Sydney Opera Project
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The Sydney Opera House
Stakeholder Management and Project Success
The Sydney Opera House is one of Australia’s iconic buildings and is recognized around the world. It is has become a global symbol of Australia. The Danish architect Jorn Utzon won the architecture competition set out by the NSW government for the new building in 1957, and the construction started in 1959. The project was originally scheduled for four years, with a budget of AUS $7 million. The project ended up taking 14 years to complete and cost AUS $102 million.
There appeared to be problems from the start of the project. Apparently Utzon protested that he had not completed the designs for the structure, but the government insisted that the construction get underway. In addition, the government changed the requirements of the design after the construction was started, from two theatres to four, so plans and designs had to be modified during construction.
The design created by Utzon was an architectural feat that had never been done before. Even after four years of construction, Utzon still altered the geometry of his design, which was to save time and cost of the construction. The project was subject to many delays and cost over-runs that were unfortunately blamed on Utzon. During the year of 1965 a new government was appointed in NSW and they withheld payments for Utzon’s plans as they opposed to his building methods. This forced Utzon to resign from the project in 1966 and a team of Australian architects were appointed to finish the construction.
There are nearly 1000 rooms in the Opera House, including the five main auditoria. It is approximately 185m long and 120m wide at its widest point. The highest point of the building is 67m above sea level. The roofs are made up of 2,914 pre-cast concrete sections; these sections are covered with exactly 1,056,056 Swedish ceramic tiles. The entire building weighs over 161,000 tons. Considering that this construction began in 1959, the building methods and design were nothing short of revolutionary and it is no wonder that this building has become the marvel it is today.
1.2 Aim of the Report
In the project study of the Sydney Opera house, there were several important questions that arose. This analysis focuses on the stakeholders and the key players in this project that governed the decisions towards the events of this historical monument. The power matrix and stakeholder influence are examined, and the problems of project coordination and learning that caused the financial disarray are identified. These aspects of the project will be analyzed to determine how the stakeholder management affected the outcome of the project.
1.3 Structure of the Report
In order to adequately analyze stakeholders, a frame of reference must be established. Therefore, the report begins with a summary of five articles relevant stakeholder analysis. Next, the empirical project data is presented, which includes project goals, stakeholders, financial data, organization and time management, project risks, and the end results and evaluation. The empirical data sets the stage for the Opera House analysis, which is then examined in light of the chosen articles.
As a management project, the Sydney Opera House had so many issues and fall backs that nearly any aspect of the construction can be thoroughly analyzed. Time management could also be identified as a big issue for the project and its completion. Monetary issues were a main reason that Utzon was forced out of this project, which will be touched on later in this paper. However, these aspects of the project were not analyzed as thoroughly since they were not directly relevant to the focal point of this report, the stakeholders. We chose this focus because stakeholder analysis allowed us to focus our report while also encompassing the broadest range of issues.
The Sydney Opera House is a historical project, the information gathered on the events and statistics of the project were obtained entirely through secondary sources. Journal and article databases were used as well as books documenting the subsequent events. Websites were referred to in this analysis; they were however used at a minimum to ensure that all sources were firmly credible. Several articles were used to aid in the criticfal analysis of this project. The first by Mitchell, Agle, and Wood, provides three criteria for stakeholder identification and classification in relation to stakeholder salience. The next articles, by Newcombe, and Olander and Landin, realize potential risks within stakeholders. Hobbs and Andersen’s article then assists with linking of customers and suppliers and defining their relationships. Finally, the article by Söderlund, Berggren, and Anderson identifies reasons for the breakdown of communication between clients and stakeholders.
2. Theory / Frame of reference
2.1 Mitchell (1997), “Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts” “Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts” is a thorough guide to identifying stakeholders, and realizing what attention to give them. After extensive research of existing theories and methodologies, the authors are able to contribute to their own theories of stakeholder identification and theory of stakeholder salience. Their theory of stakeholder identification sets out to answer “who or what are the stakeholders”(Mitchell, 1997; 853).
Some analysts such as Freeman give broad
definitions of stakeholders (“any group or individual who can affect or is affected by the achievement of the organizations objectives”)(Mitchell, 1997; 854), while Stanford Research Institute gives a more narrow definition (groups “on which the organization is dependent for its continued survival”). The authors of the article, Mitchell, Agle, and Wood, strive for a balance of theories by giving each stakeholder a class as determined by three characteristics: power, legitimacy, and urgency.
