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A conglomerate merger provides the merging companies with the advantage of diversification of business operations and target markets. A conglomerate ( / knlm.r.t /) is a multi-industry company - i.e., a combination of multiple business entities operating in entirely different industries under one corporate group, usually involving a parent company and many subsidiaries. Fake news, increased surveillance, and even political instability have been tied to transformations in the media content landscape. But is this a good thing? Media conglomeration brings more. Today, the media has many vital roles in a modern democracy such as; political lies, reviling the truth to the public as well as helping to aid with the hypocrisy of the nation. Taking a look at the different Why Does Economics Drive Most Media Companies? Any act that against this law may lead to fines or in much extreme cases, prison sentence. For some small media outlets, consolidation with a corporation means survival. One example of a Conglomerate merger is the combination of Dow Chemical and DuPont, which was announced in December 2015. Are you or your spouse an active or retired U.S. military service member?*. 3. According to the Fortune 500 list of 2014 The Walt Disney Company is America 's largest media conglomerate in terms of revenue with 21st Century Fox, Time Warner, CBS Corporation, and Viacom are amongst the top five. Three important aspects of media convergence are technological convergence, economic convergence, and cultural convergence. Technological convergence is the key element of media convergence. Conglomerates also have access to new markets and technologies. HARM than MERITS. A faction is basically a group of people who all agree upon the same thing and their point of view is different from other factions. 3M is a conglomerate that has a number of subsidiaries that operate in different markets. As a member, you'll also get unlimited access to over 88,000 Whether you are starting your first company or you are a dedicated entrepreneur diving into a new venture, Bizfluent is here to equip you with the tactics, tools and information to establish and run your ventures. Tracking of computer programs threatened personal privacy and had led to greater surveillance. It has also been effective in using the synergies between its subsidiaries for saving on costs and gaining access to new markets and technologies. *Federal Communications Commission, Broadcast Station Totals as of September 30, 2016, on the internet as a PDF at https://apps.fcc.gov/edocs_public/attachmatch/DOC-341807A1.pdf. Smartphones, tablet computers, smart televisions, and even automobiles now provide people with access to media content that was previously available only through separate channels. All rights reserved. The Article 10 allows all citizens the absolute freedom as not restricted by the government. Another advantage of this is that what works for the people also works for the media. Please use our International Form if you live outside of the U.S. Walden University is a member of Adtalem Global Education, Inc. www.adtalem.com, Walden University is certified to operate by SCHEV. Some of these effects are positive, especially as concerns convenience, accessibility, and access to information: Not all the effects of media convergence have been positive, however. Here are a few of the pros and cons. It has been able to reduce costs and gain access to new markets and technologies by leveraging the synergies among its subsidiaries. It is believed that the government censors as a way to have control not to protect citizens; by knowing more, they have the upper, Before media, politicians and other newsmakers had to rely on word of mouth to communicate the various messages they were espousing. Consumers' choice & minimal government control. How has Conglomeration Changed the Movie and Telev Conglomeration of the movie and television industry, Motion Industry and The Effects of Conglomeration. While diversity still clearly exists, there is the risk that mass media might reduce cultural variety, leaving us with less art and fewer inspirations. Though many positive attributes exist in the media, there are inevitably negatives as well. While almost all people experience major benefits from the convenient services offered by converged digitalized technologies, they also experience decreased levels of personal privacy and increased exposure to fake media content. 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Riley College of Education and Human Sciences, College of Health Sciences and Public Policy, College of Psychology and Community Services. Some of the advantages are that there is diversification, which can result in the reduction of investment risk. As a result, the conglomerate can gain access to new markets and technologies through its subsidiaries and have many shareholders. In nations described as authoritarian by most international think-tanks and NGOs media ownership is generally something very close to the complete state control over information in direct or indirect ways. For example, Sony has been able to use the synergies between its subsidiaries to save on costs and gain access to new markets and technologies. Management costs increases due to size of the group Conglomerates have to face many accounting-related problems, for example, consolidation It is the backbone of a democracy; it makes us vigilant of numerous social, political and economic activities happening around the world. Moreover, technological convergence has seen the rise of social media journalism. In the stock market, it is understood as portfolio diversification. You estimated that as a result of the increased competition, the