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Organizational Management Jft2 Task 3

In: Business and Management

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The CVF model looks at an organization based on two cultural dimensions; Horizontal and Vertical. Horizontal: Inward / Outward Focus The horizontal dimension is used to plot the degree to which the organization focuses inwards or outwards. If an organization’s position on the horizontal axis tends toward the left, it is focused primarily inward. If it tends toward to the right, the organizational focus tends to be outward, towards customers, suppliers and the external environment. An internal focus is valid when maintaining a corporate identity may not be as important as pleasing external stakeholders. Hewlett Packard and EDS were well known for creating an internal culture that was recognized, and perceived as having value. Vertical: Stability/Flexibility The position on the vertical axis determines who makes decisions. At the lower end, control is with management, whilst at the upper end, it is devolved to employees who have been empowered to decide for themselves. Stability is a valid form when the business is stable and reliability and efficiency is paramount, but when environmental forces create a need for change, then flexibility becomes more important. (Changing Minds.org) The two dimensions of the CVF are further classified into four models or cultural types, each one containing a different set of effectiveness criteria. Quinn and Rohrbaugh (1983, p.371): Clan, Adhocracy, Market, and Hierarchy, respectively (Cameron and Quinn, 2006, p.29‐35).

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Beginning with the top left quadrant, internally focuses and flexible, the clan culture is distinguished by shared values and common goals, an atmosphere of collectivity and mutual help, and an emphasis on empowerment and employee evolvement. A Clan culture is typically developed under certain conditions where there is an absence of institutional alternatives and other conditions exist such as a relatively long history and stable membership, and in depth interactions among its members. Clan culture is typically evidenced by the feeling of the organization being an extended family where collaboration is prized and long term development of individuals is a priority.

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Looking at the top right corner, leaning toward flexibility and external focus, adhocracy culture is evidenced by an emphasis on individual initiative and self‐organization in order to accomplish tasks. This is in contrast to a bureaucracy which relies on a set of defined rules and set hierarchy in accomplishing organizational goals. An organization with an adhocracy culture is for the most part a structureless organization that operates in opposite fashion to a bureaucracy. In an adhocracy structure all members of the organization are empowered with the authority within their areas of specialization to make decisions and to take actions affecting the future of the organization. In this type of structure there is an absence of hierarchy. When implemented correctly, adhocracy can be very good for problem solving and innovations. Adhocracy allows organizations to operate in a more flexible manner. This flexibility can work well in fast‐changing industries where organizations that can identify and act on new opportunities the fastest have a competitive advantage. Adhocracy may also work best with smaller organizations where managers are still able to comprehend and direct the organization when necessary. Adhocracy may become chaotic or inefficient in large organizations where, for example, work may be duplicated or insufficiently defined working roles may resulting in team members being unaware of the scope of their responsibilities ultimately leading to work not being carried out.

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The Market quadrant is focused on conducting transactions with other constituencies to create competitive advantage. The culture is one of competitiveness and productivity and is oriented toward the external environment instead of internal affairs (Cameron and Quinn 2006). looking at the bottom right corner with its orientation toward stability and control while also externally focused, Market culture organizations can be successful in an environment that is hostile and changing. In this quadrant goal achievement and profitability are important. Effectiveness is achieved in this culture by a customer focus.

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The hierarchy culture has a clear organizational structure, standardized rules and procedures, strict control, and well defined responsibilities. This structure is based upon the classic bureaucracy structure. Hierarchy cultures are characterized by as highly structured, with well defined processes, with a long term focus on stability, and efficiency.

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The Utah Opera, while it embodies elements of more than one cultural type it most closely identifies with adhocracy culture. The Opera must be flexible in determining the type, size and location of performances, as well as which guest performers are available. As in a Clan culture the Opera is concerned with development of its artists, but unlike a Clan culture organization, the Opera also relies heavily on guest performers and external validation, particularly in its need to conduct fundraising to meet profitability goals. The general nature of the opera fosters the creativity that is a defining quality of the adhocracy culture; in that Opera performers are experts in their area of expertise and are empowered to a certain extent to make decisions regarding how performances are conducted. Additionally, the opera is structured in such a way that decisions lie with a variety of directors who have the skills and knowledge to make decisions to direct the course of the Opera (DeLong, 2005). Unlike a clan culture, the Opera by, necessity also has an external focus. In order to remain viable the Opera has to please patrons and donors and thus most closely aligns with the adhocracy model.

