Professional Documents
Culture Documents
Sydney Opera House Project Study
Sydney Opera House Project Study
Group 5:
Vincent Anter
Elin Hansson
Ollie McNaught-Reynolds
Annabelle Tessard
Contents
1. Introduction ............................................................................................................... 3
1.1 Background .............................................................................................................. 3
1.2 Aim of the Report ..................................................................................................... 4
1.3 Structure of the Report ............................................................................................ 4
1.4 Delimitations ............................................................................................................ 5
1.5 Methodology ............................................................................................................. 5
2. Theory / Frame of reference ..................................................................................... 6
2.1 Mitchell (1997), “Toward a Theory of Stakeholder Identification and Salience:
Defining the Principle of Who and What Really Counts” ........................................... 6
2.2 Hobbs & Andersen, 2001, “Different alliance relationships for project design
and execution” ............................................................................................................... 8
2.2.1 Traditional sponsorship.................................................................................................. 8
2.2.2 Partners in ownership .................................................................................................... 9
2.2.3 Partners in design and execution ................................................................................... 9
2.2.4 Relational development and execution ......................................................................... 10
2.3 Newcombe (2003), “From client to project stakeholders: a stakeholder mapping
approach” ..................................................................................................................... 11
2.4 Olander & Landin (2005), Evaluation of stakeholder influence in the
implementation of construction projects”................................................................... 12
2.5 Berggren, Söderlund & Anderson (2001), “Clients, Contracts and Consultants:
The consequences of organization fragmentation in contemporary project
environments” .............................................................................................................. 13
3. Empirics.................................................................................................................... 15
3.1 Goals of the Project................................................................................................ 15
3.2 Stakeholders and Partners..................................................................................... 16
3.3 Organization........................................................................................................... 17
3.4 Financials............................................................................................................... 18
3.5 Timeline.................................................................................................................. 20
3.6 Risks of the project................................................................................................. 20
3.7 End Results............................................................................................................. 22
4. Analysis..................................................................................................................... 23
5. Conclusion ................................................................................................................ 33
6. Bibliography............................................................................................................. 34
7. Appendix................................................................................................................... 36
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1. Introduction
1.1 Background
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
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
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.
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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
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
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
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evaluation. The empirical data sets the stage for the Opera House analysis, which is then
1.4 Delimitations
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.
1.5 Methodology
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.
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2. Theory / Frame of reference
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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. The
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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
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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
2.2.3 Partners in design and execution
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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.
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2.3 Newcombe (2003), “From client to project stakeholders: a stakeholder
mapping approach”
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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.
2.4 Olander & Landin (2005), Evaluation of stakeholder influence in the
implementation of construction projects”
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
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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.
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caused the problems of control, cooperation, and opportunism to become substantially
more difficult.
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
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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. Empirics
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
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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
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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 three-
dimensional 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).
3.3 Organization
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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.
3.4 Financials
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
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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.
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3.5 Timeline
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.
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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 re-
builds 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.
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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 shell-
structures. 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
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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.
4. Analysis
The Sydney Opera House Group 5 Page 23
Stakeholder Classification Power Legitimate Urgent Type
Definitive stakeholders are easiest to recognize, and in this case there is only one:
the New South Wales Government. They retain both utilitarian and normative power,
and demonstrate it through their appointment of subordinates (the Sydney Opera House
Executive Committee (SOHEC), Utzon, etc.), and their ability to withhold funds. They
have legitimacy because their normative status is upheld through law, and they have
urgency because of their dedication to the project’s completion. Indeed, the NSW
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.
The Sydney Opera House Group 5 Page 24
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 Sydney Opera House Group 5 Page 25
In the first stage of development, before the replacement of Utzon, the matrixes can be
identified as such:
Predictability
High Low
“Lottery” Utzon
Government SOHEC
Arup
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
The Sydney Opera House Group 5 Page 26
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…)
Level of interest
Low High
“Lottery” Utzon
Arup
Government
SOHEC
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
The Sydney Opera House Group 5 Page 27
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.
