Task 2
Diane Jackson
Organizational Management

Articulation of Response
I was asked to analyze the Utah Symphony and Utah Opera merger proposal as Anne Ewers goes forward to manage the merger. I had to plan a proposal for Anne Ewers as she develops new strategies for measuring the success of this ongoing merger process. This art industry depends highly on donations from businesses and foundations. From many struggles, the art industries have developed low revenue, however; the Utah Opera and Utah Symphony need to integrate this merger for reduction of expenses for both organizations. Anne will need to implement other strategic goals that included, retain the audience platform and contract for musicians and key employees. Additionally, I had to implement a scorecard for both organizations showing weakness and strengths with recommendations of these formalities as to how Anne can mitigate these issues through the merger.

A1. Utah Symphony Strengths and Weaknesses

Financial Strengths Financial Weaknesses
Endowment revenue High expenditure structure
Profitability Low revenue from fundraising

Leadership Strengths Leadership Weakness
Keith Lockhart’s positional power as a music director for a symphony and opera. Unfilled CEO position
Keith Lockhart’s experience to expand their performances Domineering in his position/partiality with staff

A1a. Steps for Utah Symphony (Recommendation)

Financial Strengths of the Utah Symphony are endowment revenue and profitability. The endowment showed an average for Group I symphony showed approximately $76 million, and Group II symphony showed approximately $8.8 million” (DeLong, 2005). The total revenue for FY 2000-2001 was ($12,398,548 million) and FY 2001-2002 projected ($13,763,674 million), which increase by ($1,365,126 million). This was generated from the increase in performance and foundation revenues by ($679,795) and contributions ($619,772) from FY 2000 to FY 2002, which “drew approximately 5% from the endowment annually” (DeLong, 2005).
Financial Weakness Recommendation
Financial Weaknesses are from high expenditures and low revenue from fundraising.
I recommend that Anne develop a strategy to implement more superior fundraisings. The low revenue fund-rising generated from “salaries and benefits for development staff” (DeLong, 2005). In order for salaries to be increased, Anne will need to have a meeting to show them how the figures of fund-raising increased from ($1,164,026) FY 2000-01 to ($1,187,980) FY 2001-02 and there were no returns on the “annual pledges “ (DeLong, 2005). Anne will need to designate a finance member from the board to make sure all funds projected needs to be received before any staff salaries are increased. Also, the symphony has a problem with high expenditures for the program which consist of; “orchestra salaries, benefits and payroll taxes” (DeLong, 2005). Anne needs to mitigate slowly a plan into action with the musicians for renegotiating contracts with lower compensation expenses. This deficit comes as a weakness because the musicians receive their salaries regardless to how many performances are performed. The surplus deficit for 2000-01 FY ($116,308) decreased greatly to ($2,042) for FY 2001-02. So, Anne will need to discuss factors for salaries being paid only for the numbers of performances perform or schedule more performance inside town or out of town to increase revenue back into the budget. Anne could implement a plan for more benefits, like stock in the business in swap for raises in the salaries until they see higher revenue after the merger. Leadership Strengths of the Symphony are Keith Lockhart’s positional power as a music director for a symphony and opera. After he was hired as the director in 1998, he conducted over “600 concerts and created 50 television shows: also the 2002 Winter Olympic games and the Super Bowl pre-game show” (DeLong, 2005). Another Financial Strength for leadership is that after following the steps from the previous maestro, Maurice Abravanel; Keith’s professional attributes led the symphony to perform year-round.
Leadership Weakness Recommendation
Leadership weakness of the Utah Symphony was the unfilled position of the CEO and his domineering attitude in his position with having partiality with staff. During the time that Keith was director, the economy was turning for the worse and the “organization could find itself in significant difficulty and then the CEO of the symphony resigned” (DeLong, 2005). This was devastating news and by Keith only being in his position for four years at USO had started to make him stressed about what would happen to the symphony. At this point the merger was going to be a necessity. Anne was asked to become the CEO of the merger between the Symphony and Opera. At this time, Anne needs to meet with the executive board and Keith to implement plans to keep production moving and revenue coming in. Anne would need to use her positional power to talk with Keith about continuing the performances with no extra salary increase or unnecessary expenses.
Another leadership weakness is that Keith is used to being into control as a director that he would possibly feel subsidiary toward other leadership who have been in leadership a longer period of time. Anne should consider of his previous position with listening and consideration to know that they need to work together for the benefit of the merger. Also, Anne will need at stress that he should not be so close to the staff that they do not respect his authority.