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The Utah Symphony most closely aligns with the hierarchy culture. A hierarchy culture is one that is internally focused and emphasizes stability and control. They value standardization, control, and a well‐defined structure for authority and decision making. This is supported by having Chairman of the board and a music director. The Symphony is internally focused on becoming and/or remaining, a world renowned symphony. The symphony has a formal structure with Lockhart as the music director and the executive committee leading the organization. The musicians are structured in that they are unionized. The Symphony is focused on long term stability evidenced by its goal of the implementation of a business model that will allow the USO achieve sufficient annual profitability to sustain the salaries of its musicians and increasing annual profits year over year.

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Opera Distribution of Power The formal organization chart for the Opera indicates that Anne Ewers as the General Director has several direct reports that are responsible for operational areas of the Opera, and Ewers in turn reports to the Board of Trustees. Formal In theory, Ewers’ direct reports have some decision making authority for their own areas of responsibility. For instance, the Director of Operations reports to Ewers and is has as several reports numerous department directors. These department directors are in charge of the smaller units and have some decision making power and authority. Ms. Ewers designated such duties as the technical and artistic facets of opera production, music administration, and community education to these subordinate groups. In a true adhocracy, the department heads, or subject matter experts would be empowered to make decisions within their area of responsibility. Actual There have been reports that Ewers has an autocratic management style, and that at times she makes unilateral decisions without consulting with department heads, or the persons responsible for implementing the decisions. In this regard, the culture is not in line with the Adhocracy model. Symphony Distribution of Power Formal The organization Chart of the symphony is structured in a typical hierarchical fashion.

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Lockhart, as the music director of the symphony, accurately describes his organization when he says “… the reality is that this is a two‐headed organization. One person provides the artistic vision, with sensitivity to the real world, and the other person seeks, secures, and manages the financial resources, with sensitivity to the purpose and mission of the organization”. The organization chart supports Lockhart’s statements‐ the symphony’s decisions and authority rest with him and the President/CEO position (which is currently vacant). Unlike the Opera’s org chart, the reporting lines of the Symphony are very linear and well defined. Both Lockhart and the President/CEO are responsible to the Board. Actual While the organization chart is relatively accurate in defining the structure, information not included in the formal org chart is just as important in understanding the Symphony’s culture. The musicians, through their union have a significant amount of influence in determining how the symphony operates. So while the structure never anticipated employees being empowered to directly affect the success of the organization, the musicians as a group, do have the ability to directly affect the success of the symphony. For example the requirements of the collective bargaining agreement between the union and the Symphony will directly influence the budget of the symphony; and, a strike could impact the performance schedule and reputation of the symphony.

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In order to effectively support the merged organization’s goals during the first year, the leaders of the new organization will need to effectively communicate those goals throughout the organization, and create a common culture. Merging two cultures into a single culture can be a delicate process. According to Trompenaars & Prus’Hommes, implementing a successful merger requires a three step approach (2004). Awareness. Awareness of the differences in cultural gaps between the two organizations must be raised. It is important also to understand what the different organizations think of each other and learn how the two organizations deal with differences in power and culture. What impressions does the Symphony have of the Opera, and vice versa at the management, staff and performer levels. If there is no awareness of the cultural differences between the organizations, the effectiveness of the merger will be lost to miscommunication and conflicts in strategy (Trompenaars & Prud’Homme, 2004). For instance, there will already likely be an awareness in both organizations that the symphony treats its performers as full time employees, while the Opera’s performers are in effect independent contactors. We have already discussed the key cultural differences which must be taken into consideration as the new organization moves forward. Respect. The second step, respecting differences, starts with realizing the limitations of both corporate cultures as well as the positive aspects of both organizations that will merge to form the new organization. The step of realizing and respecting cultural

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differences is particularly important in the merger process, since a lack of respect often causes distrust between different cultures. The lack of respect has the effect of perceiving the partner’s cultural orientation not so much as being “different” but as being “wrong.” (Trompenaars & Prud’Homme, 2004). It is imperative that Ewers as the head of the new organization, fosters respect for both organizations, as the new organization is created. A new organization is being created that will have attributes of both of the merged organization, and new attributes that neither had previously. It will be necessary for Ewers to acknowledge the culture of both organizations, while creating the new organization and culture. Reconciliation. The third step, reconciliation, encompasses resolving the differences between the organizational cultures in such a way that it benefits both companies involved. Both organizations will learn how to use other viewpoints to improve their own and will reconcile their differences. While approaches other than reconciliation are possible, they do not encourage respect for other cultures, which makes them ineffective (Trompenaars & Prud’Homme, 2004).

