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526
HARVARD BUSINESS REPORTS
and economically than could the local manager. He believed also that the aid of a central advertising department could not fail to be of service to the house manager. In setting up the central organization, therefore, he planned to provide for supervision of those activities regardless of the type of managers finally selected.
One of the largest chains of motion picture theaters controlled all the activities of its theaters from the main offices, and relied upon its managers only for supervision of the theaters. Films were rented and bookings made at the main office. The amount to be spent for advertising and the manner in which the pictures were to be exploited were determined centrally and communicated to the local managers. Even donations to charity were made only after approval by the central office. For managers, this chain recruited men from high schools and colleges and gave them systematic training in theater management.
In another chain of theaters, the local managers were given a large measure of control over theater expenditures. Film rentals were arranged for centrally, and maximum expenditures were specified for the various requirements, but otherwise the managers controlled the expenditures. They were responsible for securing the best results from the authorizations.
Exhibit i shows the location of the company's theaters, their seating capacity, and the number and size of competing theaters.
The Gem Theater was the larger of the two theaters in Marsden, a small agricultural city. In Larson, the Modern Theater
Exhibit i Theaters Operated by Mokan Theaters, Incorporated
Theater
Seating Capacity
Built
Location*
Total
Popula
Number
tion
of
Theaters
Total
Seating
Capacity
in Town
Grand
Gem
Modern
Princess
Rialto
Empress
New Palace. .
1,500 1,700 1,400 1,300 2,500 2,600 2,500
1923 1921 1919 1924 1926 1927 1928
Centerville, N. Y. Marsden, N. Y. Larson, N. Y. Clearwater, N. Y. Bradford, N. Y. Newton, N. Y. Mohawk, Conn.
150,000
19
11,238
2
23,100
4
25,000
4
30,000
5
180,000
24
190,000
17
24,000 2,000 4,000
5,000
6,000 22,000
17,500
* Names of towns are fictitious.