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Organizational Managment ~ Key Aspects of the Merger Process
The document discusses key aspects of merging the Utah Symphony and Opera organizations. It addresses issues like organizational culture, audience strategy, and technology integration. The Symphony has a top-down structure while the Opera empowers employees. Both organizations must accept weaknesses and be willing to change. Audience messaging should establish common ground and discuss benefits. Technology like Microsoft Office and PeopleSoft can support integration, reduce expenses, and enable synergies during the merger process.
Organizational Managment ~ Key Aspects of the Merger Process
- 1. THE UTAH SYMPHONYAND OPERA KEY ASPECTS OF THE MERGER PROCESS Cynthia Smith-Walker November 2013 A Harvard Business School Exercise http://tinyurl.com/oqtrcr5
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- 3. A1. ORGANIZATIONAL STRUCTURES SYMPHONY Distribution ofauthority and decision-making powers reside primarily with top two management roles, as well as departmental managers. OPERA Distribution of authority is spread out and empowered employees at various levels make decisions.
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- 5. A2. KEY FACTORS SUPPORTING STRATEGICGOALS Both organizations must be able to accept their weaknesses and be willing to change. Decisions can be made in the reconciliation step of the 3- step approach to support the newly formed organization’s strategic goals during the first year.
- 6. B. AUDIENCE STRATEGY Who are they? Identify Key Influencers. What do they know? Share new and background information. What do they feel? Provide relevant information. How can you persuade them? Establish common ground and discuss benefits.
- 7. B1. MESSAGE STRATEGY DIRECTAPPROACH WITH OPERA Credibility has already been established due to prior work experience Conclusion presented at the beginning Emphasize results INDIRECT APPROACH WITH SYMPHONY Soften audience resistance Gain credibility by demonstrating open- mindedness and fairness. Spell out conclusion.
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- 9. C1. TOOL IMPLEMENTAION MicrosoftOffice Supports: Integration of business processes Reduction in expenses Database for patron information Enables synergistic opportunities Shared calendars Standard email application PeopleSoft Supports: Integration of business processes Reduction in expenses Enables synergistic opportunities Employee development Succession planning
- 10. REFERENCES Cameron K. S.;Quinn, R. E.; Degraff, J. and Thakor, A. V. (2006). Competing Values Leadership (Northampton, MA: Edward Elgar. 2006). p 32 DeLong, T. J., & Ager, D. L. (2005). Utah Symphony and Utah Opera: A Merger Proposal. Harvard Business School, 1-16. Retrieved from: http://tinyurl.com/oqtrcr5 Holtz, S. (2004). Corporate Conversations: Guide to crafting effectible and appropriate internal communications. New York: Anacom. Kreitner, R. and Kinicki, A. (2010). Organizational Behavior, New York. McGraw-Hill. PeopleSoft Human Capital Management. (2011). Retrieved November 28, 2012 from: http://www.oracle.com/us/products/applications/peoplesoft-enterprise/human-capital-management/overview/index.html Professional 2010. (n.d.). Retrieved November 28, 2012 from: http://office.microsoft.com/en-us/professional Trompenaars, F. And Prud'Homme, P. (2004). Managing Change Across Corporate Cultures. Chischester; Capstone.
