ORGANIZATIONAL BEHAVIOUR REPORT: FYRE FESTIVAL

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Introduction

The overall success of an organization is dependent on its organizational structure, culture, and management approach. The organizational structure is the system, which provides an outline of how all the activities will be directed, and conducted to achieve the overall goals of the organization. In this case, the activities entails the rules, roles, and responsibilities that are provided by the employees (Ahmady et al., 2016). In addition to that, the organizational structure will determine how the information will flow between the employees at different levels within the company. The organizational culture entails the behavior approach of a company based on its shared beliefs, and values that have been established by an organization’s leadership, communicated and reinforced using various methods to the employees, and which ultimately shape the employees perceptions, overall behaviors and understanding (Burton & Obel, 2018). Fyre Media had a poor organizational culture and structure, which contributed negatively to its financial problems, costly marketing strategies, and ineffective operations, which ultimately contributed to the failure of the Fyre Festival. In this report, there will be an assessment of the analysis and root causes, provision of the decision criteria, and provision of the recommendations which will ultimately ensure that in future the Fyre Festival will be successful.

Analysis and Root Causes

The root causes of the failure of the Fyre Festival can be divided into the following sections: poor organizational structure and culture, poor financial planning, use of costly, and risky marketing strategies.

Poor Organizational Structure and Culture

Fyre Media did not have an effective hiring process. A successful organization is the one that is able to hire the right people, and who will fit into the company’s culture. The employees were not experienced in event planning, which made it difficult for them to identify the challenges that came with organizing an event of such magnitude (Ahmady et al., 2016). For instance, the company tasked first-time employees with critical roles in the festival planning, which contributed to its failure. This was Grant Margolin, the company’s chief marketing officer first involvement with event planning, and he was overwhelmed by the responsibilities that he was tasked. Margolin was a poor fit for the company, and this was attested by two of his former work colleagues for this festival who reported that, other than presenting himself as a marketing genius, he did not value the input of his team members.

Fyre Festival would have focused on ensuring that they built the right organizational structure. This would have been achieved by having a clear chain of command. It means that, the leadership of the company is structured in a manner that the employees have clear roles, there are specific rules of operation, and there is effective distribution of work for the employees in the organization (Kanten et al., 2015). Secondly, there was the need to improve the communication in the organization. It was clear that at Fyre Festival there were communication issues. For instance, the finance sector of the company failed to inform the employees that they were experiencing a strain in their finances (Shahzad, 2014). This is an indication of the breakdown of communication among the employees in the organization. Thirdly, there is the need to align activities and plan the right tasks for an organization. There is the need to develop a comprehensive plan to show the breakdown of the structure, alignment of resources and monitoring tasks completion. In addition to that, activities should be aligned in relation to the planning process of the organization.

Fyre Festival had a weak organizational culture. The organizational culture determines the proper way that employees behave in an organization, their shared beliefs and values that are established by the leaders and which are used to reinforce the employees’ perception, understanding and behaviors (Gochhayat et al., 2017). This is reflected in this organization as McFarland approach to the challenges that faced the organization was that it was a ‘whack-a-mole’ game, which meant that the organization did not have an effective strategy to solve its issues. This was the mindset that a majority of his employees displayed when dealing with challenges (Tsai, 2011). Chloe Gordon the hired talent producer stated that when the event planners proposed for a delay, one of the members of the marketing team replied by stating, “Let’s just do it and be legends, man.”

An effective organizational culture has to be generated from the leadership of the organization. The leaders should define the proper way that the employees should behave, the beliefs that they should uphold and the values of the company (Acar & Acar, 2014). This was lacking in this organization starting from the leadership and contributed to the failure of the festival.

Financial Challenges

Fyre Festival faced a variety of financial challenges that were mainly founded on the poor leadership and lack of expertise in organizing festivals. For instance, a majority of the tickets that were sold were the $500, which could not meet the costs, or fund the planning process of this event. Second, the company used its finances poorly. For instance, the company had used $2million on alcohol, while failing to pay their main acts in the festival, which ultimately contributed to Blink-182 announcing they would not perform in the festival. In the end, Fyre Festival failed to secure a reliable sponsor who would have assisted them to meet their costs, and possibly made the event successful. Although Comcast was initially willing to provide a $25 million deal to Fyre Festival, they withdrew their offer after conducting due diligence on the festival.

Marketing Strategies

One of the company’s marketing strategies, led it to lose the initial location for the event. Fyre Festival violated the stipulations that they had been provided for hosting the festival at Norman’s Cay. Even after the deal was canceled, Fyre Festival continued to promote the festival as taking place in Norman Cay, although it had been moved to Roker Point on Great Exuma. In addition to that, it paid a lot of money to its 250 social media influencers to post an orange square on their social media pages (Chan & Yazdanifard, 2014). For instance, Kendall Jenner was paid $250,000 for the post, which she did not classify as an advertisement. In addition to that, this strategy failed to attract the interest of a majority of premium customers as most of the tickets that were sold were the $500 tickets, which were the cheapest, and failed to ensure that the company had enough funds to meet the costs of the festival.

