Here to stay. The role of value creation, capture and exchange in limiting the liability of newness for new entrant museums.
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1 Here to stay. The role of value creation, capture and exchange in limiting the liability of newness for new entrant museums Christine Burton
2 Here to stay. The role of value creation, capture and exchange in limiting the liability of newness for new entrant museums Christine Burton A thesis submitted in fulfilment of the requirements of the degree of Doctor of Philosophy 2006 School of Leisure Sport and Tourism University of Technology, Sydney ii
3 Certificate of Authorship and Originality I certify that the work in this thesis has not previously been submitted for a degree nor has it been submitted as part of requirements for a degree except as fully acknowledged within the text. I also certify that the thesis has been written by me. Any help that I have received in my research work and the preparation of the thesis itself has been acknowledged. In addition, I certify that all information sources and literature used are indicated in the thesis. Signature iii
4 Acknowledgements There are a number of people who have assisted me in the course of this thesis and I would like to acknowledge and thank them: Informants in the case studies were generous with their time, forthright in their opinions and meticulous with their recollection of events. I am indebted to their generosity and thoughtfulness. My supervisors, Professor Rob Lynch and Professor Ian Palmer, were a constant source of wisdom, inspiration and guidance. They encouraged critical self-reflection and intellectual rigour in steering me in directions that proved rewarding. I am grateful for their steadfastness in the course of this research. I am grateful to the Head of the School of Leisure Sport and Tourism, Assoc Professor Bruce Hayllar, who was generous in allowing me time away from teaching to complete this work. The research and writing of a thesis is a long and lonely endeavour. I am grateful to my family for their understanding, support and love during this time. This work is dedicated to my partner, Andrew, and to my father. iv
5 Abbreviations ACT AIATSIS Australian Capital Territory Australian Institute for Aboriginal and Torres Strait Islander Studies AMIC ANU ARC ATSI ANMM CSO EE HHT NMA MAAS MMAPSS NGO NSW USA Australian Mining Industry Council Australian National University Australian Research Council Aboriginal and Torres Strait Islander Australian National Maritime Museum Community Service Obligations Earth Exchange Historic Houses Trust National Museum of Australia Museum of Applied Arts and Sciences Maritime Museums of Australia Project Support Scheme Non Government Organization New South Wales United States of America v
6 TABLE OF CONTENTS CERTIFICATE OF AUTHORSHIP AND ORIGINALITY...III ACKNOWLEDGEMENTS... IV ABBREVIATIONS...V ABSTRACT...X CHAPTER 1: VALUE AND THE NEW MUSEUM CONCEPTS EXPLORED CONTRIBUTION TO KNOWLEDGE STRUCTURE OF THE THESIS...14 CHAPTER 2: AN EMERGENT FRAMEWORK OF VALUE CREATION, CAPTURE AND EXCHANGE OVERVIEW VALUE CREATION IN THE MUSEUM AND NONPROFIT SECTORS ACCOUNTABILITY AND ALIGNMENT STAKEHOLDERS TYPES OF STAKEHOLDERS: COLLABORATORS, SPONSORS, THE PUBLIC AND THE STATE VALUE CREATION, VALUE CAPTURE, ACCOUNTABILITY, ALIGNMENT AND STAKEHOLDERS NEW ENTRANTS AND LIMITING THE LIABILITY OF NEWNESS IN THE NONPROFIT SECTOR AN EMERGING FRAMEWORK THE RESEARCH QUESTION AND SUBSIDIARY QUESTIONS CONCLUSION...80 CHAPTER 3: METHODOLOGY THE PURPOSE OF THE RESEARCH SITUATING THE RESEARCH ACASE STUDY APPROACH THE STUDY DESIGN:CASE SELECTION CONCEPT DEFINITIONS AND OPERATIONALISATION CONDUCTING THE STUDY CONCLUSION CHAPTER 4: CASE STUDY: THE NATIONAL MUSEUM OF AUSTRALIA THE NATIONAL MUSEUM OF AUSTRALIA: THE STORY OF NEW ENTRY STAKEHOLDER DESCRIPTIONS ANALYSIS OF VALUE CREATION, CAPTURE AND EXCHANGE LIMITING THE LIABILITY OF NEWNESS vi