Editor's Notes
- #3 The Utah Symphony (US) most closely aligns with the characteristics of the Clan Culture. A Clan Culture has an internal, employee focus and desires to impart unity through consensus. It also fosters a high level of job satisfaction and commitment through employee involvement. A sense of family and collaboration between employees is strongly encouraged in a Clan Culture. Loyalty for co-workers and the organization is built by working together. US demonstrates this with their tight bond group of musicians, including their conductor. They have been promoted to a Group II symphony through collaboration and involvement. There is a greater emphasis on flexibility and a decreased emphasis on structure and control. Flexibility has promoted perfecting the craft by each musician. Employees are driven by shared goals, outputs/inputs and vision instead of adhering to strict rules and procedures that guide business operations (Kreitner and Kinicki, 2010). Keith Lockhart, the Music Director, shares the same goal to become a Group I symphony with the musicians. This vision guides their performances. In order to achieve this goal, they work together to deliver high-quality performances. Rules remain present, but are usually communicated socially through organizational norms instead of through written policies. Employees set the expected standards for conduct by demonstrating mutual respect. In Clan organizations, employees develop in a supportive manner and tend to take on parental-type roles. Their commitment to both parental roles and employee development was first demonstrated by Maurice Abravanel. Maurice was hired in 1947 as the US conductor. He was well-known for being extremely protective of the musicians and worked diligently to secure their full-time professional status. Fortunately, Keith Lockhart has followed in Maurice's footsteps. The Utah Opera (UO) most closely aligns with the characteristics of an Adhocracy Culture. Adhocracy Cultures value flexibility and are externally focused. This type of culture tends to be creative, promptly responds to change and adaptable (Kreitner and Kinicki, 2010). These qualities are demonstrated by the UO. The UO's business model is designed for flexibility. Their flexibility permits adjustments in both the size of the opera and fund-raising projects. Operations could be promptly adjusted, as-needed, so that they stay on track in meeting profits/goals. Due to the fact that they are an arts program, the UO promotes creativity which is a by-product of an Adhocracy Culture. The UO focuses more on fixed assets and less on budgets. Because the major portion of their revenue streams from ticket sales, UO is focused externally. This demands that the UO meet the needs and wants of their patrons by providing high-quality performances. In addition, the UO's structure is designed to permit the directors of each department to utilize the knowledge and skills in their individual areas of expertise to make decisions.
- #4 The distribution of authority and decision-making is similar between the UO and the US. As an Adhocracy Culture, the UO is lead by Ms. Anne Ewers. Anne directly reports to the Board of Trustees (BOT). Below her is the Director of Operations, who is responsible for managing the departmental directors. Each department director manages a few smaller groups and has decision-making power and authority. This is partly what differentiates the Opera as an Adhocracy culture. An Adhocracy Culture empowers its employees with some authority and decision-making power. The hierarchy of power eventually traces from the employees back to Anne, and then the Board of Trustees. However, while the departmental directors are primarily responsible for their departments in the formal organizational chart, it seems that Anne's autocratic management style often extends to decisions that should be left to, or made with input from, her subordinates. Her tendency to make unilateral decisions causes the actual decision-making within the organization to differ from what is shown in the organizational chart. In addition, below the department directors are managers who have some authority and decision making power. The US places authority and decision-making power with two top management roles, as well as with various departmental directors. Keith, the Music Director, accurately described the organization when he expressed that it was a two-headed organization whereby One person manages the financial resources and the other provides the artistic vision (DeLong and Ager, 2005). This statement would be accurate because the chart for the organization demonstrates that the symphony's main authority and decision-making power resides with the Music Director, the President and CEO positions. The UO only has One position reporting directly to the Chairman of the Board (COB), and the President, CEO and the Music Director report directly to the COB for US. The COB reports to the BOD. Depending on the function of the department, the departmental directors report to either the President and CEO or the Music Director. The musicians report to both positions. Due to union representation for the musicians, they report directly to the Music Director and indirectly, via the Orchestra Manager, to the President and CEO. This is because the Music Director oversees the artistic director of the performers, while the President and CEO oversee the financial components outlined in the collective bargaining agreement. However, because the President and CEO positions are vacant, currently, much of the actual decision-making power resides with Keith.