Decision Criteria

In future, for a second Fyre Festival to be successful, there is the need to establish the following:

The development of an organizational structure that provides a clear indication of the job roles of all the employees, their shared responsibilities, and the design of an organizational chart that informs the employees the personnel to contact when things go wrong.

There is the need to have an effective hiring, training of employees, and if need be termination of employees, and this can be realized by the organization having a human resource department. This means that they should hire experts in tasks that they are unable to accomplish.

Creation of an effective financial plan for the organization whereby the organization will have a reliable framework that it can use to attract employees.

Developing the right marketing strategies that will ensure the right audience is aware of the company’s activities and make sure that they are cost-effective.

There is the need to use the right strategies to motivate the employees.

The company’s leadership should play a primary role in developing, communicating to the employees, and enforcing an effective organizational culture. The organizational culture that will be adopted by the establishment should have a positive impact in terms of shaping the employees perceptions and overall understanding of the organization. The shared values should help in the promotion of an effective work ethic by the employees.

Action Plan

The action plan is meant to ensure that the organization’s vision is realized and the company is ultimately able to meet its set objectives. For Fyre Festival, the action plan is divided into five categories to ensure that, it is effectively implemented and realized as shown in this sector.

What Actions will Occur?

The actions that need to occur for Fyre Festival to realize its goal of organizing a successful festival is establishing an organizational structure and culture. There is the need to have a chain of command from the CEO to the lowest level of employees in this establishment. Secondly, there is the need to establish clear roles and duties of all the employees, and an effective communication framework that will be used by the employees of the organization.

Who Will Carry Out These Actions?

The company’s CEO and the human resource department will be responsible for developing both the organizational structure and culture. The human resource department will be responsible for identifying the required roles in the organization, and recruiting the employees that fit the criteria that the company needs to be successful. In addition to that, they will develop the shared values of the company, communicate and enforce them to the employees to create the right perception, and working environment for the employees.

When?

All these changes should be made before the company begins planning for its second festival. Although it is expected that the company may face some challenges, they will not be as dire as the ones that the company faced in its first organization of the festival. By setting a timeline and a schedule, Fyre Media will know the right period to organize its festival.

Recommendations

Professional Leadership

There is the need to utilize effective leadership at Fyre Media. Although Billy McFarland is the ‘brains’ behind the establishment of the company, it is clear that he lacks effective leadership qualities to ensure that Fyre Media realizes its goals and objectives (Madanchian et al., 2017). Initially, the employees of the company believed in his vision and ability to attract the right investors, however, internal human resources issues arose in the company and McFarland dealt with them in a poor manner. For instance, he dismissed employees who were highlighting the challenges of the project (Lebeck & Chighizola, 2018). He failed to adhere to the advice that was provided by experts in different sectors, and did not pay his employees after the festival had flopped.

Professional leadership will ensure that the organization is in a better position to develop an effective organizational structure and culture as stipulated in the decision criteria. Organizations that have professional leaders are able to develop the right hierarchies, ensure that all the employees know their roles in the company, and develop the right values that will ensure that the employees have the right level of motivation to perform at an optimal level (Madanchian et al., 2017). For instance, the organization will be able to have an effective human resource management department, which will hire the right employees who possess the skills that the organization needs (Lebeck & Chighizola, 2018). In addition to that, the employees based on their skills, personalities and the attitudes that they have will be the best fit in the organization. It will facilitate an aspect of teamwork, which will ultimately contribute to the overall organization success.

Financial Plan

This was a significant problem for the first festival, which contributed to its flop. In the second festival, Fyre Media needs to have a list of potential investors and a plan to ensure that they will come on board. Fyre Festival will need to hire financial consultants and event organizers who will assist in the development of a budget detailing its expected costs. After establishing its expected costs, the company can then determine the ticket prices for its festival, dividing them in terms of prices. For instance, there is no need to have a lot of $500 tickets if the overall ticket sales will not meet the costs of the organization of the event, ensure that the sponsors are able to recoup their finances, and Fyre Media is able to generate a considerable amount of profit.

