Theatre Calgary: Control Systems in an Organization in Crisis

...

IV. CONCLUSION

In conclusion, we agree to the changes introduced in the fiscal year by the new president, Tom McCabe. The figures in actual and projected budgets show that Theatre Calgary has obtained sustainability. The new management was able to eliminate the theatre’s deficit, and even resulted to a fairly significant surplus. They were able to not just meet the projected revenue, but also exceeded the actual revenue amount. And even though revenue exceeded expectation, costs were kept below the total projected expenses for the year. The two expenses which incurred unfavorable variances, production overhead and fundraising,can be attributed to an increase in the activities that resulted to increase in revenue. Production overhead may have increased due to additional electricity consumed when more special events were booked. Additional man hours were incurred when more fundraising activities were done, thus increasing the cost. These additional events and costs are directly related to more revenue. Furthermore, these mixed costs can easily be controlled by the management. They may adjust the projected amounts according to what have been expended in the current year. Then, they may apply more stringent control measures in the next planning period in order to meet the anticipated cost. The management was able to introduce effective control in the other expense driving activities such as, direct production, theatre and front of house, sales & customer service, publicity, subscriptions, and administration. These activities were able to spend lower than the anticipated amount projected for each of their areas, thus, favorable spending variance resulted. Overall, total revenue in Theatre Calgary was larger than what have been expected resulting in benefits for this nonprofit organization.

V. RECOMMENDATION

As we are amenable to the current process, we are also one in suggesting a few more tweaks:

A. Operations

a. Improve Organizational chart

b. Theater Calgary typically produced seven plays per year, appealing mostly

professionals aged 40 to 65 Theater Calgary could also consider expanding its market by also tapping the younger age group and presenting plays that are both entertaining and educational. This way, increased revenue may be the result of an extended clientele.

c. Continue tie up with different theater groups in producing presentations and sharing costs and expenses

B. Sales

a. Profit sharing and performance review ticket clerks’ performance reviews may

be commission-based so as to motivate employees toward ticket sales

b. Pricing to attract and keep subscribers Theatre Calgary needs to create a lower entry-level price point, as well as more low-priced seats in the theatre if they are to reach untapped consumer groups. They can also redistribute the number of seats in each price point. Subscription offers should be friendlier for newcomers and a greater value to full series subscribers. The Company’s loyalists may get the best price