The South African Broadcasting Corporation (SABC) reported a 395 rand million (approximately US$39,5 million) loss for the year ended March according to the Business Day, 23 September 2015. The SABC blamed this significant loss on South Africa’s poor economic performance and television license defaulters.
What is remarkable then is that against this poor corporate performance, the SABC’s annual report shows that the controversial Chief Operating Officer (COO), Mr. Hlaudi Motsoeneng received an almost R1m (US$100,000) salary bump in the 2014-15 financial year.
According to the report, tabled in Parliament last week, Mr. Motsoeneng’s salary increased by R912,000 (approximately US$ 91,200), which included a R279,000 bonus (US$27,900), in the period. His salary jumped from R2.8m (US$280,000) to R3.7m. (US$370, 000). In a poor, developing country like South Africa, this is a lot of money. It is important to bear in mind that SABC is a state-owned-enterprise thus a public broadcaster funded by taxpayers’ money.
This corporate scandal at SABC points at deeper, long-term poor organizational strategy and design problems at the SABC. Coulter defines strategic management as a process of analyzing the current situation; 
developing appropriate strategies; putting those strategies into action, and evaluating, modifying, or changing those strategies as needed. It is, therefore, apparent that there is a very poor organizational strategy at SABC and a turnaround strategy is needed.
Poor organizational strategy at SABC
As expected, SABC has tried to downplay the significance of the poor performance, saying profitability is not necessarily the SABC’s mandate. The SABC Chief Executive Officer, Mr. Frans Matlala is quoted in the 
media as saying that: “The most important thing is that the organization is sustainable. Financial results are nothing but a scoreboard.” This is a rather shocking statement from a CEO of a loss making organization and it reflects the alarming magnitude of the poor organizational strategy at SABC.
Of course, the SABC’s annual report reveals a bigger problem: salary increases have blown a R400m (US$40 million) hole in its budget. This puts in question Mr. Motsoeneng’s claim that he has turned the SABC ship around. The corporation has gone from a R559m (US$ 55,9 million) profit last year to a loss of R395 million (US$39,5 million) this year, its annual report shows. Expenses ballooned by R1.28bn (US$128 million), compared with meager revenue growth of R313m (US$31, 3 million), and Mr. Motsoeneng’s salary increase was not the only one contributing to the bleeding. Indeed, total employee compensation went up by R400m (US$40 million), to R2.93bn (US$293 million), which the SABC has failed to explain.
The public broadcaster’s ability to generate revenue has come under 
increasing pressure. It undershot its revenue target by R560m (US$56 million) in the past financial year amid increased competition, advertising budget cuts as the economy slowed, and the post office strike, which it said had affected the issuing of license renewal statements.
In addition, South Africans are deserting the SABC in growing numbers. It significantly missed its audience share target of 51 percent in 2011/12. As the public broadcaster acknowledges in its annual report, “advertising sales are inextricably linked to audience share and performance levels”. Yet, SABC has no coherent advertising strategy in place and these strategic weaknesses are now being cruelly exposed.
Indeed, Mintzberg notes that an organizational strategy is the sum of the actions a company intends to take to achieve long-term goals, and together, these actions make up a company’s strategic plan. This is clearly missing at SABC and largely explains the poor corporate performance by SABC.
