Sydney Theatre Company: Management Process - Case Study Example

Case Study: Sydney Theatre Company (STC) Name Institution Date Introduction The world of arts management is dynamic. As such managers have to acquire core skills which are delicate balance between nonprofit and entrepreneurship. Successful managers should be driven by creativity and critical thinking to be able to identify avenues through which to attract audiences and thus revenue for the Company. A proper management process and organization’s designs are key competitive advantage factors that will keep an organization such as Sydney theatre Company (STC) afloat in the dynamic environment. Therefore, In order to understand the position of any organization, it would be essential to evaluate their management processes and organization’s design. This paper therefore seeks to evaluate the management processes and organization’s design of Sydney theatre Company. Management processes of STC Management processes are key processes that are central to transforming organization operations. According to The Financial Times ltd (2013), management processes aid in structuring, Investigation, decision making and communication of business issues. Examples with this regard include Strategic Planning, talent planning, expense and capital budgeting, performance management systems, product planning and management cost accounting. On a close study of the STC it can be noted that these critical elements were lacking in its management process. Though STC had a long term plan centered on art, business and the community, it lacks a clear roadmap of how these three elements were to contribute to its growth as company. Strategic planning Strategic planning is a management activity used to set priorities for an organization. It focuses the organizations energy and resources towards a common goal and as such helps in giving direction to an organization in the ever changing business environment. Efforts in planning help the organization to identify a course of action that will lead to profitability. In the case study it is evident a strategic plan is lacking. In this study it is observed that for the human resource to operate at its optimum, performance management, position description and employee protection should be guaranteed. In addition it is clear that the STC should have a strategic plan outlining action plans, target objectives in art, business and community as have been outlined in the business plan. These are basics of strategic planning. Decision making Proper decision making is a means by which managers determine an action plan for achieving its vision. For this process to be effective the vision has to be clear, for an appropriate action plan to be chosen, tangible time lines to be set and subsequent outcome to be envisioned. As is the case of STC, the organization’s plan was to grow along the dimensions of art, Business and community but lacked an action plan, timelines and expectations that would have guided it in this endeavor. While the management had spent more time in the planning little is known of how they desired to achieve the goals. Communication of Business Issues There are various levels of communication within an organization. Constituents of the organizations communication system include the internal (human resource employed by the organization), external (Consumer, Media, Stakeholders, Public).Communication plays a vital role in determining the success of these units within the organization. With regard to STC it can be noted that the human resource within the organization was in close consultations with each other, however little effort was made to improve the external communication. This presented a challenge because STC could not effectively sell itself to the public this translates to lower revenue. Organizations Design According to Mind Tools Ltd (2013), a good organizational design is important in communication, productivity and innovation. It creates efficiency. Many organizations problems are traced back to poor organization. In this case study STC has no clearly defined organization structure.This is evident as no clear structure is available to nature talent and competence in professionals within the organization. Despite the fact that many graduates are new to arts managements as a career, the organization had no formal training for entry level position but rather relied on talent natured elsewhere. Obtaining an organizational design which has a roadmap in nurturing talent within the organization will be key in maintaining the organizations culture (McIntyre, 2010). Approaches to Organizational design According to Harcourt .H (2013) there are five different approaches to organizational design. The five approaches represent different dynamics in a business. These five approaches are functional, divisional, matrix, team, and networking. Currently STC employs both functional team structures. Under this structure there are teams all with a common goal. In this design there is no hierarchy. Teams are given an opportunity to be creative. Teams in the STC case are performance oriented because they are tasked to ensure that they succeed (Lilly, 2013). Under teams structure managers in each division focus a specific set of problems to be able to achieve greater targets and this allows clarity and focus to prevail in the operations of each team, the end result of which is efficiency in the operations of each team. In STC there are several divisions with directors as heads. The structure STC employs relates to the team structure as no hierarchy is involved: no department is subordinate to the other. This structure however has short comings. It is majorly characterized by duplication in management roles, which increases the cost of operations. Miscommunication may also arise due to lack of a proper chain of command. However a more efficient structure needs to be adopted to solve communication within the organization (Gareth R. et al. 2012). Functional structure on the other hand is a structure based on a hierarchy; Positions of each player within the hierarchy are clearly marked out. It also involves dividing the organization into autonomous units which are used to perform a task. Depending on the task at hand functions of these autonomous units are decided. Recruitments into the specific department in the organization will depend on the skill a person has. This functional structure has short comings as it is difficult to implement if the organization chooses to diversify its products and services. Secondly departments retain responsibility for performance and this may create unhealthy competition within the organization. This structure relates to that of STC, which specializes in offering a particular service. Secondly the review reveals that STC has problems stemming from lack of a clear chain of command (Goodman et al, 2006). The divisional structure is structured in such a way that departments are created to specifically concentrate on areas such as production, customer service, and regional categories. The advantage this has is to help the managers concentrate on delivering results (Ireland, et al. 2010). Its advantage is in the lower cost of production as there is no duplication of roles in management. Needs of the customer are properly addressed as this structure allows the division to focus on aspects such as the geographical location of the target group, religion and language. However it is risky as Government policy can influence the market trends and it also takes longer to approve decisions. However this structure lacks in this organization. It would be essential for STC to adopt arrangement to maximize its presence regionally by assigning a specific department with the marketing task. The structure is also essential as it will help in solving the problem of duplication of management roles within the organization (Ireland et al, 2010). Another effective structure STC can employ is the Matrix structure. The Matrix structure combines the advantages of the functional structure with a special emphasis on the divisional structure. Employees under this structure fall under more than one department. The structure improves employee motivation and also eliminates redundancy which is experienced by STC (Hearst