Strategic Organization Design: of Sydney Theatre Company - Case Study Example

Recommendation report: Five critical issues that the STC management should get right in order to survive in the long-term. Student’s Name Course Tutor’s Name Date Introduction Organisation design (OD) concerns mapping out the organisational structure and aligning other organisational aspects, processes, strategies and functions with the business. This report seeks to provide recommendations on five critical issues that the management at Sydney Theatre Company (STC) needs to get right to enhance their survival chances in the long-term. The considerations are based on a review of STC’s management processes as illustrated in the case study authored by Mobbs (2011). Organisational design Since this report intends to recommend how STC can enhance its sustainability in the long-term, the first recommendation relates to balancing the long-range development with a focus on short-term results in OD. With this in mind, STC should know its vision for the long-term, and identify short-term functions that will help it attain them. Currently, STC has adopted the vision statement ‘Theatre without borders”. It is thus clear that the theatre company seeks to take its plays beyond borders. Attaining such a vision will require the workforce to know it and internalise. Additionally, the workforce needs to be guided on both the long-range and short-term functions needed to accomplish the vision. Long-range development includes functions such as branding, people development, strategy and research and development among others (Connor et al., 2012). Notably, some of the aspects of the long-range development are already well addressed (e.g. branding). However, other areas such as people development and research and development will require ongoing attention from the theatre company. By having comprehensive knowledge of its vision, STC can realign its short-term activities – e.g. marketing campaigns, administration, sales and operations – to support its long-term development and vision. Concentrating on short-term results, e.g. selling tickets may seem like the right thing to do in the short-term, but as Connor, McFadden and McLean (2012) note, the pursuit of short-term results may jeopardise the long-term vision of a company through neglecting long-term strategies such as product development and branding. STC should therefore be careful to ensure that its short-term activities compliment the realisation of its long-term vision. While not faulting the prevailing clarity of purpose in the organisation, this report recognises the important role that a clear purpose has on any organisation. McKelvey and Kilmann (1975) observe that “when an organisation’s purpose is clear to employees, they are much more likely to identify with it and become actively engaged and committed to making their very best contribution to overall success” (p. 25). Similarly, if STC makes its purpose clear to people working therein, they (the workforce) will be galvanised and have a better focus on work. The importance of the above recommendation is underscored by McKelvey and Kilmann (1975) when they note that lack of a clear purpose can go unnoticed for long until a time when the organisation is not functioning as well anymore. As people focus on doing things, McKelvey and Kilmann (1975) further note that the emphasis can change to how the workforce accomplishes work-related tasks, instead of focusing on reasons and purpose of doing what they do. In other words, process takes precedence and people become psychologically disengaged from the results or the outcome. Waldron, Vsanthakumar and Arulraj (1997) define planning as “the process of determining in advance what should be accomplished, when, by whom, how, and at what cost” (p. 58). Planning involves setting objectives and identifying the actions needed to achieve the set objectives. Success and productivity in any organisation mainly depend on the planning aspect, since it provides direction by identifying the goals and objectives of the organisation. As has been noted by Waldron et al. (1997), most organisations are able to obtain competitive advantage through the unique ways in which they structure work and motivate the workforce to achieve specific strategic objectives. Structuring work and motivating people requires an organisation to have plans, which are often based on specific set objectives. Reading through the STC narration by Mobbs (2011), it is clear that the theatre company has specific objectives such as greening the wharf, its sponsors and supply chains, and also wants to build sustainable partnerships with donors. Mobbs (2011) does not however indicate how STC plans to meet the specified objectives. Connor et al. (2012) note that a strategic plan comprising a “clear set of strategic objectives” is essential to a good organisational design (p. 2). The plans and objectives also help in the attainment of the vision held by the organisation. STC may for example wish to consider how greening its supply chain contributes to its overall vision of providing theatre without borders. Additionally, setting objectives is important since objectives determine the plans that an organisation embarks on. Decision-making at a management level is especially reliant on the objectives that have been set, and most plans made by the management consider the performance needed to fulfil the objectives (Wyman, 2007). Once the objectives have been set, careful planning is needed in order to pave way for implementation, monitoring and close management. Overall, planning occurs in four main ways: managerial, contingency, tactical, and strategic (Waldron et al. 1997). Managerial planning helps an organisation to combine resources and fulfil the set objectives. Contingency planning on the other hand anticipates possible risks and prepares to handle them effectively should they arise. On its part, tactical planning relates to the implementation of strategic plans, and is often the prerogative of lower- or middle-level management. Finally, strategic planning is concerned with identifying organisational goals and identifying the ways and means of achieving them (Waldron et al. 1997). The STC narrative offered by Mobbs (2011) does