Theatres and Organizational Effectiveness

George S. Vozikis
Donna L. Clevinger
Timothy S. Mescon

This study examines the effectiveness of theatrical organizations. It

searches for a pattern of use of effectiveness criteria by different
types of theatres using a multidimensional construct of organiza-
tional effectiveness: performance, intraorganizational, and inter-
organizational. Research findings show that regardless of type,
theatres do not pursue artistic performance only but place equal
emphasis on intraorganizational and interorganizational compo-
nents of effectiveness.

Even though the literature on the organizational

effectiveness of business firms is voluminous, very little
has been written on the assessment of effectiveness of
theatrical organizations. The purpose of this study is to
integrate organizational typologies in the theatrical
world, such as profit or nonprofit orientation and union
or nonunion membership, with individual effectiveness
factors such as productivity, growth, morale, and utiliza-
tion of the environment.
Despite the fact that most people would agree that
organizational effectiveness constitutes a sine qua non
condition for outstanding performance, success, and
managerial excellence, it is more difficult to agree on the
Group Bc Organization Studies, Vol 9 No. 2, June 1984 265-284
@ 1984 Sage Publications, Inc
265
266

meaning of the concept itself. To an economist or finan-

cial analyst, organizational effectiveness is synonymous
with profit or return on investment. For a social scien-
tist, effectiveness is often viewed in terms of the quality
of life. For an artist it is the degree to which the
organization (theatre, art gallery, music hall, etc.) comes
close to his or her own concept and expression of artistic
perfection.
Considering the multitude and diversity of opinions
concerning the nature, definition, terminology, and com-
position of organizational effectiveness, it is not surpris-
ing that there is also lack of agreement on criteria for
evaluating organizational effectiveness. The selection of
such criteria depends largely on who is doing the
evaluation, what their specific orientations are, and
within what type of variables the organization operates.

TYPES OF THEATRES

Perhaps trying to find a definition of theatre is less

important than the establishment of many types of
theatres. Each type has its own guidelines to follow that
makes it different from the others. Langley, in his book,
Theatre Management in America, divided American
theatres into five different types: commercial New York
theatres, stock theatres, resident theatres, college
theatres, and community theatres.
New York theatres, or Broadway houses, are profit-
making organizations. Broadway theatres have been the
yardstick by which other types of theatres across the
country are measured.
While the majority of its productions possess less
than universal significance, commercial theatre
continues to function as a primary marketplace of
 267

entertainment, both for audiences and for other

branches of the industry. (Langley, 1980, p. 127)

The stock and resident theatres, excluding the Broad-

way’s national touring companies, comprise the majority
of America’s professional regional theatre organizations.
The real difference between these two types is that &dquo;stock
theatre is a largely commercial purveyor of popular
entertainment, ... while resident theatre tends to be
noncommercial, nonprofit, and more interested in serious
or experimental work&dquo; (p. 129).

College theatres are obviously the largest group. This

is any theatre that is sponsored by an educational
institution.
The community theatre derives its strength from the
citizens of the community who produce plays with some
regularity and seldom receive their income from it or
spend a great deal of time doing it.
Although there are distinct differences between each
type, all have one thing in common: Each must have an
administrative area whose job is to handle all the
theatre’s business transactions. Naturally, depending on
what type of theatre it is, the business department’s
practices and priorities can be somewhat different. For
example, in commercial theatres the management seeks
a profit on their entertainment offerings. In an educa-
tional theatre situation the management is often made
up of students who are learning how to become theatre
managers or take part in the business end of theatre.
The day-to-day operation of the business of theatre is
the same regardless of theatre type. Such duties include
maintenance of the theatre building, ticket sales, publici-
ty, program printing, a theatre staff that includes ushers
and box office personnel, and handling finances and
season budgets.
268