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Integrate the business process of the two companies: In order for business processes to be effectively integrated, the leadership first has to identify processes that are similar, those that are redundant, and those that are particular to each organization. Once redundancies are identified processes can be merged. For example, both organizations likely have an accounts payable function. Each organization may use a different bookkeeping software or different procedures. These can be merged into a single function, with a single software and consolidated process. Part of merging business processes also involves merging organizational functions. Prior to he merger, Anne Ewers led the Opera s the general director. While the Opera had a permanent staff of 23, it did not have full time performers; rather performers and artists were hired for specific productions. In contrast, the Symphony has over 30 permanent professional positions, and 83 full‐time musicians. In the absence of a President and CEO, Lockhart as Musical Director manages the Symphony. Ewers, having been tagged as the new CEO for the merged organization, in order to effectively lead the integration of the organization should consider retaining a dual leadership structure. Ewers as the CEO, and Lockhart as President or Creative / Music Director(or something similar). Ewers retaining leadership of the business, and Lockhart leading the creative side of the organization. Ideally, the full time employees that support the business would be empowered with some decision‐making authority to maintain the business. Ewers has expressed some concerns about a dual leadership organization as she

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doesn’t want someone “second‐guessing her every move.” Similarly, Lockhart doesn’t want to report to Ewers, as he doesn’t want to lose creative control. However, this is the only practical solution. Each Ewers and Lockhart would control a different aspect of the organization, and both would report to the Chairman of the Board.

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Reducing Overall Expenses as a Percentage of Profit: The second strategic goal of the new Organization is to reduce overall expenses as a percentage of profit. There are two basic way to reduce expenses as a percentage of profit: 1) decrease operating costs; and 2) increase profits. Undoubtedly, some efficiencies will be realized by reducing redundancies in the merged organization. But, one of the most significant operating expenses for the merged organization will be the salaries for the full‐ time musicians. The musician’s salaries are 60% of the symphony’s total expenses, and will continue to be a large percentage of the expenses for the merged organization. The musicians, through their union, have also contracted for raises that will significantly increase their pay over the course of the next two years. It would therefore seem a viable option to either reduce salaries, or negotiate a salary freeze with the musician’s union. However, this tactic could have a significant impact on the third strategic goal of the organization to retain key employees. We also know that a general weakening of the economy is what lead to the idea of the merger. With that in mind, if should be possible to negotiate changes in the salaries for the musicians. A pay per performance model would be better for the new organization. While this is not a “full‐time” salary, it is likely that the musicians are not working full time hours year round. A pay per performance model would take into consideration a certain number or practices and rehearsals per week and would compensate the musicians fairly for their time. If the alternative facing the musicians is to negotiate salary changes or possibly become unemployed in a weakening economy there is a good chance that the organization can negotiate salary requirements with the musicians.

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The ne organization also has to explore ways to increase profits. Stepping up efforts to increase gifts and endowments is something Ewers is good at, and should be considered here. However, Ewers should be mindful that the Symphony and the opera will likely have some of the same donors. IT is conceivable that instead of making a “double contribution” to the new organizations, some patrons may simply make their usual contribution to the new organization, thus decreasing overall donations. Ewers will have to really sell the benefits of the combined organization to maintain present donation levels, let alone increase them. Profits may be increased by raising ticket prices, but that may have the unintended consequence of driving down attendance, especially in a weak economy. Further, adding performances may not be an answer, as each performance has a cost to produce. There is likely a point where producing shows to less than sold out audiences starts to cost more than it makes. To combat this, Lockhart will have to understand the demographics of his audience, and program performances accordingly. For example, he could program more intimate concerts of American composers in one evening and avoid paying for an entire orchestra for the night, and bigger classical pieces on another evening. Further, Lockhart should consider producing recordings of Symphony performances, Opera performances, and combined performances. They can then sell the recordings either as traditional CD albums or electronic downloads. These could be available to a much wider audience and an electronic format once produced, has few other costs to maintain and sell.

