Business

Time Warner Corporation

Management Strategy and Practice

Key Executives

The Time Warner Corporation is an entertainment organization that currently ranks as the second biggest in the globe. The corporation is a merger between the Time Inc., which had initially acquired the Turner Broadcasting System Inc., and Warner Communications Inc. The company’s management comprises of the board of directors, senior corporate executives and the executives by business (Time Warner, 2010).

• Board of Directors

1. Jeffrey L. Bewkes       Chairman and CEO(Time Warner Inc)
2. James L. Barksdale     Chairman and President (Barksdale Management Corporation)
   1. Jessica P. Einhorn       Dean (Paul H. Nitze School of Advanced International Studies, John Hopkins University)
   2. William P. Barr           Former US Attorney General
   3. Fred Hassan                 Former Chairman and CEO, Schering Plough Corporation
   4. Stephen F. Bollenbach Former Co-Chairman and CEO, Hilton Hotels Corporation
   5. Michael A. Miles         Special Ltd. Partner, Frostmann Little & Company
   6. Frank J. Caufield         Co-Founder and Partner, Kleiner Perkins Caufield & Byers
   7. Kenneth J. Novack       Senior Counsel, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, Pc
   8. Robert C. Clark             Distinguished Service Professor, Harvard University
   9. Paul D. Watcher            Founder, Chairman and CEO, Main Street Advisors
   10. Mathias Dopfner           Chairman and CEO, Axel Springer AG
   11. Deborah C. White         Chairman, President and CEO, Carver Bancorp Inc.

• Senior Corporate Executives
  1. Jeffrey L. Bewkes          Chairman and CEO
  2. John K. Martin Jr.          Chief Financial Officer and Executive Vice President
  3. Paul T. Cappuccio          Executive Vice President and General Counsel
  4. Olaf Olafsson                 Executive Vice President
  5. Patricia Fili-Krushel      Executive Vice President of Administration
  6. Carol A. Melton             Executive Vice president of Global Public Policy
  7. Gary L. Ginsberg           Executive Vice president of Corporate Marketing and

Communications

Organizational Structure

            The corporation has a decentralized configuration that comprises of at least thirty divisions that all work as autonomous entities within the organization. These divisions are customer-centric in nature with all projects geared towards the realization of customer needs. This has led to the emergence of marketing segmentations that focus on various consumer targets within the information and leisure industry (Time Warner, 2010). The AOL targets web users through programs such as Netscape, AIM and Moviefone. The Home Box Office targets home users by distributing programs over television networks in at least fifty different nations. The programs majorly filmed are movies, documentaries, and program series. Warner Bros. Entertainment and New Line Cinema are the movie production labels used by the corporation. Time Inc. targets the print media in the production of magazines that cover diverse activities like sports, cooking, fashions and trends, finances and decorations. These magazines serve a global market of at least three hundred million readers. The Time Warner Cable serves the digital market with the Voice Over Internet Protocols (VOIP) and digital film applications. The Turner Broadcasting supports news houses like CNN and amusement programs like Cartoon Network (Time Warner, 2010). It is therefore evident that the company is organized in terms of customer divisions. Customer care agents are spread across the various divisions for the purpose of dealing with client needs, complaints, observations and other elements.

Tall vs. Flat

The company may be viewed as a tall organization since it has several lines of authority with the most superior members being the board of directors, led by the CEO, Jeffrey Bewkes. Bewkes also acts as the supreme authority over the six identified executive presidents. Each of the executive presidents has several staff members under them in the realization of their assigned tasks. For instance, John Martin, the CFO, has three officials namely, Edward Ruggiero, Douglas Shapiro and James Burton working under him. Ruggiero is the SVP and treasurer, Shapiro is an SVP in charge of investor relations, and Burton is an SVP M&A. All the other vice presidents also have a similar structuring in their divisions and the relevant workers required to complete a given role within the company.

Financial Strategy and Practice

Income Statement

Annual Data | Quarterly Data                       All numbers in thousands

Period Ending                                                             Sep 30, 2010

 

Total Revenue                                                                6,377,000              

Cost of Revenue                                                              3,529,000

Gross Profit                                                                    2,848,000              

 

Operating Expenses

Research Development                                                            –

Selling General and Administrative                                    1,409,000

Non Recurring                                                                                38,000

Others                                                                                   54,000

Total Operating Expenses                                                          –

 

Operating Income or Loss                                                 1,347,000          

Income from Continuing Operations

Total Other Income/Expenses Net                                       (307,000)

Earnings before Interest and Taxes                                      741,000

Interest Expense                                                                         –

Income before Tax                                                                741,000

Income Tax Expense                                                             221,000

Minority Interest                                                                      2000

Net Income from Continuing Ops                                        520,000

 

Non-recurring Events

Discontinued Operations                                                           –

Extraordinary Items                                                                   –

Effect of Accounting Changes                                                  –

Other Items                                                                                –

 

Net Income                                                                         522,000              

Preferred Stock and Other Adjustments                                   –

Net Income Applicable To Common Shares                  $522,000            

Figures

As per the third quarter of the 2010 trading period, the total revenue was $6,377,000 while the net income was $522,000 (Yahoo! Finance, 2010).  

Stock Price

As per 24 November 2010, the company’s stock price was $30.37. I expect the stock price to decrease in the next quarter. This conclusion stems from the monthly price analysis. For the first 2010 quarter, January had $27.45, February $29.04 and March $31.27 which records a mean price of $29.25. In the second quarter, April had $33.08, May had $30.99 and June $28.91 which translates into a mean price of $30.99. With the third quarter a mean price of $30.69 was recorded from the July figures of $31.46, August with $29.98 and September having $30.65. By combining the current November and October prices, $30.37 and $32.51 respectively, it yields an average of $31.44 (Yahoo! Finance, 2010). If we estimate the December price as $30, then the last quarter will generate a price of $30.96. This means that the last quarter will generate a slightly higher or lower price than $30.96. Comparing the mean figures for the four quarters, $29.25, $30.99, $30.69 and $30.96 we notice a fluctuating trend that alternates with periods of lows and highs. The first period is low, and then the prices go high, to low again and lastly a higher price. With the last quarter being a high period, then we would assume that the next period should be a low for the pattern to hold.

 

References:

Time Warner. (2010). About Us. Retrieved from http://www.timewarner.com/corp/aboutus/our_company.html

Yahoo! Finance. (2010). Time Warner Inc. (TWX). Retrieved from http://finance.yahoo.com/q/is?s=TWX