The sustainability of museum growth:
a system dynamics approach
Chiara Bernardi
CERMEC - Research Center on the Arts and Cultural Management
Universita Carlo Cattaneo LIUC
22, corso Matteotti — 21053 Castellanza ITALY
e. cermec@liuc.it w. http://cermec.liuc.it
University of Lugano
Faculty of Communication Science, Department of Business Communication
13, via Buffi. - 6904 Lugano (Switzerland)
e. chiara.bernardi@lu.unisi.ch, www.unisi.ch
Abstract
Based on a review of existing literature in management and economics of arts and culture
and on an extensive case study — the metropolitan museum district in Turin — this paper’s
objective is to show that museum growth is problematic in the long term through a system
dynamics model. The classical loop — investments, growth, profitability, investment —
encounters difficulties when dealing with public goods, characterized by high
interconnections among museums and stakeholders within the same territory. The model
simulation shows the structural characteristics of this sector that determines problems in
term of survival; it can thus be understood as blending management and economic
perspectives. Therefore, the search for sustainability should be addressed in controlling
museum growth with a long time perspective and in supporting and developing new forms
of cooperation among those organizations to decrease the “cost of growth.”
Keywords
Museums, system dynamics, strategic development, sustainability.
Introduction
Whatever definition we use, there are few doubts museums have attracted growing
attention over the last decade -- just count the number of various publications on the topic.
In approaching the subject one cannot avoid noticing one apparent reason underlying this
surging interest is museums as they are being perceived by various public authorities as a
means to contribute to the development of a territory, be it city, region or country (i.e.
Tobelem, 1998, Santagata, Signorello, 2000). More specifically, museums are increasingly
perceived as a tool for promoting tourism flow (Browning, 1993; Lemmon, Graham, 2001;
Eborle, 2002; Forte, Mantovani, 2001). Sustaining and developing museums has thus
become one of the high order items on the agenda of various stakeholders. But although it
is clear why museums should grow and increase their performance to face increasing
expectations, it is not so clear how this can be made possible or what problems might be
encountered in approaching this sector.
Analyzing the management literature in this field, the concept emerges that these
organizations should grow and improve their services, assuming a different approach to
their audience. According to this view, museums can improve their performance by shifting
their attention from the internal perspective, based on preservation, documentation and
study, to an external perspective with a particular focus on their visitors and audience. This
well-known framework can be traced back to the traditional contribution of marketing to
the field of management: the shifting paradigm from product/production to market.
But is it enough to understand these organizations and their possibilities for growth? It
could be problematic develop a normative framework - suggesting solutions/strategies -
when we have not understood how museum's system works. In addition, the understanding
in art management seems to escape what it has been understood in the economics of arts.
The goal of this study, which blends economic and management perspective in the field of
arts and culture, is to show how growth can be problematic in the long term. The empirical
base — the metropolitan museum district in Turin — has offered interesting insights that have
supported the development of a system dynamics model.
Literature review
Museums’ are complex organization for many reasons: the varieties of activities carried
out, intangible nature of the outcome, multiple nature of the value produced, role museums
can have in the society, etc. Considering the general assumption well-diffused in the sector
that culture is (or should be) something outside the rules of economics, the way to approach
this field should take into consideration multiple points of view and embrace different
fields of study. In fact, museums and the art/cultural sector are studied by different
branches — from museology to sociology, and from economics to management — with each
capturing different facets of the phenomena. The development of the literature has assumed
a disciplinary perspective, undervaluing the potential of a multidisciplinary approach.
Moreover, different branches have approached the art/cultural sector in different ways. In
particular, economics has studied museums and the cultural sector as an interesting area
that challenges traditional theory and highlights interesting phenomena (Benhamou, 1996;
Blaug, 1976; Trimarchi, 1993). In contrast, management has approached this sector
extending the traditional and consolidated framework developed in its field (Zan, 1999).
Considering the complexity and the multifaceted nature of the object of study, a
multidisciplinary approach is needed to understand the phenomena more in depth. This
paper’s blending of the economic and management perspective will contribute to
advancement in this direction.