Power is best defined by
Weberian; “…the probability that one actor within a social relationship would be in a position to carry out his own will despite resistance” (Mitchell, 1997; 865). Etzioni also further distinguishes power into three categories; coercive (use physical force or restraint), utilitarian (use of monetary material resources), and normative (symbolic, such as status). Any party that has and uses one of these can be seen as having power. Legitimacy is often associated with power, which can be a mistake. Those who may have legitimacy may not have power, while those who have power may not be legitimate. The combination of legitimacy and power is defined by Weber as “authority”. Legitimacy may be the hardest aspect to define, as it is variable within the context of a project. However, the authors accept Suchman’s definition, summarized as a perception that the actions of an individual or group are appropriate within social norms. The last attribute is urgency, requiring two factors, according to the authors: when the aspect is time sensitive and whether or not it is important to the stakeholder. While these three attributes are variable among stakeholders, any party with one of these attributes can be seen as a stakeholder. A non-stakeholder is one who posses none of the three attributes. Those who do possess one or more of these attributes can be seen as part of one of 7 distinct classes based upon all the combinations of the three attributes. Through these seven classes, the importance and actions to be taken for each specific class become clearer. The classes are broken into three types, the first being latent stakeholders.
These are stakeholders who possess only one trait and may be less apparent stakeholders than the other two groups. The dormant stakeholder has only power and little relationship to the firm, must be noted but usually not acted with. However, if the dormant stakeholder gains legitimacy or urgency, he may become a threat. The next type is a discretionary stakeholder who has only legitimacy. This usually comes in the form of volunteers or nonprofit organizations, preaching corporate social responsibility. Managers may choose weather to engage with these stakeholders. Next is the demanding stakeholder, which is no more than a casual annoyance since they hold only urgency. The example given is a picketer protesting that the end of the world is near and that the company is to blame. The second group is expectant stakeholders. These stakeholders hold two of the three attributes, and usually must receive attention. Dominant stakeholders hold power and legitimacy. Because they have the power to act on their legitimate claims, dominant stakeholders usually have a formal medium in place that realizes their importance, such as a human resource department or a public affairs office.
They also are the reason for documents such as annual reports and environmental reports. Next are dependent stakeholders, who hold both urgency and legitimacy. They use others with power to carry out their will, possibly through acting alongside government or top management. The last of this group are dangerous stakeholders, who have urgency and power but no legitimacy. The title is indeed relevant, as usually these stakeholders use coercive power to obtain their objectives, including terrorist attacks, vandalism, kidnapping, and theft. Dangerous stakeholders must be identified without acknowledgement. The last group of stakeholders is the most salient, and they are definitive stakeholders. They posses all three traits and usually move from being a dominant stakeholder by obtaining urgency. There is no question that this group must be dealt with as quickly and efficiently as possible to avoid drastic repercussions.
example given is stockholders who have power and legitimacy obtaining urgency through the drop of stock prices.
The identification of stakeholders and the degree of salience of stakeholders so identified allows managers to better understand where their focus should lie. The authors stress that common practice ignores urgency and power while focusing on legitimacy. Only through this realization of all three factors can managers “serve the legal and moral interests of legitimate stakeholders” (Mitchell, 1997; 882).
2.2 Hobbs & Andersen, 2001, “Different alliance relationships for project design and execution”
During the second half of the 1990s, a study was performed by the IMEC program among 60 large engineering projects. The aim of the study was to identify the best practice of management of such projects. Hobbs and Andersen (2001) summarize the alliance relationship aspect of these studies and propose a model in which they define four different types of relationships. Distinction is made between traditional, arm’s-length contracts and relational co-operations during the execution phase of the project and between internalized and coalitional processes in the front-end phase. These four configurations/ types of customer relations’ management all have their advantages and disadvantages, depending on the nature of the project. We will list the four configurations, describe some of their characteristics as well as advantages and disadvantages.
2.2.1 Traditional sponsorship
This is the first type of arms-length contract, meaning that suppliers are awarded contracts through a bidding process. They are expected to provide an already specified good or service to the project owner, and have little opportunity to influence project development or design, which is internalized. Here the owner maintains tight control, and the cut-off point comes late in the project, after the design process. The cut off point is where the suppliers are integrated into the project. This type of relation can be advantageous to a firm that needs control over the whole project and has a specified need concerning the design and functionality of the end product. However, it limits innovation, requires extensive management efforts and puts most of the completion risk on the owner.
2.2.2 Partners in ownership
Like in a traditional sponsorship, this configuration means that supplier relationship is kept at arm’s-length distance. The main difference is that the supplier enters the project early in the design process and thus has a greater possibility to influence design. The completion risk is shifted largely to the supplier and a more limited management effort is required from the owner.
