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Jft2 Task2

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JFT2 Task 2

A1) Financial strengths and weaknesses of the symphony

Financial weaknesses of the symphony are cash flow due to low fund raising, and high expenses resulting from artist compensation.

Financial strengths of the symphony consist of high ticket sales and a large amount of concerts performed during the year resulting in high gross revenue.

Leadership strengths of the symphony would be in part to Keith Lockhart's report with the musicians, and his artistic vision.

Leadership weaknesses of the symphony would entail the vacant CEO position and the changing of the chairman of the board during the merge.

A1a) Key steps
Anne should address financial weaknesses of the symphony by implementing higher fund raising goals and by meeting with the musicians to renegotiate contract for compensation to lower expenses. Anne should address the leadership weaknesses of the symphony by empowering Keith Lockhart to have additional decision making authority over the symphony.


Financial strengths of the opera are positive cash flow, cash reserves and assets as well as fund raising.

Financial weaknesses of the opera would include net loss on rental income and expense, and slipping ticket revenue.

Leadership strengths of the opera would include Anne's leadership, experience, and management practices.

Leadership weaknesses of the opera would include the resignation of Leslie Peterson, the daughter of the founder.


Anne can address the financial weaknesses of the opera by increasing the rental charges for the rental program of their stage equipment, which is currently resulting in a net loss of close to one hundred thousand dollars, to generate a profit. To help the ailing ticket sales Ewers needs to reevaluate the target opera audience to make sure that it is still in line with the current advertising and program selection. Anne may consider raising ticket prices, as the symphony did, to combat lower attendance.

A3) In analyzing the score cards from the symphony and the opera we can see a few issues. Based on what can be inferred from the case study, I think the scorecard for the symphony is well built to suit the vision and the mission of the organization. On the measures, I think that for customer satisfaction they should tie it to a measurable number of a customer feedback score, or instance desiring to receive a 70% or above on customer exit surveys. For internal process, I think a target for the amount of improvement based on cash or percentage is necessary. Finally, for learning and growth, again I think that a target should be associated with the measure of increased ticket sales by 10% and a customer return rate of over 65%.

On the other hand, the score card for the opera may need some tuning. In the financial perspective the measure of increasing the reserve fund amount should be associated with a measurable percentage or other more concrete assessment tool.

In the customer perspective the strategic goal is having a nationally and regionally acclaimed and accredited opera, but the measure chosen for that is having sold out or near sold-out performances. This does not seem like the proper measurement for a customer oriented perspective.

For the internal process perspective, the goal is maintaining financial stability and attracting top talent, but the critical success factor is listed as having successful negotiations with selected performers. I don't see that this critical success factor ties very well to the strategic goal listed for internal processes. Additionally, the measure for this is by measuring profitability, which relates back to the strategic goal of maintaining financial stability, but it also includes having reviews noting the quality of performances which doesn't directly tie back to attracting top talent or having successful negotiations with selected performers.

Again in the learning growth perspective, it seems that the success factors in the measures do not correctly line up with the strategic goal. The strategic goals ensuring production of high-quality performances does not line up very well with the success factor of measuring endowment fund growth and increase ticket sales. The goal of improving the production of high-quality performances does not seem like it would be driven by fund growth and increased ticket sales. The measure for the learning growth section is having capital needs covered by revenue from ticket sales and also does not tie back very well to the strategic goal of ensuring production of high-quality performances.


The vision of the new organization is to become a world-class performing arts organization.

The business model of the new organization should be to provide top quality arts entertainment through strategic fund raising, ticket sales, and resource management.

Strategic goals: Reducing operating expenses and increasing fund-raising through strategic planning and innovative fund raising techniques.
Critical success factor: Creating new avenues for fund-raising activities, and reducing salary and benefit expense.
Measure: Increase fund raising by 10% over the previous year, and to decrease expenses by 10% over the previous year.

Strategic goals: Maintain customer bases for the symphony and the opera by providing excellent arts entertainment.
Critical success factor: Marketing the combined organization to the existing customer base by showcasing the benefits and added value of the combined organization.
Measure: Maintaining the same percentage of ticket sales and attendance over the previous year.

