The Utah Symphony and Utah Opera Merger Proposal - Case Study Example

The Utah Symphony and Utah Opera Merger Proposal (Your Name) (School / College) Date Introduction Mergers give companies the opportunity to share financial, administrative, and human resources in running the business, thus promoting economies of scale, reduced costs and advanced performance and profitability if managed well. On the other hand, mergers could cause tension due to the different organization structures, cultures, plans, expectations, market targets and audiences that each individual company is looking to reach out to. Even though the Utah Symphony and Utah Opera organizations are both in the arts industry, this did not automatically mean that a merger between them would be successful, due to different audiences and operational styles. All the same, it is also quite possible for the two organizations to merge and realize success, owing to the economies of scale, sharing of administrative resources and management practices. However, there is need for a thorough and well thought out plan and strategy that takes into consideration all factors raised by concerned parties. 1. Illustrate how Bill Bailey, chairman of the board of the Utah Opera Organization, might use one theory of motivation to oppose or support the merger. Any merger can have positive or negative consequences depending on the manner in managers and individuals exercise their power. Although there are different approaches to power, many organizations benefit more from combining different approaches than applying one strategy. Managers and other leaders have power due to their positions. Leaders effect change through a top down approach where all employees must act on orders. All employees can contribute to the success of any process depending on their personal power. They must be knowledgeable and have the experience and skills a certain situation requires. These individuals influence multitudes to shift their interest to a certain change through their professional capability, multiple relationships, reputation, group support and available resources. In other every interest party in any process will exercise their power through dialogue and joint forums where they their opinions and agree on common action points (Jaab & Kilian. (1998). Although Bill did not openly express opposition for the merger, he raised several concerns that he wanted management of both sides to consider. His first concern was on financial prosperity of the two parties after the merger. It would cost the symphony a lot of its finances to support opera to gain world status like the symphony. The opera on the other hand had many possibilities of growth which would give the symphony increased growth. Bill can use his position as the chairperson of the board members at Opera to influence the members to agree to the merger proposal. The financial situation of opera was becoming out of control for the management (Jaab & Kilian, 1998). It is highly likely that none of the board members might oppose the merger idea. Although there are so many motivation theories, Bill can use Merger Encourage Individualism approach to lobby support for the merger. This theory takes advantage of the strengths of a stronger party in a merger to encourage the weaker party to accept a merger proposal. It envisions benefits of economies of scale, increased income, efficient and effective management, and economies of scale. Employees of Opera would benefit greatly from the high scale pay rates at Symphony. Many of the workers would be worried about likelihood of securing their current jobs in the merger. It would take a lot of effort to convince them. The most important thing would be to remain honest as much as possible on then benefits and consequences of the process. There are so many people who had invested in various ways in Opera. These would influence the success of the merger in several ways. Bill must present convincing messages to all these people and interest groups and get their opinions on the best way to escape the current financial situation at Opera. 2. Illustrate how Scott Parker, chairman of the board of the Utah Symphony Organization, might use one theory of motivation to convince Mrs. Abravanel to support the merger. The best way to convince Mrs. Abravanel to support the merger would be through application of Dynamics of Integration Process theory. Scott had a vast experience in mergers in the past which had resulted to positive outcomes among all parties involved. He had firsthand information on the crisis which the art industry was facing in the country and could use these facts to convince her. Success in mergers relies on how parties involved share knowledge and skills among themselves. Mrs. Abravanel would have to accept that the people from both parties were experts in their own fields and in coming together, they would be able to complement each other for best performance. There was no party in this merger process which was going to lose in any way. There were several benefits each of them would get. Scott could draw from his past experience and provide practical illustrations of various approaches to ensure mergers produce positive results (Thomas & David, 2005). 3. a. Describe Anne’s positional power in relation to her personal power. Provide an appropriate description, with sufficient detail, of Anne’s positional power in relation to her personal power. She was the CEO of Opera at the time of the merger proposal. She would use this position to convince all her employees that the merger process would for the good of the industry. Although there several opponents of the merger who doubted her abilities to lead a large organization, her experience of 11 years in a senior leadership position would make her the best candidate for the job. She was an expert in fundraising (Thomas & David, 2005). This would bring more funds for the new organization which would require increased funds for all its operations. If the vote of the two parties would favor her to become the CEO of the large organization she would be able to use her skills, experience and academic credentials to empower Keith. She might advocate for organizational structure change so as to give Keith an equal position with her in the management of both parties. It would be easy for both boards of directors and taskforce to listen to her counsel because of her expertise in management (Scott, 2002). In order to increase their competitive advantages, organizations can decide to integrate horizontally through a merger. In a merger, organizations face various challenges including establishing new structures, person to person interactions, and change of culture. In most cases it is top management which makes decisions on mergers. It actually begins with one