital while the new building is cheaper than the two buildings combined and the option of moving in with the VARA is more expensive.” (Adriani 2013)
The business director stated that the new accommodation strategy will probably include flexible workplaces. This trend, the new ways of working, provides a more technical and organizational flexibility. The organization can adapt to changes and use the space more efficiently. Innovative workplace design is also an added value in the ‘support culture’ value of real estate. The workplace environment determines the working culture of the company as well. The Director stated that with the merger, creating a new culture and identity is important for the BNN. If the employees feel like they are being owned by the VARA it could affect their productivity due to a different workplace culture. The new strategy of moving in with the VARA will be a serious challenge for the culture of the BNN, with a vibrant and messy workplace character.
For the image of the new organization it is of importance to have the accommodation located in a more vibrant, young, urban environment. The General Director Marc Adriani confirms that the location has been of high importance for the BNN as a way to connect more to the environment and thus include young people more with the accommodation, clearly adding value by promoting the company. The adjusted strategy does not include this added value though.
“The location of the new accommodation is suited because of the presence of school which is a true BNN remark. There is a MBO and HBO (schools) and that is important to keep our company young and to cooperate and attract people.” (Adriani 2013)
The added values of the of the new accommodation strategy are indicated in the table below. The new accommodation strategy, together with the VARA, has lost many added values for BNN. The organization is now mainly focusing on a flexible property. The broadcaster BNN is not risking double costs, high depreciation and possible vacancy as a merged organization. Compared to the original strategy the new BNN strategy does not include the productivity and culture added values. This is due to the fact that the organization cannot create its own culture in a new building, but is moving in with another broadcaster. The business Director Adriani has confirmed this phenomenon. The building of the VARA where the BNN is now moving in, does not reflect the image of the BNN well. It therefore does not support PR/Marketing of the organization.
Increase Reduce Control Increase Advance Support Support productivity costs risks Value flexibility culture PR/Marketing
X X X X X
Interior must Facility sharing No double New ways of Interior must reflect mix of with large costs as working reflect mix of cultures broadcaster VARA-BNN cultures
Table 2. Added values of the BNN strategy
38 2.2.3 TROS
The General Director of the TROS states that the willingness of employees to move to the new accommodation of the Wereldomroep building is not an issue. This is due to the fact that the employees are more concerned about the reorganisation and job losses. If they work productively in the new accommodation will depend more on the culture of the workplace. The plans of the organization focuses on the work floor and the satisfaction of its employees and therefore the productivity. The new accommodation will therefore be an added value to the organization. Cost reduction has been an important incentive for the new accommodation strategy while the broadcaster is moving in with the AVRO to share facilities. The rent of the Wereldomroep building is relatively low as well which gives a double cost reduction for the organization.
“If we can’t find tenants for our current accommodation it will cost us an extra 300.000 Euro on a yearly base. If we do find a tenant it will generate extra money. We would accommodate the Wereldomroep building nearly for free. We will pay, even after investments, 60 to 70 Euro per square meter and that is far below the average of the market.” (Peter Kuipers 2013)
It must be emphasized that the cost reduction is a longer term strategy, while the accommodation needs many adjustments to fit the current standards. The broadcaster is willing to invest in the property if the owner (government) invests as well. The investment to redevelop the property and the book loss of the old property will be considerable but can be earned back in the long-run. Thus the added value cost reduction is given through a structural cost reduction. The fact that the TROS owns the current accommodation for 25% means they have to sell this part of the property. In the current market conditions the 25% value of the ownership will be decreased which includes a value risk. Next to this decrease in value the organization needs to find a possible buyer or tenant. The vacancy risk of the old accommodation therefore includes a second aspect of risk for the organization. But the General Director states that the new accommodation strategy is more important than the risk of having double costs. The strategy does not include the added value of risk control.
“The AVRO partly owns the AKN building and the TROS is owner of 25% of this property. But the conclusion was that the interests of a successful merger weigh heavier than a possible short term or long term vacancy of our properties.” (Peter Kuipers 2013)
The strategy of moving to a new accommodation holds two types of flexibility; technical and financial. The technical part of the flexibility is the open spaces that the organization wants to develop. If the inside of the building doesn’t have many interior walls, the building can adapt easier to unexpected changes in the organization. The financial flexibility in the rent contract is acquired by having an option to leave the accommodation within a period of 6 or 7 years. If the organization has to shrink further or grow again they have the flexibility to leave and find a smaller or larger accommodation. Kuipers confirms:
“For now the accommodation will be demolished from the inside, it has a substantial overdue maintenance with single glazed windows and fixed cupboards. We want open spaces. We want to have the certainty of the possibility to leave the property after 6 or 7 years. This is still being discussed.” (Peter Kuipers 2013)
The new accommodation has to preserve the heritage of the old TROS culture, as shown in the drawings of the new accommodation. The layout plan shows that the floors must be filled with Avro and TROS Heritage and not AVROTROS. This indicates that parts of the new cultures will be incorporated into the new accommodation.
“Those identities are all own identities with own cultures en we will keep those and won’t replace them by an AVROTROS culture. We have stated that for the merger it is essential that both companies move out of their accommodation. We are merging the whole organization and associations and thus need a new start.” (Peter Kuipers 2013)
Supporting PR/Marketing is included by the accommodation strategy through a more openness towards customers/members. The drawings of the new accommodation show that the building will have a ‘media
39 platform’ on the ground floor. This will be a sales point with merchandise and information about the broadcasters. The second aspect of the accommodation strategy is the image that it reflects. The image that the Wereldomroep accommodation has, supports the image of a public broadcaster while the building is public property and a cultural heritage. The General Director confirms this:
“If this is the most ideal building? I don’t know. It might be too large in the appearance. The public broadcasters have to move and are moving into a gigantic property, this seems contradictory. Our current accommodation is truly TROS, family like, with a courtyard. The Wereldomroep building is lacking this and we are busy incorporating this into the new accommodation.” (Peter Kuipers 2013)
The table below summarizes the added values of the new accommodation strategy for the TROS. It is clear that the organization wants to keep the low risk and flexibility by renting a property for a period of 5 to 10 years only. Though there is a risk of book losses and structural vacancy with double costs. The appearance of the building and the choice for a governmental owned property has to contribute to the image of the approachable public broadcaster TROS. The new accommodation has to improve the integration of the merger with the AVRO and therefore add value to the organization(s).
Increase Reduce costs Control Increase Advance Support Support productivity risks Value flexibility culture PR/Marketing
X X X X X
Employees are Low rent and Open New Approachable, public happy to stay in facility sharing spaces/flexible AVROTROS owned cultural new, modern and contract culture / heritage/ family image open spaces family must be included culture
Table 3. Added values of the TROS strategy
2.2.4 AVRO
The productivity aspect of the accommodation strategy of the AVRO is present due to the fact that the organisation is also moving to the Vondelpark pavilion. This pavilion will be housed by the AVRO to create an inspiring accommodation for the employees while artists, media producers and public can influence each other. This could increase the creativity of the AVRO producers and thus increase the productivity. The new accommodation strategy of the AVRO does not focus much on reducing the costs. The new accommodation needs to be redeveloped while the old accommodation has not been sold yet, leading to double costs due to vacancy. Next to these facts the AVRO will be accommodating the pavilion in the Vondelpark which increases the total costs of real estate for the organization. Again it must be emphasized that the cost reduction of the Wereldomroep building is a longer term strategy, while the accommodation needs many adjustments to fit the current standards. But the total accommodation strategy of the AVRO cannot be judged as a cost reducing strategy. The AVRO Business Director emphasizes that other added values of real estate play a more important role in the decision of the organization to move to the Wereldomroep building while the old accommodation has not been sold yet. The organization has to sell one third of the AKN building but in these market conditions it will be difficult, especially with the specific purpose of the building. The Business Director states the following, which indicates that risk control is not part of the accommodation strategy.
40 ”Yes it will have big financial consequences because it will be hard to sell our share of the AKN property. It is a big risk for us but we think that the merger with the TROS is more important.” (Van ‘t Hooft 2013)
As show in the TROS case study results, the strategy of moving to the new Wereldomroep accommodation holds two types of flexibility; technical and financial. Having open spaces makes the accommodation more flexible when changes in the size of the organization occur. The financial flexibility can be found in a flexible rent contract with an option to terminate the contract in a maximum of 7 years. The Business Director of the AVRO confirms these increased flexibility aspects of the new accommodation strategy, while the old strategy of the AKN building did not include much flexibility.
“Inside the building both growth and shrinkage is possible. It is even possible to accommodate an extra organization should this be necessary in the future. We are hesitant about flexible workplaces and will probably apply isles of workplaces in the building. The owner of the Wereldomroep building offered us a contract of 15 years, but this period was too long for us. We have managed to include an exit option in the contract terms which increases our flexibility.” (Van ‘t Hooft 2013)
The AVRO focuses on art and culture in their programs and the workplace culture must support this mission. The strategy thus includes the cultural pavilion (including artists etc.) in the Vondelpark to support the production of cultural/art programming. The Vondelpark pavilion will therefore add value by supporting the culture of the workplace of the AVRO. The new accommodation with the TROS has to preserve the heritage of the old AVRO culture as well, as shown in the drawings of the new accommodation. The layout plan indicates that the old broadcaster cultures will be preserved in certain areas of the building. The Business Director states that this will not be an issue while the old accommodation also houses several cultures.
“The organization is already used to accommodate different cultures while a programs such as Opsporing Verzocht and Opium are operating next to each other.” (Van ‘t Hooft 2013)
Though the decision of moving to another property is to have a new start as a merged organization. A new organization must therefore be accommodated in a new building. In a merger, accommodation can add value by speeding up the integration process. The Business Director of the AVRO confirms this cultural aspect of the new accommodation strategy.
“This way the integration between the organizations will speed up. We will merge completely which means a total integration, also on the area of accommodation.” (Van ‘t Hooft 2013)
The strategy of having an accommodation in a busy park in the capital city clearly shows the PR/Marketing aspect. The PR/Marketing is also included by the image of the organization. The image of the pavilion accommodation is a cultural monument which reflects what the AVRO stands for. The image that the Wereldomroep accommodation has supports the image of a public broadcaster as well while the building is public property and a cultural heritage. The ‘media platform’ and coffee bar for visitors supports the approachable image. The Business Director confirms this publicity aspect of the pavilion accommodation.
“The AVRO stands for art and culture and we will therefore have a sort of window in the Vondelpark in Amsterdam which is more approachable for public. The people can come together here, there will be much ‘traffic’ passing the building.” (Van ‘t Hooft 2013)
The table below shows the different added values found in the total accommodation strategy of the AVRO, including the pavilion in the Vondelpark. The productivity added value is found in the strategy to accommodate the pavilion, while the inspiring, creative surroundings should improve the quality of the cultural programs of the AVRO. The AVRO strategy includes the risk of accommodating two properties and paying for a vacant property. The accommodation strategy therefore does not include reducing costs, controlling risk and adding value (property will have book loss if sold). The strategy has a strong emphasis on PR/Marketing while the window in the Amsterdam Vondelpark will serve as an accommodation with much publicity and passing
41 visitors. The Wereldomroep building will support the new culture of the merged organization better than accommodating one of the old accommodations.
Increase Reduce Control Increase Advance Support Support productivity costs risks Value flexibility culture PR/Marketing
X X X X
Including artists Open New AVROTROS Approachable, public and media spaces/flexible culture / owned cultural heritage/ producers to contract creative art artist, culture window in increase culture pavilion busy park creativity
Table 4. Added values of the AVRO strategy
42 2.2.5 KRO
The broadcaster is focusing the accommodation strategy on innovative office workplace design which is one of the ways to increase the productivity. The location of the new accommodation strategy is not relevant for increasing productivity while the organization is staying in the same accommodation. Due to the strong emphasis on implementing the New Ways of Working it can be stated that the strategy focuses on the added value of productivity. The incentive for the merger between the organizations is to have a cost reduction. The question is how much does the strategy of staying in the same accommodation add to these cost reductions? The broadcasters are already sharing facilities, hence the cost reduction cannot be found there. The only cost reduction of accommodation that the organization can focus on is to use the space more efficient and therefore create extra space which could be rented by another organization. Hence the cost reduction as added value is included in the accommodation strategy by the strong emphasis on sharing workplaces and using less office space. If the extra space will be rented by other organization it will lead to a cost reduction. For now the strategy does not have a strong emphasis on reducing the cost of the accommodation. Due to the fact that the organization is not changing the accommodation, the risk control of the real estate of the organization will remain the same. The workplace renovations will not have much influence on the overall risk control of the property. Since the ownership situation of the accommodation remains the same (one third owned) the risk of having this large building with specific purpose remains the same as well. Risk control is therefore not an added value that the organization is focusing on. The flexibility aspect purely focuses on the organizational flexibility, not financial/juridical by having a flexible rent contract. The property is owned by the KRO for one third and thus makes the current and future accommodation inflexible compared to a rented accommodation. The organizational flexibility will be included by having flexible workplaces.
“What we have formulated as demand is that it will be furnished to the future of flexible working. The accommodation will help to establish an integrated organization. We want to let go of the one employee in one office culture.” (Yvonne de Haan 2013)
The statement above indicates that there is an emphasis on changing the working culture in the new strategy. Although the broadcaster will have the same accommodation, the most important demand is to change the office culture of the old situation. The new strategy can add value to the organization by changing this culture into a more modern, flexible type of division like the New Ways of Working. The General Director mentions that this change of workplaces will have to change the whole concept of accommodating the organization.
“The minds of the employees are increasingly more open for this, but you really have to change the whole concept of the accommodation.” (Yvonne de Haan 2013)
The decision of staying in the same accommodation has not much relation with PR/Marketing. The current building is renowned for its closed appearance and is situated in a quiet residential area. The property is not an image that the organization wants to have. In fact the General Director states that the organization would want to move, as the function and transparency does not fit the character of the organization. Like other broadcasters already discussed, the KRO would want more interaction with the public. The decision of staying in the building is therefore more related to other added values.
“We would rather leave this building because we don’t see it as a media property. A more transparent building would be desirable.” (Yvonne de Haan 2013)
The table below shows that the KRO accommodation strategy focuses on flexible use of workplaces, while the organization is staying in the same building. By staying in this building the organization wants to prevent a huge book loss while the property is only 13 years old and the market conditions have worsened over the years. The organization wants the accommodation to support the PR/Marketing, but it is not possible within the current accommodation. Controlling the risk is thus an important added value for the organization.
43 Increase Reduce Control risks Increase Advance Support Support productivity costs Value flexibility culture PR/Marketing
X X X X
Strong emphasis Book loss is New Ways of The integration on sharing prevented by Working of KRO-NCRV, workplaces staying in the increases workplace same building organizational innovation flexibility
Table 5. Added values of the KRO strategy
2.2.6 NCRV
The interviews with the two organizations (KRO and NCRV) are held at the same time due to the identical current and future situation. The conclusion can be drawn that the added values of the accommodation strategies are identical and the table will only be provided below to summarize the results of the strategy analysis. Just as the KRO strategy the NCRV therefore focuses on increasing productivity and flexibility through innovative workplace design. There is no book loss or structural vacancy while they are staying in the current property. This also means that the building does not reflect the image of a modern broadcaster and therefore does not support the PR/Marketing.
Increase Reduce Control Increase Advance Support Support productivity costs risks Value flexibility culture PR/Marketing
X X X X
Strong Book loss is New Ways of The emphasis on prevented Working integration of sharing by staying increases KRO-NCRV, workplaces in the same organizational workplace building flexibility innovation
Table 6. Added values of the NCRV strategy
44 2.2.7 VPRO
The productivity of the employees depends on the environment they have to work in and this environment needs to stimulate the production of the employees. The location and accommodation itself can thus be seen as an added value for the productivity of the employees of the VPRO. The General Director Van der Meulen confirms that the current (and future) accommodation supports the production of the VPRO.
“We need a post-industrial building, just as this one. Focuses on editorial spaces, it is a creative organization. We are a developing broadcaster so much is created in-house. As you can see, 70% of this property consists of editorial space. It is one big open space, with other broadcasters that can differ. We want a property where there can be produced and where producers feel at home. They like the post-industrial feeling.” (Van Der Meulen 2013)
Cost reduction does not apply for the accommodation strategy of the VPRO. The broadcaster wants to share the building with third parties to have an efficient situation and to be able to stay in the current accommodation. Though moving to a smaller, rented space would reduce the costs of accommodation much more. Cost reduction is thus not an added value of the accommodation strategy of the VPRO. The risk control of the accommodation strategy can be judged in two different ways. First of all the inflexibility of the accommodation can be seen as a risk. Moving to a rented accommodation will be a strategy that includes a flexible situation with lower risk. Though the fact that a possible sale will cause a high depreciation for the organization is a high risk that is accompanied with moving. The General Director states that the organization does not want to depreciate the property in 15 years instead of the aimed 30 and therefore taking a high loss with a big financial risk included. The VPRO is thus controlling the risk by having an accommodation strategy that focuses on preventing a high depreciation.
“The user value of the property is 25 to 30 years and then you can move to another property. For us, the exploitation is no problem while we depreciate the property in 30 years and are now half way. If you sell it and you have to depreciate in 15 years you have a problem.” (Van Der Meulen 2013)
The current market conditions do not give an incentive for the organization to focus on increasing the value of the accommodation. The value of the existing and future accommodation has decreased. The market value of the building is what a potential buyer wants to pay. The General Director states that the original value of 17 million will not be a price that anyone in the current market will pay. The organization does not focus on increasing value with this accommodation strategy.
“We had to appraise our property again. With the value we are currently on the book value of approximately 10,5 million. If we keep using the property this will remain the same in the next 10 years. But if we sell it on the market the value is what a buyer wants to give. No one will pay 17 million for it.” (Van Der Meulen 2013)
The accommodation of the broadcaster is owned and does not hold a financial/juridical flexibility. The strategy is to stay in the current accommodation, so the flexibility will not be increased with this strategy. The organizational flexibility will be increased by the accommodation strategy through the usage of flexible workplaces. This way the new accommodation strategy can add value to the organization by reducing costs through more efficient use of workplaces. The flexibility will therefore be increased through this strategy and serves as an added value.
“We will furnish the building in a way that we can create flexible workspace, partly The New Ways of Working. We are creating scenarios to see if we can carry the burdens of our accommodation costs.” (Van Der Meulen 2013)
The creative production culture of the VPRO is already mentioned in the productivity part. The Director states that the building suits the mainly editorial business of the VPRO. Therefore the ‘production culture’ of the VPRO is well accommodation in the current and future situation. The fact that the identity of the VPRO will be to remain an independent ‘free thinking’ broadcaster, plays an important part of the accommodation strategy.