Internal process:
Strategic goals: Integrating business practices of the two organizations and identifying and pursuing synergistic opportunities.
Critical success factor: Retaining key employees by successfully managing change during the reorganization.
Measure: Seeing no increase in turnover rate during or after the merger

Learning and growth:
Strategic goals: Leveraging the combined talent of the merged organization to offer a wider variety of arts programming.
Critical success factor: Using the strengths of both the symphony and the opera together to provide higher quality performances
Measure: Increasing the combined (dual) performances of the symphony and opera by 25% over the previous year

Merged organization strengths and weaknesses

The financial strengths of the merged organization will be in reserve funds of the opera and fund-raising techniques employed by Ewers for the new combined organization. Financial weaknesses of organization will be the large fixed expenses that are part of the symphony budget.

Customer strengths will be loyal customer base of both organizations continuing to support the arts. Customer weaknesses will be creating programming that satisfies both symphony patrons and the opera patrons, and maintaining community support for the merged organization.

Internal process strengths will be Anne Ewers leadership abilities and Keith Lockhart's leadership abilities, along with the talented musicians of the organization, whose strong feeling for the performing arts will be an asset to the organization. Internal process weaknesses will be the feelings of inequality and competition that will be felt by members of the two former organizations, because of the significantly different compensation systems.

Learning and growth strengths will be the talented artists and the artistic vision of the two organizations. The learning and growth weaknesses will be the two groups of artists working together well to realize the vision of combined performances.

Potential issues
The Symphony will be very close to operating in the red if the financial projections are accurate, in the next year. That fact coupled with the declining ticket revenue that is projected for the opera for the same period could be troublesome if not monitored closely and actions taken to improve operating revenues.

Human Resource:
There is the potential for a large human resource issue given the vastly different compensation plans for the members of the combined organizations. The opera members will feel very unequal to the symphony members in regard to the compensation structures, where the symphony members have guaranteed contracts and the opera members are only contracted per production. These feelings of inequality will undoubtedly lead to organizational turmoil and human resource issues. Customer Satisfaction:
The potential issue with customer satisfaction could come from those who do not agree with the merger of the two organizations, those who do not like one art form or the other, or those who are influenced by community opinion about the merger.

D1) Recommended Actions

Financial: The financial issue action is three fold. First, Ewers must use the experience that she has along with the experienced personnel from the opera to lead a fund raising campaign. The symphony was 36% contributions to gross income, compared to the symphony at 46%. If the symphony could raise its goal for fund raising to match the opera at 46%, they could see a positive net cash flow in the coming year of approximately 1.33 million dollars. The second issue is the projected decline in ticket sales for the opera performances. Ewers needs to analyze where the 300 thousand dollar decline is stemming from. Is it poor advertising? Is it programming that is not in tune with customer demand? The symphony was not predicting such a decline so it would seem that it is not just simply due to economic downturn. The third issue is that of expenses; Ewers must go back to the bargaining table with the symphony musicians. During this economic slow time it is imperative to review the bargaining agreement for the benefit of the entire symphony. Having an iron-clad contract is no good if the organization that you are working for is unable to pay for it. We saw during the more recent recession where contract negotiations for UAW, DWU, and other automotive industry unions had to go back and review collective bargaining agreements to save everyone’s jobs. This case may not be as severe as the automotive bailout but the idea is the same.

Human Resource: For this issue, we have touched on already, the symphony musicians’ contract and the resulting discord. This is a big hurdle for Ewers to overcome, and I think it will be one that must be handled delicately. Ideally the strategy would be to discuss the compensation plan with the opera's contract employees, and discuss the possibility of providing more permanent employment options, for those that want it, as the opera continues to grow within the new organization and productions increase. Hopefully this will keep the feelings of inequality from the opera musicians from causing discord in the organization as it enters the early stages of navigating the merger.

Customer Satisfaction: This issue can be addressed by communications with the community showing the benefits of the merger, and the combined vision of the new organization. The information shared with patrons can go a long way, as we would do in managing the change internal to an organization by sharing and communication with employees. Here Ewers would use media coverage of the merger to share information with the public about where the organization is going, what new and exciting things patrons can expect, and how this merger is benefiting the community. Ewers also might use direct mail to reach out to the opera patrons directly to make them feel that they are included in the growth of the new organization, and solicit feedback from the customers on improvements they might like to see. Another idea might be to stage a grand opening of the new organization, and allow patrons special accesses and let the community truly see what the new organization is about. Involvement is key to winning over the community.…...

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