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Retain Key Employees In order to retain key employees, the new organization will have to change their culture. Employees will remain if they are secure in their position, feel appreciated, and feel that they have some input in how they perform their roles. Ewers should approach those employees that hold key positions which she wants to retain, and first assure them that they are wanted and needed in the new organizations. This will hopefully curtail a mass exodus of employees due to their uncertainty of the future of their positions. Second Ewers will have to make it clear that the first 1‐2 years of the new organization will be a struggle, but once the new organization is in good health, the key employees will be compensated for their efforts and loyalty. By showing appreciation for the employees, and letting the know they will have a direct impact on the organization and their career with the organization the retention rate should be relatively high.

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Retain Key Employees In order to retain key employees, the new organization will have to change their culture. Employees will remain if they are secure in their position, feel appreciated, and feel that they have some input in how they perform their roles. Ewers should approach those employees that hold key positions which she wants to retain, and first assure them that they are wanted and needed in the new organizations. This will hopefully curtail a mass exodus of employees due to their uncertainty of the future of their positions. Second Ewers will have to make it clear that the first 1‐2 years of the new organization will be a struggle, but once the new organization is in good health, the key employees will be compensated for their efforts and loyalty. By showing appreciation for the employees, and letting the know they will have a direct impact on the organization and their career with the organization the retention rate should be relatively high. Communication Ewers will need to communicate to the opera contractors and orchestra employees her vision, and her desire to retain them. According to Munter, Managerial communication is different from other kinds of communication. Developing the content of the message is not enough. A Communication is only successful if the message leads to the desired response. In this case Ewers message has to lead the retention of Key employees. In order to craft a successful message Ewers has to consider: (1) communicator (the writer or speaker) strategy, (2) audience strategy, (3) the message strategy, (4) channel choice strategy, and (5) cultural context strategy. Communicator Strategy: Ewers can use a variety of styles to communicate her message ranging from a Tell/Sell style to a more collaborative consult and join style. The message she has to deliver at this point, is not one that is appropriate for a collaborative approach. It may become so after delivery of the initial message, but her objective at this time is to communicate her desire to retain the employees. How to do so, is a topic for a later discussion. In this case Ewers should use the Tell/Sell strategy. The Tell/ Sell strategy according Munter is appropriate when you have information to communicate, you do not need to hear other’s opinions and you want to control the message. Ewers ants to inform her audience of merger, and let them know that retaining them in the new organization is a priority. She must be in control of the message. In order to deliver the message using the Tell/Sell style, Ewers must consider whether she has the credibility with the audience necessary to use this approach. Credibility is affected by several factors including; (1) rank or position, (2) goodwill, (3) expertise, and (4) common ground with the audience. Ewers derives some credibility from her position as CEO. Her credibility is also bolstered by her experience and expertise in leading other similar organizations. She can communicate her good will and emphasize her common ground by stressing her desire for the organization to do well, and for the contractors and employees to remain a vital part of the new organization. Ewers must identify the Audience and: understand what the know, determine what they need to know, understand their feelings/emotions, and probable bias against her message. For purposes hereof, we are assuming that the employees have an understanding that the merger is occurring. What they need to know is what that means to them and their positions within the organization. They need to know that organization want them to be part of the new entity. This is undoubtedly an emotional topic for several reasons. Among them, the livelihoods of the employees will be affected, and the death of one organization to form a new carries a certain emotional impact. Some key employees may be biased against the merger itself; so Ewers message has to focus on the positive aspects of the creation of a new and improved organization and the fact that the she wants those in the target audience to be a part of it. In order to persuade the employees to stay, Ewers should also highlight other potential benefits of the merger. For instance: The symphony will have a greater chance of attaining Group 1 status; that the Opera would have greater resources to produce shows, and that the new organization with its combined resources could generate greater interest in the arts. Ewers will need to determine the best method of communicating her message direct or indirect, and the best forum or channel for the message. The direct approach states the main ideas at the beginning of your message, and is followed by the reasoning behind the message. Indirect is the opposite, the reasoning is presented first, followed by the main message. An indirect approach is typically used when the message is sensitive, the topic is emotional, the audience bias is negative, and the presenters credibility is low. A direct approach is more appropriate when the message is non‐sensitive or has no emotional overtones, the message is sensitive and audience's bias is positive, the message is sensitive and the audience is results‐oriented, and the message is sensitive but the presenter’s credibility is particularly high. An indirect approach in this situation might be considered given that that the topic is emotional, and the audience may be biased against the merger, however in this case Ewers should consider the direct approach. The message is sensitive, it involves continued employment, the audience will want to know up front that the result is that they are being retained, in this regard there should be little bias to the message, and Ewers should be able to establish a high level of credibility. Using the direct approach improves comprehension of the message, is audience centered and saves time. These are all desired benefits of this particular communication. A direct approach message needs to be organized in a particular manner to be most effective. She will have to clearly state, at the beginning of the message the reason for the communication. “We are going through a merger, we want you to be part of the new organization.” Followed by her reasons for wanting the employees to remain, and her persuasive argument for doing so. Lastly, Ewers has to decide what channel she will use to deliver this message. She has several option to consider including in‐person, email, video conferences and other form of electronic communication. Channel‐ The type of message that Ewers wants to convey is best done in‐ person, and in this case by speaking to the target group fact to face. In person presentations are advantageous if the presenter wants to ensure that the entire audience hears the same message; the speaker want to receive an immediate and interactive response; desires to build group identity and group relationships, and want to do most of the speaking themselves (Munter, 2005). In this case Ewers wants all of the foregoing. In order to receive some meaningful audience participation she should consider announcing that a presentation will be made, and solicit questions prior to the live speech. She should also set aside time for a question and answer session to allow the employees to participate.