2.2.3 Partners in design and execution
As opposed to the previous two configurations, these collaborations take on a relational approach. One criterion for this configuration is that the project is characterised by some form of relational contracting between a
large owner and the firms it hires for project design and execution. Another criterion is that it’s an experiment initiated by the owner and that it springs from necessity.
The authors here distinguish between four different sets of practices. We will give a very brief description of all four:
Partnering: “an arrangement between an owner and contractors after contracts have been competitively bid” (Hobbs and Andersen 2001). Relatively close collaboration, communication, team-building and good management of change requests are key features. This practice has shown great improvement in cost reduction, more efficient schedules, quality and litigation. However, the disadvantage is that it tends to leave potential gains in design and construction unexploited.
Frame agreements: stands for long-term contractual relations that cover either a number of projects or a range of products/ services. Trust is a very important feature as the project owner seeks to use all resources available in the supplier organization and reduce the number of suppliers. This practice leads to gains in operational efficiency and helps avoid delays and cost overruns since the competitive bidding process is left out.
However, it leaves the owner heavily dependent on the supplier’s competencies and good will.
One-off Integrated Project Teams: Here teams of suppliers come together for a specific project and owners are large organizations with formal processes for selecting projects. The suppliers are brought in at an early stage, sharing their ideas and knowledge and a feasible design is decided upon commonly. The contract strategy often involves fixed-price contracts or cost reimbursable contracts with a guaranteed maximum price. This practice has often led to exceptional performance and technical innovation. It requires a long period for the design phase and usually involves a great number of participants which is costly and time-consuming, although it’s expected to
give outstanding results.
Sticky Informal Networks: Relations are based on informal exchanges and expectations instead of formal contracts. This type of practice is highly influenced by history and culture and particularly common in France and Japan. It is therefore not suitable for projects where the parties are from very different cultures. 2.2.4 Relational development and execution
In this configuration the same firms are involved in both front-end development and the design and executions phase. Projects like this tend to either form separate companies or joint ventures. It is the most common configuration today and often used in infrastructure building projects, financed by the public. The owner’s role in these projects is limited and the suppliers form groups who take on the responsibility for executing the whole project. Superior performance is often required to give the project legitimacy in the public eye. This configuration has a number of factors contributing to superior performance. Among these are scrutiny by various pressure groups, pressure from peer firms with similar knowledge, an integrated business perspective and efficiency in the execution phase since the executing firms participated in the design process. These types of projects can be very lucrative, but their magnitude also implies a great risk by putting pressure on the owning firm to diversify risk on other projects. Otherwise they may find themselves in a very uncertain position.
2.3 Newcombe (2003), “From client to project stakeholders: a stakeholder mapping approach”
In this paper, Newcombe begins by affirming that the concept of client is obsolete, replaced by the idea of project stakeholders. Instead, there are sorts of “multiple clients”, which involves taking into account not only the client but also the whole community. These multiple clients have interest in the organization, thus it is important that the project’s and stakeholders’
Newcombe defines the project stakeholders as “groups or individuals who have a stake in, or expectation of, the project’s performance and include clients, project managers, designers, subcontractors, suppliers, funding bodies, users and the community at large” (Newcombe, 2003; p.3). Thus, they can be people inside or outside the project. Stakeholders interact especially within two fields: the cultural arena, where they share values and reinforce co-operation; and the political arena, which can be subject to expectations’ and objectives’ and conflicts between stakeholders. One of the main purposes of Newcombes article was to make an analysis of the stakeholders through mapping. To assess the importance of stakeholders’ expectations, one must answer three questions: how likely each stakeholder group is to enforce its expectations on the project, his means, and the impact on future project strategies. Two methods are developed: the power/predictability matrix and the power/interest matrix.
Stakeholders of different zones may interact, and when a decision is made it can have repercussions on the behavior of another group of stakeholders. Zones A and B, even if they have less power, can influence the other zones. Managing them is very important too because it helps avoid the tendency of re-positioning (especially from zone C to D). Newcombe also mentions the fact that a group can change position during the development of the project.
To sum up, these mappings allows the project manager to assess the cultural
and political context of a project, and address the question of repositioning and maintaining the level of certain stakeholders or not. Project managers also have to deal with some ethical issues. For instance, there is the problem of deciding whether to give in to some stakeholders’ demands instead of staying impartial and logical. Moreover, to expedite decisions, the project manager can resort to an alliance with outside stakeholders. The more ethical Kantian approach states two principles: all the stakeholders should have benefits in the project and the project manager should be the trustee interaction between stakeholders and the project.
