Midwestern Contemporary Art - Case Study Example

Midwestern: Contemporary Art Case Discussion Question Part A Is Peter Smith micromanaging Keith Schmidt? Please support and document your position. From an objective viewpoint it does appear that Peter Smith is micromanaging Keith Schmidt. Peter Smith was brought on as a Board Director after experience within the contemporary art world and a $10,000 donation to the MCA. In these regards, its clear that Peter Smith has background in the art world, as well as a vested interest in the success of the MCA. Likewise, Peter Smith is indicated to have a history of success in the contemporary art world. For instance, its noted that he has been successful in developing past museums he has worked for, including procuring a 12.1 million dollar building for the Southern Museum of Art. In these regards, Keith Schmidt has an established track record of success, and without a doubt has established himself as a reliable individual in terms of museum expansion. It follows that its necessary to establish the chosen direction for the museums operations. Having joined the board in 1981, Smith had experience with the MCAs operations; furthermore, when he joined the board, “he began pushing his desire that the MCA would attract more artists and a broader audience” (pg. 650). Its clear that in these regards upon the beginning of Smiths involvement he was on-board with the museums expansion. Furthermore, knowing Keith Schmidts track record and understanding that the museum expansion would be a key emphasis, he approved his hiring. While Peter Smith contends that Schmidt has acted without proper care and in a reckless way, another individual at the art center indicated that, “each year, we always ended up with a balanced budget, so I feel that Schmidt acted very responsibly in dealing with fiscal matter” (pg. 651). Rather than truly believing that Keith Schmidt was acting recklessly, the evidence indicates that Peter Smiths disagreements with Schmidt were based more out of a difference of opinion on the direction of the museum. Furthermore, its noted that the responsibilities of the board members is not management and fiduciary responsibility, but rather to oversee broader matter; rather these are the responsibilities of the executive director. In these regards, Peter Smith has micromanaged Schmidt to deter his job and the ultimate progress of the MCA. 2. What type of conflict are they experiencing? Describe in detail and explain. The two individuals – Peter Smith and Keith Schmidt – are experiencing a challenging conflict that goes deeper than the simple question of whether Schmidt is acting recklessly in his expansion plans or not. Its indicated that during the time when the two men were working together, from Schmidts 1989 hiring, there were contentious issues that were raised between the two men. For instance, its stated that, “These confrontations were rooted in a number of areas: what artifacts to show, what artist to invite to forums, and when to hold exhibitions. However, the most heated arguments occurred over the direction and speed of the MCAs expansion” (pg. 650). In these regards, its clear that while the overarching conflict regards Peter Smiths conservative nature, the conflict goes beyond this to indicate that the two men have a deep and underlining difference in personal philosophy. While these are the specific reasons for the conflict, from a managerial and organizational perspective, the conflict the men are experiencing is related to their individual role within the organization. As board chairman Peter Smith believes that it is his role to ensure the safe and sound direction of the art center; conversely, Keith Schmidt understands that as executive director he was hired to oversee and ensure the expansion of the art center from its current state to that of a nationally recognized center along the lines of the previous projects that he has overseen. While the individuals have a conflict of personal philosophy, there also exists a conflict regarding their roles within the organization. It follows then that the ultimate conflict that the two men are experiencing relates to their power and decision making ability within the MCA. As an area of contention, its clear that their individual roles need to be more accurately defined within the organization to deter future conflict. While the definition of board member and executive director generally contains the understanding that the board member will not interfere in the day to day operations of the executive director, its clear that to an extent Peter Smith has assumed greater responsibility than his job definition has allowed, and as a result the organizational conflict has arisen between Keith Schmidt and Peter Smith. 3. What can an organization do structurally to reduce conflict resulting from role ambiguity? There are a number of things organizations can do structurally to reduce conflict resulting from role ambiguity. One of the overarching important features in reducing role ambiguity ensuring that the upper level members of the organization are a heterogeneous unit. In the specific case of the MCA its clear that there was a lack of organizational efficiency in the hiring of Keith Schmidt. From Schmidts background its clear that his experience and expertise are in the area of progress and expansion. His ability to procure the Southern Museum of Art a $12.1 million dollar structure attests to his aggressive and fast moving style. One questions the sense of hiring an individual with such a background and then objecting when they placed such goals into practice. Another important feature in reducing organizational ambiguity is to develop a clearly defined system of checks and balances. It seems to an extent Peter Smith needs to be made more aware of his role within the organization. It is possible that Smith believes his role goes beyond board member because of his length of service, as well as his substantial donation to the museum. However, in the case of Keith Schmidt and Peter Smith, it seems that Smith does not have ultimate decision making power over Schmidts actions. While Smith has voiced his disapproval, there should either be the clearly defined acknowledgment that Smith can overrule any of Schmidts actions that he deems irresponsible. Finally, there should be a governing body that functions to vote on whether they agree with Smiths decision making process. To an extent it seems that in the case of the MCA, despite the conflict between Schmidt and Smith, the necessary organizational system has been established, as the boards vote that overruled Smith functioned to clearly define the MCAs direction. Ultimately, in this specific case, its necessary for the board members to ensure that they hire executive directors that they agree with philosophically. 