The Limits of Flexibility: the Case of UK Television

The organization of the UK television industry has undergone radical change in the last ten years in response to a concerted programme of regulatory change and rapid technological development. It has been seen by some commentators as an exemplar of flexible specialization and of further evidence that mass production methods have become increasingly obsolescent. Vertically disintegrated, flexibly specialized forms of organization are, on this view, best placed to cope with increasing product diversity, competition and uncertainty. This paper argues that the experience of television in the UK bears little resemblance to the model of flexible specialization. Indeed, the response of firms to changing product market conditions has not been to embrace vertical disintegration but to re‐establish traditional organizational structures. Transaction‐costs analysis, while providing a number of useful insights into the development of organizational structures within television, also fails to take account of the complex web of forces determining the degree of horizontal and vertical integration in the sector.