To complete the article of Newcombe, we used the article of Olander & Landin. They give a definition of stakeholders and add that they can be a threat or a benefit. The point is to identify “stakeholders who can affect the project, and then manage their differing demands through good communication in the early stages of a project.”(Olander & Landin, 2005; p.7)
Bonke and Winch also developed a stakeholder map, which includes proponent and opponent stakeholders, problems identified by them, and their suggested solutions to the problems.
Two examples are taken in the article, which deal with external stakeholders’ issues. The first project analyzed is the housing project in Lund. The main problems were with residents in the vicinity because buildings affected their environment and with groups for the preservation of the cultural and historical image of the city. The municipality persisted in supporting the real estate developer. The second project was a railroad project in Lund. All the alternatives for the location of the railroad track had not been envisaged (the chosen option was to build it along the existing single track route) and residents were strongly opposed to this solution as they would be affected by the growing traffic.
Both projects were appealed in court because of such strong opposition. The main consequences were delays and cost overruns. In both cases, the mapping of power and interest evolved during the progress of the project.
2.5 Berggren, Söderlund & Anderson (2001), “Clients, Contracts and Consultants: The consequences of organization fragmentation in contemporary project environments” The article ‘Clients, Contracts and Consultants: The consequences of organization fragmentation in contemporary project environments’ highlights many issues that have come across several companies during their respective projects. While management issues have usually focused on the actual project team and their client, it has become more and more apparent that in today’s competitive environment the focus needs to be on the relationships between the parties involved in a project. It is now more common for external consultants or engineers to be hired on behalf of the client. This methodology is known as the Agency theory (Söderlund, Berggren & Anderson, 2001). Where a principle hires an agent to perform tasks affecting the principle(for example a client hiring a lawyer to govern the best decisions on their behalf). The method centres on the problem of handling the risk of opportunistic behaviour of the agent as they are the ones who are required to act.
Another case theory cross referenced is that of the transaction cost economics by Williamson. Transaction cost economics analyses the boundaries of a firm and when activities should be performed in house or contracted out. This theory predicts that if uncertainty and the degree of uniqueness are high, then activities should remain within the firm to avoid opportunistic behaviour from an outside firm. These theories are based on dyads, the case studies analysed in this article have a triad relationship.
caused the problems of control, cooperation, and opportunism to become substantially more difficult.
Upon viewing these triad relationships and the organizational fragmentation it created with the three case studies in the article, three situations arose: 1. The problem of co-ordination
2. The problem of the absent customer
3. The problem of learning
Comprehensive contracts and plans are not enough to navigate and coordinate large projects in this day and age. Complex engineering and interdependent activities will most likely have a high degree of uncertainty and will require other forms of coordination. This will often lead to a bureaucratization of communication that will in turn increase the control costs. As more consultants and technical engineers are hired to supervise a project, it becomes hard to distinguish who has the ability to give what orders. This in turn introduces rigidities to the project and obstructs innovation in project execution as the management flow is lost.
If the client or operator of a firm delegates all responsibilities to external consultants, suppliers lose opportunities to reach tradeoffs between project cost and operation benefits. When the communication from the client is cut, it becomes difficult to identify what solution they might benefit from most, and the goal of the project may be led astray from other firms representing the customer. The absence of the clients input will complicate the relationships between the hired firm and delimit the possibility of future transactions.
Knowledge building is a key component in building successful companies. It is important to draw on previous experiences in order to move forward in the project. Contractor outsourcing of on site management roles eliminates the possibility of interpersonal feedback channels since the experience learned in a project will be taken when the hired firm leaves. For example if an external firm is hired to collaborate with another firm for a particular task, the work they do to complete a project would have been split between them. When the project is to finish, the experience gained from the project would have been shared between them, leaving the knowledge to be scattered when communication channels break down. With these points in mind, the future will require a more developed understanding of project execution in order to avoid costly mistakes with organizational restructuring. This means that project managers will have to have a more comprehensive assessment of the risks and costs, not only on the financial level, but the impact of the relationship between top management, organization structure and the client. These relationships are a key component in maintaining a balance with the client between project completion and client satisfaction.
3.1 Goals of the Project
At the beginning of any project, goals and objectives have to be clearly defined by the client to provide a guideline for what the project must complete. There are three main factors, which constitute the iron triangle: time, cost, and quality. In the case of the Sydney Opera House, no indication regarding time or cost limits were provided for the competition. Thus, the architects were allowed total freedom in their designs. So after Utzon was selected, he presented his “Red Book” in March 1958, which consisted of the Sydney National Opera House report. It comprised some indications such as plans, sections, reports by consultants, etc. The cost restraint was set to AUS$7 million. The funds came almost entirely from a dedicated lottery, so the project was not a financial burden for the government. Finally, there were 400 contractual contributions gathered for the building and 165 companies that took part in the project (Tombesi, 2004).