not go into detail about the planning aspect in the theatre company. However, and in recognition that OD is a never-ending process, this report recommends that STC re-looks into its plans and objectives regularly for purposes of determining whether strategic, tactical, managerial and contingency plans are in place. For example, the theatre company should have plans for risk management, especially if commercial theatre companies were to start offering the same entertainment and experiences as STC does. Organisational outputs The second recommendation relates to outputs. According to Connor et al. (2012), the main organisational outputs are reflected in organisational performance. Organisational performance results from design factors such as technology, people, processes, culture and structure. Since STC is in the business of providing entertainment and cultural experience, it should lay specific attention on outputs that will attract new audiences and retain existing ones. Additionally, STC should think about future customers and their needs. For example, will they prefer more energy efficient theatres? Will they require the use of more advanced technologies, and if so, should STC install such technologies? STC will also need to enhance its structure to meet the needs and preferences of future generations of theatre goers. Its culture will also need to be accommodative of future trends. Seemingly, the prevailing culture has been shaped by the management team which includes Patrick McIntyre, Cate Blanchett and Andrew Upton. The three represent a generation shift, and are arguably responsible for the good performance by STC. The company however needs to consider whether its good performance can continue even in the absence of the three key people sitting at the management helm. The management therefore needs to engage in discovering what the company needs in order to continue being successful in future. Fostering and maintaining good internal relationships The third recommendation relates to the need to have good internal relationships. Internal relationships are often guided by the company values which are upheld by the management. To start with, the management at STC needs to appreciate that the structural properties of the organisation affect the autonomy, task significance, task identity and the skill variety reflected in employees. According to Connor et al. (2012), the management of an organisation needs to use an organisational structure which mediates between employees’ reactions and job characteristics. Specifically, the organisation needs to have structures and functions that enhance the team spirit, create open communication, enhance inter-departmental relationships, motivate individual employees and teams, enhance communication between employees and the management, and enhance cohesion among workers. The management also has a duty to ensure that employees have the technical, psychological and moral support needed to perform their work well. In an example, the branding team (ideally drawn from the marketing department) should have management support, not only by getting the budgetary allocation needed to run an effective branding campaign for STC, but also by receiving other forms of support (e.g. recognition for efforts in the creation of a successful brand) in order to motivate them. The management at STC also needs to balance management control and employees’ autonomy. Working in the arts industry, the management at STC has to encourage autonomy (especially because it might breed creative and innovative ideas), but must also never lose a grip on management. As has been noted, autonomy is essential for results to be realised, but regulation by the management is also critical for organisational efficiency. The balance between autonomy and control is also applicable in areas like marketing, where the STC management needs to afford the marketing department some autonomy, but must also maintain a hands-on approach to ensure that the marketing team does not jeopardise the whole organisation – e.g. by sending a wrong lead to customers. Fostering and maintaining good external relationships The next recommendation relates to maintaining good external relationships. As a non-profit making organisation that relies on donors, consumers and government for financing, STC has to maintain a good relationship with the external stakeholders. The relationship it has with sponsors has to be guarded and enhanced, because as indicated in the case study, 12% of the theatre company’s budget is funded by philanthropic and corporate support. A further 9% of the budget is funded by the government, while another 9% is obtained from government funding in the form of rental payments and other grants (Mobbs, 2011). Combined, 30% of the theatre company’s budget is funded by external stakeholders. It is therefore in the company’s best interest to have good external relationships in order to attract more such funding in future. Notably, maintaining good relationships with external stakeholders requires careful consideration by the STC management. For starters, and as suggested by Ross, Zaffron and Loffredi (2006), the management should be willing to “evaluate issues with stakeholders” (p. 7). Specifically, STC needs to engage the external stakeholders in order to understand their perceptions towards the organisation on matters such as communication, visual identity (or brand image), and the management of environment and community issues. STC should formulate a strategy to manage communication and relationships with different external stakeholders, handle its brand image, organisational conduct, and initiate a corporate social responsibility initiative. As suggested by Ross et al. (2006), every organisation that has active engagements with external stakeholders needs to put up an effective communication structure. Additionally, the management should be visible and accessible by the external stakeholders, and the relationship with donors and supporters should be enhanced. STC should do the same through engaging its donors, ensuring that the managers are easily accessible, and enhancing good relations with the government. Operations The final recommendation relates to having operations that are up-to date. Such