I just started doing both.  I bring a group of ten to twelve actors in for a group audition.  We do improv games, movement games - things that are fun and that a brand new actor can do easily.  I look for people to be part of the group, how they move and speak.  It gives me a chance to see the new actor in an environment that does not single them out.  I then give each actor a monolog and a scene to read and send them out to prepare.  I then bring them back in one at a time and ask if they have anything prepared they would like to share then have them read a short piece of the monolog then give them some direction then the same with the scene using the SM as a scene partner.

I have found that I am far more likely to successfully cast new people than I was under the old system.

I just started doing a combination of both also, but in a different order then Doug. I have closed auditions first. I let everyone show me what they think their best is. I get to see how prepared they are for the auditions. I make my first cut decisions after the closed auditions. Then I have everyone come back for ensemble auditions. That way I can see who "plays well with others". I was amazed at the attitude change of a woman at my last audition. She was perfectly pleasant at the closed audition. She became snide, defensive and difficult when she was with the group. I would have never known until it was too late unless I had auditioned her with the ensemble. I like the combination. Linda