45 The culture does not seem to fit with the broadcasters in the AKN building (KRO and NCRV) as this would have been an option to create more efficiency once the AVRO has left the accommodation. Next to this the building itself does not meet the requirements of the organization and its creative production culture. But the General Director of the VPRO emphasises that the VPRO culture needs its own accommodation and this cannot be shared with other cultures of competitive broadcasters. The accommodation (strategy) of the VPRO thus focuses for a large part on adding value by having an own culture.
“If the opinion is that the VPRO is entitled to have its own position within the system, then we as VPRO need our own place to shape our own culture. Then it is not possible to share an accommodation with the two oldest, confessional broadcasters of the Netherlands which looks like an elderly home. That would be the end of our organization.” (Van Der Meulen 2013)
The previous mentioned statement of the VPRO Director clearly contains a PR/Marketing factor as well. The image of the organization is to remain independent. If the VPRO would share the facilities with the KRO and NCRV in the AKN building that would affect their image severely. The appearance of the AKN building and the broadcasters it accommodates does not fit the marketing strategy (and culture) of the organization. Though the current accommodation has an appearance of a creative production company through its many architectural features. The building is specially designed for the VPRO and thus reflects what the organization stands for; independent and creative. The table below shows the added values of the VPRO accommodation and its strategy to stay in the current accommodation.
Increase Reduce Control Increase Advance Support Support productivity costs risks Value flexibility culture PR/Marketing
X X X X X
Creative Preventing New Ways of Creative Creative and independent production high book Working production broadcaster culture/New loss causes by culture/ Ways of Working depreciation independent after 15 years
Table 7. Added values of the VPRO strategy
46 2.2.8 EO
The broadcaster includes workplaces innovation in the existing situation as part of the new accommodation strategy. This way the amount of workplace needed per employee will decrease. Hence the productivity of the employees in the accommodation will increase as well.
“We have expertise for the accommodation concerning the New Ways of Working and if that is possible to realize here. Our culture allows this and there might be disadvantages but mainly benefits like using space more efficiently and the knowledge spill over.” (Jaap Kooij 2013)
The accommodation strategy will not reduce the costs for the organization. There will be a slight cost reduction due to the more efficient use of the property with the presence of the IKON/ZvK broadcasters. Overall the accommodation strategy does not focus much on reducing costs for the EO. The costs of the accommodation are low enough for the organization as mentioned by Jaap Kooij:
“We have said that our low cost accommodation causes that we are not forced to move to an expensive property somewhere else that makes us spend more money and lose a bit of our identity.” (Jaap Kooij 2013)
The accommodation strategy of the EO does not include many risks while the organization is staying and cannot cause a big value loss for the organization. The accommodation strategy includes the added value of risk control. The culture as an added value of the accommodation strategy is very important for a broadcaster like the EO. The current situation and thus the future accommodation strategy support the cultural ambitions of the religious broadcaster very well. This specific culture also makes it difficult for the organization to share the facilities with other organizations. Kooij emphasizes the importance of the current added value of the accommodation
“If you want to be a specific broadcaster with its own culture it requires and own accommodation. In a large building with many broadcasters this is not possible. It needs is own space, an atmosphere. We have worked on that over the last few years and invested in it. That is a mixture of a media company and a religious view, shaped together with the employees of the organization.” (Jaap Kooij 2013)
The image of the EO is properly reflected in the accommodation. The broadcasters religious identity is well integrated in the old boarding school with connected chapel. The broadcaster wants to share this religious look and feeling with the public and has therefore created a tour inside on the internet via Google street view. Curious citizens can have a look inside the building which indicates that the broadcaster is satisfied with the image of the current accommodation. The church like interior of the building gives the visitor a feeling of a mix of religion and office. The accommodation strategy, even though the organization is housed in a residential area, supports the PR/Marketing of the organization quite well.
Increase Reduce Control Increase Advance Support Support PR/Marketing productivity costs risks Value flexibility culture
X X X X X
New Ways of No risk of New Ways of Religious Religious image / tour inside Working book losses Working culture ‘own building place’
Table 8. Added values of the EO strategy
47 2.2.9 NTR
To encourage the productivity of employees the NTR will be stripping the property. If the employees experience a new environment instead of a combination of two broadcasters they will be more satisfied. Currently the NTR is developing a plan to refurbish the entire NET-3 building. It is therefore an added value of the strategy of the NTR.
“We are already merged and we have tried to encourage that process. In this property that is less successfully done, but the pavilion is done quite well. We have had to strip this property fully so everyone experienced it as new and not as one of the broadcasters. So we have told the VARA they should try this option as well.” (Van Bemmel 2013)
The NTR is not planning to move for a cost reduction. The broadcaster is the result of a merger, where a property has already been sold to reduce costs. If the broadcaster wants to reduce costs of accommodation by moving to another property it needs to prevent a large book loss of their current property. This is not possible due to the changed market. Thus it is not an added value of the future strategy of the NTR. The conservative strategy of the NTR focuses on controlling risks. As they don’t want to risk a book loss the broadcaster wants to stay in the current property. The price of their real estate is now too low to sell with a reasonable loss.
“We don’t have a large equity en thus cannot handle a large book loss, our equity would then be gone. This plays an important role for us. In that case the book loss must be compensated by the NPO en OCW” (Van Bemmel 2013)
In the declining real estate market staying in the current position will not increase the value of the property. In fact, the value of the property is heavily decreasing. Thus the broadcaster does not want to move and risk a huge book loss. The strategy does certainly include flexibility as an added value. The property is owned and the strategy of the broadcaster does not include a sale and leaseback construction or moving to another, rented, property. Though the organization is now planning to reorganize the work floor to increase the flexibility of workspaces. The broadcaster includes the culture aspect of their real estate. The NTR is still working out the last issues of their own merger. It is therefore an aspect of their accommodation strategy.
“The merger is not only depending on accommodation but mostly culture. But the integration of cultures is made by leadership and work ethics. You can notice the differences in work methods and procedures between cultures. These are the last pieces of our merger.” (Van Bemmel 2013)
As a task broadcaster, the NTR will not focus much on PR and Marketing. It is somewhat excluded from the competing broadcasters and therefore doesn’t focus much on their image and members. The organization has therefore put more emphasis on adding value by supporting the workplace culture and minimizing risks. There is no need to focus the accommodation on customers by moving to a more accessible property or a more image based property.
Increase Reduce Control Increase Advance Support Support PR/Marketing productivity costs risks Value flexibility culture
X X X X
Refurbished office No risk of Flexible Workplace large book workplaces culture is loss sufficient
Table 9. Added values of the NTR strategy
48 2.3 Conclusion
2.3.1 Added values compared
The accommodation plans of the broadcasters, responding to the budget cuts of the government, have been analysed by using the added value theory of De Jonge (1996). Within this theory, De Jonge distinguishes seven added values of real estate for organizations. The accommodation strategies of the merging broadcasters are already aligned as they will be sharing accommodation. General similarities and differences between the added values of the accommodation strategies can now be provided.
The first added value productivity can be used in the accommodation strategies by introducing innovative workplace design and focusing on the satisfaction of employees. This productivity is therefore used in two several ways; decreasing workplace costs per employee or increasing production per workplace by having a better workplace environment. Increasing the productivity has been found in all the accommodation strategies as an added value for the organizations. Creating higher productivity by having a better workplace environment is strongly related to the support culture and advancing flexibility added values. This is not surprising while supporting the workplace culture can increase the productivity of employees and advancing flexibility can increase workplace efficiency.
The second added value should be of high importance in this total reorganization project while the governmental budget cuts need to be met; cost reduction. The broadcasters KRO, NCRV, VPRO and EO are not changing their accommodation but only slightly improving efficiency. The statutory task broadcaster NTR is not reorganizing the current accommodation and is therefore a fifth broadcaster that doesn’t focus much on cost reduction. The broadcasters BNN and VARA will share the NET3 building thus reducing total costs of accommodation. Instead of two properties the merged organization will only have one property. TROS and AVRO are also sharing facilities but, especially AVRO, are only increasing costs of accommodation due to an extra property in Amsterdam. If the accommodation is sold the government must supply a subsidy (friction costs) to reduce the total book loss of the organization. This subsidy will determine the period for earning back the book loss and investments in the new accommodation. This applies to the TROS as this broadcaster is selling the old accommodation and moving into the Wereldomroep building. The organization that is moving out of its current accommodation and does not manage a cost reduction is the AVRO. The AVRO will have investment costs of the Wereldomroep building and is also renting another accommodation in the Vondelpark in Amsterdam as a ‘window’ for public. This two folded accommodation strategy is not reducing costs but even increasing costs for the organization.
The third added value of real estate is to control the risk for the organization. In the case of the broadcasters the analysis is made on how much risk is included in the accommodation strategies. The most important risk for the organizations is to lose equity by having a large book loss or have a structural vacancy of the old accommodation, in the case of moving towards another accommodation. Most of the broadcasters are staying in the old accommodation and are therefore not taking the risk of losing equity or structural double accommodation costs due to vacancy. Two broadcasters have to consider the old accommodation in the strategy. The BNN is controlling the risk due to the fact that their old accommodation is rented (with ending contract) and therefore cannot lose value. The accommodation strategy of the AVRO is not adding value by controlling risks due to the possibility of depreciation/book loss or structural vacancy of multiple accommodations. If the organization does not sell the property but can find a tenant, there will be no double costs but only a book loss for the organization. This still includes a risk of losing equity for the organization.
The fourth added value, increasing value of real estate, is not mentioned in the accommodation strategies.
The fifth added value of the theory includes advancing the flexibility of real estate. This flexibility can be advanced on three different areas; financial/juridical, organizational and technical. The accommodation
49 strategies are judged on these three aspects of the flexibility of the future accommodation. If a strategy includes one of the three aspects it can be concluded that it adds value to the organization by a more flexible real estate. In the case studies is shown that all broadcasters include this added value in their accommodation strategies. AVROTROS (rented accommodation with large open spaces) include two out of three aspects of flexibility. VARA-BNN, KRO-NCRV, EO, VPRO and NTR only include flexible workplaces in their currently owned accommodation to advance the flexibility.
The sixth added value of real estate is to support the culture of the organization. In the analysis of the accommodation strategies this added value has proven to be of high importance for the organizations involved. The production of high quality programs within the values and image of the organization (see next added value) can only be realized if the workplace culture reflects this. Some of the organization are merging and a new accommodation must support the start of a new culture and a sign of equality. The VARA and BNN will therefore have to refurbish the NET 3 inside property now that the original strategy is cancelled. Though it includes a challenge for the culture of the BNN work floor. The accommodation strategies of AVROTROS to move to another property can thus be seen as a way to support the new culture. The KRO and NCRV cases show that the current situation supports the culture sufficiently. They do not need a change of accommodation for the future, except for the interior of the building. The VPRO and EO accommodations are perfect examples of a workplace culture and exterior appearance that reflects the core identity of an organization. The EO with its religious appearance and atmosphere inside reflect the identity and culture of the religious broadcaster.
The last added value of real estate is to support PR/Marketing. The support of PR/Marketing includes mostly the reflection of the image of the organization and sales points. The TROS and AVRO are following this concept by including a public bar/restaurant in the new accommodation strategy. The image of the AVRO is reflected in the cultural pavilion in the public park in Amsterdam. This accommodation will reach a lot of public compared to the old accommodation in Hilversum. The EO and VPRO accommodation reflects the image of the organizations well and thus supports the PR/Marketing sufficiently. The EO has confirmed this by including a public tour online through Google Maps, proving the fact that their accommodation serves as positive publicity. The NTR does not include this in the accommodation strategy as a statutory task broadcaster. The KRO and NCRV have confirmed that the accommodation strategy does not include PR/Marketing while the appearance of the building does not reflect the image of the broadcaster. This also applies to the VARA-BNN building as it has a more pragmatic or business look then that of a bold, creative and progressive broadcaster.
The results of the analysis of the accommodation strategies by conducting interviews and accommodation plans/drawings are summarized in the table below. The most mentioned added values by the public broadcasters are Increase productivity, Control risks, Advancing Flexibility, Supporting Culture. The processes behind these strategies will be evaluated in chapter 3. Chapter 4 will then conclude about the relation of the processes and the actual accommodation strategies that have been formulated with these added values for the organizations.
50 Increase Reduce Control Increase Advance Support Support productivity costs risks Value flexibility culture PR/Marketing
VARA
BNN
TROS
AVRO
KRO
NCRV
VPRO
EO
NTR
Table 10. The added values of the accommodation strategies of the Dutch public broadcasters
51
3 Strategy Process
The strategy process behind the actual formulation of the accommodation strategies will be analysed in this chapter. Before the use of the Strategy-as-Force model an introducing paragraph will explain the general theory on strategy. The Strategy-as-Force model is based upon these theories by Mintzberg. It is thus necessary to elaborate on these theories to fully understand the structure of the model. The model itself will be explained in detail in paragraph 3.2. The empirical results in paragraph 3.3 will show the resources that have been mobilized during the case studies and the force relations that have been created. The case studies will test if the Strategy-as-Force model is suited to explain the strategy making process for the field of real estate management. The conclusion in paragraph 3.4 will combine the results into one strategy model to explain the strategy process. The result of this chapter will show the resources that have determined the formulation of the strategies.
52 3.1 General strategy
Because of the focus on strategic development in the Strategy-as-Force model the literature review must start off with an analysis on the general meaning of strategy, given by the field of strategic management. One of the main theories on strategy is given by Mintzberg et al. in the publication Strategy Safari (1998). Mintzberg et al. (1998:12) distinguish several definitions of strategies, all starting with the letter ‘P’. Hence the definitions together form the ‘Five P’s for strategy’ (Mintzberg et al. 1998:9). These five P’s are the following definitions of strategy:
- Strategy as Plan - Strategy as Pattern - Strategy as Position - Strategy as Perspective - Strategy as Ploy
The figure below shows that Mintzberg et al. divide a strategy making process that is deliberate, followed by a realized strategy. Mintzberg et al. classify the realized strategy as a pattern which can only be seen when looking at past behaviour and the intended strategy as a plan; a strategy that looks ahead (Mintzberg et al. 1998:10). The pattern over the past (realized strategy) will be a mixture of the intended strategy, the unrealized strategy and the emergent strategy. In some cases actions are taken one by one without an explicit intention which can be classified as emergent strategies (Mintzberg et al., 1998:11). Most organizations however, use a combination of these two strategy making processes while the real world involves some thinking ahead as well as adaption on the way (Mintzberg et al. 1998:12). When opportunities arise which can add value to the business it is only logical to add an emergent strategy to the intended strategy that was already formed.
Two other business related strategy explanations are more defined by content and describe strategy as position and strategy as perspective. Where strategy as position is about a market position, strategy as perspective looks inside the organization and its vision (Mintzberg et al. 1998:14). Thus Mintzberg et al. conclude that changing position within perspective can be easy, although changing perspective within position is not. This is due to the fact that the exact same organization can change its market position through innovation but cannot change its core business while retaining the same market position. The last strategy ‘P’ is strategy as Ploy. This is more an indirect strategy to double-cross a competitor (Mintzberg et al. 1998:15). The strategy is therefore not about the action itself but the threat or confusion for another organization.
Figure 11. Strategy development (Mintzberg et al., 1998)
53 The Strategy-as-Force publication uses a different theory for a description of strategy. According to Healey, ‘strategy’ is both a product as well as a process, with complex human interaction. The product is a strategic frame communicated through images and language but the process is on-going (Healey 2007:7). This is why the author uses the model with both process as well as content driven strategy development by Mintzberg (see figure below). Four out of five definitions of strategy are shown in this overview of strategy formation processes. In the outline of the model we can find Plan, Pattern, Perspective and Position to divide four different strategy processes. The only ‘P’ that is not present in the model is ploy; a strategy to outwit a competitor by using ‘tactical games’. Daamen states that strategy as ploy is of overriding importance for an organization in a political environment and does not need to be named separately (Daamen, 2010:29). Daamen uses this model as a base for his strategy-as force model which will be discussed in paragraph 2.4.
Figure 12. Strategy development (Mintzberg, 2007)
Another widely used description of strategy and it’s development is given by Idenburg. In his view there are four perspectives on strategy (development) depending on how much the development focuses on process and/or objective. With an emergent strategy (also described by Mintzberg) there is no orientation on process or objective (Idenburg 1993:133). This strategic management reacts to the context and does not plan ahead.
The second perspective of strategy is rational planning, where the goal or objective is more important than the process that leads to this objective (Idenburg 1993:133). The strategy, a plan of action, is formed after analytical considerations and rational arguments which lead to possible solutions. If the strategy of an organization is in the perspective of rational planning the desired situation is most important. From this point a strategy can be formulated that leads to the desired situation.
The guided learning perspective states that the process of the development of strategies is as important as the objective for the desired future (Idenburg 1993:133). Idenburg uses the scenario planning strategy tool as an example of guided learning. This strategic tool focuses more on influencing consciousness of possible outcomes than an actual fixed goal. With guided learning, objectives shift along the way.
The fourth and last perspective states that strategic management comprises steering goals and people (Idenburg 1993:133). If the logical incrementalism is followed the desired end situation is just as important as
54 the process that leads to this end result. The way in which people or organizations work with each other is a major focus within this perspective. The end result should be satisfying for the participating people as they have been part of the entire process that led to the end result.
Figure 13. Strategy perspectives (Idenburg, 1993)
55 3.2 Strategy as force
Daamen (2010) has researched the strategy formation processes of an urban area development project in the harbour of Rotterdam. The end result of his research consists most importantly of a model which explains the strategy processes of the project; the Strategy-as-Force model.
The project area is summarized based on existing theory where multiple organizations interact within a so called ‘arena’ (Daamen, 2010:27). Inside this arena actors can influence each other’s orientations by defending their own perceptions and preferences in relation to the urban development project at hand (Daamen,2010:27). The intent to align different organizations can be accompanied with disagreement. In this view strategy becomes a capacity to link actors with diverging interests and goals (Daamen 2010:28). Actors or stakeholders influence each other on the base of what is possible (resources) and what is allowed (structures) towards a common intention of realizing a project, following the theory of Giddens (1984). Daamen has formulated 8 resources based on his empirical findings in the CityPorts case in Rotterdam. These resources can be used by actors to influence the decisions and actions of others (what is possible). The resources, relations and strategy processes can be found in the strategy-as-force model and the terms in this model will be explained in detail below.