A goal concerning time was to complete the construction at the end of 1962 and have the grand opening at the start of 1963. The project should have lasted four years. However, the most important factor was quality because it was an almost unrestricted goal of the project. It was the reason why it was launched, and it also determined the time and cost objectives. There was the design quality, which comprised the goal of building two halls. The first one needed a capacity of 3,500 to 4,000 persons for orchestra and opera concerts and the other one, 1,800 to 2,500 for chamber music and other shows (Murray, 2004). But the aim was also to make the new Sydney Opera House one of the worlds architectural wonders, inspiring world recognition and admiration. Another part of the quality concerned the logistical aspects; providing the basic facilities like heating and ventilation, solid foundations and perfect acoustics in the rooms. In the case of the Sydney Opera House, the goals set at the beginning proved to be quite overoptimistic within the time and cost restraints (Murray, 2004).
3.2 Stakeholders and Partners
The main stakeholder, the one who did the design of the Sydney Opera House, was the Danish architect Jørn Utzon. He won the 1957 international competition thanks to his vision of the exterior of the building. But Utzon was much more concerned with the design aspect rather than time and costs objectives, which proved problematic. When he resigned in 1966, the architectural consortium Hall, Todd, and Littlemore replaced him. During the project, Utzon collaborated with Ove Arup, who was in charge of the structure and the engineering. With some other subcontractors, the team was in charge of mechanics, electrics, heating and ventilating, lighting and acoustics. There was no real project manager, but rather a collaboration between Utzon and Arup. Another of the most important stakeholders is the client, the state of New South Wales. This encompasses the Australian government, which launched the competition for the project, and especially the Labor Premier, Joe Cahill. A part-time executive committee was created by the client to provide project supervision but the members had no real technical skills. The government eventually became an obstacle to the project team by inhibiting changes during the progress of the operations and thus contributed to cost overrun and delays. When a more conservative
Liberal Party won the elections and a new government was created, Davis Hughes was appointed Minister for Public Works and eventually stopped paying Utzon.
Some other stakeholders were the external companies and consulting firms. The construction of the project required the use of new techniques (computer-based threedimensional site positioning devices, geothermal pumps…) and it was outsourced to new consulting bodies like such as Unisearch.
Finally, the public was an indirect stakeholder because they were concerned with the projects success. And while only some citizens would be customers of the Opera House, the Opera would also prove to be an integral part of Sydney and the country’s history. In addition, the public contributed to the funding of the Opera through a lottery set up by the Government. Utzon also became part of the public’s perception of the project, and when he resigned, the Australians supported him and asked for his return (Murray, 2004).
Regarding organization within the Sydney Opera House Case, it is documented that there was no real project manager. Instead, Utzon and Arup both managed the project. Utzon managed all architectural aspects while Arup and his partners were in charge of all structural and civil engineering aspects. This included electrics, heating and ventilation, and acoustics and theatrics. This strayed from the traditional model from the 50’s where the architect took on nearly the entire management role. The old way of doing things involved the architect designing the building, taking it to the engineer and asking if it would stand up (Murray, 2004). However, times were changing and the complex modern buildings that dominated the time required the engineer to be part of the design team. But the competition led to the selection of Utzon’s design before it could have the input of an engineer. Therefore, while Utzon and Arup headed the project together, there were eventual problems. The client, New South Whales (NSW), formed an oversight committee to keep an eye on the project, which was known as the Sydney Opera House Executive Committee (SOHEC). It is to be noted that this body was mostly political with very little technical experience. There was also the construction team, which was contracted very early in the process. In addition, Utzon and the team helped organize a public lottery to assist in the funding of the Opera. The actual project was divided into three stages. Stage 1 was the podium, stage 2 was the outer shells, and stage 3 was the interiors and windows (Murray, 2004). These stages proved later to be a large problem, because the design team and the construction team would often work simultaneously, which is difficult to do with a continually changing design.
The Sydney Opera House could probably be seen as one of the most financially disastrous construction projects in history. The winning design from the competition was originally meant to have a budget of AUS$7 million. Initially the cost of the Opera House was estimated at AUS$3.6 million from the design entry. When Utzon submitted his refined designs ‘the Red Book’, the estimates were then calculated by a quantity surveyor at AUS$4,781,200 (Murray, 2004). The NSW Government decided not to invest any money into the Opera House because they saw that their obligations lay with the support of current public issues, and decided to donate no more than AUS$100,000. They then set up the Opera House Lottery for the public, which ran through the course of the construction and generated enough funds to keep the construction going. Stage one saw the construction of the podium and the foundations for the building, the tender for this work was set at AUS$1,397,878. This initial estimate was however drawn on incomplete design drawings and site surveys which later lead to disagreements. The contractors for this first stage successfully claimed additional costs of AUS$1,232,000 in 1962 due to the loss of money from design changes (Murray, 2004). When stage one was completed in 1963, it had cost an estimated AUS$5.2 million and it was already 47 weeks over schedule for the whole project.