4. How should Peter Smith react when his advise is not followed by the board? Be specific. The way Peter Smith should react when his advise is not followed by the board is a complex question. If Peter Smith would like to continue work with the MCA and aid in its progress as the other individuals have deemed fit, he needs to deeply reevaluate his intentions for working with the MCA and ask himself why he is opposed to the expansion of the MCA. In these regards, it seems that Peter Smith may be opposed to the expansion of the MCA because of his older age and unwillingness to take risks that are required to move the museum forward. In these regards, Peter Smith should react by acknowledging that he may be somewhat behind the times and not abreast of current developments in museum expansion and development. In these regards, Smith needs to greatly consider the ways that he can contribute to the art center that are more aligned with the articulated goals of the executive director and other board members. Through the vote, the board has indicated that they approve of a more aggressive expansion approach. Smith needs to understand that he, not Schmidt, needs to work within this new paradigm. In these regards, Smith needs to reevaluate his overseeing of Schmidts operations through the paradigm of this new expansion criteria. It is not Smiths role to establish the means by which Schmidt conducts his job, as this direction has already been approved by the board members, but instead Smith needs to determine if Schmidt is acting in the interest of the other board members. Rather than micromanaging Schmidts direction, Peter Smith instead needs to ensure that the job Schmidt is performing is performed in concurrence with the boards established direction for the MCA. 5. How are the roles of board chairman and an executive director different in an organization such as MCA? The roles of board chairman and an executive director are much examined issues in terms of organizational structure, and their successful definition is one of the key issues in terms of non-profits. It is generally recognized that the role of the board chairman should be to govern, while the executive director manages. In these regards, the board chairman generally should not become involved in the day to day affairs of the executive director. In the case of the MCA its clear that this is being broached as Peter Smith has attempted to interfere in the day to day operation of the executive director, Keith Schmidt. In addition to the responsibilities of management features, the executive director is responsible for fiduciary responsibilities. Conversely, the board members have no singular authority, but instead function as a group. One witnesses Keith Schmidt acting within his job description in allocating funds to attempt to financially expand the MCA in terms of processes that he has recognized as successful in past instances. Again, Peter Smith has attempted to step outside of his bounds of authority through micromanaging Keith Schmidts financial decision making regarding these expansion mechanisms. Discussion Questions for Part (B) 1. What alternative approaches could Peggy Fischer use to collect the unfilled pledge? There are a number of alternative approaches Peggy Fischer could use to collect the unfilled pledge. Its indicated that Fischer was promoted to her current position as board director because of her ability to establish strong and functional working relationships with other members of the organization. Its also indicated that while Fischer is not a close, personal associate of the Smiths, she is an acquaintance of them to the extent that she would feel bad bringing a lawsuit against them. Considering these elements, it would not be out of the question for Fischer to contact the Smiths and work towards establishing an arrangement for the donation to be completed. One can surmise that one of the reason the pledge has been withheld is because of the Smiths disapproval at the direction the MCA went. Fischer could work towards bringing them Smiths back into the equation of the MCA to an extent that they would feel valued. While its indicated that Peter Smith is undergoing terminal cancer there still may exist a means by which the Smiths could become sufficiently involved in the MCA. When one considers that Peter Smith was a long term supporter of the MCA and former board member, its clear that his contributions have extended beyond simply financial assistance, or artistic direction; rather Smith represents one of the crucial figures in the development of the museum, allowing it to achieve its current state of prosperity. As a result of these contributions, Fischer could offer to name the new museum structure after Peter Smith, given he completes his $5 million donation to the structure. The new structure would stand to recognize Smith contributions to the MCA, and to recognize his memory after he unfortunately passes away from cancer. If the Smiths prove unwilling to alter their stance on the matter and refuse Peggy Fischers offer, then it would be necessary for her to attempt procure the funding from members of the general public. While its indicated that because of the tough economic climate procuring such funding would be a highly challenging endeavor, having the added factor that the funds will be crucial to the construction of