Read the text and answer the following questions.

1. What management function was most lacking in the case?

2. In order to have a target so that the cost of films would not be too high, what should United Artists have done for each film?

3. What was a key missing ingredient between the management of United Artists and its then parent company, Transamerica Corporation?

A Long Wait for Heaven’s Gate

One of the worst movie flops of all time occurred in 1981. It was Heaven’s Gate, produced for United Artists’ Corporation by Michael Cimino. Estimated originally to cost $12 million, the film cost almost triple that figure. Then it turned out to the box office poison. Heaven’s Gate was only the most dramatic boo-boo by United Artists. Of ten films produced in 1980, seven cost twice as much as they drew from rentals. Experts in the industry criticized United for not having the “expertise to select, coordinate, and monitor difficult firm projects.” United, unlike other film companies, did not have a full staff of production-liaison executives closely monitoring costs as a film was being shot. In fact, most films were not planned with a specific cost limit in mind.

United Artists at the time was a company owned by another giant corporation, Transamerica Corporation. (Later Transamerica sold United Artists to Metro-Goldwyn-Mayer.) Insiders in the industry said that Transamerica’s management was never aware of how bad the situation was with Heaven’s Gate. Otherwise, they would have cut off funds early on.

2. After reading and hearing about management, do you think you have the right skills to be a manager? Would you be able, for example, to set objectives, motivate and coordinate the staff, and manage a department store, or a computer manufacturer?

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