A2. Utah Opera Strengths and Weaknesses
Financial Strengths Financial Weaknesses
Assets in positive fundraising Loss revenue on rental facility
Profitability Reduction in ticket sells

Leadership Strengths Leadership Weakness
Anne’s past experience running a business Lack of music experience leading a larger organization (symphony)
Anne’s capability of a business leader Leadership style

A2a. Steps for Utah Opera (Recommendation)

Financial Strengths of the Utah Opera are assets in positive fundraising and profitability. Anne has the ability to put her energy into growing the opera with “successful fund-raising even if it means to get donations from donors out of the area” (DeLong, 2005). It takes an enthusiastic person with great abilities going out to solicit funds. The fund-raising aspect of the company will continue to grow and be a financial strength. Another financial strength is under the direction of Anne, the profitability of the Opera showed a surplus FY 2000-01 of $582,409. Showing growth of the Opera revenue, their funds “had grown to $5 million by year 2002, and owned production studios on 2.9 acres of land” (DeLong, 2005). This shows that their surplus will continue to remain above what or when they use it.
Financial Weakness Recommendation
I recommend that Anne should speak about the financial weaknesses of the opera of the rental of the property for equipment and the reduction ticket sales. The rental expenses ($348,339) for sets, pop, etc., showed more expense than the returned revenue ($327,900). This problem can become crucial for the financial of the opera. Anne should recommend that the director, who oversees the production, need to evaluate the rental charges and costumes that are being rented from the opera. Also, Anne will need to consider the charges of all entities of the organization rentals for clarity so the rental expenses do not exceed the revenue. Another financial weakness for the Utah opera is the reduction of ticket sales. Anne needs to analyze a plan by pulling together both market and ticket sales directors to establish ways to correct the cost for more revenue. If the tickets remain at a reasonable cost, it would drive up revenue for better sales.
Leadership Strengths of the Utah Opera
The financial strength of the Utah opera is Anne’s past experience of running a business and her capability of a business leader. Anne has greatly proved that she has the leadership experience of being hired in 1991, and ran a large city opera as, “the Boston Lyric Opera and over 60 opera productions including San Francisco Opera” (DeLong, 2005).
Leadership strength of the Utah opera is Anne’s capability of being a business leader. She is known to be “energetic, enthusiastic, and capable” (DeLong, 2005). Anne’s business leadership drafted her knowledge to expand Utah Opera with “more staged performance for over 700,000 students throughout the state” (DeLong, 2005). This gives Anne great leadership showing the students there is great appreciation for future opera participation.

Leadership Weakness Recommendation
The leadership weaknesses for the Utah opera are Anne’s lack of music experience leading a large organization and Anne’s business leadership style. Anne’s can use a more self-motivating style of leadership which would lead the staff toward giving advice. This type will be beneficial because it teaches morale to help them believe in themselves to help the merger. The best benefit Anne can incorporate is independent decision making.
Anne’s lack of music experience in a large symphony organization can become challenging. Since Keith Lockhart has four years of experience as director/conductor of the Utah symphony, would be able to help Anne understand the decision making of a large organization. I recommend that Anne work closely with Keith to learn his experience of running a large production.

A3. Scorecard Aspects
Utah Symphony Balanced Scorecard

1. Financial: I see their Strategic goals are being financially stable and profitable by maintaining their current production of tickets at the same price. This Critical Success Factor: would assure sufficient profitability that will increase their fundraising and budget that will be compared by their profitability for the long term vision. This information shows their weakness as stated before; but their Measure is keeping their profitability under control will be beneficial for the “Utah Symphony employed 33 full-time staff members and 83 musicians” (DeLong, 2005).
2. Customer: I see their Strategic goal is to meet the supply and demands of their customers by “increasing the ability to attract world class artists” (DeLong, 2005). They can truly succeed by hiring the top class artist. Critical Success Factor: will be determined by doing an assessment survey with feedback from the customers making sure their demand is met. Measure: The positive feedback will determine if they are in the right direction of their goals and meeting the demand of their customers. So, the symphony’s goal to hire world class artists will contribute toward their vision.
3. Internal Process: Their Strategic goal: is to maintain their fundraising ability but find new ways to implement funds to support their probability. Critical Success: Plan a meeting with the board members and musicians. By renegotiating the contracts with the musicians will elevate having flexibility of decreasing expenses. Measure: As noted before, Anne will need to be consistent with budgets to best benefit the organization from over spending.

