Boston Symphony Orchestra Problem Formulation

The Boston Symphony Orchestra was founded in 1981 by Major Henry Lee Higginson. Higginson was the only manager of the Orchestra, so with his wealth he used one million of his own money to develop and expand. Shortly after World War I, he retired and developed the board of trustees. These trustees were Boston’s most powerful financial, corporate, legal, political, religious, and social communities. The organizational structure of the Orchestra included: the board of trustees, the management staff, the orchestra players, and the music director. Each of the personnel in these groups had different decision making for the Orchestra.
The Orchestra first started off with just a winter season for their concerts. Since they were becoming more famous and more people wanted to attend their concerts, they expanded to six different musical activities. These concerts include the Boston Pops, the Esplanade Concerts, the Berkshire Music Festival, the Berkshire Music Center, and the Boston Symphony Chamber Players. They traveled around the world performing concerts. During this 31-week period, the BSO played 22 weeks at Symphony hall, three weeks in Europe, and five weeks in New York, with a one-week Christmas vacation. The Orchestra also did broadcast live for radio stations and television stations and they also recorded albums there were known world-wide. The concert schedule for a particular season was quite complex, reflecting a rich mixture of tradition, musical performance constraints, musicians’ union contracts, and the preference of contemporary conductors.
The Boston Symphony Orchestra was well known because of the attendance of Boston’s most prominent. In the 1968, revenue decreased from $6,000 in 1968-1969 to over $60,000 in 1969-1970. Having these losses caused many problems for the BSO.
When the Boston Symphony Orchestra first started to perform it was impossible to walk up to the box office and get a ticket the night of the show. This all changed in the seasons during 1967-1970, the BSO crowds were not filling the capacity. The subscriptions were 94% full in 1967-1968. The next two years the subscriptions fell to 92%. The reason for this is, because the subscriptions to a concert are for a certain number of concerts. A person cannot get a ticket for one concert; he or she has to purchase more than one ticket. The BSO is losing money on this because if a family comes up for a weekend, they cannot get tickets for a Friday night concert, because they have to have a subscription for that concert. Also, people that have a subscription might want to go to a concert on a Tuesday night or a Thursday night but they cannot because their subscription is for Friday nights. This is making the BSO lose more money because people want tickets for different days. This process of having only subscriptions for certain days is making the tickets very complex and hard to figure out.
Another reason for the fallen subscriptions was because of the repertoire that the Orchestra played. People were not into the classical music anymore. The generations are changing and the upcoming generation is no longer one which grew up on symphony. The traditional concert series have become very boring to the new generation. Back in the day when the symphony was famous, the only place that a person could go to hear the classical music was by going to the concert. This day and age a person can go out to a store and get the music on a CD. The point of going to a concert was to see how well the players could play the music and to see the different personalities involved that created the wonderful music.
Composers these days are unwilling or unable to create new pieces that would attract the younger generations. Many of the composers want to have a piece of history in their music. Trying to make the new pieces thrilling would be hard because it would not have the history in it like the composer would want to have. Composers like Bach all have some form of history in their pieces.
Another problem the BSO had been fighting was financial instability. The BSO was operating at a total deficit of $5.44 million. After accounting for annual contributions and investment income the final deficit was $1.42 million. Many factors contributed to the BSO’s financial instability.
The biggest problem that contributed to the financial instability for the BSO was the organizational structure. The management lacked the talent needed to run a business. The management continually were faced with cost-quality trade-offs. They wanted to keep their high standards, but still survive financially. There is no possible way the BSO could keep these trade-offs. The times are changing and with the economy, people cannot afford to go to places that cost a lot of money. Keeping these trade-offs forced them to lose future income. Another problem with the organizational structure is the conductors and the management does not have any standards or job descriptions. The management does want they are good at. A business cannot function without giving their employees duties. They need to have some kind of structure so things do not get out of hand.
Another problem that did not help the BSO financially was the board of trustees. They had no past experience dealing with music. The board consisted of financial, corporate, legal, political, religious, and social communities. The board had the responsibility of selecting and hiring the music conductor and the manager for the BSO. If a person has no sense of music, he or she is not going to know who is a good conductor, and who is not. The board of trustees have an old-style, person-to-person management. Most of the time this style of management does not work which then causes more problems within the business. BSO’s manager Thomas Perry, described the trustees as inactive and only guided policy in a general way. It seems that the board of trustees was more of a nuisance then a benefit to the BSO.
Thomas Morris, the assistant manager for business affairs, tried to implement the concept of control budgeting. This was hard to implement because the conductors had never been restricted before. The conductors felt they were unable to express their artistic ability, and they took offense to being put on a budget. Putting a budget on the conductors can lower costs and can possibly increase income, because they are not spending as much on guest conductors or guest musicians. If a person knows that a budget needs to be followed, they will usually stick to that budget and will try not to go over it. Not having a budget is costing the BSO to invade their capital. Having a budget limits them to not invade capital.
Fundraising was another problem that the BSO faced. When Higginson first started the BSO, he used his own money to handle the finances. Having him use his own money meant that there was no need for a lot of fundraising. Forrester Smith was in charge of fundraising for the BSO. Ever since he started at the BSO the fundraising had increased but it was not enough for the BSO to survive. In Smith’s first year he raised $650,000 which exceeded the yearly average of $330,000 for the three years prior to his arrival. The reason the fundraising was not enough was because the BSO had a large operating deficit and the decline in subscriptions. Smith said that if they see a merit in a program, they say “go ahead” without looking at a budget to see if we can afford it. Not looking at the budget can cause trouble later on for a business. Smith blamed this on the previously mentioned problem of having no budget.
Mary Smith was the assistant manager for concerts and artists. Mary’s main task was to schedule the concerts for the year’s performances which include the BSO’s winter season of 100 or more performances, the five New York concerts, and the 24 Tanglewood concerts. The scheduling was done a year in advance which meant that there were many revisions and adjustments to the schedule. This was costly to the organization having so many concerts to schedule and trying to figure out whose schedule would work with what day. Instead of putting all her time into the scheduling of concerts, she could have been spending her time elsewhere.
The orchestra’s musicians were governed by a contract between the BSO and the Federation of Musicians. Under this contract the BSO was required to guarantee year-round employment with a minimum salary of $16,500. Many of the players made much more; especially the principal players who were paid more than twice this figure. The contract ran for three years and allowed for 70 concerts each year. This was a problem for the organization because the contract was binding and nothing could be done to decrease expenses by cutting back on programs. The BSO also had problems with members of the orchestra who performed for only part of a recording session. Even though these players were only playing for part of the recording session, the BSO still had to pay them for a full year. The BSO is paying these players for doing nothing, which does not help out their financial problems.
Overall, the Boston Sympathy Orchestra has a lot of financial problems that they need to try to over come. Overcoming the financial problems will probably increase ticket subscriptions, which would then increase overall income. Reading through this article was interesting, because I got to see what kind of a financial problem a big organization can go through. Even though they are a big organization, they still have problems. We see all the time these big organizations that portray to be perfect, but inside they are hurting because they do not have a strong financial structure.