demand elasticity has increased from -2 to -3, ie you face more, 2. The new company, known as GE Alstom, was jointly owned by both GE and Alstom. He also satirises the. While MEG's broadcasting decreased 17% and digital media increased 8%, its newspaper was down 43%. In a May 2003 article appearing on the Heritage Foundation, James Gattuso - a senior research fellow in regulatory policy - reports that the ability to own multiple television stations, for example, allows the owners to provide programming for niche markets on the different stations. As a result, the conglomerate may find it difficult to respond to changes in the market. By contrast, conglomerate diversification is the product of two companies that have little in common coming together, which presents a unique set of advantages and disadvantages. On one hand, media convergence has expanded access to media, simplified media production, and democratized the base of media producers through user-created content. In Malaysia, Law such as Publications act and printing presses give the Malaysian authorities the control over all the media. A multinational conglomerate can benefit from economies of scale and from the ability to operate in multiple markets. Viacom, a leading global media company, was formed in the 1970s by Central Broadcasting System (CBS). There have been a number of negative and very impactful consequences of the restructuring of the media landscape: There are two sides to every coin, and media convergence is no exception. Totalitarian regimes have used mass media for nearly a century to control what their people believe. From the television and radio, we receive the news very fast and learn about many subjects like our health and environment. Media conglomeration means that several media companies of different purposes combines together to form conglomerates. United States [ edit] Expand your career options and earn your degree in a convenient, flexible format that fits your busy life. On the concluding note, it can be said that conglomerates are the big business houses that have many subsidiaries working under them and conglomerates have their own pros and cons. Increasingly, taking cross-enterprise synergy into account is essential for investors to properly evaluate future prospects has been done by GE effectively. 2023 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. Citizen Journalism: Advantages & Disadvantages. 11) Beefing up media bias Within a single investment, there will always be negative shocks. Conglomerates can also benefit from scale economies. It is the image that tells us what is attainable in the vast cult of the self, what we should desire, what we should seek to become and who we are (Hedges, 4). Conglomerates are less popular today, but were quite popular in the 1960s and 1970s. Which is to say, mass media simultaneously benefits us and creates new problems. Edition: 2nd ed. Conglomerate Merger: A conglomerate merger is a merger between firms that are involved in totally unrelated business activities . Global Mass Communication: pros, cons and the driving force behind it. Cultural Show More Related Media Influence On Parliament 1256 Words | 6 Pages In the same way, one advantage of a conglomerate is that it is better equipped to retain a general position and be less affected by adverse fluctuations. Therefore, the main aim is to analyse and investigate the working mechanism and different models of multi-agency. A successful conglomerate is a company whose parts are made up of several smaller independent companies that operate in various sectors. As a result, the conglomerate may find it difficult to manage all of its subsidiaries effectively. In that while global media has brought about several advantages or rather benefits to the world, there are notable consequences to it as well. How do you know what youre seeing or hearing from mass media is true? I.,& Santa, M., (2014). The former says that, up to a certain point, companies will consistently lower relative costs as they grow, and the latter that advantages can be increasingly gained from complementary services available within a growing entity. However, they found this was an unreliable method of communication and the first newspapers and other media mediums were created. Global Village Overview & Concept | What is a Global Village? It has been contaminated by political influences. Later the radio provided another source to achieve the majority. Media help to correlate or co-ordinate various parts of the social system by gathering and disseminating valuable information. At its best, this is unfair. Why Conglomerates Get Formed Websites and applications such as Facebook, YouTube, Twitter, and TikTok have seen unprecedented, explosive growth in the last decades. Previously researchers have found that all types of electronic media whether its TV or computer or internet or social media have negative impact on children but now researchers are focusing on educational aspect of media and how educational programs can help in developing cognitive thinking among children. All told, we have more ways to reach more people than weve ever had in the history of humankind. Conglomerates are usually formed via acquisitions, in which one company buys a controlling stake in another firm. Through television and radio programs, people get to learn about health matters, environmental conservation, and much more. The main disadvantages of the conglomerate model are as follows. Different radio stations with the same music, The effect of deregulation on today's radio. Comment * document.getElementById("comment").setAttribute( "id", "ae2097044bcf4eadb3719e41bcea7d1f" );document.getElementById("i2e65971ac").setAttribute( "id", "comment" ); Copyright 2023 Marketing91 