individual who sells this idea to other people at top most management level. Organizations require individuals who have experiences on crisis management to be able to realize positive results which come with merger. Anne was outspoken among employees and supporters of both Opera and Symphony. They knew her as a hard working individual who can go to any length in achieving the results they need for their organizations. Even before the merger was complete, board members from either side had recognized her as the best suited individual for the leadership of the new organization. They were able to recognize her potential through the great performance she had given to her previous and current organizations. Anne had served several organizations for many years and excelled greatly in all that she did. At Utah Opera (UOC) she recorded a great performance. She was able to influence other employees to work harder than before. Within the first year of her tenure, UOC was able to increase its annual productions from three to four. This increased the number of funs up to 130, 000 patrons within one year. These people came from several states including Utah to Capitol Theatre at Salt Lake City for its stage performances. She managed to conduct several productions in many parts in Utah to attract students to opera. She knew that creating demand and interest among young people would contribute greatly to an increase in funs in the future. It was through her leadership that UOC was able to employ 23 people on permanent basis to serve in administration, education and production. At Boston Lyric Opera where she had served many years at her young age, she was able to change the organization from a loss making organization to a profit making one. At the time she entered Boston, there was a debt of $450,000. She did not only manage to clear that debt, but also established an endowment fund, and raise productions from 1 to three. Having served as a stage director in opera shows she knew what an opera organization needs to succeed in the arts industry. She had not only raised money through improved performances, but conducted successful fundraisings. Through these, UOC’s budget rose rapidly from $1.5 to $ 5 million. She had the expertise to lead an organization of combined parties. Externally, she had the academic qualifications a person of her managerial status should have. She was the director of UOC. This is a position with a lot of power. She had large funs who could always vote her into any position if there was need for that. With her position there are many things she can influence her organization to do. The first thing she might have to do would be to organize for public forums where all opera and orchestra funs can attend and give their public views on management of the new merger organization. b. Discuss how Anne could use her personal power to empower Keith Lockhart after the merger. Provide a logical discussion, with sufficient support, of how Anne could use her personal power to empower Keith Lockhart after the merger. In case the merger becomes successful, she would have to bring together all people with opposing and proponent opinions to discuss the best ways of operations. The next thing she must do would be to meet employees from both sides jointly or separately and address all their concerns. Through this she can get the confidence of all people and motivate them to give their best in their new assignments. She can also influence organizational changes so as to accommodate both parties in desirable positions of influence. This might include delegating some responsibilities fully to Lockhart, who had felt reporting to Anne as a demotion. This would assure orchestra funs and artists that the merger had their interests as a priority. She would have to work hard to empower Lockhart to take up any new responsibilities which would come with this new arrangement. Lockhart was a man of great influence in orchestra. Working directly with Anne would present great opportunities for him to get support on how to make profits for the organization through stage performances and other means. He had not served at any top position in any organization in the past. In the proposed merger, he might have to report to Anne for ease of operation and management. Anne would have to assure such a system of accountability would be the good of the organization. She would also mentor him to take the leadership of the organization in the future in case she went on retirement. Anne had several skills like fundraising, leadership, human resources, and crisis resolution through which she can help the organization to grow together. Lockhart would support her best in dealing with employees, artists, and funs from Symphony since he had many years of engagement with them. She would empower her with these skills. Then he would use his influence and the skills to persuade all supporters, employees, and artists to work as a team. This would become a mutual partnership where both leaders would have to borrow much from each other for successful operation of the merger. 4. Review of the Utah Symphony and Utah Opera Merger Proposal What emerges from the case study is that the board members in the Utah Symphony and Utah Opera companies, the musicians, employees and community at large were not in agreement as to the viability of merger. While some felt that it was the best cause of action in order to mitigate continuing deterioration of sales, lack of funding and therefore financial problems, others viewed a merger as going from the frying pan into the fire; they viewed the plan as doomed to fail. This was particularly so because of the glaring differences that characterize Opera and Symphony, and how the two organizations have always operated. The idea of a merger between Utah Symphony and Utah Opera first occurred to the Symphony’s Chairman of Board, Scott Parker, who upon the realization of the weak position that the arts were in, not just in Salt Lake City but all over the U.S. viewed a merger as the best solution. According to Parker, the entire arts industry in the U.S. was laden with an uncertain future due to poor economic performance, lack of adequate sales and uncertainty regarding continued support from government and other organizations. Another important reason for Parker’s merger idea was because of the resignation of the CEO of Utah Symphony in early 2002, and getting a new CEO who would fit the bill would be a daunting task. In Parker’s mind, getting into a merger with Utah Opera which was well managed under the CEO, Anne Ewers, would mean that no other CEO would need to be recruited. After introducing this merger idea to the board of directors of the Utah Symphony, and letting them know that this arrangement would remove the need to recruit a new CEO, they were