Predictability
High Low
Construction workers
“Lottery”
Arup
Government
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In this predictability/power matrix of the second period, Utzon was replaced by Hall,
Todd and Littlemore; but contrary to Utzon in the first period, we cannot consider them
as “greatest danger or opportunities”. They had low power and high predictability,
because they had less power than Utzon since they were appointed and under the
restriction of SOHEC. SOHEC has also been repositioned in the category of “powerful
but predictable” stakeholders because they gained predictability with the election of the
new government, which set a stricter frame. Finally, the new greatest danger or
opportunity for management became the Public Works Minister, David Hughes. He is
very powerful but also unpredictable since he is the one who decided to stop paying
Utzon and could make decisions unquestioned.
Level of interest
Low High
“Lottery” Government
Arup
SOHEC
New stakeholders, which appeared in 1966, have been categorized in this matrix too. The
first one is the architectural consortium Hall, Todd and Littlemore. As previously
explained, they do not really have power; nevertheless, they have a high level of interest
The Sydney Opera House Group 5 Page 29
and thus have to be kept satisfied. Their interest relies on the financial incentive that the
project provides and the reputation they can get from the accomplishment of it. The other
additional stakeholder is David Hughes, the Public Works Minister. He can be considered
as a key player since he is very powerful and his interest is very high, as he represents his
country.
Being a stakeholder Hughes and the government can now be analyzed by their
relationship to other key players within the construction. Following the Hobbs &
Andersen model for owner-supplier relations, the Sydney Opera House project seems to
fit best into the “Partners in design and execution” configuration. One of the criteria was
“contracting between a large owner and the firms it hires for project design and execution
(Hobbs & Andersen 2001. The state of New South Wales sure is a large owner, who
contracted Utzon to carry out the designing work, the subcontractors led by Arup for the
engineering part and other external firms and consulting companies. The project was
initiated by the NSW government on request from the conductor of the Sydney
Symphony Orchestra, Eugene Goossens. The orchestra had developed into one of the
most renowned symphony orchestras in the world and they needed a new arena for their
concerts. The Sydney Town Hall lacked proper acoustics and basic facilities such as
heating (Murray, 2004). Necessity was thus the mother of invention, just like one of the
other criteria for the mentioned configuration.
Hobbs & Andersen distinguish between four different sets of practices within the
“Partners in design and execution” configuration. The one that best applies to the SOH
project is “One-off Integrated Project Teams”. The suppliers came together for this
specific project and were brought in at an early stage. Though the initial design was
decided upon by Utzon solely, the whole team collaborated on the implementation of it
from the very beginning and had the opportunity to share their ideas and knowledge
before starting off the project. Projects of this kind are normally very time and cost
consuming but tend to result in exceptional performance and technological innovation.
The immense cost overruns, AUS$102 million instead of AUS$7 million, and the 10 year
long delay confirm this statement. The project was also very much before its time
regarding technological innovation. The distinctive roof shells and the use of computers
The Sydney Opera House Group 5 Page 30
for structural calculations are two good examples of technological innovation in the
Sydney Opera House project.
This type of project requires a long time for the design phase usually involving a
great number of participants. One of the major problems in the building of the Opera
House was that Utzon wasn’t given enough time to complete his design before the
construction work begun. If Utzon and Arup would have had a chance to work together
long enough to come up with a perfectly feasible design before the construction team was
hired, a significant part of the additional costs and time could probably have been
avoided.
While studying the Sydney Opera House it became apparent that it was one of the
most unplanned and mismanaged stories in history. In light of the article by Söderlund,
Berggren & Anderson (2001), it can be seen that there were many issues between clients
and project teams. The nature of the Opera House required the NSW government to
acquire an agent for their task at hand. In this case the agent was Utzon and all
managerial privileges were given to him to ensure the successful completion of a new
Opera House. This caused very opportunistic behavior in Utzon since he actually had
most of the management power, instead of the NSW government.