THEATRE ADMINISTRATION

The area of management for the theatre, however, has

not had a long history. Langley explains:
The actor-managers who controlled the first century
of professional theatre in America, roughly from
1750 to 1850, were too naive about business affairs to
effect a successful transition from an agrarian to an
industrialized America. The businessman who re-
placed them and controlled professional theatre for
the second hundred years, roughly from 1850 to
1950, eventually deserted live theatre for more
lucrative enterprises when theatre ceased to offer
easy profits. Beginning in the 1950’s, a new breed of
manager-producer started to evolve.
Langley continued to discuss this new manager by
quoting from the 1965 Rockefeller Panel Report, The
Performing Arts: Problems and Prospects. This new
manager is

a person who is knowledgeable in the art with which

he is concerned, an impresario, labor negotiator,
diplomat, educator, publicity and public relations
expert, politician, skilled businessman, a social sophis-
ticate, a servant of the community, a tireless
leader-becomingly humble before authority-a
teacher, a tyrant, and a continuing student of the
arts.

This person, who seems almost superhuman, has gone

through stages of training to become an arts manager.
His or her experiences are taken from life itself. A
prerequisite for this position must be love of the arts. The
person should also study the components of this profes-
 269

sion through formal and specialized education. Even

after the conclusion of institutional study, the person
must continually learn what is going on within his or her
area and stay abreast of new trends and happenings.

THE MEASUREMENT OF
ORGANIZATIONAL EFFECTIVENESS

Most studies take an organization-wide view of effec-

tiveness. Measurement is generally expressed in terms
of performance, productivity, profit, and the like (Kat-
zell, 1975). Few research studies have looked at the
subunits of the organization. The earlier studies tended
toward a univariate measurement viewpoint: a look at a
single factor. More recent studies have taken a multi-
variate approach: taking several factors and determin-
ing how they interact to produce effectiveness.
The univariate approach takes a single criterion as its
measure of effectiveness. An early study by Thorndike in
1949 identified some of these criteria as productivity, net
profit, mission accomplishment, and organizational
growth and stability. Unfortunately, the Thorndike
study has questionable merit. This study is directed at
the specific task of developing techniques to aid in the
selection of personnel and not in organizational effec-
tiveness, as its inclusion here would imply. A review by
Campbell in 1973 identified 19 variables, with the more
prominent being overall performance, productivity,
employee job satisfaction, rate of return on investment,
and employee turnover (see Figure 1). Typically the
univariate approach will set one of these criteria of
effectiveness as the dependent variable to compare with
the predictor variable (e.g., leadership style).
270

Three criticisms are directed at the univariate ap-

proach :
(1) Some of the variables do not appear as a good
measure of overall organizational effectiveness
(e.g., turnover rates).
(2) Some of the variables are subjective value judg-
ments on the part of the researcher as to what
&dquo;ought to be.&dquo;
(3) The integration problem-the lack of a meaning-
ful understanding of how the variable contributes
to organizational effectiveness.

Multivariate analysis brings together several vari-

ables to measure their relation to organization success
and represents a real-world approach. Organizational
effectiveness does not hinge on a single factor. Studies
are characterized as being inductive or deductive in

approach. In the inductive approach the investigators

gather data through an empirical study and then deter-
mine what the data indicate as the significant variable.
In the deductive approach the investigator hypothesizes
what the variable should be and then prepares a study to
determine whether the hypothesis is true or false.
Models also differ in their ability to generalize their
evaluation criteria, and on whether the models are
normative or descriptive. The normative model attempts
to specify those things an organization must do to become
effective. Most of the organizational effectiveness models
are normative. The difficulty with these models is lack of
a rational defense as to why the given criteria are in fact
a measure of effectiveness and why they should be used
for the organizations. The descriptive model attempts to
summarize those characteristics that have been found in
successful organizations. This is a more conservative
 271

approach that simply gives the results of an investi-

gation.
The most striking comparison among different models
is the lack of consensus as to what constitutes a useful set
of measures of organizational effectiveness. Only one
(adaptability-flexibility) is mentioned in more than half
of the models.