Developing a detailed financial plan will ensure that they are able to provide reasonable presentations to their list of sponsors. They will meet with them, and inform them on how they will use the expected funds, and their plan to repay them. In addition to that, they will inform them of the expected ticket sales, which will ensure that the sponsors are able to assess how the festival will benefit them from an advertising perspective. This means that, the sponsors will be able to see how they will benefit from participating in the festival. In the first festival, the potential sponsor Comcast Ventures considered the deal with Fyre Media but they may have felt that even with the $25 million funds, Fyre Media would not have been able to make the festival successful because they lacked a comprehensive financial plan to detail how they were going to use the funds that were made available to them.

Effective Marketing Strategies

Fyre Media had an effective promotional strategy initially. However, it implemented it in a manner that ultimately made it a flop. For instance, initially they unveiled the festival during the Web Summit in 2016 in Lisbon, Portugal, which is a large tech event. Secondly, they used influential social media influencers who led to the festival receiving 300 million impressions within the first 48 hours. However, based on its overall ticket sales, this marketing strategy can be considered to be a flop. For instance, it failed to attract a reliable number of ticket holders in its $12,000, and $250,000 tickets. This is despite using $250,000 to pay individual social media influencers such as Kendall Jenner. It means that the organization failed to attract its main target audience.

In future, to market its product, it can use a similar marketing strategy as the one used by Red Bull. The company should not focus on selling the event, but building its brand to a certain target audience (Chan & Yazdanifard, 2014). In this case, it should cover tech events on its social media platforms, sponsor technocrats and even gamers, and include the videos of such events in its social media pages. Fyre Media should then focus mainly on its target audience such as young, urban technological enthusiasts and market its brand to them through the tech events and technocrats. This may contribute to the organization having successful festivals in the future.

Conclusion

Fyre Media’s festival was a failure because of poor leadership that negatively affected its organizational structure and culture, and employee motivation. It also lacked an effective financial plan, and marketing strategy. In the analysis section, it was determined that an improvement in the organizational structure and culture would have a positive impact on the overall success of future events of the organization. In addition to that, the company needs to professionalize its leadership as this will contribute to them hiring the right, and best fit personnel to the company. Having the right employees and structure will contribute to better financial plans and effective marketing strategies, which will positively contribute to the overall success of its future events.

References

Acar, A., & Acar, P. (2014). Organizational culture types and their effects on organizational performance in Turkish hospitals. EMAJ: Emerging Markets Journal, 3(3), 18-31. https://doi.org/10.5195/emaj.2014.47Ahmady, G. A., Mehrpour, M., & Nikooravesh, A. (2016). Organizational structure. Procedia – Social and Behavioral Sciences, 230, 455-462. https://doi.org/10.1016/j.sbspro.2016.09.057Burton, R. M., & Obel, B. (2018). The science of organizational design: Fit between structure and coordination. Journal of Organization Design, 7(1). https://doi.org/10.1186/s41469-018-0029-2Chan, J. M., & Yazdanifard, R. (2014). How social media marketing can influence the profitability of an online company from a consumer point of view. Journal of Research in Marketing, 2(2), 157. https://doi.org/10.17722/jorm.v2i2.55Gochhayat, J., Giri, V. N., & Suar, D. (2017). Influence of Organizational Culture on Organizational Effectiveness: The Mediating Role of Organizational Communication. Sage Journals.

Kanten, P., Kanten, S., & Gurlek, M. (2015). The effects of organizational structures and learning organization on job Embeddedness and individual adaptive performance. Procedia Economics and Finance, 23, 1358-1366. https://doi.org/10.1016/s2212-5671(15)00523-7Lebeck, B., & Chighizola, N. (2018). Emotional intelligence and its effect on performance outcomes in a leadership development school. Journal of Values-Based Leadership, 11(2). https://doi.org/10.22543/0733.62.1223Madanchian, M., Hussein, N., Noordin, F., & Taherdoost, H. (2017). Leadership effectiveness measurement and its effect on organization outcomes. Procedia Engineering, 181, 1043-1048. https://doi.org/10.1016/j.proeng.2017.02.505Shahzad, F. (2014). Impact of organizational culture on employees’ job performance. International Journal of Commerce and Management, 24(3), 219-227. https://doi.org/10.1108/ijcoma-07-2012-0046Tsai, Y. (2011). Relationship between organizational culture, leadership behavior and job satisfaction. BMC Health Services Research, 11(1). https://doi.org/10.1186/1472-6963-11-98

Exhibition 1: Organizational Structure

Figure 1: An Organizational Structure that Fyre Festival can adopt

Exhibition 2: Marketing Strategy

9042404062730Measure Interaction

Measure Interaction

304165688975504190264350522758404529455433324028054303647440107188031902404100830Engage

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43427651784350Identify Target Audience

Identify Target Audience

-4197351727200Analyze and Strategize

Analyze and Strategize

207581598425Optimal Message

Optimal Message

Exhibition 3: Organizational Culture

Figure 2: A Framework for adopting Organizational Culture