Courtney Calestini

Business and the Arts

4/15/2017

Why Supporting the Arts is Good Business

Introduction

It is often rationalized by companies to connote that “art” and “aesthetic” is a luxury, especially in an era of highly saturated markets, economic adversity, alongside shifting consumer demands. However in the post-industrialized world we live in, commercial motives for innovation seem to be marketed at every juncture of our lives. For instance, there is an essential  9 cm long, liquid crystal configured object, with softly curved glass edges, that has made its “home” in the palm of our hands. Less than twenty years ago, the public's’ notions of a “smart phone” were hypothetical. Let alone, the first camera phone was only released fifteen years ago and resembled a brick. How did this luxury become a commodity for the majority of us to express its essential function for connection and communication? Simply put, art is explicitly essential,ultimately proved through analyzing the present applications and benefits of including art related expenditures in corporate spending, projected  return of invest in creative corporate events from the past 16 years, and the economic drivers that have become a catalyst for innovation.

 Beginning at square one, we must ponder why art is often a low priority starting in academia all the way through industrialized career fields.  By nature the “art” or the mastery of a subject to create tangible emphasis upon requires specific skill. Skills are inferred as a learned experience, that must be practiced. There is no estimated, exacted or even approximate time someone can become a “master.” Whereas the basic building block of business is the plotted orientation of generating profit. In this sense, an industry cannot “practice” this craft without risking themselves financially. They can only gain experience from previous “failure”. However experience is where these polar realms meet.  

Practical Applications for Art Based Learning Inside Corporations

Nick Nissley, the Executive Director for Leadership Development at the Banff Center in California wrote about the modern implications of creativity in post industrial economics in the 2010 issue of the Journal of Business Strategy, titled,Arts-based learning at work: economic downturns, innovation upturns and the eminent practicality of arts in business. It is increasingly difficult to stave, adapt, let alone be an advanced player in the industry. In turn, new ideas, innovation and differentiation are all variants required to remain absolutely viable in the marketplace for every industry. Nissley claims that arts offer an alternative thought and engagement than standard curriculum in business related academics. “Arts based training can be designed to teach corporate America about undefined outcomes, the allowance for failure and risk-taking.”Hypothetically, arts can facilitate imagination, spatial thinking and abstract reasoning. Developing  this further the art based learning models in the corporate sphere are  separated into four categories, Skill transfer, Projective technique, Illustration of Essence and Making.

Skill transfer is  facilitation that artistically related traits can be applied in organizational settings. For an example, the learned narrative skills of effectively communicating empathy and relatability in presenting company culture to the consumer market. Projective techniques are the external methods of displaying inner thoughts that are often complex in conventional presentation. These techniques ultimately infer reflecting through projecting. For instance, using word association and collaging in presentations communicate, implicate cultural and emotional connections more simplistically, than fully explaining in text. Illustration of Essence is the implemented use of other mediums to relate and associate relevant points to the audience. Kaiser Permanente, a health insurance company out of the Eastern United States, collaborated with HBO to produce a documentary about obesity. These elements invoke an emotional response, easy association and a memorable medium. Finally Making, is literally extending education or craft through artistic expression to manifest on a personal level. This could be MBA students taking acting lessons to enhance extemporaneous speaking. In turn, all of these methods acknowledge and apply creative aspects which promotes a long term internal and external benefit to company culture and ultimately brand differentiation..

Surveyed Priorities for Implementing Art Initiatives

In extension arts management presents comprehensive proof of benefits originating from over fifteen years ago. Thus, implicated relationships with the increasing benefits of cultural exchange and motivations for the further involvement with Corporate Social Responsibility. Corporate sponsorship and philanthropy are often attributed to cause related marketing, which satisfies the the bottom line of social, economic and environmental factors. Professors O’Hagen and Harvey from Trinity College Dublin, in the Department of Economics, researched, surveyed and  presented a study in 2000 titled Why Do Companies Sponsor Arts Events? The study dives into the specific reasons companies decide to engage in commercial exchanges with the arts realm. And more importantly so, what it means in correlation to the arts field for the projected future.

First O’Hagan and Harvey make the distinction between Corporate Philanthropy and Corporate Sponsorship, specifically why sponsorship the an expanding field between the two. Philanthropy itself is defined through the indirect contribution it has to creating profit for the firm. By extension, the cause by association of these public gestures of giving to the arts community boost employee morale, community relationship, and perhaps most pertinent, improving public image. They refer to Young and Burlingame's  theory dubbed the Ethical/Altruistic Mode, (1996) which cites that “This is based on a concept and culture of social responsibility and ethical behavior that comes with the power over resources granted to corporations in American society. It is based on the understanding that corporation and the societies they operate within are extremely interdependent.” Contributing to the local or subscribing demographics insures brand trust and a sphere of influence, which facilitates longevity and consumer investment.

Whereas sponsorship is not explicitly involved with charitable events and does not prescribe itself to, instead it is more fluidly designated to the marketing department. O’Hagan and Harvey continue by listing the prime motives recorded by the survey of 107 companies; altering public perception, increasing sales, higher market visibility and having a social role in the market. Moreover, the prime discrepancy is improving versus the alteration of public perception. Kotler and Scheff (1997) designate that sponsorship provides a lifestyle to be associated with. Consumers increasingly base their allegiance to experience or catered economics instead of tangible commodities now. “Sponsorship provides companies with the opportunity to open up more direct and involving lines of access to customer groups, and thereby enhance sales opportunities.”  