Figure 1: A partial listing of univariate measures of organizational effectiveness.

Source: J. P. Campbell, Research into the Nature of Organizational
Effectiveness: An Endangered Species? Unpublished manuscript, Um-
versity of Minnesota, 1973. Reprinted by permission.
272

Figure 1 (Continued)

RESEARCH DESIGN

Campbell’s (1973) list of univariate measures of organiza-

tional effectiveness was carried a step further by this
research study. The 18 measures were grouped into
three categories in order to contribute to a meaningful
understanding of the organizational effectiveness con-
 273

struct. Performance Effectiveness comprises the univari-

ate measures of readiness, productivity, growth, efficien-
cy, quality, profit or return, and accidents. Intraorgani-
zational Effectiveness comprises the behavioral and inter-
nal univariate measures of stability, morale, motivation,
conflict and cohesion, satisfaction, internalization of
organizational goals, absenteeism, and turnover or reten-
tion. Finally, InterorganizationaL Effectiveness com-
prises the external univariate measures of utilization of the
environment, evaluation by external entities, and flexi-
bility of adaptation.
Classification of the univariate measures into the three
categories in order to obtain an organizational effective-
ness construct was undertaken to avoid one of the most
serious criticisms of univariate measures, that of an
integration problem. Although the research literature is
abundant with definitions and measurements of specific
dependent variables, there is a general lack of effort to
build a comprehensive model such as the one presented
in this study.
To identify the use of measures of organizational effec-
tiveness by the theatrical organizations, a questionnaire
was administered to 288 theatres. The population of 288
theatres was drawn from library sources. The question-
naire was mailed to these theatres; 68 replies were
received for a response rate of 23.6%.
The standardized 18 yes-no questionnaire was pat-
terned after Campbell’s findings (1973), which were
derived from an extensive survey of the literature on
organizational effectiveness (see Figure 1). The use of 18
organizational effectiveness criteria may seem exces-
sive, but as Steers (1977, p. 39) observes, &dquo;it is difficult to
advance a tenable argument in support of the use of
several of these variables (for example, turnover) by
themselves as comprehensive or even adequate measures
of organizational effectiveness.&dquo;
274

Classification of the criteria was not revealed to the

respondents, and the questions on the use of the criteria
were randomly mixed to avoid any subliminal bias or
&dquo;tunnel vision&dquo; in the responses. Finally, a provision for
an &dquo;other&dquo; criterion category was made, in case a mea-
sure of effectiveness not included in the list kept appear-

ing as a frequently used measure.

The data were classified and coded into the three effec-
tiveness categories through a statistical analysis system
(SAS) univariate procedure.
The last phase of the research design consisted of
hypothesis testing and statistical analysis through chi-
square tests to identify whether there are significant
differences in the degree of emphasis placed by different
types of theatres on different types of criteria of organi-
zational effectiveness-namely, performance, intraorga-
nizational, and interorganizational; and the Cramer’s ~p’
statistic to ascertain how strong these differences are.
It was contemplated that each type of theatre, because
of its nature and character, would place a significantly
different degree of emphasis on one or two different
categories of organizational effectiveness. Union the-
atres would be more concerned in satisfying the perfor-
mance and interorganizational effectiveness rather than
intraorganizational effectiveness because of the pres-
sures to produce performance (in order to pay the higher
union pay scales) and pressures to satisfy the external
demands submitted by the unions. Resident theatres,
interested in serious or experimental work, would be
expected to place less emphasis on interorganizational
criteria of effectiveness. Educational theatres whose
purpose is to train future actors cater more to the needs
of the student actors and intraorganizational criteria of
effectiveness rather than performance and interorgani-
zation. Nonunion theatres would be as concerned as the
union theatres in satisfying the performance criteria of
 275

effectiveness, but without the constraints of the union-

ized actors, they would not be as concerned for inter- or
intraorganizational effectiveness. Finally, nonprofit com-
munity theatres would be more interested in serving the
needs of their often volunteer actors and the community
rather than high levels of performance.
The following hypotheses were tested in order to fulfill
the objectives of the study:

