The Power Struggle Within Viacom

From the early days of American media combine Viacom, the organization has been both an American success story as well as drama of the highest order. In this paper, the succession battles that have shaped Viacom in recent years will be discussed, along with other key topics in order to fully explore where Viacom began and where it is headed in the future.

The Industry in Which Viacom Competes and the Characteristics of the Industry Itself

Simply stated, Viacom competes primarily in the media entertainment industry, which in this case refers to cable and satellite television networks, movie production and distribution, and in recent years, Internet ventures. This particular industry is characterized by constant change, facilitated by technological innovations, increased competition, and the changing tastes of the consumer. Viacom is indicative of this change, having evolved from a broadcasting company in the early days of television to embracing the Internet and satellite radio in the 21st century.

Porter's Five Forces as They Apply to the Industry

In order to truly understand the dynamic nature of the media entertainment industry, the application of Porter's Five Forces is very helpful. This application is as follows:

HOW THE FORCE APPLIES TO INDUSTRY

Suppliers
Entertainment can be a cut throat business
Potential Entrants
The dynamic nature of technological advances makes new entrants into some parts of the industry rather easy.
Substitutes
Viewers' tastes frequently change, providing little loyalty to any particular network, etc.
Buyers
Advertising buyers dictate television programming choices; moviegoers dictate film offerings, etc.
Competitors
Competition is fierce; ethics are often questionable

Based on the application of Porter's Five Forces to the entertainment media industry, the question arises as to whether this is an attractive industry. Like the industry itself, this is a complex answer; if the goal of the industry players is to make large financial gains based on substantial risk of failure, then the answer would be yes; however, for the more conservative, less dynamic of the business world, perhaps other industries would provide a more reliable and predictable return on investment.

Available Tangible and Intangible Resources

Viacom has at its disposal a wide range of tangible and intangible resources, both of which represent tremendous opportunity for profit, as well as risk. Among the tangible resources at Viacom's collective fingertips are established business entities such as DreamWorks and Paramount Pictures, television networks such as CBS and MTV, etc. Less tangible are the intellectual properties that Viacom controls, such as the broadcast rights for motion pictures and television programs, licensing of trademarks, etc.

The Major Problem Facing Viacom

Aside from the complexities and challenges of the industry itself, Viacom faces an additional major problem in the form of a succession dispute. More precisely, a power struggle for the role of COO of Viacom emerged when longtime COO Mel Karmazin vacated the post in 2004, leaving a vacancy that needed to be filled, and several people vying for the post. Because of this struggle, the organization found itself faced with several succession planning options.

Possible, and Recommended Succession Options

Because of the need to develop an effective succession plan at Viacom, several possible options emerge: the organization could be divided into several entities, giving all of the COO contenders an opportunity to apply their talents for organizational benefit or remain as one and choose a single COO. The recommended plan of action is to create divisions of Viacom which represent the various interests of the organization, such as separate television, film, and Internet divisions. This also gives the executive team a chance to realize their best potential.

Outcome of the Succession Planning Controversies at Viacom

Given the possible options, and the nature of the struggle for leadership of Viacom, a clear choice had to be made in terms of succession planning. Ultimately, it was decided that Viacom would be divided into two distinct divisions: network television and cable television, two similar yet vastly different entities. This divide solved the internal power struggle and gave Viacom's lagging stock price a needed boost. However, it is reasonable to assume that future power struggles will erupt as the other diverse Viacom interests, such as films and Internet products seek independent leadership.

Members of the "New" Viacom Board of Directors

Because of the realignment of Viacom, a shakeup of the Board of Directors took place; the new board members include George Abrams, Phillipe Dauman, Thomas E. Dooley, Tom Freston, Ellen V. Futter, Robert Kraft, Alan Greenberg, Charles Phillips, Sumner Redstone (Chairman), Shari Redstone (Vice Chair, non-executive), Frederic Salerno and William Schwartz.

Summary

In closing, it can accurately be said that as far as Viacom has come, it undoubtedly will continue to evolve in the future due to the dynamic nature of the industry they compete in, as well as the dynamic nature of the organization itself.