' ICOM (international Council of Museums) defines a museum as “a non-profit making, permanent institution in the
service of society and of its development, and open to the public, which acquires, conserves, researches, communicates
and exhibits, for purposes of study, education and enjoyment, material evidence of people and their environment.” (ICOM
Statutes, 2001, article#3).
The main contributors in the museum management literature have regarded the nature of
museum organizations (McLean, 1994; Bagdadli, 1997; Chierieleison, 2003; Dubini,
1999), strategic management (Kovach, 1989; Moore, 1994; Chirieleison, 2003; Solima,
1998, Moretti, 1999), marketing management and approach (Kotler, Kotler, 1998; Colbert,
1995, Diggles, 1986, Melillo, 1995; McLean, 1997), consumer behavior (Robbins,
Robbins, 1981; Goulding, 2000), accounting and accountability (Zan, 2000, Sibillio Parri,
2004), performance measurement (Paulus, 2003, Chirieleison, 2003), In this stream,
museums can be viewed as a “nearly-organization” (Chierieleison, 2003) in which the lack
in autonomy of defining objects and the lack of auto-generation of financial resources
implies an interdependent relationship with public institutions. This little degree of
autonomy is particularly evident in Italy where museums are mainly “offices” of public
authorities (Jalla, 2000) in which organizational boundaries are not clear.
Taking into consideration the general decrease in public expenditure from one side, and the
new role the museum should play in a changing society, from the other, the attention paid
to museum performance has furthered the development of many normative suggestions and
studies. The basic idea is to shift the focus of the museum from an internal to external point
of view (i.e. Gilmore, Rentschler, 2002). The contribution of marketing — the importance of
the market/demand in shaping what firms do or should do? — is traceable in many
contributions (i.e. Yorke, Jones, 1987). The audience seems to be an unexplored and
unknown market: as museums do not know their visitors or their needs, they are not able to
develop suitable offerings for them. By increasing their offerings for visitors (ranging from
cultural to additional services), they can increase the visitor flow and consequently their
revenues (i.e. Di Maggio, 1986; Kotler, Kotler, 1998; Goulding, 2000; Bagdadli, 1997
Solima, 1998, Chirieleison, 2003). However this intuitive cause-effect relationship
overestimates the relevance of revenues from visitors in these types of institutions. Some
studies in this area have shown visitors cover only 5-10% of museum costs (Rosset, 1991;
Fourtes, 1999; Valentino, 1990). The larger amount of revenues comes from public
institutions and private sponsorships (i.e. Settis, 1998). Public institutions and other private
actors, such as bank foundations, invest in museums in order to restore buildings, develop
or preserve a collection, etc.
The economics of arts has investigated the reasons for state involvement in the cultural
sector. First, arts organizations often do not have enough resources for current operations.
Despite the high value people attribute to culture, consumers have a low degree of
willingness to pay for cultural goods and services (Trimarchi, 1993). In addition, customers
are also not able to evaluate the cultural good/service offered before acquiring them, due to
the informative impossibility that characterizes this sector’. Therefore state involvement
? We note that Colbert (1995) and others (Mokwa, et al 1980, Melillo 1995, Diggles 1986) advocate a shift in attention
from the adaptation of the product to a given and defined set of customers to the need to identify and reach customers for
iven product. In this way, marketing for arts is different from the traditional marketing theories.
ion depends on the level of novelty the marginal quantity of good can add to the cultural capital
accumulated in previous cultural experiences (Trimarchi, 1993). However before purchasing, the customers do not know
if what they are going to buy will actually add value to their cultural capital.
can be explained and justified in many ways (Frey, Pomerehne, 1987, 1989; Austern-
Smith, 1980), as culture can be considered a merit good (Musgrave, 1987) or a public good
(i.e. Pilotti, 2003) that creates wishing externalities (Throsby, 1982). The assumed reason
should influence the ways of funding these organizations. However public authorities face
difficulties in evaluating the performance of these organizations, due to the informative
impossibility (Hansmann, 1986; Trimarchi, 1993) from one side, and the image return
coming to administrators thanks to investments in this sector (Benhamou, 1996), from the
other side. These conditions imply an unclear and opaque process of resource allocation
(Maddison, 2004; Peacock, 1991, Trimarchi, 1993; Benhamou, 1996).