Communications, Inc.2013). One advantage of the matrix structure is in efficiency in Information Exchange. This structure ensures efficiency in the manner in which information is relayed within the organization, this happens because departments are in constant communication with each other. This efficiency translates to the enhancement of productivity and faster decision making. In this regard employees from different departments interact in decision making thus are able to respond quickly to consumer demand. In STC for instance consultations between the entry level positions and senior management was strained due divisionalisation, thus derailing consultation. To be able to bridge this gap the matrix structure allows the sharing of information between different divisions and management thus improving consultation. STC has no proper decision making structures, this mostly has been caused by the organization structure it is operating in. It is believed the current structure in STC derails consultation thus negatively affecting decision making and motivation. However by applying the matrix structure there will be increased motivation because decision making is an all-inclusive process that accommodates all views of team members before a decision is reached. Motivation levels for employees are increased because each employee is allowed to contribute to decision making process. Management is also able to arrive at prudent decisions because they are able to approach challenges through the perspective of the employee. A review of the operations of the STC has brought to the fore the fact that consultation is important in arts management. This structure provides an environment interaction between the employees and management therefore more consultation (Houston Chronicle, 2013). Five critical Issues management should focus on There are five traditional issues to be dealt with in arts management. These are Planning, managing change, Staffing, managing growth and controlling (Chong, 2009). STC therefore needs to focus on these issues. It is believed that by focusing on planning the management will improve its decision making. According to (Edwards, G 2011), proper planning helps in promotion of strategic thinking and action. Planning will include setting tangible timelines, the expected outcomes and an action plan of how to achieve results. The review of the STC case study shows that there is a plan adopted by management to diversify the company along the dimensions of art, business and community, however there is no clear roadmap for achieving this growth. With the aid of a proper plan, the STC can thus improve its performance as an organization. Managing change Another theme that emerges from the study of STC is managing change. According to Harvard Business Press (2009), in order to remain competitive in increasingly uncertain markets, managers must be receptive to change. Success in management depends on how readily change can be accepted. Change encourages open mindedness which then leads to new ideas, and progress. For instance, the change in the management of STC yielded the transformation of the organization to profit making ways. The introduction of a whole new set of talent in management positions is the key to revamping the organization. It is the manner in which this transition in management was handled that improved its profitability. In addition, the change in strategy from targeting the domestic markets to the larger untapped market outside Australia provided a greater revenue base for the theatre company. This is evidenced in the fact that the company has a turnover of 30million dollars. Staffing An important aspect of creating a successful organization is staffing. Many organizations are faced with the challenge of recruiting skilled people due to competition from other large companies for this skilled labour. Additionally most organizations do not allocate resources to have in house training programs. In the review of STC it is noted that the management had to be on the job training. No structures are in place for internship and mentorship. This is much of a disadvantage because transitions cannot be easily managed. A better way to retain employees is to have to strategic and operational plans of how to acquire raw talent and have structures in place to nature talent. In addition roles of each manager have to be outlined in the staffing policy. For instance, in the STC, there is no clear guideline as regards the obligation of its employees to the organization. This will enable the organization to evaluate the performance of its employees (Byrnes, 2009). Managing growth Expansion of an organization refers to an increase in the size of operations. This means its structures, resources; systems have to grow proportionately to make the growth effective. It is believed that growth can take place in three fronts: Internally, externally and combination of both internal and external growth. The STC has made significant strides in expanding its operations at home and abroad, this is evident in the turnover and net worth. There should be a deliberate effort by management to increase the teams (personnel) that support the expanded operations of this organization to this ever increasing customer base. This expansion should involve nurturing operations of the theatre company. Emerging Markets Expanding into an emerging market is a means by which the organization can widen its revenue base. According to Thorniley (2010), senior management must be committed to allocating resources for this cause; similarly efforts in equal measure are required to sustain the growth in these markets. Venturing into a new market comes with its challenge and requires management that can make decisions that will steer the organization through uncertainty. The STC has made a huge leap in this regard. Case in point is the organization has been able to expand the market to North American cities of New York and Washington after a successful tour which saw 52,000 tickets sold. This marked a turnaround for the fortunes of this company. This move marked the return to profitability of the STC as it increased its revenue base. Conclusion The analysis done on the STC has revealed both its weakness and strengths chief of which lies in the management processes and the organizational design. For instance, it has been noted that within this organization there is no defined career path for its employees as such there is lack of understanding by most employees within the organization of what is required of them. This represents a significant challenge which can only be addressed by putting in place a strategic plan that will define the role of the employee in the organization and how the employee fits into the long term plan of the organization. From the discussion, t is clear that Proper decision making is a means by which managers determine an action plan for achieving its vision. For the process to be effective the vision has to be clear, for an appropriate action plan to be chosen, tangible time lines to be set and subsequent outcome to be envisioned. As is the case of STC, the organization’s plan was to grow along the dimensions of art, Business and community but lacked an action plan, timelines and expectations that would have guided it in this endeavor. It is also essential to note from the discussion that STC lacks a clear chain of command and organizational structure. This is a contributing factor for underperformance. The change in management introduced new talent which saw the company return to profitability and now has a turnover of 30 million dollars. The STC has made significant strides in expanding its operations at home and abroad, this is evident in the turnover and net worth. References Mind Tools Ltd. (2013). Organization Design: Aligning Organizational Structure with Business Goals. Retrieved on 13 December 13, 2013 from Houghton Mifflin Harcourt. (2013). Principles of Management: Five Approaches to Organizational Design. Retrieved on 13th Dec 2013, from < http://www.cliffsnotes.com/more-subjects/principles-of-management/organizational- design-and-structure/five-approaches-to-organizational-design> Lilly, M. (2013). Organizational Structure and Designs with Case Study: QUALCOMM. 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