Hypothesis 1. There will be significant differences

among theatres in general on the amount of em-
phasis placed on different criteria of effectiveness-
namely, performance, intraorganizational, and
interorganizational.
Hypothesis 2. Union theatres will place significantly
more emphasis on performance and interorganization-
al effectiveness criteria combined rather than intra-
organizational.
Hypothesis 3. Resident theatres will place significantly
more emphasis on performance and intraorganiza-
tional effectiveness criteria combined rather than
interorganizational.
Hypot~~esi.s ~.. Educational theatres will place significant-
ly more emphasis on intraorganizational effectiveness
criteria rather than performance and interorganiza-
tional combined.
Hypothesis 5. Nonunion theatres will place signifi-
cantly more emphasis on performance effectiveness
criteria rather than interorganizational and intra-
organizational combined.
Hypothesis 6. Nonprofit theatres will place signifi-
cantly more emphasis on intraorganizational and
interorganizational effectiveness criteria combined
rather than performance.
276

RESULTS

Categorization of the theatres that were included in this

research study resulted in the diverse frequency distribu-
tion presented in Table 1. Some theatres belonged to more
than one type.
Another point of wide variation among theatres was the
amount of fund allocations among different budget cate-
gories. Table 2 presents these budget allocation frequen-
cies by budget category and percentage allocation. It is
quite obvious from Table 2 that most of the theatrical
budget is allocated for salaries, construction and equip-
ment, and most surprisingly, for the buildup of a reserve
fund to ensure the continuity and survival of the theatrical
organization. Survival, as an ultimate goal, seems to be an
overwhelming objective of which theatres are keenly
aware to a much higher degree than widely believed.

Organizational Effectiveness Criteria

There were 865 total affirmative answers to the 18
criteria of effectiveness on 70.6% of the total answers (yes
or no) given by the 68 theatres that responded to the sur-

vey. Inversely, there were 359 negative answers to the use

of the 18 criteria of effectiveness on 29.4% of the total.
The measure of effectiveness used most frequently was
quality, a performance measure with 66 theatres on 97% of
the 68 surveyed theatres reporting use of this criterion. A
close second was productivity, again a performance mea-
sure (60 theatres, or 88.2%). A surprising third was stabil-
ity, an intraorganizational effectiveness measure with 59,
or 86.8%, of the surveyed theatrical organizations report-

ing its use. This finding strongly suggests an explanation

to the budget allocation trend toward the buildup of a
reserve fund to stabilize the ups and downs of theatrical
prosperity.
 277

TABLE 1
Frequencies of Theatres by Type

*68 theatres represent 100%.

The measures of effectiveness used least frequently

were both accidents, a performance measure, and absen-
teeism, an intraorganizational problem with 21 theatres,
or 30.9%, of the 68 surveyed reporting using these criteria.
They were followed by profit or return, a performance
criterion (29, or 42.6%), probably because most of the
responding theatres were educational. Frequencies of
effectiveness criteria appearing under the &dquo;other&dquo; category
were not sufficient to justify their inclusion in the final
results.
The frequencies of the organizational effectiveness
criteria used by theatrical organizations to measure their
effectiveness are presented in Table 3.
The effectiveness categories of performance effective-
ness, intraorganizational effectiveness, and interorgani-
zational effectiveness represent the major variables in this
study and constitute a three-faceted construct of overall
organizational effectiveness. The frequency distributions
of the 18 univariate measures grouped into the three effec-
tiveness categories are shown in Table 4.
Table 4 reveals a particular emphasis placed by the-
atres on interorganizational effectiveness criteria.
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 279

TABLE 3
Overall Frequencies of Organizational Effectiveness
Criteria for 68 Theatres

*68 theatres represent 100%.