7 CHAPTER 5: CASE STUDY: AUSTRALIAN NATIONAL MARITIME MUSEUM THE ANMM: THE STORY OF NEW ENTRY STAKEHOLDER DESCRIPTIONS ANALYSIS OF VALUE CREATION, CAPTURE AND EXCHANGE LIMITING THE LIABILITY OF NEWNESS CHAPTER 6: CASE STUDY: THE MINT THE MINT: THE STORY OF NEW ENTRY STAKEHOLDER DESCRIPTIONS ANALYSIS OF VALUE CREATION, CAPTURE AND EXCHANGE LIMITING THE LIABILITY OF NEWNESS CHAPTER 7: CASE STUDY: THE EARTH EXCHANGE THE EARTH EXCHANGE: THE STORY OF NEW ENTRY STAKEHOLDER DESCRIPTIONS ANALYSIS OF VALUE CREATION, CAPTURE AND EXCHANGE LIMITING THE LIABILITY OF NEWNESS CHAPTER 8: VALUE CREATION, CAPTURE AND EXCHANGE IN LIMITING THE LIABILITY OF NEWNESS A VALUE CYCLE FRAMEWORK OF NEW ENTRY FROM THE CASE STUDIES CONCLUSION APPENDIX 1: AN OVERVIEW OF MUSEUM MANAGEMENT APPENDIX 2: CONSTRUCT DEVELOPMENT FROM INFORMANTS AND INTERVIEW GUIDELINES APPENDIX 3: CASE STUDIES: COMPARISON OF MARKET SHARE AND GOVERNMENT APPROPRIATIONS REFERENCES vii
8 Tables Table 1: The elements of value creation, capture and exchange and limiting the liability of newness 76 Table 2: Concepts and questions 78 Table 3: Definitions and operationalisation of the research question 98 Table 4: Types of informants for each case study 102 Table 5: National Museum of Australia: Table of attributes for value creation, capture and exchange for different stakeholders 127 Table 6: NMA collaborative research projects 137 Table 7: NMA analysis of sponsorship funding 140 Table 8: NMA visitor analysis Table 9: NMA analysis of public programs 144 Table 10: NMA growth of collection 145 Table 11: NMA government funding patterns and staffing Table 12: NMA analysis of visitor cost 152 Table 13: ANMM: Table of attributes for value creation, capture and exchange for different stakeholders 178 Table 14 : Visitor numbers to the ANMM Table 15: Proportion of earned income to government appropriations 193 Table 16: ANMM Value of Sponsorship 194 Table 17: Admissions and gate receipts Table 18: Average visitor spend at Kiosk/Restaurant and shop Table 19: The Mint: Table of attributes for value creation, capture and exchange for different stakeholders 217 Table 20: Visitor attendance at the Mint Table 21: Visitor attendance at the Mint Table 22: Earth Exchange: visitor numbers from Table 23: Earth Exchange: Table of attributes for value creation, capture and exchange for different stakeholders 250 Table 24: Percentage of sponsorship revenue to government revenue 263 Table 25: Admission revenue as a percentage of total revenue 264 Table 26: Summary of value attributes across cases 276 Table 27: Shifts in museum paradigms 312 Table 28: Constructs developed from the interviews using the Value Cycle Framework as a working analytical tool 319 Figures Figure 1: Value Cycle Framework of New Entrant Museums 7 Figure 2: Strategy in the Public Sector 28 Figure 3: Stakeholder typology: one, two or three attributes present 44 Figure 4: New entry time span - elements of value and survival, transformation or exit 70 Figure 5: The Value Cycle Framework of New Entrant Museums 75 Figure 6: Case study research diagram 105 Figure 7: Relationship between Upstream and Negotiated Stakeholders and the Museum Figure 8: Relationship between Upstream and Negotiated Stakeholders and the Museum viii
9 Figure 9: Relationship between Upstream and Negotiated Stakeholders and the ANMM Figure 10 : Relationship between Upstream and Negotiated Stakeholders and the Mint Figure 11 : Relationship between Upstream and Negotiated Stakeholders and the Mint Figure 12: Relationship between Upstream and Negotiated Stakeholders and the Earth Exchange Figure 13: The Value Cycle Framework of New Entrant Museums 274 Figure 14: The Revised Value Cycle Framework of New Entrant Museums 298 Figure 15: Museum and art gallery market share Figure 16: Canberra market share Figure 17: Government appropriations Figure 18: Sydney market share Figure 19: Government appropriations All photographs in this thesis were taken by the author ix