Stage two became the most controversial stage of the entire construction. As costs were rising a new government stepped in and monitored all payments being requested by the Opera House. By the end of stage one, Utzon submitted an updated estimate of the projects total cost as AUS$12.5 million, and by March 1964 he submitted another estimate totaling AUS$17.4 million. It was at this time that the government decided to take more firm action towards the expenditure of the Opera House, and on July 17 they issued a statement declaring that the costs be reduced to Utzon’s original estimate of $12.5 million (Murray, 2004). As more payments were being delivered and no visible progress was seen, the government began withholding payments to Utzon. Stage two was beginning to slow down and in 1966 Utzon felt he was forced to resign from the project as his creative freedom was restricted, and therefore could not bring his perfect idea to fruition. The project was taken over by the three Australian engineers as mentioned earlier, and stage two was completed in 1967. The cost of stage two came to a total of AUS$13.2 million, which pushed the cost of the project beyond Utzon’s last estimate to a total of AUS$18.4million.
When Utzon walked out of the project, he did not leave any designs or sketches to work with, he was convinced that he would be called back to the project once the new team failed. This was not so, and due to the lack of designs to work with, new ones had to be created. The new architects had to design the interiors based on the current structure of the Opera House and they encountered many unforeseen complications. Evidently this caused a huge increase in the estimate of the total cost of the project, which came to AUS$85 million. This came as a shock and nearly an insult to Utzon who had been fending off the Government from rising costs for years. The news that they had agreed to this cost, which was more than four times Utzons original estimate was evidence that he had been unjustly treated. Stage 3 ended up costing AUS$80.4 million, which brought the grand total to $98.4 million. In May 1974, the minister for Public Works announced that the final bill for the Sydney Opera House was AUS$102 million (Murray, 2004).
The lottery system that was created to help fund the Sydney Opera House, was largely responsible for the prompt reimbursement of the construction bill. According to Jahn (1997), the construction bill was fully paid for by 1975 only two years after it opened.
The timeline of the project was dramatically altered throughout the project. After the decision was made to build the opera house, the design competition was held in 1956 to find an architect. After selecting Utzon in 1957, the original schedule was made. The estimated completion was 1962, with the grand opening in 1963. In 1958 Arup was selected as the structural engineer, and by January 1959, the design team was well underway and the construction team was contracted. In 1961 the reinforced concrete foundation was completed. Arup completed the design for the roof in 1962, about the same time the project was originally intended to be finished. Instead of 1963 acting as the grand opening year, portions of the foundation had to be demolished in order to support the new roof design. However, February 1963 marked the end of stage one and the beginning of stage two of construction, which was the building of the shells. In 1965, the project was still far behind, and the client decided, specifically David Hughes (the Public Works Administrator), to reclaim payment responsibilities (Ramroth, 2006). He used his new power to stop meeting Utzon’s funding requests. In 1966, Utzon quit the project and the replacements were announced.
There were protests on the State
Parliament House for Utzon, but Utzon was never again to return to this phase of the project. In 1967, stage two of the project was finally completed. By 1972, there were test performances in the house, and finally, in 1973, the project was finished. The opening occurred on October 20th, 1973 and even included Queen Elizabeth II. In 1999, Utzon was reinstated as a design consultant to prepare the Opera House for the new millennium (Murray, 2004).
3.6 Risks of the project
The Sydney Opera House encountered a multitude of risks and delays throughout the project. The design competition was a great incentive to find new talent by many international architects, but it also failed to review how much experience the entrants had with large scale projects. Utzon was later found to have not enlisted the assistance of any engineers for their approval of his design before submitting it in the competition.
The internal risks of this project were seen within the management and organization of the construction. There was no project manager appointed to the job, and it was assumed that Utzon was to take the role for all decisions regarding any design, construction or development. In actuality, it was Arup who was in charge of construction and development, even though Utzon usually had the final decision. So while the responsibilities should have been 50/50 between Utzon and Arup, Utzon strived for more control than he had. In addition, since Utzon was unquestionably the leading professional in the team, the other members expected that he would control the program and produce the drawings for construction. The power given to Utzon saw many re-designs and rebuilds of several aspects of the Opera House, this caused many delays and cost overruns that eventually caused the distrust of the Government. The formation of SOHEC was used as a way to guide the process and design of the Opera House. However they never really had much input, they mostly agreed to Utzon’s requests and never had any problems with the issues that were coming up.