When strategic actions and decisions are not made within institutional ‘structures’ (what is allowed) it will provide resistance from practice. Strategy is here the force of actors to realize a particular goal according to their knowledge of what they can and cannot do in relation to others (hence the title strategy as force). In order to study these rules Daamen makes use of the concept of ‘actor orientations’, as developed by German political scientist Scharpf which consist of perceptions, interests, norms and identities that are specific to a particular actor, group, or organization. These orientations form the institutional structures and together with the resources they determine the strategy processes.
In the figure below this strategy-as-force model is presented. The model consists of 4 quadrants which are separated by a vertical and horizontal axis. The axes, deliberative-emergent and allocative-authorative form the base of the model. According to these axes the resources are divided in the quadrants. The eight resources then form the force relations which are named on the outside of the model (grey letters). The force relation can be described as an interaction through which certain resources are added to the capacity to affect or effect the realization of the project. Finally the strategy making processes are based in between the pairs of resources in the quadrants (white letters).
Figure 14. The strategy-as-force model (Daamen, 2010)
56 Allocative vs. authorative and Deliberative vs. emergent
The strategy-as-force model is divided along two axes. The vertical axis divides resources into allocative and authoritive. These terms are used by Daamen according to a theory by Giddens (1984) who states that actors try to influence others by mobilizing particular resources which he divides into allocative and authoritive. The allocative resources at the upper half of the model are used by actors to directly effect the actions and decisions of others in the process. Using authoritive resources is done by obtaining a powerful position to coordinate or affect actions and decisions of others.
The model is further divided by a horizontal axis which consists of the term deliberative (left side of the model) and emergent (right side of the model). These terms are taken from the strategy processes of Mintzberg which are discussed in part 2.1. The term deliberative means that the resources are used in a stable environment, so the organizations can formulate strategies for a long term period. The opposite of this stability is the emergent side of the model. The emergent resources are mostly used in a highly unpredictable, uncertain environment in which decisions and actions need to be made on a short term base. There is less stability on this side of the model. Now that the two axes are known, the total model can be divided into 4 parts existing of force relations, resources and strategy processes which will be explained further below.
Figure 15. Allocative-Authorative and Deliberative-Emergent (Daamen, 2010)
Material relations; Property and Finance
The material (force) relations are described by Daamen as follows; “Interaction through which property and finances are added to the capacity to effect the realization of the urban development project” (Daamen, 2010:216). In the urban area development project of the CityPorts in Rotterdam Daamen (2010) has identified these two allocative resources as part of an emergent strategy process. The first resource, property, consists of land, water, building, infrastructure and public space (Daamen, 2010:211). In the Rotterdam CityPorts area port industrial businesses owned most of the land and buildings. This meant that the Rotterdam CityPorts Development Company had to mobilize this resource in order to realize the developments that were intended. The second allocative resource is finances. In Daamen’s research, no large scale private investments were made to help realize the urban area development project at the start. Most of the financial resources mobilized during the strategy processes came from governmental bodies. After this, the large institutions like Hogeschool Rotterdam did additional investments. Hence the financial resources that Daamen are described as subsidies and private investments. Property and finance are the most tangible resources of the strategy-as-force model.
57 Figure 16. Material relations; Property and Finance (Daamen, 2010)
Knowledge relations; Expertise and Information
The knowledge relations are described by Daamen as follows; “Interaction through which expertise and information are added to the capacity to affect the realization of the urban development project” (Daamen, 2010:216). In the urban area development project of the CityPorts in Rotterdam Daamen (2010) has identified these two authoritive resources as part of an emergent strategy process. Examples of the expertise resource in the strategy-as-force model are access to information and skill. In the CityPorts project, the expertise first of all was in the leader of the project who had 30 years of experience in urban area development practice. Advisors and consultations were used by the responsible organization of the project for the necessary knowledge. The information resource was mostly about the characteristics of the area and thus the project at hand. The information gathered was published in documents and books. The problem with the mobilization of this resource was the bias it possessed according to the shareholders and the scepticism that followed, eventually this was cleared.
Figure 17. Knowledge relations; Expertise and Information (Daamen, 2010)
Deliberative relations; Legitimacy and Commitment
The deliberative relations according to Daamen is about; “Interaction through which legitimacy and commitment are added to the capacity to affect the realization of the urban development project” (Daamen, 2010:216). The resources, with an authoritive character, are in the deliberative side of the model and thus part of deliberative relations between the actors involved. The legitimacy resource is a crucial resource of the strategy-as-force model while it is a core issue of power. Legitimacy entails the capacity of key decision makers
58 with a legal prerogative to coordinate actions and decisions of others. In the CityPorts case this resource was mobilized mainly by the City Council. According to Daamen legitimacy is a mandatory resource for an urban development project. It should be emphasized that the resource is not mobilized in an objective environment, but exposed to the different orientations of the challenges the project is supposed to meet (Daamen, 2010:220). Commitment as resource in the urban development project has provided stability among the actors involved. This commitment was mainly provided by the Collaboration Agreement CityPorts. Documents like Stadsvisie have provided this commitment and authoritive power as well.
Figure 18. Deliberative relations; Commitment and Legitimacy (Daamen, 2010)
Planning relations; Time/Result and Instruments
The planning relations of the strategy-as-force model are “interactions through which time/result and instruments are added to the capacity to effect the realization of the urban development project” (Daamen, 2010:216). The planning relations contain the allocative, deliberative resources time/result and instruments.
Because of the nature of politicians, time/result is of importance in a project like this. This resource is mobilized in order to be able to ‘move one’ and put pressure on other actors to realize the project. In the CityPorts project Daamen found this behaviour in the actions and decisions of those responsible for the project. The other planning resource is instruments and contains plans such as the Havenplan 2020, Economic Vision 2020 in the CityPorts project. Daamen found that these plans were actually used to effect actions and decisions of others, not to coordinate specific land uses (Daamen, 2010:212). Instruments can also be mobilized by actors against a development initiative.
Figure 19. Planning relations; Time/Result and Instruments (Daamen, 2010)
59 Strategic Venturing, Learning, Visioning and Planning
The final part of the strategy-as-force model consists of the strategy formation processes of the 4 different quadrants, based on theories of Mintzberg (2007). The processes of strategy formation are divided according to the process (plan, pattern) or content of the strategy (position, perspective) as shown in the figure below. When certain resources are used and relations between actors arise, the formation of a strategy is qualified by the model in four ways. These strategy formation processes are placed in the model in between the resources (see figure).
Figure 20. Strategy formation processes (Mintzberg, 2007) (Daamen, 2010)
The first strategy process, Strategic Venturing (top right quadrant), is understood as emergent patterns manifested as tangible positions (Mintzberg, 2007:11). This process is further described as place-making, where the product meets the customer. It is partly deliberate and planned, but mostly an emergent positioning process. Strategic learning is about emergent patterns that result in a broad perspective. This strategy process contains much reflection by actors about their initial intentions and how to improve these. The analytical
60 thinking of the planning process is here contrasted by a more experimental process (Daamen, 2010:30). The strategic visioning process is described as deliberative plans in a broad perspective. This strategy process is understood as an intuitive, creative process to influence and persuade other actors to visualize the desired projects end result. Finally strategic planning formulates deliberative plans with tangible positions (Daamen, 2010:29). The strategies that are formulated in this process have two purposes; they serve as communication resource and as a controlling resource. It communicates strategic plans but also what others have to do in order to realize them. The use of these strategic plans must be done in a fully stable environment, while the plans don’t need adjustment in during the realization. This fully stable environment is rarely the case according to Mintzberg and therefore it is necessary to leave room for emergent strategy processes described earlier.
A requirement of the model is that all the different quadrants need to be constantly considered. The project of the CityPorts showed different phases with all the strategy formation processes included. The image below is taken from the PhD of Daamen and partly visualizes the different phases in the strategy-as-force model. Between November 2002 and January 2004 the process shifted from strategic planning towards strategic learning. After this phase the resources property and finance were mostly used, hence the strategy formation process shifted towards strategic venturing. This demonstrates the usage of the strategy-as-force model; identifying the different strategy formation processes to gain more insight in the strategies used in urban development practice.
Figure 21. Different phases of strategy formation processes (Daamen, 2010)
61 Conclusion
As we have seen in the first paragraph, strategy is much more than one simple plan for an organization about going from point A to B. The main conclusion can be made that there is no definition which is generally seen as strategy or strategy development. Next to this it is important to note that a strategy holds both emergent strategies as well as deliberate strategies. The strategy formation process thus shifts between these types of strategy formation.
As this thesis mainly tests the Strategy-as-force theory by Daamen it will follow Mintzberg’s view on strategy development processes. Hence the definition of strategy by using the 5 P’s will be of most importance. Four of these P’s are already used in the Strategy-as-Force model. The fifth ‘P’, ploy, is not named separately by Daamen’s Strategy-as-Force theory but can be judged as an overall strategy for organizations in political environments. Within these strategies as ploy the four other strategy development processes occur. Within these four strategy processes the model provides resources that are mobilized during these processes to affect or effect the outcome of a project. By mobilizing certain resources the actors in the process enter into so called force relations with each other.
The Strategy-as-Force model is developed to gain more insight into the processes that occur in political environments. The initial application of the model has been for the field of urban area development. The resources that have been placed in the model suit the strategy processes that occur in that particular management field. The case studies of the public broadcasters must provide empirical evidence whether the resources and force relations occur in the field of real estate management as well, while the political forces are most likely present. Whether the resources, force relations and adjacent strategy processes can be explained by using this model will be concluded after the case studies results in the next paragraph.
62 3.3 Case studies; results
3.3.1 VARA
Property and finances
The fact that the property is in undivided ownership by both the VARA as well as NTR means that if the property is sold, the NTR has to move as well. The VARA was trying to move to another property which could have positively influenced the total project. Though the resource property has not been mobilized intentionally by the VARA to influence other actors to effect the total project. The municipality of Hilversum has intentionally tried to influence the strategy of the VARA by offering attractive property in local and national newspapers (see appendix IV). The major wanted VARA to stay in the Media Park while the economic business of the broadcaster is important for the municipality. The ministry and NPO could not mobilize this resource against the VARA while they do not have a real estate portfolio to offer. Financial resources are not mobilized by the VARA in this project. The friction costs and merger bonus are mentioned by the Business Director as temporary resources mobilized by the ministry.
Expertise and information
The VARA uses expertise as one of the resources in this project to obtain more knowledge and therefore a strategic position towards other organizations of the system. The organization has approached three different organizations for their strategic decisions on accommodation. The most important expertise is the BRINK Groep organization. The BRINK Groep consists of advisors which give professional advice on accommodation issues. The information about moving to the Bijlmer location is for the VARA more important than information about the actions and decisions of other organizations. The ministry has provided enough information about the total project by using the Boston Consulting Group.
“If you talk about expertise we have knowledge about this building but we have also included external expertise like BRINK Groep and Rudy Stroink. Endemol has also moved to the Bijlmer so we include them as well to see how they have done this and what we can learn from their movement and to see what it is like.” (Minkman 2013)
Legitimacy and commitment
The fact that there is no organization in this process with true power means for the VARA that their choice is by law only made by the organization itself. The fact that the VARA is a private organization means, as Minkman states, that the government can’t force the organization to act in a different way. Vice versa the VARA has no legitimacy to affect actors in the total project. Only by moral forces, also part of the term legitimacy, the VARA can be forced into a certain direction. This is done by both the mayor of Hilversum as well as the Director of the NOS. They have stated in the media that the movement is a waste of public money. The organization tries to block this moral force by making decisions they can legitimize towards the citizens. The Business Director clearly states that the VARA is not committed to the project, but merely involved. This is an important issue while commitment is another authorative resource that organizations can use to influence decisions and actions of others. The fact that the organization is only involved is crucial for the progress of realising the reorganisation and budget cuts.
“The blocking power has not influenced our choice but the realization of it. We are a private organization so the government can’t force us, only with moral pressure.” (Minkman 2013)
63 Time/result and Instruments
The time available and lack of planning documents and laws have made the process slow. The VARA indicated that the project is slow due to the lack of forcing resources besides finances. Also the dynamic environment with the political issues gives the organization no solid ground for definitive decisions and actions. Planning is not a strategy process that is possible with this project according to Minkman. The broadcaster could not mobilize this resource and it has not been mobilized against the broadcaster either.
“Yes this could have gone faster. This is not happening because of the fact that the NPO does not have other pressure resources with the money available. It hinders in the sense of that we only are able to make temporary decisions. We know more or less what the new Media Act will contain.” (Minkman 2013)
Conclusion
It is clear that the organization possesses only knowledge resources to affect the total project. Other organizations (municipality of Hilversum, ministry and NPO) have tried to influence the strategy of the VARA with material resources. These resources are in the emergent part of the model which fits the dynamic, unstable environment in which the organization operates. Lack of planning resources during the project slows down the process of the VARA and their accommodation strategy and thus the total project of the Dutch broadcasters. A provisional new Media Act and proposed strategies in the BCG report were the only planning resources mobilized. Though mobilized it did not effect actions and decisions positively during the project much. No other organization can force the VARA to act differently and faster or can affect decisions concerning the cost reduction of their accommodation. The organization has the total legitimacy to realize their own accommodation strategy while it is an autonomous organization. Only moral force can be used and the VARA is defending this moral force by stating that their new accommodation will be much cheaper. The commitment of the VARA to realize cost reductions is lacking. The aim of the project therefore (cost reductions of accommodation) is hard to achieve while the VARA is only involved to realize this. The resources mobilized by and against the VARA are summarized below and this shows that the organization does not have many resources to affect or effect the total project while other actors have tried to influence the VARA with other resources than deliberative ones.
Resource Mobilized by Property Offering attractive property Municipality Hilversum alternatives Finances Subsidy for merger Ministry Subsidy for friction costs Expertise Boston Consulting Group Ministry Brink Groep VARA Information Organizational statistics Boston Consulting Group Accommodation statistics (ministry) Legitimacy Moral force/ethics Mayor of Hilversum, Director NOS, VARA Instruments Provisional Media Act changes Ministry, BCG (ministry) Proposed strategies in Boston Consulting Group publication Table 11. The resources of the VARA case study
The strategy-as-force model following this table for the VARA case study is shown below. The model shows that mostly emergent resources are mobilized during the process where only one of these resources is mobilized by
64 the VARA itself. Other resources were mobilized by the municipality, ministry and NPO. However these resources were not sufficient to successfully force the VARA in order to effect the total project.
Figure 22. The strategy-as-force model of the VARA case study
3.3.2 BNN
Property and finances
The BNN does not own their current property so this can’t be used by the organization as a resource towards other organizations. The municipality of Hilversum, as shown in the VARA case, has tried to influence the VARA- BNN decisions by offering alternative accommodation in Hilversum. The broadcaster does not have any financial resources to influence the project. They need to cooperate with another organization to obtain a strong position within the public broadcasting system. The ministry has tried to affect the project by mobilizing financial resources (reimbursing friction costs for example) to motivate the VARA and BNN to move to another property.
Expertise and information
The BNN uses the same expertise as VARA as one of the resources in this project to obtain more knowledge and therefore a strategic position towards other organizations of the system. The organization has approached (with the VARA) three different organizations for their strategic decisions on accommodation. The first expertise is the BRINK Groep organization. The BRINK Groep provide the VARA and BNN with consult on accommodation issues. Rudy Stroink, a real estate consultant and founder of the bankrupt organization that owned many properties on the Media Park, is the second expertise that the VARA and BNN have included.
65 Endemol, a commercial broadcaster, has also moved to the Bijlmer so information/knowledge on how this accommodation strategy has worked out can be used by the BNN in their decision making. The ministry has provided all the broadcasters, including BNN, with financial and organizational facts. The broadcaster indicates that they would want more information about other organizations in the process. The fact that BNN does not have the information resources they need indicates that their position is weaker than the VARA.
“It is absolutely true that we would want more information of other broadcasters. It would be much better than it is now. Have you spoken to the VPRO and what do they think?” (Adriani 2013)
Legitimacy and commitment
While the organizations operate in the same environment, the BNN also has the power to make decisions on their accommodation, without the NPO or government interfering. The organization is the only one that has the legitimacy by law to make decisions about the real estate. They cannot control the acts or decisions of the other broadcasters. However legitimacy as a moral force mobilized in the VARA case also counts for the BNN case. The organization is committed to their own decisions and plans concerning the accommodation, but certainly not committed to the complete reorganisation of accommodations. These deliberative resources are not mobilized during the process.
Time/result and Instruments
There is no planning framework available for the organizations. Hence the ministry and NPO could not mobilize this resource due to the dynamic environment of the national politics. During the process there were only proposed modifications (no official) of the current Media Act. The other instrument that was mobilized included the proposed strategies by the Boston Consulting Group report. The General Director of BNN Marc Adriani emphasizes that the position of a merged broadcaster must be clearly described by the Media Act (instrument), otherwise merging and changing accommodation is not an attractive option. He also stated that there is too much time in this process due to the events in the Hague (where the parliament houses).
“Yes there is too much time because of The Hague. It is going too slow and I think we are talking too much with each other. Time pressure would speed things up.” (Marc Adriani 2013)
Conclusion
The conclusion can now be made to what resources are available and used by the BNN in the process. The table on the next page shows the mobilized resources by and against the BNN. The emergent environment in which they operate is the same as the VARA. The only resource the BNN has mobilized is the expertise that they have consulted together with VARA. As the BNN has operated using the same accommodation strategy as the VARA, other actors have tried to influence both VARA and BNN at the same time. The resources mobilized against the BNN are therefore also identical to those of the VARA. While the BNN is a much smaller broadcaster than the VARA, the latter took a more authoritive position during the process.
66 Resource Mobilized by Property Offering attractive property Municipality Hilversum alternatives Finances Subsidy for merger Ministry Subsidy for friction costs Expertise Boston Consulting Group Ministry Brink Groep BNN Information Organizational statistics Boston Consulting Group Accommodation statistics (ministry) Legitimacy Moral Force/Ethics Mayor of Hilversum, Director NOS, BNN Instruments Provisional Media Act changes Ministry, BCG (ministry) Proposed strategies in Boston Consulting Group publication Table 12. The resources of the BNN case study
The strategy-as-force model following this table for the BNN case study is shown below. The model shows that the resources are identical to that of the VARA case study. This is only logical while the organizations are collaborating on their accommodation strategies. Within the process they are acting as VARA-BNN using an embedded strategy. The organizations are thus operating with the same resources and the other actors mobilize the resources against VARA-BNN. The VARA and BNN strategy-as-force model can now thus be seen as the VARA-BNN strategy-as-force model.