A chi-square test was used to test for significance of

the differences on the use (i.e., the amount of emphasis
placed) of the three different effectiveness criteria types.
The statistical test reveals no significant differences at
a = .05 with X2 = 4.71 and d.f. = 2.

The hypothesis that theatres place different amounts

of emphasis to different types of effectiveness criteria
must therefore be rejected. The level of significance
exhibited reached p <.10.
The Cramer’s ~p’ index revealed extremely weak dif-
ferences among the theatres in the use of criteria to
measure effectiveness, reaching only ~p’ = .062.
280

TABLE 4
Organizational Effectiveness Criteria by Effectiveness
Category for 68 Theatres

The second hypothesis, as well as the remaining four,

explored the possibility that a specific characteristic of a
theatre (in this instance, unionization of the employees)
might force the theatrical organization to put more
emphasis on one or two categories of criteria of organiza-
tional effectiveness at the expense of the other(s). The
chi-square tests used to test these hypotheses were also
rejected. The statistical tests revealed no significant dif-
ferences at a = .05. Table 5 summarizes the findings of
the research study.

CONCLUSIONS

These findings have great theoretical significance for

theatrical organizations. It seems that theatres do not
use univariate criteria of effectiveness; instead, they use
a balanced triptych of effectiveness criteria: perfor-
mance (goal optimization; Etzioni, 1960); intraorganiza-
tional (behavioral; Steers, 1976); and interorganizational
(systems perspective; Child, 1975). Additionally, as men-
tioned before, there seems to be a complete absence of
organizational effectiveness research focused on the-
atres. The most &dquo;exotic&dquo; animal that has been used by
effectiveness researchers is probably religious organiza-
tions or research and development laboratories.
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282

For the first time, this empirical study went beyond

the artistic requirements of a theatre organization and
focused on the challenge of overall theatrical manage-
ment and effectiveness that is filled with the same
excitement of adventure as many of the other exciting
activities that go into the production of a theatrical
presentation.
On the practical side, the findings of this study should
encourage theatre administrators to attempt to deter-
mine not only their state of the art but also their state of
organizational effectiveness. By using the total construct
of effectiveness (performance, intraorganizational, and
interorganizational criteria), lists of critical areas for
examination could be developed into an effectiveness
advantage-disadvantage profile tailored to the character
and potential of the particular theatre.
The study however, does have its limitations. Of the
288 randomly selected theatres, only 68 chose to respond
to the questionnaire, for a response rate of 23.6%. Of
these theatres, 54 declared themselves primarily educa-
tional. Perhaps the educational-type theatres felt an
obligation to fill out the questionnaire because the
research was being conducted by educators, like them-
selves, and was supported by an educational system, like
they were. A better survey and/or a better set of organi-
zational effectiveness definitions may create more inter-
est and better understanding from all types of theatres in
the future.
Nevertheless, this research study showed a kindred
spirit relationship between the world of business and the
world of theatre. A theatrical organization operates on
the idea of balanced organizational effectiveness, a bal-
ance between the show business and the business of doing
shows.
 283

REFERENCES

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Steers, R. M. (1976). Antecedents and outcomes of organizational commitment.
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George S. Vozikis is Associated Professor in the Department of

Management at the University of Miami. He received his Ph.D.
in management policy and international business from the Uni-
versity of Georgia. His current research interests include stra-
tegic management, organizational effectiveness, and small busi-
ness management and development.
284

Donna L. Clevinger is Assistant Professor in the Division of

Drama at North Texas State University. She received her Ph.D.
from the University of Michigan. Her current research interests
are in the area of theatre management and theatre history. She is
serving the State of Texas as an University Inter-Scholastic
League One-Act Play critic judge.
Timothy S. Mescon is Associate Professor of Management and
Entrepreneurshipat the University of Miami. He received his
Ph.D. in management policy and entrepreneurship from the
University of Georgia. His research interests include organiza-
tional effectiveness, entrepreneurship, and minority business
development.