However after two full years of construction, the appointed committee wanted to increase the number of rooms inside the building, showing that they tried to have input, but lacked the technical knowledge to do so. To change the design of the building so late cost the project a lot of time and money as a lot of re-structuring was required. This lack of knowledge of what was required and how it should be handled was a large pitfall in the management of the Sydney Opera House.
A great external risk was the general failure of the project, since it was so deeply rooted with the public of Sydney. If the project were to fail, it would reflect on the ability of the Australian work force in construction. On top of this, the NSW government had a large impact on the construction. While Utzon largely controlled the initial stages, by the middle of the second stage the government thought it was best to step in and control the budget of the construction.
There were numerous technical/quality/performance risks involved in this project. The construction techniques that were required for many parts of the construction had never been done before, and while Utzon was breaking new ground in architecture, the process for completing his design was unclear. For the first time in construction, computers needed to be used to calculate stress points within the roof of the Opera.
House. With all these new technological advancements in construction, it is no wonder the cost estimates were understated. Another risk was the fact that Utzon was required to start the construction of the project before his design was even close to finalization. While the groundwork was taking place, he still had to design the interior of the building, and the way in which the roof was going to be supported. He also had to ensure the design of the interior space was adequate to accommodate the number of seats for a large audience (up to 3,500). One of the main problems faced in the project was the construction of the outer shell. The initial design never would have been structurally sound. To make matters worse, the design of the interior rooms kept changing, which constantly meant that the outer shell design had to change with it (Murray, 2004).
3.7 End Results
As mentioned, the Sydney Opera House opened in 1973 by Queen Elizabeth II, after 17 years of redesigns, underestimates and cost overruns (sydneyoperahouse.com). By 1975, the building had paid for itself, its total cost amounting to over AUS$102 million. The building holds over 3000 events per year and more than 200 000 come only to attend the guided tour (Architecture Week, 2009). It encompasses over 4.5 acres of land, and uses the power equivalent to a town of 25,000 people. The seating capacity of the main concert hall is 2,679, while the Opera Theatre holds 1,507 (Sydney, 2009). The construction consists of three groups of interlocking shells roofing two main performance halls and a restaurant. Terraces that function as pedestrian concourses surround the shellstructures. The building is one of the architectural wonders of the world, and included in the UNESCO World Heritage List. Some performing groups that utilize the Opera House are Opera Australia, Sydney Symphony, Sydney Theatre Company, The Australian Ballet, Australian Chamber Orchestra, Bangaraa Dance Theatre, Sydney Philharmonia Choirs, and many others.
Today, more than being a world-class performing arts centre, the Opera House represents Sydney and even the whole nation the same way as the Eiffel tower represents Paris. It’s known not only for its outstanding architecture, but also for exceptional engineering and technological innovation. Moreover, it has had a continuing influence on architecture around the globe. However, there are still complaints from some parties on the acoustical properties as well as on the inadequacy of support spaces (UNESCO, 2009). Steps were taken and completed in 2004 towards the correction of the acoustics, but the hall still may undergo changes in the future. Utzon created a set of design principles in 1999 that guide how changes are to be implemented to the structure. Utzon was never to return to Australia, never to see the final result of his work. His work was recognized as an incredible feat of architecture, and in 2003 Utzon was honored with the Pritzker Prize for architecture, the most renowned architectural prize in the world. On November 29th, 2008, Utzon passed away at 90 years of age.
Mitchell’s article, “Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts” can assist with the analysis of the Sydney Opera House stakeholders. By determining which potential stakeholders hold which of the three stakeholder attributes, one can identify stakeholders.
Next, stakeholders can be grouped and analyzed within their salience. In classifying the stakeholders of the Sydney Opera House case, it is important to remember the definitions of the three attributes. Power enables one to act despite resistance of others, legitimacy is being seen as acting appropriately within context norms, and urgency relates to time sensitivity and importance to the stakeholder (Mitchell, 1997). And while the interpretation of the Sydney Opera House stakeholders may not coincide completely with Mitchell’s interpretations of stakeholder class, analysis is always dependent on the context of a project, and all stakeholders are variable. That being said, 13 primary stakeholders have been identified within the three groups of the “Theory of Stakeholder Identification and Salience”.
Government’s requests should have always been held in top priority. Utzon failed to recognize this.