Figure 23. The strategy-as-force model of the VARA and BNN case study
67 3.3.3 TROS
Property and finances
The TROS does not fully own the property and they have a rent contract that expires this year. For the 25% owned share of the property the TROS has to find a tenant to be able to reduce the costs of accommodation. It therefore certainly plays a role in the accommodation project of the TROS and AVRO. The organization has large financial reserves to spend on possible accommodation strategies. This is the reason that the organization can afford incidental investments on a redevelopment of an old property like the Wereldomroep building. The ministry has tried to influence the decisions of the broadcaster by offering extra subsidy for costs made during the moving. This is the only material resource mobilized to effect the project.
Expertise and information
A real estate broker is the only expertise that the TROS has used during the process. The broker has explored several options for the organizations new accommodation. For the design of the new accommodations interior the broadcaster has contract the architect Cleassens Erdmann. The information required for the strategic decision making process is also lacking, according to the General Director. The accommodation statistics and organizational statistics in the BCG report is not sufficient for the broadcasters. The director confirms the small amount of expertise and information in the following statement:
“Yes I would have liked to have a bit more information. There is little expertise here in the field of real estate.” (Peter Kuipers 2013)
Legitimacy and commitment
The legitimacy resource has only been mobilized in the TROS case study. This is due to the fact that the state secretary Sander Dekker has threatened to withdraw the licence of the TROS if the broadcaster would no cooperate. The broadcaster can make own decisions about the real estate but was forced to collaborate with the AVRO. The organization is committed to their own decisions and actions, but only involved if it concerns the total accommodation situation and its total cost reductions to meet the budget cuts. No actor during the process has mobilized the deliberative resources as was already shown in the previous case studies.
“There is no management that can control the actors, the authorative power is not present.” (Peter Kuipers 2013)
Time/result and Instruments
The General Director of the TROS confirms the lack of time urgency. The only official instrument that was used at the start of the process was the BCG report with the possible strategies for the accommodations of the broadcasters, including the TROS. The planning instrument that is of the highest importance for the broadcasters, the Media Act, is still to be officially changed. The terms and conditions for the broadcaster are uncertain and only provisional decisions can be made. The process of formulating an accommodation strategy is affected by the lack of these planning resources. The broadcaster has tried to force the ministry to officially present a new Media Act as a planning instrument by stating in newspaper articles that the merger will not proceed. In reply the ministry has forced the TROS to collaborate or leave the public broadcasting system (see appendix IV). This has been the first mobilization of legitimacy to force other actors to act in a certain way. The
68 threat of withholding the licence is a legal force towards the TROS to collaborate with the AVRO. Peter Kuipers states:
“We have used the media deliberately to create urgency for decision making. I can’t rent a property while the terms and conditions are uncertain. Mutual agreements are blocking this process. The Media Act is a law that you can adjust constantly, for example the guaranteed budget. As long as those agreements are lacking, my budget is uncertain as a merged organization and I’m unable to advance in the process of moving to a new accommodation.” (Peter Kuipers 2013)
Conclusion
The only resource mobilized by the TROS is the small use of expertise. The TROS has financial reserves and will receive an extra subsidy due to the merger and friction costs. Unlike the VARA and BNN case there is no property offered by other actors while the choice for the Wereldomroep building is within the desired end result. The Director states that there is a lack of expertise on the field of real estate and also a lack of information available to the organization. As seen before, the left side of the model is lacking during this process due to the environment in which the organization is operating. The state secretary Sander Dekker has legally forced the TROS to collaborate with the AVRO. The threat of withholding the licence is the first mobilization of true power or legitimacy during the case studies so far. This act of legitimacy is strongly connected to the fact that the organizations are not committed to the project but only involved and thus have to be forced. The lack of mobilized planning documents and time overview of the project makes the relations between the organizations in the broadcasting system more emergent. The TROS emphasizes the fact that there is no time pressure and therefore no urgency to act or make decisions. The small amount of resources mobilized are summarized in the table.
Resource Mobilized by Property Finances Subsidy for merger Ministry Subsidy for friction costs Expertise BCG Group Ministry Real Estate broker TROS Information Organizational statistics Boston Consulting Group Accommodation statistics (ministry) Legitimacy Forcing merger by law Sander Dekker (ministry) Moral force/Ethics TROS Instruments Provisional Media Act changes Ministry, BCG (ministry) Proposed strategies in Boston Consulting Group publication Table 13. The resources of the TROS case study
The strategy-as-force model following this table for the TROS case study is shown on the next page. It shows a first mobilization of legitimacy and thus a forced collaboration. The only resource mobilized by the TROS, the expertise, is even less specialized in the field of strategic real estate management. The strategy of the TROS is therefore influenced by the amount of financial support for moving to the Wereldomroep building and forced by the threat of withholding the broadcasting licence. The resources mobilized during the process of the TROS case study are evidently on the emergent side of the model.
69
Figure 24. The strategy-as-force model of the TROS case study
3.3.4 AVRO
Property and finances
The AVRO currently still owns one third of the AKN property. Though this ownership is not necessarily a strategic resource mobilized by the AVRO as already seen at the TROS case study but certainly part of the strategy making processes. The AVRO has large financial reserves to finance one-off costs. This resource is essential for the organization to be able to finance these short term actions and decisions regarding the accommodation. The fact that the organization is willing to take the risk of having three costs (Wereldomroep building, Vondelpark pavilion and the old AKN building) while only accommodating two, indicates that the AVRO can afford these financial burdens. The extra financial resource for compensating the friction costs is again mobilized in this case study.
Expertise and information
The AVRO has included several expertise offices into the project. These experts are; a real estate broker, a real estate expert (Twynstra/Gudde) and a real estate lawyer. The organization has confirmed that this expertise is used as a resource in the whole process. The information is not sufficient according to Van ‘t Hooft. He states that the strategies of other organizations are unknown which causes the delay in the decision making process. Though the BCG report with its information is also applied to the AVRO accommodation and thus mobilized by the ministry. The statements of the Business Director of the AVRO are summarized in the following quote:
“We have called in two real estate experts to research what it is that we actually want. Broadcasters are not moving though because they are looking at each other. The key of this prisoners dilemma is obviously information on others. In that point of view more information would be needed yes.” (Van ‘t Hooft 2013)
70 Legitimacy and commitment
The AVRO cannot be legally forced into making decisions about the accommodation. There has been no mobilization of commitment towards any actors within this case study either. This absence of deliberative resources mobilized is summarized in interview with the Business Director. He confirms this by stating that the organizations mainly follow their own interests.
“The NPO has obviously little power because it has no rights to move the broadcasters. At this point there is only an incentive, but actors follow mainly their own interests.” (Van ‘t Hooft 2013)
Time/result and Instruments
The political environment of the organizations is the main reason for the lack of planning resources. The end result is constantly changing due to the changes in political regime. For the AVRO (as well as the other organizations) this means that decisions and actions concerning the accommodation cannot be adequately made. The business strategy is depending on the politics in the Hague, but the organization is still waiting on the official new Media Act. This law will be the planning instrument for the organization to have a business strategy and thus a definitive move to other accommodations. The other instrument that was mobilized is the BCG report with the proposed accommodation strategies.
“Yes our organization depends heavily on the politics in the Hague. In the spring they presented plans which they have cancelled again. They now state that the amount of members is not normative. This blocks the strategy of our organization.” (Van ’t Hooft 2013)
Conclusion
The relations that the AVRO will have with the other organizations in the process can be classified as material relations. The organization is dealing with an ownership of one third of the large AKN building and the organization has many large financial reserves to make decisions on accommodation. Though these resources were not intentionally mobilized in order to realize the project. Only the financial subsidy of the ministry is meant to motivate the broadcaster to move to a lower cost accommodation. The broadcaster has only used expertise in the process to gain more knowledge on the strategic real estate decisions. The information, as the Business Director stated, could be more extensive. If more information was available to the organization this would have increased the knowledge relations and improved the process. The only information resource mobilized has been the publication of the BCG report. Just as other organizations so far, the broadcaster has insufficient deliberative resources mobilized during the process. The AVRO has full legitimacy to formulate its own strategy and therefore no capacity to affect the total reorganization. There is no holding company among the organizations that ensures a commitment of the broadcasters to meet certain requirements. The resources that were mobilized during the process by the AVRO or other actors are not in the planning side of the model, as shown on the next page.
71 Resource Mobilized by Property Accommodation AVRO Finances Subsidy for merger Ministry Subsidy for friction costs Expertise BCG Group Ministry Real Estate broker, Twynstra AVRO Gudde Information Organizational statistics Boston Consulting Group Accommodation statistics (ministry) Legitimacy Moral Force/Ethics AVRO Instruments Provisional Media Act changes Ministry, BCG (ministry) Proposed strategies in Boston Consulting Group publication Table 14. The resources of the AVRO case study
The strategy-as-force model following this table for the AVRO case study is shown below. It shows that there have been little resources mobilized during the process. The AVRO has mobilized expertise as the only resource, just as other broadcasters. The information about other broadcasters is not sufficient according to the AVRO but the ministry has tried to mobilize information by presenting the BCG report to the broadcasters. The model is lacking half of the deliberate resources. The model therefore has a highly emergent character.
Figure 25. The strategy-as-force model of the AVRO case study
72 3.3.5 KRO
Property and finances
The KRO owns one third of the AKN building hence the resource property plays a role in the actions and decisions of the organization. The ownership is shared with the broadcasters AVRO and NCRV. The fact that both KRO and NCRV are already both owners of the building is an important aspect in this process. The KRO has large financial reserves (owned by the association) and can use this resource in the project as well. The financial resource in the form of a subsidy was mobilized by the ministry to reimburse the costs of collaboration.
Expertise and information
The broadcaster does not need further information about other broadcasters in the process. The organization states that the information provided by the BCG research is sufficient. The organization has not used a strategic real estate management firm to help in the process. The only expertise used, bureau Rietmeyer, has focused on the AKN building and its possibilities concerning flexible workplaces. It has researched the possibilities of reorganising the existing situation and creating an optimal situation for the organization. It was not mobilized to have a stronger capacity for the entire project. The General Director of the KRO mentions the following on the expertise matter:
“They have researched to what extend it is possible to rearrange a building to a flexible situation with flexible workplaces to create more workplaces. That process has run parallel with the research of the Boston Consulting Group so we were well prepared.” (De Haan 2013)
Legitimacy and commitment
The ministry did not mobilize its legal power towards the broadcaster. The organization is committed to their own decisions and plans concerning the accommodation, but certainly not committed to the complete reorganisation of accommodations. The broadcaster will focus on the merger like the other merging broadcasters have done. The KRO General Director emphasises that the role given to the NPO is inefficient due to the lack of power and responsibility. But there is use of ethical responsibility while the broadcaster is staying in the accommodation to not lose public money.
“There is no formal power. The NPO is sometimes seen as a representative and sometimes not. That contains a dilemma.” (De Haan 2013)
Time/result and Instruments
The BCG report was the only instrument for the broadcaster to strive for, but could not be mobilized effectively. During the timeframe given for the budget cuts, there have been many developments. Thus the extensive timeframe is an important reason for the uncertainty of the organizations. No planning resources could be mobilized to force the organizations into a satisfying result.
“A budget cut is announced in 2010 which will be effected in 2014. I think the fact that little progress can be made weighs heavily for the organizations.” (De Haan 2013)
73 Conclusion
The KRO is dealing with an ownership of one third of the large AKN building and the organization has many large financial reserves to back up any financial losses. The broadcaster has only used one innovative workplace design bureau to research the possibilities of the existing building. Other expertise on accommodation strategies are not mobilized by the KRO in this project only by the ministry through the Boston Consulting Group. The broadcaster also indicated that the information provided and mobilized by this BCG research has been sufficient. The organization is not in need of information about other strategies. Just as other organizations seen so far, the broadcaster has insufficient deliberative resources. The KRO has no legitimacy to control actions and decisions of others due to the system of the broadcasters. There is no holding company among the organizations that ensures a commitment of the broadcasters and can manage the total real estate portfolio. Next to this the planning relations are hardly present due to the changing politics and unofficial Media Act changes. The organization states that an the time frame of the policies is stretched out over 4 years which provides a difficult situation for the organization and no mobilization of any time or result pressure.
Resource Mobilized by Finances Subsidy for merger Ministry Subsidy for friction costs Expertise BCG Group Ministry Bureau Rietmeyer KRO-NCRV Information Organizational statistics Boston Consulting Group Accommodation statistics (ministry) Legitimacy Moral Force/Ethics KRO Instruments Provisional Media Act changes Ministry, BCG (ministry) Proposed strategies BCG Table 15. The resources of the KRO case study
The strategy-as-force model following this table for the KRO case is visualized below. The model explains the emergent mobilization of resources during the project. The KRO has only used Bureau Rietmeyer as a resource. The ministry could not mobilize enough resources to effect and/or affect any movements.
Figure 26. The strategy-as-force model of the KRO case study
74 3.3.6 NCRV
Property and finances
The NCRV is the third organization of the case studies that owns one third of the AKN building. The resource property plays a role in the actions and decisions of the organization. The ownership is shared with the broadcasters AVRO and KRO. The fact that both KRO and NCRV are already both owners of the building is an important resource in this process. The NCRV has large financial reserves and could have mobilized this resource in the project as well. However the organization states that the merger bonus is the financial incentive that is critical for the upcoming merger with the compensation for friction costs included. The financial resource is available but not needed so far, while the organization is not investing in moving but only rearranging the interior.
“Yes if that bonus is removed, what is then the bonus for everything we are planning compared to the standalone broadcasters? It would be very strange if that is reversed.” (Van Kolfschoten 2013)
Expertise and information
The fact that the organization states that the information provided by the BCG research is sufficient means that their own actions and decisions are not influenced by the information of others. The organization has not mobilized a strategic real estate management firm to influence other actors. The only expertise used, bureau Rietmeyer, was used for realizing the broadcasters’ own strategy. It has researched the possibilities of reorganising the existing situation and creating an optimal situation for the organization together with the KRO.
“No we have enough information from the NPO and we don’t need information from other broadcasters. It’s more about the other resources like vision, leadership and clear frameworks.” (Van Kolfschoten 2013)
Legitimacy and commitment
The organization is only involved if it concerns the total accommodation situation and the cost reduction that the NPO and government are aiming for. Like other case studies during this research the legal situation is identical. The fact that the subsidized organizations can make all decisions freely about the accommodation offers no strategic power to the NPO or ministry to affect or effect the accommodation strategies of other actors. The only boundary for the NCRV is the irresponsible use of public subsidy. Justification of the choices is done by the conservative accommodation strategy.
Time/result and Instruments
The dynamic political environment of the organizations is the main reason for the lack of planning resources. The comment below from the interview held with the Business Director of the NCRV shows that this is a huge obstacle for the organization and an important missing resource in the project. The ministry has only provided some strategies for the total reorganization as planning resources. Obviously this was not sufficient for the NCRV (and other broadcasters).
“The politic sometimes changes within one year. Hilversum is filled with the legacies of old politicians which is not a good thing…In normal businesses they work with a shorter period and clearer frameworks and that works when you know as an organization where to go. It is now a series of budget cuts after each other…For example
75 the Media Act of last year may and now before the summer does not contribute to a fast decision making process, also concerning the accommodation strategies.” (Van Kolfschoten 2013)
Conclusion
No material resources were effectively mobilized towards other actors in order to realize a total strategy. The broadcaster has used one bureau to research the possibilities of the existing building. Other expertise on accommodation strategies are not used by the NCRV in this project or process. The broadcaster also indicated that the information mobilized by the BCG research has been sufficient. The organization is not in need of information about other strategies. Just as other organizations seen so far, the broadcaster has insufficient deliberative resources. The NCRV has no legitimacy to control actions and decisions of others due to the system of the broadcasters. There is no holding company among the organizations that ensures a commitment of the broadcasters and can manage the total real estate portfolio. Next to this the planning relations are not present due to the changing politics and changing desired end result. The Business Director has shown that this lacking resource is of critical importance for the difficult process the organization is dealing with. The ministry has tried to mobilize some resources in the form of the BCG report and announcements of a changing Media Act.
Resource Mobilized by Finances Subsidy for merger Ministry Subsidy for friction costs Expertise Boston Consulting Group Ministry Bureau Rietmeyer KRO-NCRV Information Organizational statistics Boston Consulting Group Accommodation statistics (ministry) Instruments Provisional Media Act changes Ministry, BCG (ministry) Proposed strategies in Boston Consulting Group publication Table 16. The resources of the NCRV case study
The strategy-as-force model following this table for the NCRV case study is presented below. The model again clearly lacks the mobilization of deliberative resources in order to affect and/or effect the project. The NCRV has not mobilized many resources for the entire strategy while its only resource used (expertise) has only been a bureau for innovative workplace design.
Figure 27. The strategy-as- force model of the NCRV case study
76 3.3.7 VPRO
Property and finances
The VPRO will not receive a bonus for a merger or compensation of friction costs. If the broadcaster would have moved it would have received a compensation for extra costs. Though this compensation was not sufficient for the broadcaster. One of the assets of the organization is the property that is fully owned by only the VPRO. The fact that the organization has the resource of property but has small financial resources creates an important insight for the position of the VPRO. The broadcaster was not offered any alternative property to motivate any movement.
“If we as a broadcaster sell our property for a low price our liquidity position will become worse. That is also playing a role for the VPRO because a lot of our equity is in our property. The ministry wants to finance a bit as well but it remains a loss of capital.” (Van Der Meulen 2013)
Expertise and information
The expertise of the VPRO with knowledge on accommodation (strategy) consists of a real estate broker and a facility manager. The real estate broker has appraised the building to have a current value of the property. The broadcaster has not included other expertise for the strategic aspect of the accommodation like other broadcasters have done. The broadcaster thus focuses purely on the current building with its value and possibilities. The broadcaster does not require more information on other actors in the process to make a better decision on their real estate. Therefore the information resource mobilized by the ministry through the BCG report is sufficient for the organization.
Legitimacy and commitment
The legitimacy resource is again essential in the process while the organization cannot be influenced by others in their actions and decisions concerning the accommodation. The ministry could not mobilize the legal power against the VPRO in order to affect any desired results. Though they have motivated their decisions by using moral force. Like the other organizations, the commitment to realize a cost reduction is lacking. This is due to the fact that the organization is not responsible for the budget cuts of all the broadcasters and therefore the decisions and actions can be based on other values. The organization is not committed to the total reorganization and cost reduction of the total real estate of the broadcasters, but only involved.