- #5 Cultural differences could be overcome for the merger to be successful. However, it is important that the differences not be overlooked and that the merged organization be fully aware of the key factors that will help them achieve their goals. To effectively merge 2 organizational cultures is a process that demands a 3-step approach: Awareness, Respect and Reconciliation (Trompenaars and Prud'Homme, 2004). Awareness happens when individuals within the two organizations recognize and comprehend that there are cultural differences within their workplaces. Its critical to map out those differences, determine the perceptions they hold about the company for which they are merging with, give some consideration to which organization holds the more powerful position, and learn how the organizations will deal with power and cultural differences. If there is no awareness for cultural differences, the effectiveness of the merger could be potentially lost to conflicts in strategy and miscommunication (Trompenaars and Prud'Homme, 2004). The second step involves respecting the differences between the two organizations. This requires individuals to recognize the limitations of their own culture, as well as to recognize the benefits of the other culture. This helps each organization with the development of trust and respect for each other. It will also assist each organization in the identification of their weaknesses, so that they can learn to work together (Trompenaars and Prud'Homme, 2004). The third step is reconciliation which involves resolving the differences between the organizational cultures in such a manner that both organizations benefit. Both learn how to use other perspectives to enrich their own and reconcile their differences. While approaches other than reconciliation are possible, they do not promote respect for other cultures, which makes them unsuccessful (Trompenaars and Prud'Homme, 2004).
- #6 A2. Key Factors (continued) The US and UO have developed the following five main strategic goals for the first year of the merger: Integration business processes; Reduction of expenses as a percentage of profits; Retain key employees; Maintain audience bases; and Identification and pursuit of synergistic opportunities between the two organizations. The 3-step method could be utilized by the UO and US to develop a new organizational culture. Once the organization reaches the reconciliation stage, they will need to examine their strategic goals to determine if any modifications need to be made. In order for this process to be effective, both the US and the UO will need to comprehend and accept that they both organizations will need to accept changes. The first strategic goal is the integration of business processes. The UO is lead by Ms. Anne Ewers. She has the authority and decision-making distributed among various levels of managers and employees. The US is lead Mr. Keith Lockhart, Music Director, as well as the President and CEO (these positions are currently vacant). These positions combined retain most of the authority and decision-making power. In order to efficiently integrate these leadership styles, the newly formed organization should use the decision-making and authority distribution of the UO with the top leadership of the US. Specifically, the organization should be a two-headed organization with distribution of authority among the employees that have departmental responsibility for implementing the decisions. Anne has indicated that she does not want Keith to hold equal authority with her. Anne has expressed that she doesn't want someone second-guessing her decisions. Keith, on the other hand, wants to retain the control he holds with the US, and, therefore, doesn't desire to report to Anne (DeLong and Ager, 2005). In order for the organization to benefit, both Anne and Keith must recognize that they need to make compromises and work together. The second strategic goal is the reduction of expenses as a percentage of profits. The US' current expenses are substantial. The salaries for the musicians are about 60% of the US total expenses. The collective bargaining agreement also holds the parties to yearly raises for the next 2 years. The musicians would become upset if they had to renegotiate their wages. The only other solution is to substantially increase profits. Fund-raising would be the method to increase revenues. Anne has already been identified with exceptional skills in this area, so this will provide her with the opportunity to earn the respect from skeptical employees. The employees with the UO need to learn to become more goal-oriented for the merger to be successful, a change that will benefit the newly formed organization. The third strategic goal for the organization is to retain key employees. Workers could be provided with bonuses or incentives to remain with the organization for a minimum of 3 years following the merge. Neither of the organizations are currently employee-oriented, with the exception of certain requirements set forth by the collective bargaining contract. Nonetheless, adapting an employee-centered philosophy for the newly formed organization will help to keep key workers, as well as create a positive and constructive work environment. The fourth strategic goal for the organization is to maintain the audience bases. This could be accomplished by adopting US' customer-based method, while maintaining the UO's high-quality, exhilarating performances. The UO's patrons expect to see these high-quality performances, therefore, the cancellation or radical changes might result in loosing existing supporting patrons. Nevertheless, both organizations need to make sure that customer satisfaction remains intact with high-quality performances. This will be measured by increases to ticket sales and the results of customer questionnaires. The fifth strategic goal for the organization is the identification and pursuit of synergistic opportunities between the two organizations. This should be easy for them to achieve since the UO and US both already possess many similarities. They could combine their talents to show performances with full orchestral accompaniment. They could also share some administrative functions such as HR and accounting. By pooling their resources, the newly formed organization could be more successful than each were individually. Taking advantage of the synergies between the two organizations would provide the newly formed company a distinct identify which would benefit all stakeholders.