As mentioned earlier, Utzon had a lot of power and urgency within this project, so
as a stakeholder he was able to govern most of the decisions of construction. This led to
many design changes and cost overruns which can be blamed on the absence of the
customer. Utzon made very erratic decisions with suppliers, and contracts were made too
early in the project which lead to many transaction costs that did not contribute to the
progress of the Opera House. This can be seen by the fact that there were over 400
contractual contributions and 165 companies involved. While they all contributed there
were many costly issues. For example the case with Civil and Civic engineers for the
construction of Stage 1 saw them claim additional costs of AUS$1,232,000 to reimburse
their money lost from design changes brought on by Utzon.
The year that Utzon resigned created the biggest problem for the Sydney Opera
House; this was of course during stage two. The difficulty of communication with the
hired consultants lead to many disputes and the designs for the interior were never
properly accomplished.
The Sydney Opera House Group 5 Page 31
“He was dealing with three acoustics consultants - the Danish Jordan and two
Germans, Cremer and Gabler complicated by the fact that Cremer, although he could
speak English, would only write his reports in German. To make matters worse, Jordan
did not agree with Cremer and Gabler in their overall approach” (Murray, 2004: 66)
It became apparent that within this stage of the project the coordination of the
design and consultant efforts became too conflicted, leading to arguments over the
desired end result. They didn’t actually consult the client for any input on the final
design. The client was simply happy with hired consultants’ opinions since they had no
technical involvement what so ever. When Utzon resigned he left a series of incomplete
drawings that were not comprehensible for the next architect to pick up. The problem
here deals with the basis of learning. It cannot only be blamed on the number of
consultants that were involved in this project, but that Utzon was also very particular
about which of his designs he let other people see.
“Over lunch, the Minister [for Public Works] explained some of his concerns on
the progress of Stage 3. The previous month, the quantity surveyors had submitted a new
estimate but had reported that they had been unable to obtain proper information to work
from - they could only access 'preliminary and not working drawings'.” (Murray, 2004:
80)
Utzon had only discussed issues and techniques with the consultants based on
drafts, and he kept the rest of the designs in his head. While this was an issue that could
not have been foreseen by the client, it is a reflection on their first decision to allow so
much freedom in the designs. This led to the issues outlined by Söderlund, Berggren &
Anderson (2001), with the problem of learning. Utzon never felt the need to submit a full
design to the SOHEC until he himself thought it appropriate. This not only delayed
construction, but it inhibited Todd and Hall to design an interior that would never
compliment the aesthetics of Utzon’s architecture.
The Sydney Opera House Group 5 Page 32
5. Conclusion
This analysis has thoroughly investigated the effect of stakeholder management in the
Sydney Opera House project. Through this examination, the following conclusions can be
drawn. A main issue that lasted throughout the project was the fact that the construction
work was ordered to start before the design work was completed. On the other hand, if
Utzon, in cooperation with the engineering team, would have had the chance to finish the
design, the estimation of the project cost would probably been so high that the project
would never have been implemented. The involvement of engineers and suppliers at an
early stage in the process was a criteria for the successful outcome of the project.
The Sydney Opera House Group 5 Page 33
6. Bibliography
2006/1108/culture_1-1.html>.
Hobbs, Brian, and Bjørn Andersen. “Different alliance relationships for project design
Mitchell, Ronald K., Bradley R. Agle, and Donna J. Wood. “Toward a Theory of
Stakeholder Identification and Salience: Defining the Principle of Who and What
Murray, Peter. The Sage of the Sydney Opera House. New York, New York: Taylor &
Francis , 2004.
(2005): 321-328.
Ramroth, Jr., William G. Project Management for Design Professionals . Chicago, Illinois
house_history_landing.aspx>.
Söderlund, Jonas, Christian Berggren, and Christian Anderson. “Clients, Contractors, and
The Sydney Opera House Group 5 Page 34
Consultants: The Consequences of Organizational Fragmentation in
39-48.
UNESCO. “Sydney Opera House.” Sydney Opera House - UNESCO World Heritage
The Sydney Opera House Group 5 Page 35
7. Appendix
The Sydney Opera House Group 5 Page 36
Source: Different alliance relationships for project design and execution (Hobbs and
Andersen, 2001)
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Stakeholder Map: 1959-1966
Public SOHEC
Consultants
Construction
Workers
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Stakeholder Map: 1966 - 1973
Consultants
Construction
Workers
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