operations should include technological apps and management information systems that will probably enhance financial management while ensuring that the financial data of the theatre company are safe. Gardner (2013) explains how basic technologies such as Skype have been embraced by theatres, and by so doing, collaboration among artists has become much easier. In some countries like Britain, theatre performances are relayed live in cinemas across the audience hence reaching a wider audience (Gardner, 2013). In another example, theatre companies in Britain are engaging writers in brainstorming sessions, where storylines are discussed and storytelling in the digital age redefined. The foregoing examples illustrate the countless opportunities that STC can access using technology. However, it will take deliberate action by the management to access such opportunities. Notably, use of technology can enhance STC’s sustainability since future theatre goers will be seeking experiences that can fit into technologies they already use. For example, instead of waiting until STC stages a play in local theatres, young people who appreciate digital technologies would be satisfied watching a theatre play that is beamed live from another location. Going forward therefore, STC will need to understand the technologies that its targeted audiences are using, and use the same to reach them. One of the major characteristics of technology use in theatre is that it has to be participatory. According to Gardener (2013), participatory technology shares many qualities with art and as such, theatre lovers will find it appealing. Notably, technology use does not have to be relegated to engaging theatre audiences only; rather, it can be used in management and other administrative functions in the firm. Financial management and financial security are some of the areas where STC can use technology. Past research has shown that individuals and organisations do not always act in their best financial interests regardless of whether they have precise financial information or not (Braunstein & Welch, 2002). Technological financial systems would therefore be best placed to enhance financial best practice. The adoption of financial management systems can for example enable STC to govern and oversee its income and expenses, while maintaining a record of assets and liabilities. With a financial management system, STC can maximise earnings by sealing some of the loopholes where unnecessary spending occurs. The financial management system is a necessary sustainability tool since it improves the short-term and long-term financial performance of an organisation by streamlining invoicing and billing, getting rid of accounting errors, reducing record-keeping redundancy and ensuring conformity to accounting regulations. Other advantages of financial technologies which could contribute to STC’s sustainability include: minimising paperwork, maintaining a precise audit trail, up-to date record keeping, data security and integrity, balancing numerous bank accounts that the organisation might have, and coordinating income and expense statements and balance sheets. As a non-profit organisation that receives funding from donors and government, STC could also benefit by keeping all accounts transparent through the use of financial management systems. This is an important element in securing more funding in future. Conclusion This report has identified organisational design, organisational outputs, internal relationships, external relationships, and operations as the five critical issues that the management at STC should get right in order to ensure that the organisation survives in the long-term. The report has paid specific attention to organisational design aspects such as clarity of purpose, knowing the organisation’s vision, and planning and setting objectives as some of the areas that STC needs to pay close attention to. Notably, STC already has processes which seem to be moving the organisation to success and effectiveness in the short-term. This report should not be interpreted as criticism to existing organisational processes; rather, it should be seen as a recommendation report advising STC on some issues that should be properly dealt with for the sake of ensuring its long-term viability and sustainability. Ten years from now, STC may become irrelevant if it fails to consider and pursue actions and processes that will secure its future. One such action is the adoption of technology, which will probably be the trend in theatre entertainment in future. In other countries like Britain, technology adoption in theatres is widespread and as noted elsewhere in this report, technology use complements the artistic nature of theatre. STC should prepare for the future because only by acting with the future in mind can the organisation enhance its chances of surviving in the long-run. References Braunstein, S., & Welch, C. (2002). Financial literacy: An overview of practice, research, and policy. Federal Reserve Bulleting, 88, 445-457. Connor, G., McFadden, M., & McLean, I. (2012). Organisational design. In Stewart, J & Rogers, P. (Eds.). Developing People and Organizations, 1-35. London: CIPD. Gardner, L. (2013). A new stage age: Why theatres should embrace digital technology. The Guardian. Retrieved August 24, 2013, from: http://www.theguardian.com/stage/theatreblog/2010/mar/23/stage-theatre-digital-technology-ished. M cKelvey, W., & Kilmann, R. H. (1975). Organizational design: A participative multivariate approach. Administrative Science Quarterly 20(1), 24-36. Mobbs, R. (2011). Sydney Theatre Company’s great revival. ITB March, 012-016. Ross, A., Zaffron, S., & Loffredi, O. (2006). A new methodology for managing effective external stakeholder relationships. Barbados Group Working Paper 06 (04), 1-19. Waldron, M.W., Vsanthakumar, J., & Arulraj, S. (1997). Improving the organization and management extension. In Swanson, B., Bentz, R. & Sofranko, A. (Eds.). Improving agricultural extension: A reference manual. Rome: FAO, UN. Wyman, O. (2007). Strategic organization design: an integrated approach. Delta Organisation & Leadership. 1-16. Retrieved August 24, 2013, from: http://www.utoledo.edu/strategicplan/strategicorg/pdfs/StrategicOrgDesign.pdf Read More