Alana 8aLes

AccounLlng 831
10/23/11

Case 91
new ?ork 1lmes

Cvervlew 1hls case ls abouL Lhe formulaLlon of Lhe new ?ork 1lmes ulglLal
dlvlslon and lLs need Lo become lndependenL of Lhe new ?ork 1lmes prlnL
newspaper wlLhouL loslng Lhe poslLlve collaboraLlve relaLlonshlp beLween Lhe Lwo
dlvlslons' 1he case focuses on Lhe n?1u's organlzaLlonal sLrucLure and
leadershlp lLs culLure and values hlrlng and compensaLlon as well as lLs
budgeLlng process and performance procedures Cverall Lhe case seeks Lo
deLermlne n?1u's susLalnablllLy and proflLablllLy for Lhe company as a whole

3 Would you change n?1u's exlsLlng organlzaLlonal sLrucLure?
no We would noL change n?1u's exlsLlng organlzaLlonal sLrucLure 1helr currenL
organlzaLlonal sLrucLure allows Lhem Lhe ablllLy Lo have Lhelr own unlque
corporaLe culLure 1he Crg sLrucLure also allows Lhem creaLlve freedom of Lhe
conLenL provlded on n?Llmescom

N1D's cu|ture and |eadersh|p sty|e
Pro CenLrallzed operaLlons Lo pursue greaLer operaLlng efflclencles
LxperlmenLal CulLure
1eam approach
SplrlL of Cpenness
8ureaucraLlc conLrols procedure and paperwork were mlnlmlzed
con n?1u had Lo develop a more forceful and confronLaLlonal leadershlp
approach Lhan was LradlLlonal wlLhln Lhe company 1hls was done Lo
conLrol Lhe beglnnlngs of an overly compeLlLlve lnLernal envlronmenL



N1D's ||ke|y budget?
Pro n?1u adopLed a boLLomup approach Lo budgeLlng Meanlng LhaL conLenL
ldeas could come from LhroughouL Lhe organlzaLlon ManagemenL sLlll had Lo
approve
con 1he budgeLlng process and flnanclal LargeLs were seL aL Lhe corporaLe level
1hls was noL beneflclal because corporaLe budgeLs were based on expecLaLlons of
much smaller varlablllLy and were revlsed aL much longer lnLervals
con uue Lo Lhe somewhaL unpredlcLable and rapld changes of Lhe lnLerneL
markeL n?1u's budgeLs and forecasLs had Lhe poLenLlal Lo change rapldly and
were updaLed monLhly

1he way N1D's performance |s [udged
con 8evenue growLh became Lhe mosL slgnlflcanL lnfluencer of performance
percepLlons 8evenues vs forecasL and revenue growLh vs compeLlLor revenue
growLh were consLanLly revlewed lnLernally
con roflLablllLy was dlfflculL Lo measure due Lo Lhe operaLlng overlap beLween
n?1u and Lhe core buslness
con n?1u recelved no commlsslon on generaLlng new cusLomers for 1he new
?ork 1lmes news aper 1he lnLerneL dlvlslon had a much broader reach Lhan Lhe
newspaper lLself and Lherefore people who were lnLroduced Lo n?1lmes
newspaper Lhrough n?1lmescom would someLlmes end up becomlng n?1lmes
newspaper subscrlbers
con lL was dlfflculL Lo deLermlne how Lo evaluaLe Lhe performance of an lnLernal
sLarLup 1herefore performance percepLlons depended on more Lhan [usL
flnanclal daLa and oLher quanLlLaLlve meLrlcs 1herefore n?1u had Lo malnLaln a
poslLlve relaLlonshlp wlLh n?1lmes newspaper

,od|f|cat|ons w|th|n the current organ|zat|ona| structure
Performonce vo/uotion As a sLarL up Lhe organlzaLlon should only be evaluaLed
based on how much revenue lL generaLes as mosL sLarLups don'L become
proflLable unLll afLer 3 Lo 3 years
commissions n?1u should recelve commlsslons based on news aper Sales
made by cusLomers who were lnLroduced Lo n?1lmes Lhrough n?1lmescom
udqetinq Process 1he budgeLlng process should noL be based on Lhe
corporaLlon budgeL process model because Lhe corporaLlon's budgeL ls noL as
volaLlle as Lhe com dlvlslon's budgeL ConLlngency budgeLs should be prepared so
LhaL Lhe 8udgeL wlll noL have Lo go Lhrough anoLher revlew and approval process
before lL can be lmpllcaLed