- #7 B. Audience Strategy Anne should develop an audience strategy to utilize when speaking with the employee about the merger. This would help her to achieve her objective and the understanding of the employees. An audience strategy would include responses to the following questions: Who are they? What do they know? What do they feel? How can you persuade them? Anne must identify who will be included in her audience. It will be very important for Anne to also identify the key influences as they will have a significant impact on her communication with the employees. Key influences will have direct and indirect impact on the outcome. For instance, leaders from the ad hoc committee would likely be considered key influencers. Anne might consider tailoring One speech for the orchestra employees and another for the opera contractors. Two separate presentations will be necessary due to the fact that each of these employee groups will have different questions/concerns regarding the merger which Anne will need to address (Holtz, 2004). Anne will need to consider what her target audience already knows and what she wants them to know. She will need to consider how much background and new information to provide them. She will also need to consider the preferences and expectations of her target audience. Again, two separate presentations for each of the employee groups would best serve her objective as Anne could address the questions/concerns unique to each of the employee groups. Anne needs to determine what information is relevant for each group, (Holtz, 2004). The musicians will clearly want information about how the merger will impact their collective bargaining contract. In addition, they will likely be concerned about job security and any potential reduction to their performance season. Anne should address how the merger will benefit them. Anne will also need to address wages and performance season with the Opera employees. These employees may also want information about how the merger will impact their financial position, especially given that the Opera was much stronger, financially, than the Symphony. They will likely want to know if they will be covered under a collective bargaining contract and union representation. Anne should prepare to address each employee group's concerns/questions in an effort to make the merger a success. It is very important for Anne to maintain open and honest communications with both employee groups. This will help Anne to establish common ground with the employees which she can then utilize to persuade them. Anne will also be able to use the merger benefits to persuade them. The employees will likely not tolerate being lied to or having Anne avoid their issues/questions/concerns. Anne should maintain an upbeat, enthusiastic approach to her presentation which will help to relieve the employee tensions about the merger. Anne needs to use the industry vocabulary to gain respect. This helps to demonstrate her knowledge about the industry. Anne shouldn't avoid the controversial issues but could ease into them, and focus on illustrating the benefits derived from the merger. Anne could achieve her objective by identifying key influences, determining the depth of background information, provide relevant new information, persuade with the merger benefits and establish common ground with her audience.
- #8 B1. Message Strategy Anne should organize her ideas, emphasizing her strategy. Her message will vary for each employee group because she is familiar with the Opera organization but not as familiar with the Symphony. Anne should use the direct method when addressing the opera employees, due to the fact that she has experience working with them. At the beginning of her address, she should express her support for the merger and her main ideas. For instance, she could express why she is supporting the merger and discuss its benefits. An audience tends to understand the content better when the conclusion is discussed at the beginning of the address. This method is audience-centered because it stresses the results instead of the steps leading to the conclusion. This method does not need repetition, thus saves time. This method is best used for the opera employees because the audience is already familiar with her and she has established credibility with them. For her message strategy with the Symphony employees, Anne should use the indirect method. She will need to spell out each step leading to the conclusion, saving her main ideas for the end. Despite the fact that this method may take her audience longer to understand the message, it oftentimes softens their resistance, as well as provides them an opportunity to see that Anne is fair and open-minded, thus providing her time to build credibility with this audience. This method works well when it is a sensitive and emotional message, for bias audiences, and when the speaker has low credibility with her audience. This method would be best because the musicians have openly conveyed their lack of support for the merger. For both message strategies, Anne should convey her support for the employees. She needs to discuss, in great detail, her plans for guidance and direction. She should address the issues concerning each employee group, and how she intends to resolve those issues. This will help to garner support for the merger. She needs to include an outline of the strategic goals and express the importance that everyone work together to make the merger a success. If the workers are not clear about the direction and goals of the newly formed organization, low morale and job dissatisfaction could result. It is also important that Anne stresses that both employee groups support each other instead of remaining divided. The optimal time to address the employee groups is before they quit or form alliances in opposition to the merger. She should reach out to them before rumors about the merger begin to spread and take hold, so, in the early stages of the merge and then on a continual basis throughout the merger process. Anne needs to communicate to all the employees that they play an important role in the success of the merger. Anne should emphasize how their skills and knowledge are valued and appreciated. Anne needs to provide the employees with good reasons why leaving wouldn't be good for them, such as better wages in the years following the merger. After meeting with the groups of employees, Anne could later meet with employees on an individual basis to discuss future wages, career paths and employee goals.