4. Learning and Growth: Their Strategic goal: is to pull a more diverse range of artists to attract bigger audiences to strengthen the symphony. Critical Success Factor: This can be done by marketing and advertising in different age groups. Measure: This will show flexibility to more performances, attract audiences to increase ticket sales and people coming who were not interested in the performances. Although, this was not listed as a weakness will defiantly be consider as a financial weakness, but can reduce the weakness with the increase of profits.
Utah Opera Balanced Scorecard
1. Financial: Their Strategic goal is shown to be financially stable with continuous success in fundraising and endowment funds. Critical Success Factor: their factors were not using “interest or dividends from endowment but to invest money back into their endowment” (DeLong, 2005). Measure: I believe their measure should be continuously a progress of work, but can be fully successful by obtaining their reserve funds for their productivity for future gain.
2. Customer: Their Strategic goal will be succeeding their superiority of top artist performers. Critical Success Factor: I think they can succeed if they use a marketing strategy by lowering the ticket price to draw more customers and build a quality line of performances. Measure: I see that if they continue with the top artist and having sold-out performances, they will show an investment to increase the organization to be financially stable.
3. Internal Process: Their Strategic goal is to maintain financial stability and attracting top talent with a staff of quality musicians and also draw new gifted musicians. Critical Success Factor: I believe they can be successful if they can implement a plan to negotiate with the performers to receive top revenue both “locally and nationally” (DeLong, 2005). Measure: Although; the board will see the vision of the organization against the profitability of quality performances.
4. Learning and Growth: Their Strategic goal would be to incorporate high quality performances, possibly five per year. Critical Success Factor: I believe if they ensure these productions it will show the growth of their endowment and increase ticket sales. Measure: With the high quality performances exceeding production, they will be able generate individuals to invest more, and meet the need of capital from the revenue of ticket sales.
The Utah Opera shows strength in their current financial stability and in all four areas of the scorecard. This will help them reach the goals that have been set in place and their long term vision. The scorecard did not address the leadership weakness, but until the merger takes place, there is no reason to be addressed at this point.

B. Merged Company Balanced Scorecard
Vision statement: The newly merged organization is to provide more professional performances, and be in the best top 10 orchestras in the nation.
Business goal: The business model from the new organization is to gain more fundraising profits and meet the needs of our customers with high quality performances. The business goal will be to have exemplary return from the investment of 100% commitment from staff and meeting all contract needs.
Financial
 Strategic goal: Being financial stable and increase revenue over expense by 20%.
 Critical Success Factor: Sustain funding by improving the symphony’s fundraising and endowments.
 Measure: Integrate profitability between both organizations and the reserve funds.
Customer
 Strategic goal: Through the merger of the opera and symphony, having top performers and sustain audience base worldwide and pursue a synergistic between the symphony and opera by performing together.
 Critical Success Factor: Hiring excellent quality performers for better success.
 Measure: Increase in the ticket sales and attendees by reaching out to society and feedback from customers.
Internal Process
 Strategic Goal: Maintain flexibility to decrease expenses for superior surplus.
 Critical Success: Through the merger, implement a contract negotiating to freeze pay raises for the musicians.
 Measure: Enhance profitability and increase ticket sales.
Learning and Growth
 Strategic Goal: Incorporate a diversify type of performers to draw new audiences.
 Critical Success Factor: Plan a marketing strategy to increase revenue and retain the retention rate of the staff.
 Measure: Enlarge ticket sales with a reoccurrence audience

C. Merged Company Strengths and Weaknesses
Financial Strengths;
Historically, the Utah Opera; under direction of Anne Ewers has grown the company to become very successful in sustaining a well-balanced operation income statement during year one. In year one, Anne was “successful in fundraising and investment by reinvesting money back into the endowment; shown in exhibit 3” (DeLong, 2005). The benefit of the merge is the mixed fundraising that would expand ticket sells from the joined audience. Also, motivating performances will continue to strengthen the merge. The merge will benefit of having more supplies and more employment for a better unity of the company.
Financial Weakness;
The weakness of the merger does not hold up to being successful of their financial operating income statement for the symphony. The symphony’s revenue remain larger than the opera, and their expenses where large too. Through the merger between the symphony and opera, they will have to generate a market strategy for the public. The major effect to alleviate the financial weakness status will be to negotiate contacts to hire more talented musicians to build a different variety of audiences.

Customer Strength;
When it comes to merging the two organizations, there is an understanding they have “different sets of problems, different audiences, ad different methods of doing things” (DeLong, 2005). When the two organizations combine will have the capability of drawing more upscale performances and new patrons. But knowingly they will bring in a diverse population of top performances to increase revenue. Having an excellent quality of performers will defiantly max out the ticket sells. The flexibility of the performances will help sustain all audiences.
Customer Weakness;
Their weaknesses will not succeed if the audience does not show interest in the performances or their expectations. The weakness is the merger not meeting the supply and demand of the community. The resolution to the strategy would be to promote with radio or social media to advertise for community involvement.