“No one can force us to move but they can reduce our program production budget because we a in the way of a solution that can lead to cost reductions, as a sort of sanction.” (Van Der Meulen 2013)
Time/result and Instruments
The organization has no clear time frame and instruments to be able to make a clear planning for the accommodation. Most important for the organization is the constant changing policy and repeated budget cuts which has a consequence for the amount of employees in the future. The amount of employees influence the space needed in the current building and the efficiency matter and sharing the facilities with third parties. These resources are lacking and slows down the process of the organization and therefore the total process as well. The provisional Media Act and proposed strategies of the BCG report were the only planning instruments mobilized.
77 Conclusion
The fact that the VPRO owns the current accommodation and cannot be forced by law to change the strategy weighs heavily for the total project. Next to this the broadcaster is lacking financial resources to back up changes or investments of the accommodation. The organization has a small amount of liquidity assets which influences the accommodation strategy within the total project. There is not much room for the organization to change the accommodation strategy directly. The ministry could not mobilize enough resources to motivate any movement of the broadcaster. The VPRO has chosen to stay in the accommodation they’re currently in and have tried to gain knowledge on the accommodation by collaborating with a real estate broker and facility manager. The organization is not committed to realize any budget cuts and with the other resources in mind thus chooses to stay in the current accommodation. As seen with the other organizations, time and result pressure is scarce which influences the accommodation strategy and thus the total project as well. The resources of the VPRO are summarized in the table below.
Resource Mobilized by Finances Subsidy for merger Ministry Subsidy for friction costs Expertise Boston Consulting Group Ministry Real Estate broker VPRO Information Organizational statistics Boston Consulting Group Accommodation statistics (ministry) Legitimacy Moral Force/Ethics VPRO Instruments Provisional Media Act changes Ministry, BCG (ministry) Proposed strategies in Boston Consulting Group publication Table 17. The resources of the VPRO case study
The strategy-as-force model following this table for the VPRO case study is shown below. The resources mobilized in the VPRO case are situated in the emergent side of the model and mostly mobilized by the ministry and NPO. The VPRO has only used a real estate broker in order to gain expertise knowledge.
Figure 28. The strategy-as- force model of the VPRO case study
78 3.3.8 EO
Property and finances
Due to the proper business strategy the EO does not need financial support and can act very independent in the current process of the public broadcasters. Mobilization of financial resources against the broadcaster would therefore not have the desired effect. There was not alternative property mobilized to motivate the broadcaster to move. Kooij states that material relations with the government are not needed due to proper business.
“We have done proper business and organizations that have taken high risks by buying large properties now have to be helped” (Kooij 2013)
Expertise and information
The expertise that the broadcaster has used only focuses on the value of the building and the implementation of innovative workplace design. There is no strategic consultant involved while the strategy is determined by the organization without expertise. The only information mobilized again is the publication of the BCG report and this was sufficient according to the broadcaster.
“I think the organizations involved in this process differ too much from each other. Everyone is allowed to know everything about us and in the BCG report that is all quite transparent. (Kooij 2013)
Legitimacy and commitment
The division of power that the EO Director mentions is part of the legitimacy aspect of the strategy-as-force model. In the case of the Dutch public broadcasters this aspect is of high importance for the lacking of a fast and smooth process. The EO Director gives an example of the disadvantages of the current structure of the Dutch public broadcasters. The fact that the organizations are not committed to the project is, according to Kooij, partly due to the fact there a many organizations with different interests.
“I think you could say that the board structure is blocking a solution. If I get a fine for blocking an efficient strategy I can still say that I find my own culture more important. I will use my own financial resources or do a cost reduction on another part. You always feel responsible for the whole project but we are not ‘owner of the problem’. The NPO is owner of the problem and maybe there is no other solution with this many organizations and interests.” (Kooij 2013)
Time/result and Instruments
Kooij confirms that his organization is operating in a uncertain and dynamic environment which cannot be done with structural planning. The switching between what is important for the business strategy implies that the accommodation strategy is hard to determine as well. The business strategy is determined by the organizations according to the Media Act which has at the time of the case study not been formulated. Therefore the planning instruments are absent. The only planning instrument mobilized was the proposition of different accommodation strategies for the broadcasters.
79 Conclusion
The organization has a very strong culture and identity which is perfectly reflected in their accommodation. Due to this perspective the resources mobilized had to be much more than actually used. The organization is owner of the property and does not need financial resources to be persuaded into making certain decisions. The organization has enough knowledge for their strategy while the information published by the BCG report appeared to be sufficient. The Director has clearly stated that the legal power of the organization is sufficient for making own decisions according to their interests. The authoritive position is therefore quite strong and the broadcaster was not being forced by the mobilization of legitimacy or commitment. The organization cannot make long term plans due to the dynamic environment. It can be concluded for the EO case that the strategy- as-force model is a solid explanation for the difficult process. The resources mobilized during the EO case study are shown in the table below.
Resource Mobilized by Finances Subsidy for merger Ministry Subsidy for friction costs Expertise Boston Consulting Group Ministry PWC/KPMG EO Information Organizational statistics Boston Consulting Group Accommodation statistics (ministry) Legitimacy Moral force/ethics EO Instruments Provisional Media Act changes Ministry, BCG (ministry) Proposed strategies in Boston Consulting Group publication Table 18. The resources of the EO case study
The strategy-as-force model following this table for the EO case study is shown below. The model is comparable with the other case studies while it lacks the mobilization of deliberative resources. The only resource mobilized by the broadcaster in order to affect the project is the use of little expertise.
Figure 29. The strategy-as-force model of the EO case study
80 3.3.9 NTR
Property and finances
The broadcaster is owner of the property together with the VARA. The broadcaster can use this resource against the VARA if the plans are not pleasing the organization. The NPO has tried to seduce the NTR into moving in with them by offering an attractive, low cost part of the building. This mobilization of property is comparable with that of the municipality of Hilversum in the VARA and BNN case. Though the organization does not have large financial resources as Van Bemmel stated (see risk control) to use during the project. The financial losses of selling the property for a much lower price due to the market conditions would cause big problems for the broadcaster. The NPO and ministry could not mobilize enough financial resources to effect this movement of the NTR while it still offered reimbursement of friction costs.
Expertise and information
The NTR depends on the VARA to make decisions and is not changing its situation at the moment due to the lack of information. The broadcaster has not mobilized any experts to give advice on any future events concerning their real estate. The information mobilized by the ministry through the expertise of the BCG report has not been sufficient for the broadcaster.
“We regularly organise meetings with the VARA but we have noticed that they don’t show us everything they are planning. So we can’t do much and are basically waiting.” (Van Bemmel 2013)
Legitimacy and commitment
The NTR has the same legitimacy and commitment issues as the other case studies. It is fully legitimized to make decisions and act with their own real estate and other company assets. Though it has no legitimacy towards the total strategy. The broadcaster was not forced to integrate with other broadcaster by a mobilization of legal power. The broadcaster has legitimized this decision by stating that selling the property would be a waste of public money. The commitment of the organization differs slightly from other broadcasters as it is a task broadcaster. Moving the NTR would therefore be easier and it is therefore not surprising that the NPO has tried to seduce this broadcaster into moving. The NTR cannot be committed to any actions as it is making its own decisions.
“No we cannot be forced to do anything but if there will be a structural bonus we would consider moving.” (Van Bemmel 2013)
Time/result and Instruments
The NTR is not a broadcaster that is very involved in the entire process. It is mostly focusing on the value of their real estate and the plans of the VARA. There are no structured plans for concerning the accommodation as the Media Act was not officially modified. The broadcaster has not mobilized any communicative instruments in order to try and realize the project. The desired en result is formulated by the NPO and ministry in the publication of the BCG report in April 2012. The NTR did not mobilize the resources of the strategic planning process part of the strategy model either.
81 Conclusion
This paragraph has discussed the added values and resources of the NTR. The task broadcaster NTR is not planning to act in any way with their accommodation. The organization is waiting for the VARA to act but is not changing anything about their own accommodation. The broadcaster is also not in the strongest position as it lacks all strategic resources. The NTR cannot be forced into moving while the financial loss would cause many problems for the NTR. The mobilization of the NPO property did not have a desired effect either.
Resource Mobilized by Property Offering attractive property NPO alternatives Finances Subsidy for merger Ministry Subsidy for friction costs Expertise Boston Consulting Group Ministry Information Organizational statistics Boston Consulting Group Accommodation statistics (ministry) Legitimacy Moral Force/Ethics NTR Instruments Provisional Media Act changes Ministry, BCG (ministry) Proposed strategies in Boston Consulting Group publication Table 19. The resources of the NTR case study
The strategy-as-force model following this table for the NTR case study is shown below. The model shows that the NTR has not mobilized many resources during the process. The interests and goals of the NTR are not focused on changing property in any way. The NPO has in vain tried to motivate the NTR to integrate the properties but the broadcaster was not interested due to capital losses. The ministry could not mobilize sufficient financial resources to effect this movement.
Figure 30. The strategy-as-force model of the NTR case study
82 3.4 Conclusion
3.4.1 Resources compared
Material relations
Property
The first resource that has been researched is the use of property. First of all the case studies proved that the broadcasters have different ownership situations. Broadcasters are deciding not to move due to the fact that they own the property. The only broadcaster that is moving easily is BNN while the rent contract is already terminated. Other broadcasters VARA, TROS, AVRO, KRO, NCRV, VPRO, EO and NTR are (partly) owner of the accommodation. Some broadcasters have mentioned that they are not cooperating with the entire project while they are risking a significant book loss or double costs of accommodation. This resource is thus mobilized by the organizations towards the government in the strategy formation process. Though it has certainly affected the process in a negative way, it is not used by the organizations as a strategic force to effect a certain outcome. The VARA and BNN cases showed that the mayor of Hilversum has tried to convince the broadcasters to reconsider their plans by offering property in Hilversum with lower rents. The mayor of Hilversum and the NPO have used property in such a strategic manner.
Finances
The case studies have shown that the government uses financial resources to try and effect the entire project. The first financial subsidy is given to merging broadcasters. If two broadcasters combine their organizations they will receive an extra bonus on top of their (doubled) regular subsidy. This has been the initial incentive for the broadcasters to merge and combine their accommodations. Next to this subsidy the government has arrangements for compensating book loss and one-off investments. The level of these so called ‘friction costs’ determines the willingness of the organizations to move. This is due to the fact that the compensation will reduce the period of earning back the losses and having structural cost reduction on accommodation. These financial resources are used to influence the decisions of the broadcasters in their strategic process. Once again the resources are not used by the broadcasters but against the broadcasters to try and effect certain actions and decisions.
Knowledge relations
Expertise
The process of the reorganization of the accommodations of the public broadcasters also depends on the expertise on the field of real estate. While the broadcasters do not have in-house expertise on the strategic use of real estate, the case studies have shown that only a few broadcasters call in expertise to have more knowledge on the matter. The expertise that many broadcasters have used as a resource only includes the expertise that is necessary for already made decisions about the accommodation. Many broadcasters have therefore not carefully researched other options as their minds were already made up. Only VARA (and BNN) and AVRO have used strategic management bureaus to help in their decision making process. The broadcasters did not use a collective expert for the entire project, hence the broadcasters have not made sufficient use of the expertise as resource. The only expertise for the entire project has been the Boston Consulting Group. This expertise was requested to initiate a full research on the accommodations by the ministry of Culture, Science and Education. By using this resource the ministry has tried to effect the actions and decisions of the broadcasters. The problem statement in paragraph 1.2 already showed that this resource was not sufficient to effect the project.
83 Information
The information provided by the Boston Consulting Group has been sufficient for some of the broadcasters involved. In this report all the financial facts of the accommodations were published towards the broadcasters. Initially the report of the BCG was provided as a planning document to effect the project of the total accommodation reorganisation. The outcome of the report was an overview of several strategies that the broadcasters could choose from. The NPO tried to push the broadcasters to realize the desired strategy of the report with a structural saving of 6.9 million. Though due to changes in the market and extra budget cuts the BCG report has changed into an information resource to affect to entire project. Also, some broadcasters stated that knowledge about the strategies of others could have helped their process. The difference in the level of information required by organizations can be explained by uncertainty of the general management about their strategy. Especially the BNN and NTR showed that the information resource is not sufficient for a well-designed accommodation strategy. The NTR depends on the actions and decisions of the VARA and is thus in a weaker position with less information. The BNN with scarce resources has a weak strategic position within the system.
Deliberative relations
Legitimacy
The legitimacy resource has been an interesting part of this process. Legitimacy is the right to control the actions and decisions of others. While every broadcaster involved has legally full rights on their own (part of the) accommodation, they cannot be forced to make certain decisions about the real estate. Vice versa they cannot force other broadcasters to act in a way or make a certain decision. Both the ministry and NPO do not have the legitimacy to affect the entire project either. The other part of legitimacy is to justify decisions/accountability. Legitimacy in this form can be considered of high importance for public organizations. Hence this is done several times during the case studies but did not provide enough force towards realization of the total reorganization. A project like this is therefore hard to manage for an organization like the NPO or the government. The government and NPO had to use other resources to force the broadcasters to make certain decisions about their accommodation.
Commitment
The crucial part of the case studies, commitment, concerns the commitment of realizing the total reorganization. Due to the fact that the broadcasters are only involved, the need for a cost reduction and a collaboration towards a better end result is not strong. This is connected to the legitimacy resource while the umbrella organization of the broadcasters NPO has no legal rights to manage the accommodations. The broadcasters can therefore act within their own interests and that makes them not responsible for the end result; a cost reduction on the total amount of accommodation costs of the Dutch public broadcasters. The broadcasters are committed to their own goals and interests and involved in the total project. The ministry and NPO are committed, while they have to make sure that the budget cuts will be realized. The only power that the government has to commit broadcasters to cooperate is strongly related to finance. The licence for receiving a part of the Media Budget subsidy can be withdrawn by the government. An example of this use of commitment is the TROS ‘threat’ in February 2013 where the broadcaster claims not to proceed with the merger if the programming plans of the NPO are continued. The government then has used the threat of withholding the licence to put pressure on the broadcaster. State Secretary Sander Dekker has replied to the TROS media statement with this (also via the media) a few weeks later. Due to its stronger relation with financial resources this commitment resource will be seen as a financial resource.
84 Planning relations
Time/Result
The first of the planning resources is creating a time pressure to realize fast results. In political environments it is often the case that politicians involved want results and they want them immediately to show their capacity. The case of the Dutch public broadcasters however shows a timeframe of several years instead of politicians that want immediate results and creating time pressure. The mergers were announced in May 2011 and have to be realized in 2016. This has given the broadcasters a time frame of nearly 5 years to decide what to do with their real estate situations. The time frame has therefore also included a second budget cut by the government and a heavily declining real estate market which changed the perspectives of the broadcasters. The future demand of space will change due to the reduction of employees. The lack of time pressure and fast result from the government has been an important reason for the cautious and conditional accommodation strategies. The strategy-as-force models of the broadcasters show the exact same results in this particular part of the model.
Instruments
The instruments of the strategy-as-force model can be used both legal as well as communicative. The instrument with legal grounds is the Media Act (see paragraph 1.1). The Media Act has not been officially changed during the period of the research which caused the temporary, non-official accommodation strategies. The other initial planning instrument has been the publication of the Boston Consulting Group. This document provided several accommodation strategies to realize the budget cuts. Every broadcaster has collaborated in this research and the conclusion was made that one strategy would be desirable. Though the second budget cuts and worsened market conditions made this instrument outdated. The BCG report has become more an information resource during the research. Other communicative instruments can be presentations, newsletters, media statements, booklets, social media and websites. Newspapers and other media have been used especially by the merging broadcasters. They have tried to put more pressure on the governmental policies to be able to make proper decisions on accommodation. The VARA-BNN have also experienced strategic media use by a new actor in the process; the municipality of Hilversum. Mayor Pieter Broertjes has often used newspapers and television to get more support. By getting more support the mayor has tried to force VARA-BNN to stay in Hilversum.
The resources identified during the case studies are summarized in the table on the next page. It shows what resources are mobilized and by whom these are mobilized as well. The resources of the case studies combined show that there is a clear lack of deliberative and planning resources. The planning resource of the BCG report is between brackets while it could no longer be applied during the process. The results also show that the NPO and ministry are the only actors that have tried to push the entire project forward.
85 Relation Resource Case study results Mobilized by Material relation Property Offering attractive property NPO alternatives Municipality Finance Media budget : merger bonus Ministry Media budget: Licence NPO Friction costs subsidy Reallocation temporary fund Knowledge relation Expertise Boston Consulting Group Ministry
Rudy Stroynk, Brink Groep VARA/BNN Real estate broker, real estate AVRO expert, Twynstra Gudde Bureau Rietmeyer KRO/NCRV Real estate brokers TROS KPMG/PWC EO Information BCG results: Ministry Financial/organisational facts of the broadcasters Deliberative relation Legitimacy Ethics Municipality, all broadcasters Commitment Planning relation Time/Result Instruments (BCG-report) Ministry Table 20. Relations and resources of the case studies
This table is visualized in the strategy-as-force model below. The model shows in one single glance that there is a clear lack of deliberate resources used by the broadcasters of the case studies. The action of the State Secretary is judged more as use of a material strategic resource (finances) while the BCG report is no longer a planning resource.
Figure 31. Resources mobilized in the project
86 3.4.2 Deficient processes
Daamen’s Strategy-as-Force theory proposes that the things people decide and do in order to bring a project forward corresponds with the resources they are able to draw upon themselves and mobilize through others. Now that the resources that are mobilized have been collected throughout the case studies, the force relations can be identified. From this point a conclusion can be made about the ability to bring the project forward. This ability will result in strategy processes behind the actual accommodation strategies of the broadcasters.
The material relations are mostly mobilized during this process. Financial resources are important for the broadcasters and the NPO and ministry have tried to influence the organizations with (threat of withholding) subsidies and bonuses. Property is used by the municipality of Hilversum and NPO to try and bring the project forward by offering low cost property. Though the financial and property resources were not attractive enough for an effective force. The knowledge relations between broadcasters and ministry existed through both expertise as well as information. The most important knowledge resource has been the Boston Consulting research. Some broadcasters have also hired experts in the field of real estate. Deliberative relations did not exist much during the project of the public broadcasters. No actor during the process had true power or capacity with a legal prerogative to coordinate actions and decisions of others about the real estate. Only moral force was used to influence the outcome of strategies. Next to this the actors could not be easily aligned due to their focus on culture and image which eliminated the mobilization of commitment. Only the ministry and NPO were committed to realize the reorganisation but could not force this upon the broadcasters. The planning relation existed only in the form of a BCG research which could no longer be used along the way. It can therefore be concluded that the NPO and ministry tried to mobilize some emergent resources for the realization of the project, though the resources and adjacent force relations were not sufficient to effect an efficient alignment.