The highest factor involved for sponsorship includes the the public perception. In short by associating their products with an arts event, a company can transform and relate exposure to different demographics. This creates product differentiation and a secured image. For an example beer companies like Budweiser and Miller Lite are marketed for accessibility, cheap cost and rugged sporting events. Whereas Wicked Weed and Highland Beer are often more associated with artisanal brewing, catered experience and aims to represent the culture of the Southern United States. Despite both categories being beer, they all preach different lifestyles, which resonates separately with the consumers.  

While public image and the associated accountability is very externally motivated, the benefits of arts involvement also extend internally to Supply Chain Cohesion. By further strengthening the brand image, employees are also embodied within the culture the company promotes. Through pulling closer engagement with the employees, they can inadvertently project inclusivity and synergy, which can reduce industry level tensions. “An example that illustrates this motivation is the sponsorship by a company of an arts festival in the town in which it is located, a central focus of which might be the participation of the employees of the company.”

Finally Rent-Seeking is listed as an important factor due to creating less competition in a regional market or reducing production costs by subsidizing capital. Directly, rent seeking is sponsoring particular events that correlate with influential figures in the community. However, in recent years this is moreso done with intention align in the interests or leanings of specific exhibitions, displays or socially fueled causes of the aimed figure; rather than exclusively catering to that entourage or figure. “By choosing to sponsor high-profile national arts events, the monopolist appears to have some positive benefits for society: monopoly rent is not being totally appropriated by the company or its employees but flowing back to the community.” Coming full circle, the connotation of these arts events act as a platform for exposing, altering and investing in the public via the associated branding art has. Finitely, Corporate Social Responsibility is reflected by its engaging efforts both in work culture and externally catering to impressionable demographics.

Altering Industrial Motivations and Design Perspective

Bluntly, the most palpable role and motivation to invest in art related causes are the economic drivers that encourage market shift. As noted through the themes of the sources above, there is a  pervasive integration of aesthetic components to almost every industry. For instance, Apple does not only sell computers, tablets and phone but, a sophisticated lifestyle the shareholder possesses, perhaps more so than the tangible object itself. Professor Robert D. Austin from the Department of Management, Politics and Philosophy in Harvard Business School and Professor Lee Devin from Swarthmore College, determined two significant market shifts in their article, Not just a pretty face: economic drivers behind the arts-in-business movement.  

        The first shift, is the movement towards differentiation strategies. Professors  Austin and Devin express that prioritizing cost effective production is only a short term fix for survival. Globalization has increased the transfer of knowledge from the sphere of influence to developing nations. Outsourcing production dismantles exclusivity among these major players which, conclusively leads to less market share. “China’s real exports have increased by more than 500 percent, and the major share has shifted from farm produce to electronics and machinery.” In conjunction the evolution and emulation shown by economies like China, India and South Korea firmly display that these exports do not take decades to match the leaders any longer. If we ponder the quality between Hyundai from 2007 to 2017, the consumer perception has radically transitioned. Hyundai’s market shift is numerically shown by an increased value in their consumer based prices and the levels of depreciation improving drastically. Let alone, the Genesis is already become fitted to follow the prices of Mercedes. Whereas Toyota took twice as long to solidify their own market share and brand trust in the same manner from the early 1970’s to the 1990’s. With emulating international brands flattening the “field,” brand differentiation and novelty becomes the competitive edge instead of accessory.

         The second shift is towards a more iterative “shape” for making processes. With evolved global dissemination and technology, how should a firm successfully maintain market share? Basically Lee and Devin express the convergence of, Information Technology, 3-D Printing and other simulation create a marriage experimental innovation and reasonable cost effective production. Retrospectively, there was some genius in pre industrial manufacturing, in which the product became an asset to the consumer because of the customized approach versus that of an exacted template. Lee and Devin coin this as the innovation benefit, “The value that arises from the novel features of a product, value over and above what we call the core benefit. This approach allows for a company to experiment without risking time, resources and finances for concepts. Furthermore the incorporation of business art does not transition into science, instead industrial science and manufacturing are becoming like art.”  

        In summation, the arts field is becoming surprisingly ubiquitous with the evolving demands of major industries across the world. As each market becomes increasingly leveled by globalization, being basic is no longer enough. In researching the internal and external implications of art based strategies in companies, observing the motivation, growth and connotation for Corporate Social Responsibility and deconstructing the economic drivers that plague company success it is especially evident that the Arts is no longer a luxury but, an essential in business.

Works Cited

 Nick Nissley, (2010), “Arts-based learning at work: economic downturns, innovation upturns, and the eminent practicality of arts in business” ,Journal of Business Strategy, Vol 31 Iss 4 pp.8 - 20

O’Hagan John, “Why do companies sponsor art events? some evidence and a proposed classification” ,Denice Journal of Cultural Economics (2000), Periodical Archive Online pp.205-224

Robert D. Austin Lee Devin, (2010), “Not just a pretty face: economic drivers behind the arts-in-business movement” ,Journal of Business Strategy, Vol.31 Iss 4 59 - 69