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Maintain audience base for both the opera and the symphony: The fourth strategic goals is to maintain the audience base for both the symphony and the orchestra. In order to accomplish this, yet another change in culture will be required. The new organization must refocus itself on customer satisfaction. While reviews by critics may be useful in measuring one aspect of customer satisfaction, the most direct method of focusing on the customer and changing strategic directions is by obtaining feedback directly from the customers. Ewers should consider implementing periodic customer satisfaction surveys. Such surveys can be conducted using any of several methods including comment cards submitted after performances, email surveys, phone surveys, website surveys and post card surveys to name a few. The new organization has to understand what its audience base wants, and be able to deliver it if they want to retain that audience base.

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Identify and pursue synergistic opportunities between the two companies: At the core, each the orchestra and opera are performing arts organizations. As separate organizations, the Opera and Symphony already put on joint performances. The Balanced scorecard for each organization prior to merger can be analyzed and similar goal identified to highlight synergistic opportunities. Further as a merged organization, with merged assets, the new entity should be able to streamline its operations and using its combined assets to produce performances at a lower cost.

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Finding appropriate Technology and IT systems is always a primary concern when merging two organizations. The new combined Symphony Opera will be a larger organization than either of the root organizations, and will have to manage a wider diversity of systems ranging from word processing to payroll and benefits management. There are several companies that offer technology solutions for small to mid‐sized businesses. Two that might be considered are Google Apps For Business / non‐profits, and Oracle. Google Google offers an suite of office applications that are compatible with Microsoft applications. These include Gmail, Calendar, Drive, Docs, Sheets and Slides. The main advantage to using Google Apps for the new organization is the cost. Google Apps for business starts at $50.00 per year per user. This is in contrast to Microsoft Office which averages about $175.00 per copy. Further, if the new organization is non‐profit, Google offers the same applications free of charge to non‐profit organizations. The service is cloud based, meaning a user can access their files anywhere in the world so long as the have an internet connection. This means that no software has to be installed on individual computers, and since files are not stored on hard drives they won’t be subject to loss. Files can also be easily shared among users. This would be advantageous to the organization given that both the symphony and opera will likely be touring. The tour will have to be supported by some office staff who will need access to company files. Google apps could be particularly useful in making the merger go more smoothly. By utilizing the Google drive application, documents relative to the merger and due diligence process can be stored on a common cloud drive for easy access by all interested parties. New documents, spreadsheets, correspondence etc…, could also be stored on the shared

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drive for easy access. Since the Google Applications are compatible with Microsoft Office, little to no training would be required for the staff, and conversion to a common platform would be easy to accomplish. Implementing a common business platform like Google apps would help the organization achieve the strategic goal of integrating business processes. Oracle Oracle also offers a wide variety of business applications not only for large corporations, but for small and medium size businesses as well. Oracle offers: Financial management software, one of the key features being travel and expense management which would be critical for touring; Human resources software; and, project management software, which could be customized for use in helping to manage productions and show schedules. Implementing a platform like Oracle would be critical in achieving the goals of integrating the business process of the two companies; and reducing overall expenses as a percentage of profit. Of course, these are only two suggestions. There are many tools and software platforms available to assist in managing the business processes of the organization. In order to determine which best fits the needs of the new Opera and Symphony, Ewers and the management team will need to research the available options, and then consider sending out Requests for Information, followed by a Request for Quote of Request for Proposal to compare their available options.

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