The case titled The Theatre Budget was a short journal about a frustrated Vice-President of a performing arts theatre that had a Board of Directors more concerned about artistic values than how they would pay the bills. Janet Dobbs was Vice President for Administration and President-elect for this small taxexempt organization called the Greater Euclid Little Theater (GELT). It is obvious in the case that there is a divide between industries; business administration/accounting and the arts. One can only imagine the frustration Dobbs faced trying to inform and educate a Board of Directors about the financial crisis at hand to only have it fall on deaf ears and have blunt resistance. Being a non-profit organization means GELT needs to be very careful with their resources and how they obtain and distribute their funds. The Theatre Budget demonstrates how important it is to have a strategic plan meet the goals and objectives of an organization whether it is quantitative or qualitative. With the acquisition of a new Artistic Director (Andy Spaulding), the small theatre grew to become quite successful after eleven years of operating; with its new found success, GELT adopted a new mission statement: “to provide professional quality theatre at an affordable price for the families of the greater Euclid area.” (Tucker, H., 2003, p.1)
The beginning of a budget formulation needs a strategy; Chapter 7 of the text discusses how managers must understand the linkages between their programs and the organization’s overall strategic directions (Young, D., p.149). In the case, GELT’s treasurer informs Dobbs that prior to 2001, Spaulding’s salary had been paid for by the tuition from the students taking classes from him at the theatre. Spaulding decided he didn’t want to teach the classes in the future which was going to result in a significant loss of revenue. Spaulding would not be convinced that realistic budgeting was necessary for GELT and that there was a direct tie between the programs (or classes) being offered and their future revenue projections. (Tucker, H., 2003, p.2) In addition, if Spaulding is serious about raising artistic awareness in the community, what not a better way than to teach the classes to the youth of Euclid? It just doesn’t
make any sense why he would decide to stop teaching these classes nor does the case explain that decision. The Board of Directors gives the impression of being so utterly ignorant it is dumbfounding! If an organization’s strategy is to evolve over time because of shifting environmental opportunities and threats, and changing organizational strengths and weaknesses, senior management i.e. Board of Directors, must find ways to monitor and manage the organizations programs so they remain consistent with, and supportive of the evolving strategy and potential growth. (Young, D., p.149-150) Managers must be careful not to allow the quantitative factors to dominate the decision. Maybe Dobbs needed to try to relate to the Board of Directors in a language they feel more comfortable with. For example, explain the impact it has had on the students in the community since Spaulding stopped teaching classes. Perhaps bring one of the old students in to tell the Board how much they wished they could still take those classes. Maybe it is a little manipulative but these people need something real that will make them understand in a different way how important the classes are; it’s a win-win situation. There isn’t any real indication that the mission was considered in developing the rejected budget. Reading through the budget problems and solution, there was not a sense that it was tying back to GELT’s mission at all, it was more Dobbs trying to prove a point about how unrealistic their budgeting practices had been. There was no “feeling” behind her proposal and the Board of Directors may have not immediately gone on the defensive if Dobbs may have taken more time to explain how things got the way that they did...
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