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Closing of Blockbuster

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Closing of Blockbuster
Alimatu Asumah
Organizational Behavior
Southern New Hampshire University

I. Introduction a. Closing of Blockbuster b. Challenges faced by Block c. Filling for bankruptcy
II. Dish Takeover and Tactics a. Dish Purchase and Layoffs at Blockbuster b. Exploring new channels c. Blockbuster need for innovation
III. Employment and Morale a. Compensation and Quality of work b. Morale and Job Satisfaction c. Corporation Image
IV. Conclusion

I. Introduction
Founded by David Cook and Wayne Huizenga in the mid 1980’s, in the late 1980's and early 1990’s, Blockbuster Inc. was the leading in the video rental industry. Which grew quickly maintaining interest in the entertainment industry, including retailing music. Also growing nationwide, many American families were turning all over to movie rentals as a form of in-home entertainment. I propose that an organizational behavior theory that leads to a company’s success includes a rational system perspective and the most important things within these theories are formalization and specific it y of goals. Organizational behavior becomes standardize. Through formalization, organizational behavior becomes standardize making training of new employees easier for both management and the employee. Goal specification allows procedures for specific tasks to be performed along with a structured way for resources to be allotted (Kreitner 2012). When companies have a rational structure, expectations are stable, which turns out to creating a rational organizational system. The role of management and organizational structure, management is put in place to deliver training and knowledge on new products for the business. When the organizational structure is a matrix structure, it combines functional and divisional chains of command in a grid so that there are two command structures; vertical and horizontal (Kreitner 2012). In this essay, I will explain and explore the different theories used in organizational settings. I will answer how did the owner’s final decisions facilitate in the loos of connections with its customers. How were the employees and their work environment centralized and impacted by the organizational structure? And also how did a societal shift force the company’s hand in making the drastic change to it’s close. a. Closing of blockbuster In 2013, Dish Network announced its purchasing and closing of Blockbuster in 2011. Though, the company had it all and was running smooth for them, employees and consumer demands were not recognized. b. Challenges faced by Blockbuster
Fulfilling the new demand towards the digital distribution of its media, blockbuster developed its Blockbuster on Demand services in a reactive need. The reactive part is that it was reacting to the strength of Netflix growth, which had rapidly replaced the rental. After a while Netflix sued blockbuster, for its online delivery system violation. Blockbuster business came down due to kiosk rentals such like Redbox. Despite the competition, if blockbuster had its focused on the online delivery system and rental kiosks, it would have outlasted up until today. c. Details of bankruptcy
In 2010, after struggling with nearly over $1billion in debt from competition with Netflix and Redbox, Blockbuster filed for Chapter 11 Bankruptcy. Through out that time, over 1000 store were to be closed across the U.S border. CEO Jim Keyes, had self-confidence that his well reputable brand name will be recapitalized and will deliver accesses across multiple new consumer demanded channels such as stores, kiosks, mail and online.

II. Dish Takeover and Strategy a. Dish Purchase and Layoff Blockbuster
While in the attempt to give Blockbuster a new redirection, Dish Network’s implementation plan was the one that was the solution was for another company to take over the entire blockbuster business. Dish Network takeover soon yielded immediately closing of unprofitable stores in both North America and the United Kingdom, laying off over 3,000 employees across the North America and United Kingdom. This gave a way for the company to be profitable, and start creating revenue for Dish Network. b. Surveying new networks
Whilst analyst were wondering why a satellite company wanted a takeover an everyday public physical DVD and game retail and rental. The expectation behind this was that Dish using Blockbuster name to compete in the digital movie rental through satellite services. Utilizing both brands and restoration it into a force to consider with in the digital movie rental space. c. Blockbusters need for innovation
In order to diversify, implementing a strategy that take the company away from its core business is something that almost every company needs to do. For blockbuster to stay in business, this strategy was one that they needed reinvention and innovation. Communicating this strategy clearly from senior managements so that all scope of confusion and conflict doesn’t arise and also for everyone to understand their position and role in the organization innovation not just in technology but also the awareness of the organization.
Making sure each team keeps ROI from their team at the center of their operations and resists any chance of conflicts and confusion. Surely, this takes lots of patience and agility and focus in order to ensure that the strategy progresses as planned. The teams should be encouraged by senior leaders to take a look at the goal of the enterprise and all be unified in the approach to moving the company forward. In the case of Blockbuster and Dish Network, this was looked at. Dish did a very little to maintain the calm mental posture. As there were constant disputes between Blockbuster and Dish teams that deemed toxic to the unified strategy that needed to unfold. Usually it is true that in a merger, there is a lot of bad blood, but there are always very strong communication strategies that help in the moving forward, and this comes from the CEO down to the bottom.
When the innovation aspect comes directly down to technology, the entire entertainment industry is evolving, bringing with it consumers that are demanding more and more refined delivery for prices that are more competitive than previous years. At this time, there needed to be new technology related initiative that enabled Blockbuster to use their brand name to reach their core customers thru new delivery channels.

III. Employment and Morale a. Compensation and Quality of work
During any buyout or merger, it is the employees that to manage a lot of their time and maintain balance to get through the difficult times. This is without knowing what shape and form the company really is in. Usually the strategy in these cases is to reward employees through reward programs, benefits, time off and vacations. This helps the loyalty held up from the company to the employees kept through the rough period and help them maintain a sense of security. A reference to Maslow’s Hierarchy of needs is a good method to follow during these rough period as it has proven over time and time again when an employee needs are met, they tend to being more effective and focused.
b. Morale and Job Satisfaction Investing in the betterment of the environment for the employees after a buyout/merger is the first thing to do. Communicating the renewed strategy to the old and new employees, and ensuring that training and hence morale are taken up a notch should have been thought about and applied by Blockbuster. Usually there is a lot of political issues that arise and changes and reorganizations, delivering groups and employees should be kept out of this, with that their pace doesn’t slow down or worry about new demands or hindrances to their status. b. Company Image
With both companies, Blockbuster and Dish Network strong public image, both helping each other out during and through out this moment to become a more and stronger brand name and a force to consider within the entertainment industry. Dish Networks, spent over months, case by case evaluating which stores across the country was doing poorly and then shut it down. In the logistic of it all, the big picture to why the merger was actually happening was lost. As a true competition to Netflix, Blockbuster on demand was also becoming highly recognized by public.

IV. Conclusion

Wondering how companies like Google and Apple are at the forefront in their respective markets and highly competitive in markets that they share. In order for a company to be truly successful in the long run it needs to be forward thinking, and focus on being the very best. The company should constantly look at its consumers and see how to service them better. Simple decisions that could have saved Blockbuster from doom, but they didn't recognize the early signs that were being flashed at them from the consumers. When Dish took the low drawn out approach to resurrection of blockbuster the consumers simply decided to move on as companies like Netflix and Redbox, were out there already. With promotions being run everyday, week and month, Blockbuster on demand, still have a chance of competing with companies like Amazon and Redbox as they give the same services as Netflix perhaps with more value added to the services.

Kreitner, R. (2012). Organizational behavior. McGraw-Hill/Irwin; 10th Edition

Blockbuster LLC - Wikipedia, the free encyclopedia. (n.d.). Retrieved November 6, 2013, from

Blockbuster: The End. | The BrandBuilder Blog. (n.d.). Retrieved from

How Netflix Innovates and Wins - Forbes. (n.d.). Retrieved from


Ressner, R. (2013). Blockbuster Inc.: A Communications Brief

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