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Business Daily: Does the head or the heart rule in business?

13/07/2011

Does the head or the heart rule in business?

BBC World Service - Business Daily, Does the head or the heart rule in business?

Are business school graduates or gut instincts the best guide to dealing with a crisis?

As Rupert Murdoch battles to defend his empire are business school graduates or gut instincts the best guide to action? And, who's to blame when things go wrong?

We've seen something very unusual this week - Rupert Murdoch in retreat.  

First the tycoon closed Britain's most popular newspaper.  When that failed to quell the clamour around the hacking scandal he kicked his company's bid to take full control of the UK satellite television broadcaster BSkyB into the long grass, forcing a lengthy referral to the British regulatory authorities.  

Meanwhile his many enemies are having a field day.  The sight of the greatest media magnate of his generation wounded and weakened has prompted an outpouring of venomous comment.  

But don't underestimate the old war horse yet. As the BBC's Nick Higham reports, Mr Murdoch has negotiated his way out some pretty tough scrapes as he has built up his multi billion dollar global empire.

Mr Murdoch faces an even bigger challenge after Britain's three major political parties united in opposing the octogenarian tycoon's  attempt to take full control of the satellite broadcaster.  

So how will Rupert Murdoch respond, will he be ruled by the head or by the heart? 

Business schools teach that detailed analysis is what makes a successful chief executive.  Mr Murdoch's career would suggest otherwise. 

It isn't just his capacity for snap decisions and brazen risk taking, he is also very loyal to key staff.  Just look at how he has stood by the former editor of the News of the World, Rebekah Brooks. 

So do these kind of emotional instincts make good business strategy Justin Rowlatt asks the Irish businessman and management guru Gerry Robinson.  

One of the most extraordinary aspects of the story has been Mr Murdoch's continuing loyalty to the chief executive of his UK subsidiary, News International.  

Rebekah Brookes was the editor of the News of the World when one of the most shocking activities of all took place - the mobile phone of a murdered teenager was hacked into. 

There are rumours that Mrs Brooks has offered to resign but Mr Murdoch has been very clear this week that she still has his confidence.   

It raises an interesting question: When should a chief executive fall on their sword?  

Roger Harrop has been advising chief executives of companies both large and small for the past ten years. As he tells Justin Rowlatt, he believes Rebekah Brooks should resign.

And finally, you might assume that phone hacking scandal relates to a problem that was sorted out by the telephone companies a long time ago. You can't still easily break into people's mobile phone voicemails, can you?  

Believe it or not, there are still relatively straightforward ways to listen to other people's messages, and our regular technology commentator Jeremy Wagstaff, reckons it's about time that telephone companies and regulators around the world took more responsibility over the issue.

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