Now that the resources are known a conclusion can be made concerning the strategy processes in the Strategy- as-Force model. First of all it is clear that the process is lacking strategic planning processes. The strategic planning of the Boston Consulting Group was initiated as a planning resource to have a desired end result on paper. This planning instrument has proven not to function in the dynamic environment in which the organizations are operating. Hence the Boston Consulting Group document of April 2012 has turned into an information resource while most of the organizations have indicated that the information for the project is sufficient due to this research by BCG. When the BCG document was published, the organizations have called in several experts on real estate, depending on their own situation. All the knowledge from the experts in the project have thus turned into information. The strategy formation process in this phase can be classified as strategic learning.
After receiving the required knowledge about the project, the broadcasters have negotiated with the NPO and government about the preconditions for the new accommodation situation. The ownership of the properties has been the main problem for the organizations while the capital losses are expected to be fairly large in this economic recession. The ministry offers ‘friction costs’; costs to compensate the investments and losses because of the changes that the broadcasters have to make in their accommodation situations. The NPO and municipality of Hilversum tried to influence the broadcasters by offering attractive property alternatives. This phase of strategic venturing is still going on during this thesis and is currently the only strategic formation process in the case of the Dutch public broadcasters. Though the material resources that were mobilized do not seem to be enough force for the organizations to make risky decisions about the accommodations.
It has been evident during the strategy formation processes that the organizations are stuck on the right side of the strategy-as-force model, especially in strategic venturing. There are no planning resources available anymore to provide stability in the business processes and accommodation strategies. The absence of commitment has been essential for the difficult process of the Dutch public broadcasters. There is no
87 legitimacy to force broadcasters to move; the broadcasters are legally responsible for their own accommodation. The NPO has no power to coordinate the overall project and can only influence actions and decisions of the organizations with the help of other resources. The only use of legal power was the threat of withholding the broadcasting licence of the TROS and the use of moral force. The other deliberative resource commitment is lacking during the process as well. In the case of the Dutch public broadcasters the business strategies are blocking the commitment to cooperate and realize the desired end result. The broadcasters are competitors and their identities are in the way of realizing the most effective and efficient overall strategy. Concluding, strategic visioning is not part of the case of the Dutch public broadcasters. Obviously the Dutch public broadcasters cannot formulate strategies in a deliberative manner.
Below the strategy formation processes are visualized in the strategy-as-force model. The first shift has been to turn the planning instrument of the Boston Consulting Group into an information resource. Connected to this shift is the use of several individual experts as information resource for the individual accommodation strategies. The next shift has been to mobilize material resources in the strategic venturing process. Currently the organizations are stuck in this formation process, as they have no stability to move towards the left side of the model. While the theory of Daamen states that all the different quadrants need to be constantly considered, it can be concluded that the processes of the case studies are deficient. The deficient processes are visualized below.
From Strategic Planning to Strategic Learning
From Strategic Learning to Strategic Venturing
Figure 32. Strategy formation processes of the Dutch public broadcasters
88
4 Applying Strategy as Force
The evaluation of the case studies with the framework of the strategy-as-force model has provided some important conclusions. This chapter will continue with this evaluation by combining the results of the analysis of the accommodation strategies and the alignment process behind it. The use of the strategy-as- force model must be adjusted to apply as a tool for improving processes in advance, instead of only an evaluation tool for gaining more insight into these processes. The possible use of the strategy-as-force model will also be evaluated and reflected upon in practice. The conclusions of this second empirical part of the research must prove whether the adjusted model can actually be used as a tool for improving these types of processes. These results will help answering the main research question of this thesis.
89 4.1 Synthesis
4.1.1 Strategy-as-Force and added values
In chapter 1 the problem statement for the research was described as a difficult process of aligning the accommodation strategies of multiple actors with diverging interests and goals, within a dynamic political environment. A theoretical background of two theories has served as a framework for the case studies. The accommodation strategies of 9 public broadcasters have then been analysed on both content and process. The content of the accommodation strategies has been analysed by using the added value theory of De Jonge (1996). The process of aligning these accommodation strategies has been analysed with the Strategy-as-Force model of Daamen (2010).
The content of the accommodation strategy depends on the outcome of the strategy design process. The process on the other hand is not independent from the topics that are mentioned in the strategy. The synthesis of the content of the accommodation strategies with the main parts of the process model Strategy-as-Force shows this connection or dependency (see table). The actual accommodation strategies analysed during the case studies have a strong connection with the deficient process of aligning the strategies during these case studies. In the table below is shown which strategy processes can be connected with the added values of the accommodation strategies of the broadcasters.
Resources Case study results Relation Strategy process Added values case study results Offering attractive property Material relations Strategic Venturing Risk control value alternatives through Media budget : merger bonus Media budget: Licence Friction costs subsidy Reallocation temporary fund Boston Consulting Group Knowledge relations Strategic Learning Flexibility BCG results: Financial/organisational facts of the broadcasters Absence of commitment No Deliberative No Strategic Culture Relations Visioning (PR/Marketing) Absence of instruments, No Planning Relations No strategic Planning Risk control time/result Flexibility Table 21. Synthesis of results
The declining real estate market demand, prices and risk of double accommodation costs cannot be compensated by the subsidies of the ministry. Many of the broadcasters have chosen to control the risks and stay in the current accommodation. The material force relations were not sufficient to affect these decisions. Controlling risks is more obvious than trying to increase value of real estate. It is not surprising that most broadcasters don’t want the risk of structural vacancy and therefore double accommodation costs. For some organizations this strategy will also lead to cost reduction as they are now sharing facilities.
The lack of planning resources due to the dynamic political environment has also led to a strong focus on risk control and advancing the flexibility of the real estate. Designing a five year plan is too difficult for the organizations in the current dynamics. The broadcasters have therefore used expertise to implement flexibility in the strategy while a long term planning is not possible. Some organizations want to move to rented
90 properties and other organizations focus more on flexible workplaces within their owned property. This way the organizations can easier adapt to changes if the government decides to reduce the Media Budget even further. It is difficult for the broadcasters to design a long term planning hence the accommodation will have to add value to this business strategy. Controlling risks is another consequence in the strategy due to the uncertainty of the subsidies. The lack of strategic planning resources has thus led to adding value through risk control and flexibility. Aligning the actors could not be done by the NPO through strategic planning.
Finally the broadcasters are focusing on supporting the strong culture in the accommodation strategy. The broadcasters are nothing less than competitors and are therefore difficult to commit to realizing a total project. The NPO and ministry could not commit the broadcasters due to this strong focus on their own brand. Strongly connected to this (corporate) branding is the focus on culture in most strategies and PR/Marketing in some strategies. Corporate branding is a business strategy that differentiates from competitors but also includes attracting customers. Therefore the strategy is both differentiation as well as belonging (Hatch and Schultz 2008). A successful brand according to Hatch and Schultz (2008) has a coherence between what the top managers want to accomplish (vision), what has been known or believed by the employees (culture) and what the outside world thinks of the organization (image). By adding value through the workplace culture and image of the accommodation the broadcasters create a suitable atmosphere for the employees. For example by moving merging organizations to a new accommodation or refurbishing the entire inside of one of the buildings, it is seen as a new start without a more dominant culture. This deliberate business strategy (and adjacent added values) is one of the main reasons for the lack of deliberative force.
This synthesis shows that there are obvious relations between the added values of the accommodation strategy and the strategy processes of the Strategy-as-Force model. As De Jonge et al. mentioned, a strategy design process is often a combination of an inside-out approach and outside-in approach (2009:34). The environment of an organisation is important for designing an accommodation strategy using an outside-in approach. This means that the influences of the environment (outside) determine aspects of the accommodation or business strategy (in). In other words, an accommodation strategy is a response to two sets of demands; those imposed by the external strategic environment of the company and those which serve the internal structure and culture of the company (O’Mara 1999).
91 4.1.2 Urban Area Development versus Real Estate Management
The synthesis already concluded that such an urban area development model could in itself be applied in these types of projects as well. The main difference between the results of the strategy processes between the original project and the one studies here has, as already concluded, been the lack of deliberate resources. The strategy processes of the urban area development project have been deliberate as well as emergent. The Dutch public broadcasters, though in a similar political environment, did not show this deliberate characteristic. Therefore the characteristics of both projects and practices need to be closely reviewed to identify why these strategy processes are not present, and to which extent the model needs adjustments.
The first difference between the strategic visioning processes of the two projects is the fact that commitment is lacking. The actors in the CityPorts project were mobilizing commitment as a resource which consisted of trust, belief and persuasiveness (see table). The commitment of key decision makers (like the mayor) provided stability among the other actors in order to have trust of belief to invest in the project towards realization. The actors involved were willing to realize the development project but needed some stability of key decision makers to reduce the risk. In the broadcasters reorganization project, the Board of the NPO, the minister Jet Bussemaker and the State Secretary Sander Dekker could be seen as key decision makers that were committed to realizing the reorganization. The broadcasters however, had no intent to realize a total project while they are only responsible for their own business and essentially have never seen the project as a goal for their organization. In addition to this, the business of the broadcasters is focused on corporate branding; differentiating from the other public broadcasters. Trust, belief and persuasiveness are not sufficient resources to bring a project with this nature towards realization.
Another main difference is the diverse use of legitimacy. In the CityPorts case there was stability among the actors involved when an actor with true power (mayor of Rotterdam) defended the project. In the broadcasters case there is no actor with a true power that provides stability. Legitimacy was mobilized by addressing the moral responsibility (ethics) of public organizations, especially by the mayor of Hilversum. Through the use of media the broadcasters were forced to justify their actions and decisions. Though this emergent use of legitimacy did not provide the stability needed (deliberate) for affecting such a reorganization project towards realization.
The third main issue for using the model in real estate management projects like these is that strategic planning is difficult for the organizations involved. There is an important difference between the urban area development case and the cases in this research that explains the difficult mobilization of strategic planning resources; the Rotterdam CityPorts project is driven on economic and rational processes. The strategic planning process depends on market demand and market supply. The business of the broadcasters depends mostly on the subsidy of the government instead of only supply and demand. This government can, whenever needed, reduce the budget for the broadcasters due to a budget deficit. If there is not enough clearness about the future budget, which there never really is, the organizations will be reserved in their decision making process. The instrument that was provided, the BCG report with future supply and demand of space, lost some of its value to act as a leading document immediately after the new budget cuts at the end of 2012. These main issues for real estate management projects like these are put in the overview on the next page where both projects are placed next to each other.
92 Urban Area Development Real Estate Management project project
CityPorts Rotterdam Dutch public broadcasters
Main actors Mayor and Alderman municipality Ministry of Education, Culture and Rotterdam Science Port City Administration Nederlandse Publieke Omroep (NPO) Port Authority Dutch public broadcasters Strategy processes/resources Strategy processes/resources Difference Strategic Visioning Strategic visioning Legitimacy Legitimacy In the CityPorts case legitimacy Accountability, ethics, acquiescence (No) power to steer provided stability through the Justification towards general public mobilization of legitimacy by for example the mayor. In the broadcasters case there was no use of legitimacy to provide stability. Only the use of moral force through media, which is more a use of an emergent resource, was used by actors involved. Commitment Commitment CityPorts case consisted of actors Belief, trust, persuasiveness Willingness to collaborate, share willing to collaborate and realize an facilities end result, only needing commitment Willingness to combine cultures, of key decisions makers to provide identities stability. Public broadcasters consisted of actors not willing to collaborate and realizing a total reorganization due to the nature of reorganization. This resource has thus a different character for aligning accommodation strategies. Strategic Planning Strategic Planning Time/Result Time/Result The CityPorts case contained Time and Opportunity, momentum, procedure Result as a pressure resource mobilized by politicians. There was more certainty about the future of the CityPorts project. In the Public broadcasters case the actors could not mobilize this resource due to the dynamics and uncertainty Instruments Instruments CityPorts case is driven by economical, Contracts, plans, presentations, Fluctuating laws and regulation rational processes (supply and websites, press (Media Act) demand). The business cycle of the Dutch public broadcasters is driven by subsidies that are issued by the government. While the budget cuts cannot be predicted by the broadcasters through the use of economic models, strategic planning has a total different character.
Table 22. Differences between projects researched in strategy-as-force and this thesis
93 4.2 Using Strategy-as-Force in real estate management practice
Up to this point in the research the Strategy-as-Force model has only been used for evaluating an existing process. The following sentence, taken from the Strategy-as-Force publication, shows that the model is a descriptive tool for reflecting with practitioners. Though it does not imply that such a model could improve processes by using it as a management tool.
“In doing so, this thesis proposes a descriptive ‘strategy-as-force’ model by which contemporary urban development project strategies can be comprehensively evaluated and reflected upon.” (Daamen 2010:1)
The model has therefore so far only been used to explain the processes of aligning different actors. Conclusions were drawn about the deficient processes it has visualized. The resources of the strategy-as-force model were mostly mobilized by the leaders/coordinators of the project; the ministry and NPO. These actors have tried to steer the reorganization project while the resources available showed that this was too difficult. The broadcasters of the case studies did not seem to mobilize many resources towards realizing the total reorganization. They were mainly concerned with realizing their own accommodation strategies, without considering the entire project. These conclusions provided more insight in these types of processes. Though the question remains whether the model can be altered to function more as a management tool for these types of projects and processes, instead of functioning only as an evaluation tool. To be able to function as a management tool for a reorganization project in real estate management practice, the weaknesses of the model and its use need to be improved.
Planning resources
The broadcasters cannot change the environment of the fluctuating level of subsidies and other regulations imposed by the government. Leaving the Dutch public broadcasting system will be very difficult for these organizations as they rely both on the subsidies as well as the image of being a public broadcaster. The past decades there have been many shifts in the structure of the public broadcasting system. It can be expected that the organizations will endure more of these changes. This expectation is stressed by statements made in the political arena. As one of the political parties in the Netherlands state one their website:
“The merger of existing broadcasters is an important step towards a public broadcasting system that retains the diversity which makes the public broadcasters this special, but at the same time is less fragmented, more efficient and better management”. (PVDA 2013)
The mergers being a step towards a new public broadcasting system indicates a dynamic future for the organizations where many changes are expected. Mobilizing deliberate planning documents and a long term time frame is therefore difficult according to the organizations involved. Though long term planning is not the only planning method for organizations. There are planning methods that anticipate to future changes. One of these planning methods for dealing with an uncertain environment is scenario planning; a strategic planning method to make flexible long term plans. With this planning technique possible or plausible futures are outlined by presenting possible developments of some critical factors. The scenario planning method works in three main steps (DeWulf et al. 1999:18):
1. Formulating possible portfolio or accommodation strategies on the base of a discussion about strategical choices
2. Formulating possible futures by using scenarios
94 3. Determining the consequences of different strategies in terms of political, practical and financial efficiency by crossing the strategies with the formulated scenarios
If the broadcasters or comparable organizations dependent on fluctuating subsidies and other regulations can formulate different options for the future, they can adapt quicker and more efficient to changes. Using scenario planning can thus be helpful for these types of organizations. If instruments and a clear timeframe do not provide enough stability, the planning relations can thus be realized by using these types of planning techniques for organizations in highly uncertain environments.
Commitment
To be able to create deliberative relations, the urban area development project also mobilized commitment. The commitment of key decision makers provided stability for the actors involved. Though aligning accommodation strategies requires more than only the commitment of key decision makers. The practice deals with organizations that need to commit to aligning the accommodation strategies. This is a delicate matter when workplace culture and organizational values are included in the strategy processes. The strategic visioning in these types of real estate management projects will also include the process of mobilizing resources for a successful collaboration. This is while the cases of the Dutch public broadcasters showed that soft criteria’s also need to be considered in the strategy processes of trying to align organizations. Kaats and Opheij formulated the following resources for a promising collaboration (2012:47):
“A collaboration is promising when people and organisations can align each other in a signifying process that does justice to the interests and is aimed at a shared ambition. It is a major challenge to create the right conditions for that.”
The quotation already shows some essential indicators for a successful collaboration. The presence of all these indicators together will determine the commitment of the organizations involved for realizing a total project where several actors need to collaborate. The indicators include the more ‘soft criteria’ for affecting a project towards realization. These indicators can be described in more detail by the following elements (Kaats en Opheij 2012:364):
Ambition; degree of division, attractive force, collaboration strategy, personal meaning
Interests; sincere interest, value creation, negotiation space and willingness, quality of the dialogue
Relation; power to combine, quality of group processes, trust, binding leadership
Organisation; effectiveness, support, decisiveness, commitment to agreements
Process; phasing and timing, balance content and process, role division and process control, process quality
Figure 33. Indicators for a coherent view on collaboration (Kaats and Opheij, 2012)
95 The model implies a central role for formulating a shared ambition. This is due to the fact that the formulation of a meaningful ambition has been the key success factor for successful collaborations. The essence of collaboration is to create something together which separately could not be created. This creation of something new firstly needs to be formulated in the shared ambition. From there on other indicators need to be mobilized in order to realize a successful strategic visioning for a collaboration. If these collaboration indicators cannot be mobilized there will be no strategic visioning possible. The model will be included into the strategy-as-force model instead of commitment. Commitment according to the Strategy-as-Force model consisted only of trust, belief and persuasiveness. For reorganisation projects in real estate management practice, this is not a sufficient describing resource of all the indicators involved and will therefore be replaced with the model of Kaats and Opheij. If organizations can mobilize the collaboration indicators of this model it could create commitment and it will positively affect a reorganization project towards realization. In other words, the capacity to align accommodation strategies increases.
Strategy-as-Force model for aligning accommodation strategies
The use of the Strategy-as-Force model in projects like these is close to the original use of the model and the conclusions drawn about the mobilization of resources. Though to serve as a management tool to improve these types of processes it will have some alterations. In this approach the resources also need to be mobilized to affect or effect the project realization towards a desired outcome. By mobilizing several resources an organization can have a stronger capacity to align the actors. The initial approach of the ministry and NPO with the proposed desired end result did not produce any movements of the broadcasters. During the initiative phase of the project the organizations could have located the available resources on the basis of the strategy- as-force model. Therefore, instead of a tool to analyse the processes afterwards, the model can serve as a continuous inventory tool. If both resources in one of the four quadrants cannot be found, the adjacent relation cannot be created. Hence the organizations need to constantly consider the resources before engaging in such a project and ask themselves four main questions;
- Can we create deliberative relations? - Can we create material relations? - Can we create Knowledge relations? - Can we create Planning relations
The answer to these questions lies in the fact whether the organization can mobilize the six resources.