10 Abstract This thesis examines the concepts of value creation, capture and exchange in limiting the liability of newness for nonprofit museums entering the sector. There has been considerable examination of cultural value in relation to museums. However, little is known about how value is created, captured and exchanged for stakeholders in new museums. It is posited that value creation, capture and exchange constitute a value cycle. Through this value cycle management in new museums detects and limits the liability of newness. The ability to detect and limit the liability of newness enables the continuation of the museum. If the liability of newness is not limited, it may mean that a new museum exits the sector or is transformed. The concept of a value cycle is derived from an examination of the nonprofit management literature, aspects of the for-profit management literature and the arts and museum management literature. Value creation is a key concept in the three literature areas. Value creation in this context, is specifically defined as the worth of the physical manifestation of the museum. It resides in the building and the collection, services and programs within the building. It is suggested that this value needs to be transformed and consumed by a range of stakeholders. The transformation of value creation is denoted as value capture. Value capture is the appeal of programs, projects and activities. Value capture includes how well the products and services align with particular stakeholders, how accountable the managers are to stakeholders and how products and services are consumed by stakeholders. The measure of how managers have been able to capture value is in the realm of value exchange. Value exchange is the merit of programs, projects and activities. Value exchange is in the form of revenue raised through sponsorship; continuation of revenue investment by the principal stakeholder, the state; time and money transacted by visitors; and intangible exchange such as leadership and reputation enhancement through collaborations. A Value Cycle Framework of New Entrant Museums is then developed as a working analytical tool to assess how the value cycle operates and how the liability of newness is detected and limited by museum management. x
11 The Value Cycle Framework is used to assess four cases. These case studies include the National Museum of Australia as a purpose built new entrant; the Australian National Maritime Museum as a purpose built new entrant; the Mint as a recycled new entrant; and the Earth Exchange as a refurbished new entrant. Each case is assessed discretely using secondary and primary source material and analysing qualitative data generated from interviews with key stakeholders. The cases are then compared in order to track similarities and differences in relation to value creation, capture and exchange. The research findings suggest that a value cycle is operating in relation to new entrant museums. This value cycle is dynamic and non-sequential. Until value creation is floated for a range of stakeholders it is difficult for managers to know the worth of their content, location or their building. Value creation is a nominal starting point, signifying the arrival of a new entrant in the museum marketplace. However, value capture is the zone that is the most vulnerable and volatile for managers of new museums. Typically in these case studies value capture includes a disruptive episode, such as a review process that indicates the liability of newness. Managers within the museum who can respond and resolve contradictions between museological beliefs and the demands of stakeholders (and in so doing limit the liability of newness) are likely to continue museum operations. Senior executives who find such reconciliation more difficult, jeopardize the future operations of the museum to such an extent that the museums close or are transformed within the museum sector. Through these four case studies a revised Value Cycle Framework is developed as an analytical device. This analytical framework can assist in understanding the processes involved in new entry for museums. xi
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