building in question, it would be possible to design a fundraising program with this specific goal in mind. Individuals who donate can then be guaranteed to have specific names of the structure to be named after them, or a variety of programs could be designed that would recognize these individuals, including naming exhibits or specific lectures or programs after them. While this approach may not be enough to regain all the lost funding, it may be a substantial start. After gaining all the possible funding from the public as possible, Fischer could potentially seek to gain added funding from government organizations. While such funding is oftentimes specific to the city or region in question, Fischer has substantial means by which she could promote the project as necessary for the benefit of the public, as the establishment of the structure has great public use. In these regards, it would be necessary for Fisher to emphasize these features to the necessary government entities and attempt to gain public tax funding for the project. 2. Should Fischer involve the board in further discussions leading to a decision about whether or not to file a lawsuit? Or should she formulate a recommendation on her own for the boards next meeting? Please support your answer and explain. The question of whether Fischer should involve the board in further discussions leading to a decision about whether or not to file a lawsuit, or formulate a recommendation on her own for the boards next meeting is a complicated question. From the perspective of Fischer, it seems that because of her insight into the Smiths condition, her past experience with Peter Fischer, and her skill-set, that she should assume responsibility and develop a course of action that could be presented to the board. The reason for this is that while the board as a body can work towards establishing a logical course of action, the actions of a competent individual with adequate information and consideration may be able to work more effectively and efficiently in establishing a potential course of action. In establishing this course of action, Fischer will be able to consider issues from a unique perspective that other board members may not be privy to, including her knowledge of the Smiths condition, as well as her personal background with the Smiths. If the board was asked to develop a plan, they may consider the issue by strictly examining the facts of the situation. In this specific instance, the facts involve the financial distress of the MCA, the history of legal action regarding financial donations, and the reach a decision based on these features. By assuming responsibility for the course of action, Fischer is able to consider these elements, but also consider the more subtle personal elements that would most likely not be recognized by the board of directors. Furthermore, its notable that Fischers course of action must be reviewed and approved by the board of directors. In these regards, rather than inefficiently attempting to piece together a course of action, wherein competing interests will surely affect and influence the plans development, Fischer will be able to present a course of action that the board can consider and contribute to in a pragmatic way. If the board decides that they disagree with Fishers plan wholeheartedly, then they can work towards developing an entirely unique plan on their own accord. 3. Do you think the museum should sue the Smiths? Why or why not? Please justify your decision and response. Whether the museum should sue the Smiths depends on a number of factors. One of the most pervasive factors that must be considered relates to the extent of financial hardship that the museum would be in if the donation from the Smiths was not procured. From a consideration of the elements that have been supplied it appears that many individuals recognize that while the museum will be in considerable financial hardship without the $5 million dollar donation, with considerable doubt being placed on the construction of the new structure, it also seems that the MCA will not entirely go bankrupt. In these regards, it seems that attempting to procure the funds from the Smiths through legal actions would not be in the spirit that the funds were originally granted to the museum. Its stated that oftentimes individuals will need to go back on their donations because of financial hardship, or extraneous circumstances that made the original donation no longer feasible. With a museum that vigorously pursues individuals in such manners with legal means, there is a serious public relations risk that is being faced. While some may argue that the Smiths decision is based less on hardship than on a disrguntled feeling they harbor towards the museum, its clear that in deciding whether to sue individuals based on their intentions for withdrawing their donation creates an ambiguous scenario whether the true course of action can never be determined. While its been indicated that the 1995 revisions to the FASB had an important impact on the financial account of the MCA and similar art centers, it must also be realized that the MCA took a risk in building the new center without procuring the funding, and then as the risk has not worked out for the organization, they must accept responsibility for their actions and scale back their operations. However, there were also indications that without the funding the museum could possibly be facing bankruptcy. In such an instance, the public relations aspect of possibly advancing a lawsuit against the Smiths is not a determining factor, as in not procuring the funds the museum will have no public to create a positive image. It follows that the MCA must take serious consideration of their financial situation and determine the extent that not procuring the $5 million donation will adversely prevent their continued existence. If it is then determined that without the donation the museum will indeed go bankrupt, then it is necessary to act in self-preservation and sue the Smiths for the money that had promised to donate to the museum. Read More