- Property - Finances - Expertise - Information - Legitimacy - Ambition - Time/Result - Instruments
Firstly if planning relations cannot be created the organizations cannot effect the total project by using instruments, a timeframe or clear end result to formulate their strategy. Secondly if material relations cannot be created the organizations don’t have the capacity to effect the total project with subsidy, investments or alternative property towards a desired end result. Thirdly if knowledge relations cannot be created the organizations don’t have the capacity to affect the total project with information and skills of experts on the field of real estate. And finally if deliberative relations cannot be created the organizations involved cannot add legitimacy and a shared ambition to the capacity to affect the total reorganization project. The only resource
96 that has been changed here is commitment. Mobilizing commitment in real estate projects like these will not be as obvious as in an urban development project. This type of collaboration needs to be stimulated by paying attention to the ‘softer’ criteria as well. As described above, the theory of Kaats and Opheij will be therefore included. A shared ambition is the first and most important resource that needs to be mobilized in order to create commitment and successfully affect an alignment of accommodation strategies. The process indicator, standing for a meaningful process with actors, is named as process approach. This is due to the fact that the strategy-as-force model is already a process model. The process approach is part of this process and fits better into the existing model.
As Daamen stated, a successful process needs a constant consideration of all the quadrants of the strategy-as- force model. If one quadrant is missing during the process this could be a major stumbling point and a reason to quit prematurely. Therefore the four arrows around the model indicate that the all quadrants need to be considered constantly. If an organization can add all four relations it will have the necessary capacity to influence actors in order to realize the total project. The model, including the second wheel of the stimulation of commitment, is presented in the figure below.
Figure 34. Identifying available force resources for steering a real estate reorganization project (based on Daamen 2010, Kaats and Opheij 2012)
97 4.3 Reflecting on the model in practice
In this part a short empirical research will be done in order to draw conclusions about the use of the strategy- as-force model in real estate management practice. It must show whether the model is a useful evaluation tool to create more insight into the processes of these organizations, or if it could have been used as a management tool and if that would have positively influenced the process. The reflection has been done with experts of the NPO, which is considered as the responsible organization for the reorganization project. Next to these experts the developer of the original model, Tom Daamen, has been asked to reflect upon the results of the strategy- as-force model in this particular field of knowledge.
Expert Function/expertise Henk Hagoort Member Board of Directors NPO Shula Rijxman Member Board of Directors NPO Marije Schuring Director Finances NPO Cees Smaling Chairman Supervisory Board NPO Tom Daamen Urban area development at TU Delft, Author Strategy-as-Force publication Table 23. Reflection with experts
Applicability as an evaluation tool
The original use of the strategy-as-force model has been to serve as an evaluation tool for urban area development practice. By evaluating processes and therefore gaining more insight, one can improve the practice. In the case of the CityPorts this contained improving the urban area development practice. In this thesis it has been researched whether the strategy-as-force model can be applied as an evaluation tool for these types of projects, to improve the real estate management practice. Instead of only focusing on the end result, the involved actors can learn from the process in order to improve it for future developments. The developer of the strategy-as-force model has its doubts for using the model in real estate management practice.
“The model is intended to be used to analyse/evaluate the strategic process behind an urban area development project, not the process behind the alignment of accommodation strategies. However, if the combined accommodation strategy results into an area development, it can be used.” (Tom Daamen 2014)
The quotation shows that even with the acquired knowledge of the process of the Dutch public broadcasters, Daamen does not believe that the model can successfully evaluate these types of projects. His answer to whether the model is applicable in real estate management practice implies that the model can only suit urban area development practice. Marije Schuring, director of Finances at the NPO, has a different view on the added value of the strategy-as-force model for processes like these. She states that the model has created an additional insight into the process of the Dutch public broadcasters. This could improve another upcoming process in the next few years if another reorganisation occurs.
98 “It provides additional insight into why the reorganisation of the accommodations of the Dutch Public broadcasters was almost impossible to steer and able to bring to a successful conclusion. For us it serves as a handgrip for process improvement on the many topics that are awaiting us in the upcoming years.” (Marije Schuring 2014)
The statement ‘a handgrip for process improvement’ in short shows the value of the strategy-as-force model for the organizations. Henk Hagoort, chairman of the board of Directors at the NPO, also confirms that the strategy-as-force model can act as an evaluation tool. He states that with the knowledge of the difficult process at hand, the NPO would have saved time and money by not having the ambition to try and steer the project.
“It definitely works as an evaluation instrument. I shows why these types of projects don’t work here and one could apply the model next time or in a different environment. It would have certainly, as we are now talking about why the process was not successful, helped if that difficult process was known beforehand. Then we would not have had the ambition to steer the project.” (Henk Hagoort 2014)
The statement of Hagoort is an indication of using the strategy-as-force model in real estate management practice. The insight into the insufficient amount of resources available to effect or affect the project, could have prevented the NPO from having an ambition to try and advance it. However refusing to enter into these types of processes does not imply anything about the usefulness of improving these processes as well. In order to be able to improve processes the model needs to serve as a management tool, instead of only as an evaluation tool. The experts have also reflected upon the model about it being a management tool, where the different parts need to be filled in order to improve the process.
Applicability as a management tool
Proposing the strategy-as-force model as a management tool requires the ability to fill every part of the model/tool. If this was possible in the cases of the Dutch public broadcasters, the model could have served as a management tool to improve the process. The model has been adjusted while the character of commitment in urban area development projects is different compared to that of real estate management. The softer criteria are added to the model as a necessary strategic resource to bring the project towards realization. Marije Schuring states that using the model would not have improved the process for the alignment of the accommodation strategies. This is first of all because the governance structure of the Dutch public broadcasters does not allow a deliberate use of legitimacy in order to affect a project. Also the interests of the stakeholders were too diverse in order to mobilize any commitment to the entire project.
“We could have chosen to address the issue more often in group meetings and consciously fill in the ‘white’ spots in the model. If it concerns the accommodations I don’t think using this model would have led to a better result because the power and interests were too fragmented at the time. In a later phase, and probably if the governance would change, then it could be used for real estate management issues at the Public Broadcasters as well.” (Marije Schuring 2014)
Hagoort has a similar view on the applicability of the model as a management tool. In order to be able to mobilize legitimacy the governance structure should allow this. One condition is that there must be one actor having a final authority. In the case of the broadcasters, as Hagoort states, there is too much independency in decision making, especially when it comes to accommodation. He continues with saying that a holding
99 company will have more control over the different parts of the company and its accommodations. Under such conditions the model could have more value as a management tool as well.
“In this project there are nine risk assessments, where one says it costs a bit more but I will retain my culture, or it costs a bit more but I have less risk. One cannot get that collective in a process where the whole has no legitimacy over the parts, in final terms. The usefulness of this management tool is to assess up front whether this could work, right? Where is then the governance structure around such a process. You can imagine that a holding company will encounter the same resources, but there is always an authority that states we are moving. There is no final authority here.” (Henk Hagoort 2014)
The strategy-as-force model would therefore not have been useable as a management tool in this particular real estate management project. First of all the experts state that the governance structure does not allow the mobilization of legitimacy. There is no formal power that provides deliberate stability to be able to bring the project towards realization. Next to this mobilizing commitment is a very difficult issue in the cases of the Dutch public broadcasters. The goals and interests are too fragmented and there is therefore no shared ambition to collaborate. Cees Smaling, chairman of the supervisory Board of the NPO, summarizes this weakness that could not be overcome in this particular process.
“The problem is that the organisations don’t give away the responsibility. The only alternative would have been to develop the long process of creating commitment. A lot of thought and deliberation would have had to be put in.” (Cees Smaling 2014)
100
5 Conclusion & Recommendations
Chapter 5 will answer the main research question of this thesis; whether the Strategy-as-Force model is a useful tool for improving multi actor processes of aligning accommodation strategies. The conclusion in paragraph 5.1 will discuss the results of the thesis. Paragraph 5.2 will present some final recommendations for the broadcasters and further use of the strategy-as-force model in practice. Paragraph 5.3 contains some personal reflection upon the research. This part will discuss the strength of the research design and conclude with some personal notes for the research subject (Dutch Public Broadcasters).
101 5.1 Conclusion
This thesis has analysed the processes behind a reorganization project of several autonomous organizations that have a strong emphasis on culture and identity; the Dutch public broadcasters. In an attempt to learn from urban area development processes, the strategy-as-force model has been applied on this real estate management project. Applying the strategy-as-force model on this particular project has led to the following two main conclusions about its usefulness to improve such a process of aligning accommodation strategies.
o Useful evaluation tool for improving reorganization processes
Process improvement can be realized by evaluating a process and from there on improving it. The original strategy-as-force model has been developed for this purpose. The first application of the strategy-as-force model is therefore to use it as an evaluation tool. Only if the evaluation tool creates more insight into the existing processes it will add value for the organizations involved. An essential requirement of the evaluation model is that it should create additional insight into the processes of the practice. The main challenge therefore was to analyse whether this insight could be created in the reorganisation project of the Dutch public broadcasters by using the strategy-as-force model. Both the empirical research as well as the reflection with experts have proven that the strategy-as-force model was successfully applied and useful for this purpose. The different parts of the model have suited the strategy processes of a temporary reorganization project in a political environment as well. The model clearly showed to the actors involved why the existing processes are not effective enough to align accommodation strategies of autonomous organizations with strong corporate values, cultures and identities. The deficiencies that the model has exposed could be a handgrip for the ‘responsible’ organization for process improvement if a next reorganization occurs.
Figure 35. Strategy-as-force model as an evaluation tool (Daamen 2010)
102 o Less useful management tool for improving reorganization processes
Another option has been to use the strategy-as-force model as a process management tool. To serve as a management tool organizations must be able to mobilize the resources of the strategy-as-force model in order to create a successful process. The model firstly needed an adjustment to fit reorganisation projects like these, while a different interpretation of commitment was found during the empirical research. Commitment to share facilities with other organizations has a total different character than commitment to participate in an urban area development project. Creating this commitment requires more attention to the ‘softer’ criteria, not just the commitment of key decision makers. The strategic resource commitment has therefore been replaced with the collaboration model of Kaats and Opheij (2012).
The adjustment of the strategic resource commitment has not been sufficient for a successful use of the strategy-as-force model as a management tool for these types of projects. NPO board members stated that the autonomous organizations and their real estate cannot be aligned by using legitimacy as a strategic resource. The absence of this crucial strategic resource prevents the ability to mobilize all resources of the strategy-as- force process management tool. The reflection thus showed that the governance structure mainly prevented the strategy-as-force model to serve as a management tool in this environment. If a reorganisation project is done within the governance structure of a holding company, it could be a more useful tool for process improvement. This is due to the fact that a holding company has a final authority over the different parts. These organizations can therefore always mobilize legitimacy as a strategic resource to force the project towards realization. Most holding companies will also try to mobilize the other resources of the strategy-as- force model in order to create more support, instead of only using authorative force.
Though a changed governance structure, with an organization having a true power or legitimacy to coordinate actions and decisions of others, could affect the usefulness of the strategy-as-force model in general. The core of the model namely states that organizations are influencing each other by mobilizing strategic resources in order to affect or effect a project towards realization. If there is a clear hierarchical structure this process of influencing other actors will change; it will become a different processes with a top-down steering approach. Further research must therefore prove whether the strategy-as-force model could improve reorganization processes for holding companies with large real estate portfolios.
Figure 36. Strategy-as-force model as a process management tool (based on Daamen 2010, Kaats and Opheij 2012)
103 5.2 Recommendations
o Using strategy-as-force
The strategy-as-force model cannot be further applied to the cases of the Dutch public broadcasters. The process has already been evaluated on the basis of the model. The model has served as an eye-opener and the organizations involved can try and improve the existing processes. The model could have a similar function beyond the Dutch public broadcasters cases. If a comparable difficult process of aligning accommodation strategies has occurred, the organizations can evaluate the process on the basis of the model and from there on improve it.
There is no possibility to use the model as a process management tool for the Dutch public broadcasters, while the governance structure and cultural differences do not allow the mobilization of deliberative resources. The strategy-as-force model could be applied in other businesses if the governance structure allows this and if an intention or ambition is shared to realize the project. This means that businesses such as health care, universities or organizations in complex environments could benefit from the knowledge of the strategy-as- force model. In the initiative phase the organizations can make an inventory on the available strategic resources. If there are sufficient resources available, there is a capacity to steer the project towards realization in a signifying process.
o Dutch public broadcasters
1. Dealing with uncertainty
The past decades there have been many shifts in the structure of the public broadcasting system. It can be expected that the organizations will endure more of these changes. This expectation is stressed by statements made in the political arena. Trying to mobilize strategic planning resources could be considered as wasting time. One way to deal with the uncertain and dynamic environment is to optimize the emergent organizational strategy; this also includes the accommodation strategy of the organization. One option is to maximize the flexibility of the organizations, the financial contracts or the technical flexibility of the accommodations. Currently the organizations are focusing on this strategy already to some extent. Another option to deal with high uncertainty is the use of scenario planning; a strategic planning method to make flexible long term plans. If the broadcasters can formulate different options for the future they can adapt quicker and more efficient to changes.
2. Collaboration
Another recommendation for more efficient strategies at the Dutch public broadcasters would be to stimulate collaboration. A first requirement for these types of collaborations is a shared ambition or commitment. Though this research has once more showed that it is difficult to formulate a shared ambition when the cultural and identity differences are this large. For example; the broadcasters believe that the accommodation adds most value to the organization when it is not shared. There is thus no ambition to realize a collaboration strategy to share facilities. There are many opportunities in collaboration while the broadcasters, within the current perspective, can only see threats. Two important benefits or added values that could arise from collaboration are:
- Cost reduction - Increase productivity
104 The organizations can share facilities and therefore create more budget for other parts of the organization such as programming. Secondly the cooperation between employees could increase the productivity as the producers and other employees could benefit from knowledge spill over. Why could the EO not learn from the TROS and vice versa? Though it has to be noted that this requires an immense paradigm shift in the way the broadcasters operate. The cultural differences cannot be aligned easily though this shift seems necessary for the organizations while there are many threats that could influence the strategies:
“D66 wants that the existing and new broadcasters become production companies in the future, receiving air time in the public broadcasting system more based on programmatic content and less on the amount of members.” (D66 2013)
These changes in the broadcasting system towards more collaboration can be expected to happen in the future. The broadcasters are now in the position to stimulate collaboration without being forced. The forced collaboration between the broadcasters will only be focused on cost reduction. While cost reduction is limited, other benefits must be sought in order to create revenues. The forced approach to collaboration with focus on cost reduction entails many risks such as deficient relations, no real cooperation, continuous conflict of interests, underlying power games and failure of creating new identity (Kaats and Opheij 2012).
3. Proper PR/Marketing
The added value research showed that some of the Dutch public broadcasters are currently focusing on the PR/Marketing of their real estate. One could question whether concentrating on the image of buildings is a proper strategy for the Dutch public broadcasters. This is due to the fact that the end product of these organizations are mainly in the form of radio and TV programs. The productivity and workplace culture are important aspects of the creation of these types of programs. Even the location can be considered as important due to the travel distance of employees, which is strongly connected to productivity. Though the outside image of these buildings cannot be expected to have much added value for the organizations involved. PR/Marketing projects such as Het Glazen Huis have a much stronger impact on the image of broadcasters and in the case of Het Glazen Huis. radio stations. These types of events, where a radio station is placed one week long in the middle of a city square, creates much interaction with the citizens. Creating interaction between a building and its environment will demand a lot of thinking about the location and access of this particular building, if even possible. It would therefore be advisable for the broadcasters to focus on a particular aspect of these buildings; the interior.
Figure 37. Different forms of PR/Marketing
105 Epilogue
The motive for choosing multi actor processes as a research subject was based on the possible effects of the economic crisis. Due to cost savings and strategies about sharing facilities, organizations would increasingly have to align their accommodation strategies. The hypothesis was that the Strategy-as-Force model could explain and improve these processes in political environments. Though the research has shown that successfully aligning actors and their accommodation strategies requires planning. The Strategy-as-Force model presumes that there are planning resources available for the involved actors. The case studies of the Dutch public broadcasters have indicated that with a clear lack of deliberate resources there has been hardly any planning possible to align the actors and push the project forward. The reflection with the steering organization NPO confirmed this weakness of the Strategy-as-Force model. Looking back at the research during this thesis, the question needs to be raised whether a different methodological approach would have provided different results.
There are two general approaches in qualitative research; inductive and deductive reasoning (Hyde, 2000). Inductive reasoning starts with an observation of specific instances after which generalisations are established. Deductive reasoning commences with generalisations and seeks if these apply to specific instances. This thesis has followed a combination of the two approaches. First the cases of the broadcasters were observed after which some conclusions were drawn. Then the Strategy-as-Force theory was included (from what seemed to be a similar project) with the hypothesis that it could improve processes of this type of cases, after which the hypothesis was tested. Testing of hypotheses relates directly to the question of “generalizability,” and this in turn relates to the question of case selection (Flyvbjerg 2006:229). The working method of starting with an observation of the broadcasters gave the research predetermined case studies; there has been no process of strategic selection of cases.
Two main consequences due to the lack of strategic selection of cases can be identified. First of all this research included as many as nine case studies. Comparing the results of nine cases studies usually provides valid cross case analysis results due to its large sample size. Though the broadcasters are all operating in the exact same environment. The results concerning the process behind the strategies are very comparable. The empirical research has therefore successfully tested the applicability of the model in the Dutch public broadcasting system, though it has not tested the applicability of the model in real estate management practice due to its narrow context. A strategic selection of cases with similar processes but different environments could have increased the validity of the results. Selecting case studies in a similar environment does not need to be an unsuited approach. If the strategies and processes of the public broadcasters represent the typical process of aligning accommodation strategies, they can be judged as critical cases. If the cases of the Dutch public broadcasters are critical for the applicability of the model in real estate management practice the conclusion would have been valid for the whole field of real estate management. Though the character and mechanisms of the unique broadcasting system leave some doubts about the generalizability of the empirical results in this thesis. The Dutch public broadcasting system provided a lot of extreme or atypical empirical findings where many process models could meet their Waterloo.