all in agreement with the merger idea, despite earlier reservations based on the complexities of running two very different organizations as one. Anne Ewers, the CEO of Utah Opera was excited at the prospect of heading the merged organizations. For Anne Ewers, the main challenge was how to ensure that the synergy and partnership between the two organizations was successful and sustainable into the long term. She appreciated the fact that not all concerned parties (board members) were in agreement with the merger proposition, but hoped that she together with the other parties, who were proponents of the merger, would convince the dissenting group to join them. This would only be possible if practical and feasible plans that put into consideration both companies interests were put in place, and ensured that the majority of board members and employees could see the viability of the merger strategy, and therefore were in agreement with the merger. Challenges of the Merger Despite the fact that Anne Ewers knew it was a major challenge to pull through with the merger, she was ready to work through it, but had some reservations, just like Keith Lockhart, the Utah Symphony’s Music Director. Lockhart on his part had been keen to hold on to the old model of running things separately, and upon further thought into the issue realized that he resisted it as it was a new idea, and not due to any objective or technical hitches. The same reservations were experienced by Scott Parker and Chase Peterson (the incoming Symphony Board Chair). The resistance was fueled by the fact that in the whole of the U.S. no other major merger between a Symphony and an Opera had worked well. In addition, the Symphony was a long established organization with traditions and culture on how it was operated, while the Opera was a much younger organization. William Bailey, the Utah Opera Board Chairman, and board member Herb Livsey, also expressed reservations to the idea of the merger. For William Bailey, he was of the view that the merger could not work because the Opera was financially stable and flexible, while the opposite was true of the Symphony. This meant that serious and thorough investigation into the merger needed to be carried out involving both companies’ boards, as well as independent bodies like Ernst and Young and Joan Madison Collaborative Consulting firm. In March 2002 when the announcement for a possible merger between the Utah Symphony and Utah Opera was made public, it elicited mixed reactions from various people and over a period of time. Lockhart for one had been optimistic about the impending change and viewed it as the way to break through into the future of the arts industry in the U.S., but was also not impressed at the prospect of losing control of the Symphony, as the merger would entail. There were also fears that the Utah Symphony would become an affiliate of the Utah Opera, as opposed to a strong and stable company on its own, when Anne Ewers became CEO of the merger. The merger proposition faced opposition from some community members, Caroline Abravanel, the widow of the Symphony’s founder Maurice Abravanel, and even Leslie Peterson, the daughter of the Opera founder, Glade Peterson, amongst a number of other people. 5. How to Win Consensus for the Merger from the Critical Persons The Musicians of the Symphony, who are critical in its success, felt that the merger would shake their stability. They therefore proposed establishment of a strong collective bargaining agreement, a budget strategy that would ensure the Utah Symphony remained relevant into the long term, an organizational structure that promoted and protected artistic talent and effective fundraising to ensure that they were given their deserved dues. These actions would make the Musicians happy and therefore willing to go ahead with the merger plans. These issues bring to light the potentiality for musicians to go-slow in making the merger a success if there wishes were not incorporated. It would therefore be prudent for Anne Ewers to listen keenly and work out an inclusive strategy that would integrate the Musicians wishes, while at the same time not jeopardizing the best interests of the company into the long term. Anne Ewers also needed to find a middle ground of how to work with Keith Lockhart, the Symphony’s Music Director, where both parties would be winners; if at all the merger would be successful. This is because Lockhart is knowledgeable and a big influence in the Symphony company, thus having him on board would definitely add points to the merger. Anne Ewers could use the consultation tactic with members of her team, in which case she hears them out in terms of what they value and aspire for, and pledge to meet them halfway and in return, they agree to endorse the merger for mutual benefit. Anne Ewers could also use the coalition influencing tactic, where she identifies members of her team that are most persuasive and can be easily listened to by the rest of the team. She then gets the individual members’ support for the merger and urges them to interest other members of the team to support the merger for various reasons and benefits. Using these tactics would help Anne to gain some good leverage against her opponents for the merger of the Utah Symphony and Opera organizations. Conclusion This process of combining two or more organizations to form a single unit of the organization involves a number of organizational systems, which include people, resources as well as tasks Integration is an aspect that fits within the life cycle of an organization or that of specific business mergers (Barrett, 1973 p. 50). The various stakeholders could use the proposed theories to make the merger a success and thus integrate the two groups. The nine tactics of organizational behavior can be applied comfortably in the integration process as well as the persuasion process. Before deciding to merge two organizations, both of the organizations should take time to do business research concerning the organization that they want to merge with. Reference Delong, T. J. & Ager, D. L. (2005, August 8). Utah Symphony and Utah Opera: A Merger Proposal. Harvard Business School Thomas, J. D. & David, L. A. (2005). Utah Symphony and Utah Opera: A Merger Proposal. Harvard: Harvard Business School. Scott, I. (2002). Idea is in talking stage; finances are main impetus. Deseret News. http://www.deseretnews.com/article/901764/Symphony-opera-to-merge.html?pg=all Jaap, J. B. & Kilian, M. B. G. (1998). Power Dynamics and Organizational Change: A Comparison of Perspectives. EUROPEAN JOURNAL OF WORK AND ORGANIZATIONAL PSYCHOLOGY, 7(2), 97–120 Roberta, H & Sandy, W 2008, “Seven Steps to Merger Excellence”, Ivey Business Journal Available from . 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