Business Outline of a Group Dispute and the Use of Email

The New York Metropolitan Opera has been facing a serious dispute with its employees over pay agreements as they wanted to cut costs. The company, which is the largest performing arts organization located in the United States, employs a variety of staff across many disciplines, not only the singers and musicians, but also people such as set designers, costume makers, engineers, has staff which are represented by a total of 15 different unions (Farago, 2014). The dispute started when the negations for the renewal of employment contracts started. The employees' contracts all ended on the 31st of July, and although management wanted to renew the contracts, they wanted to reduce costs by a stated 16% (Farago, 2014). Management wanted to make the saving by cutting overtime payments and other benefits. Management stated that these changes were necessary as costs had been increasing, while attendance had been declining. Costs which have been $222 million in 2006, the year the current manager Peter Gelb joined, increased to $227 million for the season 2013/2014 (Allen, 2014). However, although costs will increase, revenues were not increasing proportionately, and in 2013 attendance appeared to be only 79% of capacity (Farago, 2014). In addition, the amount that is received through endowments of donors was decreasing significantly, with Gelb stating that unless costs could be reduced the company which faced bankruptcy by the year 2017. Statements made by Gelb also indicated that he believed part of the problem was a decline in the target market, with insufficient young people interested in attending opera, so the audience was expected to continue declining (Allen, 2014).

From the employees perspective the situation was somewhat different. The unions estimated that the cuts which were presented as 16%, would actually equates to a great deal more when you implemented (Farago, 2014). The employees also argued that the problem faced by the opera house was not simply a problem of declining...

While it may have been agreed the costs were high, it was argued that the attendance was due to poor management, and not environmental conditions. When it is considered that the opera houses in places such as Vienna, London, Stockholm, and Munich, all filled to 95% capacity or greater, it does not appear that opera is in a terminal decline (Farago, 2014). Indeed, even in United States, in opera houses the do not receive high levels of government support, which is observed with in their counterparts in Europe, there has also been increase in attendance (Farago, 2014). Therefore, the employees that they were suffering as a result of poor management, and rather than simply cutting costs, the management situation should be addressed in order to improve management performance and increase attendance. For example, it was claimed that the choice of productions were not encouraging the attendance of new audience members (Allen, 2014)
The negotiation process is complicated due to the large number of unions. As negotiations progress the situation deteriorated, with the New York Metropolitan Opera taking a hard line, and threatening to lock employees out their workplace if they reached agreement (Allen, 2014). With the new season due to start on 22 September, the time scale was increasing the pressure for a settlement to be found. However, rather than force assessment, this created further deterioration, and a federal negotiator was brought in to try and resolve the dispute. The federal mediator requested independent analysis to studies of the organization's finances. The final settlement reached was based on compromise from both sides, mediated by the negotiator. The staff has accepted some pay cuts, but it is stated they are significantly less than the 16% demanded by management (Lunden, 2014). At the same time, management have accepted the presence of an independent financial consultant to oversee the spending, the agreement was based on the management making dollar for dollar savings on the non-labor costs (Lunden,…