Furthermore this thesis has combined different fields within the department of Real Estate and Housing. The goal of the thesis was to add knowledge to strategy processes in the field of REM by building upon existing knowledge of the university. It is evident that both practices concerned with the built environment could exchange knowledge about projects and processes behind it. The thesis builds upon knowledge within the university itself. Graduating at the Real Estate and Housing department can be done by joining existing research with intensive guidance of the researcher. This thesis has shown that one can use a publication of the department while at the same time creating a full individual research.
106 There is much critique on the broadcasting system, especially on its programmatic content. The broadcasters are receiving subsidy for many programs which could be broadcasted by commercial organizations, due to their commercial character. Next to this the high salaries for popular TV personalities of the public broadcasters are extensively criticized. The criticism on the broadcasters is a ground for the government to keep reorganizing the system and plan cost reductions. The only way for the organizations to survive in this system is to collaborate. This means that they would have to collaborate on real estate, especially due to the fact that the outside of buildings does not have much influence on programmatic content.
I would therefore like to end this thesis by using a comparison with the movie Gladiator. In this movie there is a scene where gladiators are, forced to fight, being centred in an arena by warriors driving around the gladiators on horses and attacking them. First there are some gladiators struck by speers as they are running around in the arena by themselves. But at some stage the gladiators are working together, due to the coordination and leading skills of gladiator Maximus, and they survive the battle. They listen to this gladiator while they trust him and believe in him. He can therefore persuade them. The emperor and crowd of Romans are watching this scene with much joy. If we replace this scene with the case studies of the Dutch public broadcasters, it forms a complete comparison. The public broadcasters are stuck in the broadcasting system (arena). The only way for the broadcasters (gladiators) to survive in the political environment of the broadcasting system (arena) is to collaborate. If the NPO (Maximus) can lead the broadcasters (other gladiators) and make them collaborate they can handle the budget cuts and reorganizations (warriors on horses) that are being sent into the arena by the government (emperor). In the light of possible future developments, the broadcasters can therefore choose to collaborate and unite in order to create a strong group, or run around in the arena with the risk of being speered.
107 References
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Kaats, E, Opheij, F. (2012). Leren samenwerken tussen organisaties. Deventer: Kluwer
Kumar, R. (2011). Research Methodology. A step-by-step guide for beginners. London: SAGE
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Mintzberg, H., Ahlstrand, B., Lampel, J. (1998). Strategy Safari. A guided tour through the wilds of strategic management. New York: The free Press
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Articles
Flyvbjerg, B. (2006). Five Misunderstandings About Case-Study Research. Qualitative Inquiry. Vol. 12, No. 2, pp. 219-245
Idenburg, P.J. (1993). Four Styles of Strategy Development. Long Range Planning. Vol. 26, No. 6, pp. 132-137
Lindholm, A. and Leväinen, K. (2006). A framework for identifying and measuring value added by corporate real estate. Journal of Corporate Real Estate. Vol. 8, No. 1, pp. 38-46
Websites http://www.rijksoverheid.nl/onderwerpen/publieke-omroep/vraag-en-antwoord/wat-is-de-overheid-van-plan-met-de- publieke-omroep.html [visited 3-12-2012] http://www.publiekeomroep.nl/system/files/143/original/Jaarverslag_2012.def.pdf [visited 13-02-2013]
108 http://cult.thepostonline.nl/2013/01/17/publieke-omroepen-hebben-90-miljoen-euro-belegd/ [visited 17-04-2013] http://www.rijksoverheid.nl/documenten-en-publicaties/kamerstukken/2013/02/13/wijziging-mediawet-2008.html [visited 14-02-2013] http://www.pvda.nl/standpunten/diversen/Mediabeleid [visited 28-12-2013] https://www.d66.nl/standpunten/publieke-omroep/ [visited 28-12-2013]
Images
Chapter banners
Front page www.nationalgeographic.nl Chapter 1 www.dearchitect.nl Chapter 2 www.hilversum.nl Chapter 3 www.hilversumbeterbereikbaar.nl Chapter 4 www.villapalladio.nl Chapter 5 www.sieril.nl
Appendix I www.impulseverlichting.nl www.frozenfountain.nl ww.index.realnext.nl/ www.vastgoedjournaal.nl www.igg.nl www.dipity.com www.OOKArchitecten.nl
Newspaper articles
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109 Appendix I List of terms and abbreviations
Explanation Dutch translation Allocative resources Resources to effect actions and Allocatieve middelen decisions of others Authoritive resources Resources to affect actions and Gezaghebbende middelen decisions of others Association Council Council representing the members of Ledenraad, Verenigingsraad the associations of broadcasters BCG Consulting organization that has Boston Consulting Groep researched the optimal accommodation situation for the Dutch public broadcasters Broadcasting Associations Associations that can claim airtime if Omroepverenigingen they meet the requirements of the Dutch Media Act Broadcasting System System in which the Dutch public Omroepbestel broadcasters operate Coalition Agreement An agreement between the parties that Regeerakkoord form the cabinet Corporate Branding Business strategy that differentiates ‘Bedrijfsmerken’ from competitors while attracting customers. It has a coherence between what the top managers want to accomplish (vision), what has been known or believed by the employees (culture) and what the outside world thinks of the organization (image) Deliberate strategies Strategies used in a stable and Opzettelijke strategieën predictable environment Deliberative relations A relation where actors discuss or use Deliberatieve relaties legislative power in order to have others adopt a certain action or decision Dutch Public Broadcasters Organizations broadcasting on the Nederlandse Publieke Omroepen channels Nederland 1,2 and 3 operating according to the Dutch Media Act and receiving subsidy Emergent strategies Strategies used in a highly uncertain and Emergente strategieën dynamic environment Force Relations Interaction through which certain Krachtrelaties resources are added to the capacity to affect or effect the realization of a project Inside-out approach A way of designing a strategy by starting ‘Binnen-naar-buiten’ benadering with a scan of the organisation based on its resources Media Act 2008 Dutch law from 2008 regulating the Mediawet 2008 Dutch public broadcasting system Ministry of Education, Most important political body in the Ministerie van Onderwijs, Cultuur Culture and Science public broadcasting system en Wetenschap NPO Organization which coordinates the Nederlandse Publieke Omroep Dutch public broadcasters and
110 determines the strategy and programming in cooperation with the broadcasters Pillarization Social structure and political institutions Verzuiling in the Netherlands Scenario planning A strategic planning method to make Scenario Planning flexible long term plans Spring Agreement Agreement between Dutch political Lente Akkoord parties in the spring of 2012 Standalone broadcaster Broadcaster that will not merge with Zelfstandige omroep another broadcaster State Secretary Member of the cabinet working under Staatssecretaris the minister STER Advertisement organization of the Dutch Stichting Ether Reclame public broadcasting system Task Broadcaster Broadcaster with special Taakomroep tasks/programmatic content defined in the Dutch Media Act Outside-in approach A way of designing a strategy looking for ‘Buiten-naar-binnen’ benadering the best fit of the organisation within its environment
111 Appendix II Accommodations
VARA accommodation
The VARA is accommodated at the Media Park in the city of Hilversum, which is easily accessible with public transport by walking from the Hilversum Noord train station. The most notable external feature of the building is the western red cedar slat façade (see image). The building is shared with another broadcasting organization; the NTR. The property is undivided ownership of these two organizations. The entrance hall is shared with a third broadcasting organization; the VPRO. This entrance hall is situated in between the properties of the VARA/NTR and VPRO. It is a very colourful building which gives immediate access to the three different corridors leading towards the spaces of the different broadcasters (see image). The floor plan of the building shows that the office space is situated around two main voids. The interior of the VARA/NTR building is mostly covered with a light wooden material on the internal walls and floors, which makes it special (see image). The feeling of the accommodation spaces is quite static, with some playful features (see image).
The other real estate that is used by the VARA is a studio in the Westergasfabriek in the West part of Amsterdam. The Westergasfabriek is an old gas factory that has been renovated and has been given a new, cultural purpose. The VARA rents space in the old factory for broadcasting the two popular daily talk shows De Wereld Draait Door and Pauw en Witteman. The studios are facilitated by the external company Dutchview.
Broadcaster VARA
Address Sumatralaan 49, Hilversum Year of construction 2000 Architect Trude Hooykaas, Royal Haskoning Owner VARA/NTR Rent - Workplaces 632 Lettable floor space 7.106 sqm
Table. Accommodation details VARA (BCG, 2012)
Image. Accommodation of the VARA/NTR
112 BNN accommodation
The accommodation of BNN is situated outside the Media Park of Hilversum. The BNN office and studios can be reached by public transport by walking from the Hilversum Sportpark train station. The property is situated in an old industrial area of small businesses. The Rotor Media Complex, as the whole accommodation is called, is shared with other small media businesses and only partly rented by BNN. The outside of the building has features of an old industrial building that has been transformed to a multimedia complex. Inside the building there is a student-like, creative office space. A lot of different colours and materials give the BNN accommodation a somewhat messy feeling. Most of the furniture is old and worn out to complete the feeling of a student apartment. The editorial offices have an open floor plan.
Broadcaster BNN
Address Arendstraat 33 Year of construction 1950 Architect unknown Owner Rotor Media Rent 114 € / sqm Workplaces 158 Lettable floor space 3.147 sqm
Table. Accommodation details BNN (BCG, 2012)
Image. Accommodation BNN (own images)
113 TROS accommodation
The TROS broadcasting company is accommodated just outside the Media Park in Hilversum. It is situated within walking distance of the Hilversum Noord train station. The property is located in an area with large single family dwellings and small businesses. The building is an old school from the 1920’s with many of the old features and typical brick façade. In 1998 the TROS realised an extension with more modern features and glass facades. Because of the new extension a square was formed which gave the complex a more community-like character. Due to the extension, the inside of the building has a double feeling to it as well. The old building still has the inside of a school building with classic hallways and classrooms, renovated and transformed into offices. The extension has a more modern feeling with modern (editorial) offices and open floor plan. The complex is owned by Bouwfonds for 75% and TROS Association for 25% (BCG, 2012). Below some details of the building are given.
Broadcaster TROS
Address Lage Naarderweg 45-47 Year of construction 1920/1998 Architect J.L. van der Bom/ZZDP Owner Bouwfonds (75%), TROS (25%) Rent 100 € / sqm Workplaces 337 Lettable floor space 7.043 sqm
Table. Accommodation details TROS (BCG, 2012)
Image. Accommodation TROS
114 AVRO accommodation
The AVRO is accommodated in the ‘AKN-building’ in Hilversum. The building is situated just outside of the Media Park in an area of large villas. The realisation of this building has been a shared project with the other broadcasting organizations KRO and NCRV, hence the name A(AVRO)K(KRO)N(NCRV) building. The collaboration between the three broadcasters has started because of the shared channel (channel 1) they were all going to air on. Tough the collaboration of the AKN has been more than just on the field of real estate. The broadcasters founded the ‘AKN-foundation’ to facilitate restaurant, security, financial control and broadcasting magazines. The AKN-building is owned by the AVRO for one-third and they are accommodated on the whole second floor of the office building.
The AKN building has a zigzag shape with atriums in between. The brick façade is therefore alternated by the big glass facades of the atriums. The inside of the building has a very commercial feeling to it. The spaces are large with modern facilities. The office spaces do not have an open floor plan and therefore are very closed off. In between the studios and offices are the atriums with bamboo plants (see image). Further details on the AKN building are shown in the table below.
Broadcaster AVRO
Address ‘s-Gravelandseweg 78-80, Hilversum Year of construction 2000 Architect Ector Hoogstad Architecten Owner AVRO/KRO/NCRV Rent - Workplaces 1114 Lettable floor space 24.183 sqm
Table. Accommodation details AVRO (BCG, 2012)
Image. Accommodation AVRO/KRO/NCRV
115 KRO accommodation
The KRO is also accommodated in the AKN building, as mentioned in the previous section. The building is situated just outside of the Media Park in an area of large villas. The realisation of this building has been a shared project with the other broadcasting organizations AVRO and NCRV, hence the A(AVRO)K(KRO)N(NCRV) building. The collaboration between the three broadcasters has started because of the shared channel (channel 1) they were all going to air on. The collaboration has been more than just the real estate. The broadcasters founded the AKN-foundation to facilitate restaurant, security, financial control and broadcasting magazines. The AKN-building is owned by the AVRO for one-third. They are accommodated on the whole second floor of the office building.
The AKN building has a zigzag shape with atriums in between. The brick façade is therefore alternated by the big glass facades of the atriums. The inside of the building has a very commercial feeling to it. The spaces are large with modern furnishes. The office spaces do not have an open floor plan, therefore are very closed off. In between the studios and offices are the atriums with bamboo plants. Further details on the AKN building are shown in the table below.
Broadcaster KRO
Address ‘s-Gravelandseweg 78-80, Hilversum Year of construction 2000 Architect Ector Hoogstad Architecten Owner AVRO/KRO/NCRV Rent - Workplaces 1114 Lettable floor space 24.183 sqm
Table. Accommodation details KRO (BCG, 2012)
Image. Accommodation AVRO/KRO/NCRV
116 NCRV accommodation
The NCRV is the third broadcaster that is accommodated in the AKN-building, as mentioned in both of the previous sections. The building is situated just outside of the Media Park in an area of large villas. The realisation of this building has been a shared project with the other broadcasting organizations AVRO and KRO, hence the A(AVRO)K(KRO)N(NCRV) building. The collaboration between the three broadcasters has started because of the shared channel (channel 1) they were all going to air on. The collaboration has been more than just the real estate. The broadcasters founded the AKN-foundation to facilitate restaurant, security, financial control and broadcasting magazines. The AKN-building is owned by the AVRO for one-third. They are accommodated on the whole second floor of the office building.
The AKN building has a zigzag shape with atriums in between. The brick façade is therefore alternated by the big glass facades of the atriums. The inside of the building has a very commercial feeling to it. The spaces are large with modern furnishes. The office spaces do not have an open floor plan, therefore are very closed off. In between the studios and offices are the atriums with bamboo plants. Further details on the AKN building are shown in the table below.
Broadcaster NCRV
Address ‘s-Gravelandseweg 78-80, Hilversum Year of construction 2000 Architect Ector Hoogstad Architecten Owner AVRO/KRO/NCRV Rent - Workplaces 1114 Lettable floor space 24.183 sqm
Table. Accommodation details NCRV (BCG, 2012)
Image. Accommodation AVRO/KRO/NCRV
117 VPRO accommodation
The VPRO property is located on the Media Park in Hilversum within walking distance of the train station Hilversum Noord. The property is designed by MDRDV specially for the broadcasting organization. The ‘Villa VPRO’ is also fully owned by the organization. The building has won some prizes for the architectural design. The outside of the building has the look of a modern villa in a green area. The concrete structure with the many glass windows are the most striking elements of the building. From the inside the building has a more industrial character than the outside. The concrete structures are mainly unfinished and the industrial character is emphasized by steel elements. The building has some patios and an approachable rooftop for the leisure of the employees. The editorial office is an open space with different levels that are all visible from one point. In the table below some extra information of the building is given.
Broadcaster VPRO
Address Sumatralaan, Hilversum Year of construction 1997 Architect MVRDV Owner VPRO Rent - Workplaces 410 Lettable floor space 8.709 sqm
Table. Accommodation details VPRO (BCG, 2012)
Image. Accommodation VPRO
118 EO accommodation
The EO accommodation is housed outside the Media Park in Hilversum. The property is situated within short walking distance from the Hilversum Sportpark train station. The character of the area can be classified as residential. The EO is accommodated in an old boarding school including a chapel. The dark brick facades on the outside are in contrast with the white walls inside the building. The building has kept most of its old features and gives the offices and studios a classic look and feeling. The studio of De Vijfde Dag (see image) is placed inside the chapel with the stained glass windows.
Broadcaster EO
Address Oude Amersfoortseweg 79-85, Hilversum Year of construction 1909 Architect H. Nieuwenhuijsen Owner Unknown Rent 85 € / sqm Workplaces 391 Lettable floor space 8.480 sqm
Table. Accommodation details EO (BCG, 2012)
Image. The EO accommodation
119 NTR accommodation
The NTR is accommodated at the Media Park in the city of Hilversum and is easily accessible with public transport by walking from the Hilversum Noord train station. The most notable external feature of the building is the western red cedar slat façade (see VARA). The building is shared with another broadcasting organization; the VARA. The property is undivided ownership of these two organizations. The entrance hall is shared with a third broadcasting organization; the VPRO. This entrance hall is situated in between the properties of the NTR/VARA and VPRO. It is a very colourful building which gives immediate access to the three different corridors leading towards the spaces of the different broadcasters (see image). The floor plan of the building shows that the office space is situated around two main voids. The interior of the NTR/VARA building is mostly covered with a light wooden material on the internal walls and floors, which makes it special (see VARA). The feeling of the accommodation spaces is quite static, with some playful features (see VARA).
A second real estate property is owned by the NTR which is small pavilion just behind the NTR/VARA building. Before the merger of NPS, Teleac and RVU the pavilion was owned by the RVU. After the merger the property of Teleac was sold and the RVU pavilion was renovated. Part of the new NTR organization is now accommodated in the pavilion (see image).
Broadcaster NTR
Address Sumatralaan 49, Hilversum Year of construction 2000 Architect Trude Hooykaas, Royal Haskoning Owner NTR/VARA Rent - Workplaces 632 Lettable floor space 7.106 sqm
Table. Accommodation details NTR (BCG, 2012)
Image. Second accommodation of the NTR
120 Appendix III List of interviewees
Date Interviewee Organization Function Location 5-2-2013 Yvonne de Haan KRO Business director AKN building 5-2-2013 Beppie van Kolfschoten NCRV Operations manager AKN building 5-2-2013 Niels van ‘t Hooft AVRO Director financial business AKN building and operations 7-2-2013 Lisa van Bemmel NTR Operations Manager NET3 building 8-2-2013 Mark Minkman VARA Business director NET3 building 11-2-2013 Jaap Kooij EO General Director EO building 12-2-2013 Peter Kuipers TROS General Director TROS building 14-2-2013 Lennart van der Meulen VPRO CEO VPRO building 15-2-2013 Marc Adriani BNN CEO BNN building 8-1-2014 Henk Hagoort NPO Chairman Board of Directors NPO building 8-1-2014 Shula Rijxman NPO Member Board of Directors NPO building 8-1-2014 Marije Schuring NPO Financial Director NPO building 8-1-2014 Cees Smaling NPO Chairman Supervisory Board NPO building
121 Appendix IV Newspaper articles
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