Internal Process Strength;
Due to the quality of leadership will help draw strength to make the merger a success. The combined symphony and opera will have more strength to serve a wide diversity group of people. Consider the multi-talent of experience from the management group and various trails, will look brighter for future gain of productions and revenue. The best benefit of fundraising and negotiation of contract will be a great success for a positive surplus.
Internal Process Weakness;
The internal process of weakness that would be considered a trail is adequate funding for the new company. Also, the negotiation of salaries and the issue with contracts for the musicians could result in a weakness for the merger. If the musician does not meet an agreement, they could possibly walk away.
Learning and Growth Strength;
The merger working together will be able to learn and grow from each other’s talents. But the main factors that will best benefit and help their growth are; good marketing strategy, and a diversify type of performers to attract new audiences. Increase ticket sale to continuing drawing bigger audiences.

Learning and Growth Weakness;
The weakness is based off not drawing in enough revenue to oversee their expenses. Since the expenses are more than the revenue, the merger will develop a deficit for the future of the company and become a failure.
D. Issues
Finance
In finance, the highly probability would be increasing productivity. In the arts organizations, the symphony and opera are totally depending on government agencies and private entities for their organization funding. The operating income statement (exhibit 3) showed over 5 million from “contributions, corporations, and foundation” (DeLong, 2005). This large amount was given in 2001/2002 which accounted for about 36% of the symphony’s income. If the contributors decide not to favor the merger, would be a big setback for their financial support.
Human Resource
In the human resource, the highly probability would be resistance change. “Change will not accrue unless it’s a motivation change” (Olve, 1999). The staff in the human resource department will seem over loaded with more responsibilities of the merge. If the board members do not take into consideration the need for more help, this merge will become disaster. This problem can become unmanageable for Anne to handle when there is confrontation.
Customer Satisfaction
There is a possibility that the merger will not please the customers. The symphony and opera have customers that are committed to the organization, but when the merger takes place; they feel they are losing their voice because of the merge and lose contributors. The satisfaction will eventually decrease in sells if the ability of the opera does not meet the expectation of the symphony. Consider that both have great talents, they might not desire to practice at the same time, which will draw controversy.

D1. Mitigating Actions
Finance
The financial issues was to increase productivity , finding other areas for finances because the group is already depending on government and private entities and contributors deciding not to favor the merger. Anne should mitigate plans for fundraising by going outside their area to gain new contributors and a marketing strategy through social media to gain a variety of audiences. Also, Anne should involve members of the board from the opera and symphony for their input. Anne could collaborate with contributors by using her positional powers as CEO to collaborate on the supply and demand of the community.
Human Resource
The human resource issues were over loaded responsibility of current staff and confrontation of not knowing about their position. Anne should mitigate a plan with the board members and staff to let them know that management cares about their needs and the responsibilities that they are encountering. Also, Anne can collaborate with the staff about changes for the merge. If the staff has a visualization of future goals, then they would be more mindful and receptacle about how the merger would be essential for both organizations. Anne can elevate any confrontation from the staff by using her positional power as CEO and illustrate how everyone’s job and schedule will be conducted, and use her personal powers of letting them voice their opinion of negotiating contracts.

Customer Satisfaction
The customer satisfaction issues were appealing to the customer’s needs, ways not losing contributors during the merger and all musicians working together. Anne, the CEO could mitigate a bench marketing change. This is “which a company compared its performance with that of high-performing organizations” (Olve, 1999). The organization needs to know how their performance is doing compared to what others are doing. Contributors’ feedback is important to the customer as well to the organization to incorporate new ideals. They want to know that their voice is heard and Anne wants to know what they can do better. Anne can collaborate by meeting with contributors and customers to assure their voice of opinion in the merge process is valuable. Anne can use her personal powers to assure them that this merger between the symphony and opera is necessary and will instill the best artist for their performances. Also, Anne will need to assure the musician know that coming from different areas are a big issue, but working together will help suppress their way through the merge.

E. Sources

DeLong, T. (2005). Utah Symphony and Utah Opera: A merger proposal. "Harvard business Review, 5-406-027. Boston, MA: Harvard Business Publishing.
Olve, J., Roy, J. & Wetter, M. (1999). Performance drivers: A practical guide to using the balanced scorecard. Chichester: John Wiley & Sons.