The next set of stakeholders, which are by far the largest group, are the expectant stakeholders. This includes dangerous, dominant, and dependent stakeholders. The two dangerous stakeholders, holding power and urgency, are Public Works Administrator David Hughes and Utzon. There is no question that both had power: while Utzon was part of the project he was able to push for whatever project design and monetary requests he desired, and Hughes was eventually able to use his power to overthrow Utzon. The project was urgent to Utzon because of its importance to his career and reputation, while Hughes was urgent due to his time constraints and restraints pushed on him by the NSW government. What truly made these parties dangerous was their lack of legitimacy.
Within the eyes of the definitive stakeholder, Utzon was not legitimate, as demonstrated in his loss of power: “In the long run, those who do not use power in a manner which society considers responsible will tend to lose it (Mitchell, 1997; 866)”. And while Hughes was seen as legitimate at the time of the project, in retrospect it is clear that his actions tainted the integrity of the project. Both Hughes and Utzon can be described as jeopardizing the success of the project. The next set of stakeholders are the dominant stakeholders, who hold legitimacy and power, and include SOHEC and Arup. SOHEC was sanctioned by the government, therefore legitimate, and had power to enforce their will. However, because they rarely used their power, especially while Utzon was part of the project, they lacked urgency. And while the project was no doubt important to Arup, his actions spoke differently. He allowed Utzon to take control, and sometimes appeared to be in the project only for the recognition, rather than time and cost focused completion. The final group within the expectant stakeholders are the dependent stakeholders, who retain urgency and legitimacy. This includes the design team, the engineer team, the consultants, the suppliers, the contractor, the construction workers, and Hall, Todd, and Littlemore. All these groups lacked the power to address their urgent and legitimate concerns without the assistance of Utzon, Arup, SOHEC, Hughes, or the NSW Government. They were therefore dependent on those with power. These stakeholders relied on the management to remain employed and content, which is why they were also urgent.
The last class are the latent stakeholders. Many of these are difficult to identify because the possibilities of latent stakeholders are almost infinite. However, within the empirical data provided, we can recognize one discretionary stakeholder, meaning they hold only legitimacy. This is the public. The public served primarily as an indirect stakeholder, acting as more of a watchful eye than an involved participant. While the public primarily held only legitimacy throughout the project, they easily obtained urgency, such as when they protested for the return on Utzon after he left. This shows the unpredictable nature of the stakeholders involved in this project, which will now be classified.
The first group identified is stakeholders with few problems. They have minimal influence on the project, which means they have a high predictability and low power. These are the consultants, design team, and engineering team, who depend on the executive committee SOHEC; and construction workers, who are a labor force, executing the construction. Next is the unpredictable but manageable public. They support the project since it will become part of their country’s culture and history, but they have no real power and are quite unpredictable at this early stage. The next group contains, among others, the “lottery”. They are funding entities, which have the power to give funds or not. Thus, they are predictable and very important for the progress of the project. The government and Arup also fall under these restrictions because their lack of urgency allows them to be predictable. The government also gives directions to Labor Premier Joe Cahill, who was largely responsible for the prompt start of the construction and was a particular supporter of the project; and Arup and his team, are responsible for all engineering aspects. Finally, the stakeholders representing the greatest danger or opportunities are Utzon and the SOHEC. Utzon had a high power since he was in charge of the whole design of the project, but he was also very unpredictable because he often added things or instilled changes without considering other opinions or additional difficulties (costs, delays, realization…)
The second matrix concerns the level of interest and the power. In this matrix, public and construction workers are categorized as needing minimal effort from management. The public is not really interested in the project at this stage and have no power to influence it. The construction workers also require a minimal effort since their interest in the project is limited to employment. The consultants, design team, and engineering team have to remain informed because they do not really have power in the project but their interest is high. This is because they see the project as a financial income, but if it is a success, it would also benefit their reputation. Funding entities which took part in the lottery have to be kept satisfied because they hold the power to give more or less money to the Opera House, but have also low interest as long as they do not have return on investment; thus they have the potential to become dangerous and have to be carefully managed. Finally, we distinguished four key players, Utzon, Arup, the NSW Government, and the SOHEC. Utzon and Arup are powerful as we said earlier, but they have a high level of interest in the project since Utzon could become one of the greatest architects of his century, propelling his reputation to new heights. The same holds true for Arup. The government wants to prove to the world they can make a world marvels with the Sydney Opera House, and the SOHEC was involved to make sure the project went smoothly.
Utzon resigned in 1966, thus, we then focused on the new matrixes since some stakeholders changed position, and others appeared.