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Ml 'IrflOfi IH Bf DF ORD ROW LONDON WC 1 R 4LJ.NCR. t A N D 8100145 FARKAS, SHEVA INNOVATION IN THE COMMERCIAL TELEVISION NETWORKS: AN ANALYSIS OF ORGANIZATIONAL CONSTRAINTS AND STRATEGIES USED TO MINIMIZE THE IMPACT OF NEW AND DEVELOPING TECHNOLOGIES The Ohio State University PH.D, 1980 University Microfilms International 300 N Zecb Road. Ann Arbor, M l 48106 Copyright i98o by FARKAS. SMKVA All Rights Reserved INNOVATION IN THE COMMERCIAL TELEVISION NETWORKS: AN ANALYSIS OF ORGANIZATIONAL CONSTRAINTS AND STRATEGIES USED TO MINIMIZE THE IMPACT OF NEW AND DEVELOPING TECHNOLOGIES DISSERTATION Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of The Ohio State University By Sheva Farkas, B.F.A., M.A. The Ohio State University 1980 Reading Committee: Approved By Dr. Joseph M. Foley Dr. James L. Golden Dr. Victor D. Wall, Jr. Communication To Mom, Dad, and Harry ii ACKNOWLEDGMENTS As with any research study of this size, there were people whose assistance was invaluable and must be noted. Foremost, I would like to thank Dr. Joseph M. Foley whose advice and guidance, though often frustrating, resulted in work that reflected the importance of the subject. His faith in me as a researcher made an overwhelming task almost manageable. Also, I would like to thank Drs. James L. Golden, Victor D. Wall, Goodwin Berquist and Leslie Berkes of the Ohio State University for their assistance throughout my graduate studies. The assistance given by the commercial networks, especially research personnel, made the acquisition of data a less difficult task. Melvin A. Goldberg, Vice President of Primary and Social Research for the ABC Television Network, was an important source of information and guidance throughout the study period, and his help is gratefully acknowledged. Other network persons assisting me included Drs. Thomas Coffin and Sam Tuchman of NBC, and Earle Marsh of CBS. On a personal level, I would like to thank Dr. Dorothy Painter, and Mimi Morris, whose unquestioning friendship was the glue that kept putting the pieces back together; and Alexandra Coe who proofread the entire study. Finally, I would like to thank my family whose support, both financial and emotional, was an inspiration during difficult times. I hope we all find that it was worth it. VITA December 29, 1949........ Born - Elizabeth, New Jersey 197 1 ....................... B.F.A., New York University New York City, New York 197 2 ....................... M.A., New York University New York City, New York 1972....................... Associate Director, WKYC-TV Cleveland, Ohio 1972-197 4 .................. Producer/Director, WSRE-TV Pensacola, Florida 197 4 ..................... .. Producer/Director, WLWC-TV Columbus, Ohio 1974-1975.................. Producer/Director, WJZ-TV Baltimore, Maryland 197 5 ....................... Producer/Director, WTOP-TV Washington, D.C. 1977-198 0 .................. Teaching Assistant, Department of Communication, The Ohio State University Columbus, Ohio 1978-197 9 .................. Research Assistant, OCLC, Inc. Columbus, Ohio FIELDS OF STUDY Major Field: Communication Studies in Mass Communication. Dr. Joseph M. Foley Studies in Communication Theory. Dr. Victor D. Wall, Jr. Studies in Rhetoric. Dr. James L. Golden v Studies in Research Methodology. Dr. Joseph Foley Studies in Organizational Behavior. Dr. Leslie Berkes TABLE OF CONTENTS Page ACKNOWLEDGEMENTS i i VITA....................................................... v LIST OF TABLES............................................ X LIST OF FIGURES........................................... xii INTRODUCTION.............................................. 1 Background....................................... 5 Purpose.......................................... 9 Research Plan.................................... 10 PART I COMMERCIAL NETWORKS AS ORGANIZATIONS.. 14 Chapter 1. ORGANIZATIONS...................... ........... 15 Organization Theory............................. 21 The Study of Organizations..................... 26 Innovation in Organizations.................... 31 2. THE COMMERCIAL NETWORKS - AN ORGANIZATIONAL PERSPECTIVE...................................... 37 The History of Network Broadcasting........... 38 The Corporate Positions of the Networks........ 4 3 RCA............................................... 48 CBS ............................................... 58 ABC ........................ 68 vii PART II ENVIRONMENTS AFFECTING THE COMMERCIAL TELEVISION NETWORKS............. 77 3. THE COMPETITIVE AND ECONOMIC ENVIRONMENTS 80 Competition...................................... 80 Theories of Network Behavior................... 81 The Economic Environment........................ 85 4. THE TECHNOLOGICAL ENVIRONMENT.................. 100 Levels of Technological Development........... 100 Factors Affecting Technological Dissemination. 104 5. THE REGULATORY ENVIRONMENT...................... 110 Regulatory Influences........................... 110 Regulatory Behavior............................. 113 Broadcast Legislation........................... 115 Regulation for Competition..................... 117 Regulation of New and Developing Technologies. 120 Current Regulatory Constraints................. 12 3 6. AN ORGANIZATIONAL MODEL OF THE INTERACTIVE ENVIRONMENTS AFFECTING NETWORK TELEVISION 125 Uncertainties.................................... 128 Organizational Rationality..................... 131 Organizational Domain and Task Environment.... 133 Organizational Design........................... 134 PART III THE HISTORY OF INNOVATION IN THE COMMERCIAL TELEVISION NETWORKS............... 138 7. INNOVATION IN THE COMMERCIAL TELEVISION NETWORKS......................................... 140 Competitive Innovations......................... 140 Economic Innovations............................ 148 Technological Innovations...................... 154 Regulatory Innovations.......................... 160 viii 8. THE DEVELOPMENT OF COLOR TELEVISION............ 169 Methodology...................................... 171 Results........................................... 175 Conclusions...................................... 185 Organizational Response......................... 19 4 S. THE ABC-ITT MERGER ATTEMPT...................... 200 Methodology...................................... 205 Results........................................... 205 Conclusions,.............. 2 2 r Organizational Response......................... 225 PART IV CURRENT THREATS TO THE COMMERCIAL TELEVISION NETWORKS.......................... 2 31 10. TECHNOLOGIES CURRENTLY AFFECTING THE COMMERCIAL TELEVISION NETWORKS................. 2 33 Background....................................... 2 34 Methodology...................................... 242 Results .......................................... 243 Analysis.......................................... 249 Conclusions...................................... 258 11. STRATEGIES USED TO MINIMIZE THE ORGANIZATIONAL IMPACT OF NEW AND DEVELOPING TECHNOLOGIES 263 Environmental Strategies........................ 264 Analysis.................................... 275 Conclusions...................................... 283 12. SUMMARY, DISCUSSION, AND CONCLUSIONS.......... 290 Summary...................................... .. 290 Discussion....................................... 297 Conclusions...................................... 305 APPENDIX A - FREQUENCY COUNTS FOR THE COLOR CONTROVERSY...................................... 314 BIBLIOGRAPHY.............................................. 319 ix LIST OF TABLES Table Page 1. Network