- #9 C. Technology Tools There are several technology tools that the newly formed organization could select. PeopleSoft and MS Office Professional are just two. With these tools, the organization could create synergistic culture and increase effectiveness. PeopleSoft is an HR Management tool (PeopleSoft Human Capital Management, 2011). This program includes Workforce Service Delivery, HR Analytics, Talent Management and Workforce Management. This program is a database management system. All employee information could be entered into this program. It would save time and resources for the newly formed organization. In addition, this tool would help the organization with employee development and succession planning. Microsoft Office Professional (MSO) is a program which could be used to track inventory, create presentations, track financials, maintain patron information, and many other functions. This program includes OneNote, Outlook, Word, PowerPoint, Excel and Access (Professional, 2010). It could be purchased for about $350 per licensed copy and could be used for the daily business operations. This program would support integration of the two companies' administrative applications. Outlook would support scheduling and email, standardizing the email application across the board, as well as the ability to share calendars. In addition, all employees could communicate with Outlook. Excel could be utilized for compiling information in a standard format across the board. This format would make it easy to compare information between the departmental expenses against budget projections for the determination of financial performance.
- #10 C1. Tool Implementation MSO and PeopleSoft could both be utilized to meet the following strategic goals: Integration of business processes; Reduction of expenses as a percentage of profits; Retain key employees; Maintain audience bases; and Identification and pursuit of synergistic opportunities between the two organizations. These programs could be utilized for synergistic opportunities and the integration of business processes because they promote sharing and project partnering. PeopleSoft will be good for employee development and succession planning. It will help with the identification of employee skills and talents. It could be utilized to track wages and model future wages and benefits. It could curb expenses by combining both HR groups into a single application. The program could be utilized to track patron information and help with the determination of whether they are maintaining their client base. That way the organization could promptly identify problems and address them. MSO could be utilized for tracking trends and changes with profits and expenses. Excel will help to track the expense and revenue sources and to compute daily financial profiles. It will aid in tracking and maintaining budgets and help with measurements for expense reductions. If they should fail to meet that objective, the program helps them to promptly identify the source of the issue so that they could take corrective action.
- #11 Cameron K. S.; Quinn, R. E.; Degraff, J. and Thakor, A. V. (2006). Competing Values Leadership (Northampton, MA: Edward Elgar. 2006). p 32 DeLong, T. J., & Ager, D. L. (2005). Utah Symphony and Utah Opera: A Merger Proposal. Harvard Business School, 1-16. Holtz, S. (2004). Corporate Conversations: Guide to crafting effectibe and approapriate internal communications. New York: Anacom. Kreitner, R. and Kinicki, A. (2010). Organizational Behavior, New York. McGraw-Hill. PeopleSoft Human Capital Managent. (2011). Retrieved November 28, 2012 from: http://www.oracle.com/us/products/applications/peoplesoft-enterprise/human-capital-management/overview/index.html Professional 2010. (n.d.). Retrieved November 28, 2012 from: http://office.microsoft.com/en-us/professional Trompenaars, F. And Prud'Homme, P. (2004). Managing Change Across Corporate Cultures. Chischester; Capstone.