General Electric and the National Broadcasting Company: A Clash of Cultures

General Electric and the National Broadcasting Company: A Clash of Cultures

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Publication Date:
January 01, 1989

Source:
Harvard Kennedy School

On June 9, 1986, General Electric Co. acquired the Radio Corporation of America (RCA) for $6.8 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 $50 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. HKS Case Number 939.0.

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General Electric and the National Broadcasting Company: A Clash of Cultures

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