All Rights Reserved, Conglomerate Definition, Benefits and Examples, 22 Best Side Hustle Ideas (Online and Offline), How To Buy Into A Business? In a conglomerate, it is vital to set up efficient systems to ensure productivity across subsidiaries to maintain productivity and profits. In order to achieve the aforementioned aim of this essay I will focus on the following: limited-effects theory, two-step flow theory, attitude change theory and agenda setting. These companies often own a number of smaller companies that operate in different sectors, such as television, radio, films, and the internet. Would the alternatives be more ethical or virtuous? What is the I How will the print industry survive? Conglomerates may also be created through joint ventures, which occur when two companies come together to form a new company that is jointly owned by both firms. Those involved in multimedia studies have been answering this question in different ways for many years. Here are some advantages of conglomerate diversification: People's spending patterns alter as the economy changes. First, conglomerates tend to have mixed results from their various business units. This is because a conglomerate can have many different business types under one umbrella, which means that there are many different people with different skill sets working for the company. Media bias has a very large effect on society and most often in a negative way. A conglomerate is a business model in which many companies are collected into a single large corporation owned by a parent company. But along with conglomeration come many advantages and disadvantages. Mass Society Theory Examples & Features | What is Mass Society? Each subsidiary business operates independently from the other divisions in the conglomerate, but the managers of those subsidiaries report to the senior management team at the parent firm that is responsible for overseeing the various businesses and making sure they are all performing well. As the merging companies operate in distinct industries and/or markets, the merged company is less vulnerable to declines in sales in one industry or market. Finally, conglomerates may be less responsive to change than companies that are not conglomerates. Berkshire Hathaway has been able to utilize the synergies between its subsidiaries to create value for shareholders. A Conglomerate merger is seen as a valuable move if the value of the two companies combined is more than they are valued . While mass media can create opportunities for anyone to share their story, the vast majority of our mass media is bought. Only a few companies representing the interests of a minority elite control the public airwaves. These services have drastically changed the kind of media that people view and diversified and democratized the base of people producing this media. The digitalization of information has allowed people to have unprecedented access to educational and informative content on their devices. Media convergence influences people's lives and society overall in countless ways. Electronic Media is a form of entertainment, knowledge and communication and influences societys conductivity and is deeply censored, biased and manipulative in order to control society. Conglomerate firms often have greater access to capital markets and can spread research and development costs over a larger number of businesses. The main objective of this research paper is to identify the working process and to recognize the challenges in the working mechanism. Organic convergence is when one person uses multiple media technologies at once. Before mass media, art and culture were more localized, so they reflected diversity in how people spoke, dressed, and entertained themselves. English 103: Analyzing and Interpreting Literature, Environmental Science 101: Environment and Humanity, Psychology 105: Research Methods in Psychology, Create an account to start this course today. With the help of television or radio shows, the mob discovers various facts about health affairs, environmental preservation, and many more topics of relevance. WHY DOES ECONOMICS DRIVE MOST MEDIA COMPANIES ? These subsidiaries include Dongfeng Nissan, Dongfeng Renault, and Dongfeng Peugeot Citroen. In this advance era, mass media plays a significant role towards all of us and we can truly admit that mass media is one of the basic essenssial that used by everyone in their daily life. It decreases competition, commercializes the media, and opens the door to commercial interests' curtailing journalists' independence. There are many services under the media sector which includes Newspaper, TV and radios are the main parts to the factor as their coverage spans over a wider area unlike pressure groups. The first part, digitalization, refers to media companies moving to and expanding their media on digital platforms. Other major players are Comcast and Sony. The argument can be made that, instead of appealing to the lowest common denominator in the public, at least some media should give the more informed and critical segment of the people what it wants (Lazere 305). The majority of conglomerates offer a variety of products and services that arent always connected. Media convergence is a transformative process. . Cultural convergence is the way in which cultural output is affected by these developments, such as through trans-media storytelling and social media use. This has lead to a proliferation of bias across the many media companies in existence today. However, in recent years the media has, like other agencies, come under the influence of politicians. Smartphones, tablets, and other smart devices offer a plethora of services that used to only be available through various, unconnected technologies.