Subject category:
Ethics and Social Responsibility
Published by:
Harvard Kennedy School
Length: 45 pages
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https://casecent.re/p/7766
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Abstract
On June 9, 1986, General Electric Co acquired the Radio Corporation of America (RCA) for USD6.8 billion, setting a record for the largest non-oil merger in US history. GE wanted RCA for its defense-related businesses and for its solid domestic sales of consumer goods, an area where GE was faltering. But the 'jewel in the crown' was the RCA-owned television network, the National Broadcasting Company (NBC). GE was delighted with its new NBC subsidiary, which the media press had christened the 'Cinderella network' for its recovery from a profound slump to become the most successful of the nation's three networks. The network's news division, however, was different. It had rarely balanced a budget and was losing at least USD50 million a year. From the standpoint of GE - a company which had successfully boosted revenues by ruthlessly cutting expenses and personnel - NBC News needed simply to cut costs. This case describes the process GE underwent to make NBC a profitable venture.
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Abstract
On June 9, 1986, General Electric Co acquired the Radio Corporation of America (RCA) for USD6.8 billion, setting a record for the largest non-oil merger in US history. GE wanted RCA for its defense-related businesses and for its solid domestic sales of consumer goods, an area where GE was faltering. But the 'jewel in the crown' was the RCA-owned television network, the National Broadcasting Company (NBC). GE was delighted with its new NBC subsidiary, which the media press had christened the 'Cinderella network' for its recovery from a profound slump to become the most successful of the nation's three networks. The network's news division, however, was different. It had rarely balanced a budget and was losing at least USD50 million a year. From the standpoint of GE - a company which had successfully boosted revenues by ruthlessly cutting expenses and personnel - NBC News needed simply to cut costs. This case describes the process GE underwent to make NBC a profitable venture.