Case 9 1

Q1. Describe NYTDs evolution to date. What is the strategy of NYTD?
Are the organization and control consistent with the strategy? Evolution: New York Times first ventured into the Internet in 1995. Back then, the company was called the New York Times Electronic Media Company. At first, the organization included four more employees. Later during the first year, Martin Niesenholtz was hired as a president and the project consisted of only one webpage; NYTimes.com. Mr. Niesenholtz reported to both the general manager and the editor of the newspaper. Later, Bernie Gwertzman was assigned to direct the editorial operations of NYTimes.com. At this time there was a need for an own newsroom for the digital version of the newspaper. In 1999, a new operating division, Times Company Digital, was created, which reported directly to corporate management. The new division included NYTimes.com, Boston.com, NYToday.com, GolfDigest.com, WineToday.com, and Abuzz. The new division had a very decentralized structure and different organizational structures but still with similar roles as a common newspaper. The different websites were combined in the new organization to be able to learn from eachother. However, in 2000, the organizational structure changed and product managers were nominated as well as functional heads. A lot of effort was then put into creating a culture of team-work and openness, and the NYTD moved into a new building. This separated unit, first organizationally and then physically, led to tensions between the original Company and the new division. The new culture and employees hired from outside the Company created a very competitive internal environment. Strategy: The main strategy of NYTD is to convert printed newspapers into website content that would be displayed over the internet. The NYTD aimed to find new and creative ways to utilize the full potential of internet multimedia. The division encouraged conversation and cooperation to inspire new ideas between groups of people and they used a decentralized organization. The NYTD is an independent division. Moreover, NYTD collects customer information through registration. However, registration is free of charge; most revenues come from selling advertisements on the website. Another part of the strategy is to add value through interactive features and functions to the webpage. To create a distinct Internet culture, which aimed to be experimental, can also be seen as a strategy. Several ideas were realized but then later discontinued if not profitable. An objective for NYTD was also to enhance the geographical reach. Was it consistent with organization and control? Control was minimized but some processes were defined. Information was shared and decision-making was to be transparent. The hiring process was consistent with the strategy; NYTD wanted to find persons who fitted into the new culture (young, smart, ambitious, with dotcom experience). The organization and location supported the openness of the culture. NYTD had a bottom-up approach to budgeting; ideas were welcome from all areas of the organization. Q2. What impact has NYTD had on the rest of the Company? In the beginning, NYTD was considered a credible part of the corporation. However, in time NYTD created a lot of tensions with the original Company. NYTD broke down the Chinese Wall that existed between the editorial and business operations in the original Company; they encouraged collaboration
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and communication. Concerning advertising sales, the newspaper sales force was unwilling to share their key customers. Moreover, staff feared that the online version would decrease subscription sales. It did not; it even increased the number of subscriptions and became a complementary asset instead of a competitive. Because of this, NYTD considered its branch to have a positive impact on the Company. However, tension was also due to the fact that NYTD was allowed to stay in business even though it lost money several years in a row. Q3. How does the way NYTD is managed compare to the way a venture capital firm manages a startup? What insight, if any, do you draw from this comparison? NYTD can be compared to a venture capital as a lot of money has been invested in the beginning, this can be described as organic growth. However, contrary to the venture capital, there has been no real return on investment. Q4. What impact do internal perceptions of NYTDs performance have on its operations? In NYTD, the employees are a priority; all the ideas are coming from them. As said before, there is a very tough selection; they are using an external and internal hiring system. This organization allows them to work in a fully creative atmosphere. Q5. Would you change in NYTDs existing organizational structure? According to themselves, the NYTD division works pretty well, indeed they have a good organizational structure, they do not really need change. However we can make some suggestions, a better collaboration between NYTD and the company would reduce the rivalry. The use of responsibility centers, increased measurement of financial performance could be a good solution as well as to increase the number of sources of profit.
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Q1. Describe NYTDs evolution to date. What is the strategy of NYTD?

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