The management literature seems to overestimate the virtuous process of services offered
for visitors, well-explained in the economics literature. Moreover the economics of art does
not catch the dynamic of expenditure, instead assuming a static perspective. Neither
considers, in any appropriate way, the dimensions of competition in and outside the
museum/cultural sector. Along this way, culture competes with the other public sectors in
acquiring resources needed for its development, and it has a low capacity to attract
resources with respect to other expenditure sectors. In fact, culture is not considered a
primary need, therefore it is considered less necessary than labor, education or health. For
this reason, culture chronically suffers from a scarcity of resources. Competition is also
recognizable among museums in acquiring resources for their functioning and
development.
Methodology
The emerging limits from the literature, both in management and economics, have
addressed our attention to the selection of an adequate methodology that can catch the
dynamics of this sector, taking into consideration the non-linearity, delays within the
system and accumulation process. For these reasons, the system dynamics method
(Forrester, 1961, 1968; Sterman, 2000; Coyle, 1996) was assumed to address the problem
definition and the development of the model. Moreover, the system dynamics method is
also consistent with the long time perspective that characterizes the cultural sector,
although it is not often confirmed by decision-makers or by the literature, especially in
management studies*.
An empirical field that shows interesting growth in the last few years is the metropolitan
area of Turin, used here as an embedded case study (Sholtz, Tijete, 2002). Data and
information were collected through primary and secondary sources with a double
perspective: one was focused in studying the whole metropolitan area and its evolution
during the last fifty years, while the other was focused on analyzing several museums
* Some contributions have already applied the systemic perspective in analysing museum sector, such as
Lorenoni & Odorici (1999) and Bernardi et alli (2004). They have represented the dynamic problems
adopting qualitative perspective (Senge, 1990). In this paper we have applied a quantitative perspective based
on stock and flow diagrams and model simulations.
involved in a growth strategy. The primary data was collected through semi-structured
interviews of the decision-makers and museum directors. The selection of the interviewees
was driven by the opinions of several experts on the cultural sector in Turin. The secondary
data was addressed to collect documents and information about the strategy pursed by the
municipalities, the region and the bank foundations that play a crucial role within the
sector.
The development of the system dynamics model has followed the modeling process
suggested by
Sterman (2000). The logic of the model is not to forecast the evolution of the system
studied, but rather it is aimed at showing what type of problems the evolution of museums
located in the same area could face if they pursue a high growth strategy. To increase the
reliability of the model, it was validated through a series of validation tests suggested by
Forrester & Senge (1980).
Some insights from the field: the Metropolitan Museum District in Turin
Turin, the fourth largest city in population in Italy and now one of the wealthiest, is located
in the north-east. Dominated in the past by the noble Savoy family, Turin has retained its
regal feel, traceable in the majestic buildings and Baroque architecture. The cultural
tradition and new cultural streams are also traceable in the number and variety of museums
located in the metropolitan area, which has thirty museums located in the city and another
thirteen in the province covering archaeology, classic and modern arts, anthropology,
history, natural science, technology. Furthermore, there are also specialized museums,
historical residences, castles, and exposition spaces.
The analysis of this sector can be divided into two different parts. First, a picture of the
metropolitan museum district is given so as to describe the role played by each museum
and the interdependences among them. Second, an analysis of the dynamic of this sector in
the last decades is reported to identify the strategies pursued by the museums and highlight
some interesting insights to identify the dynamic problem.
As to the first point, public authorities and private sponsors support the museum district.
These public authorities are the municipality of Turin, the Province and the Region which
all have different roles within the sector. The Municipality of Turin governs over some
museums (called civic museums) and supports investment in and current operations of
many museums located in the city. The Piemonte Region is also involved in supporting the
cultural organizations located in the region and obviously in the metropolitan area, often in
partnership with the Municipality. However the role of the Province is not well-defined due
to the evolving reform of public administration that is reshaping the roles and
responsibilities of the different levels of government.
The main private sponsors in the city of Turin are the bank foundations, which both provide
available financial resources and invest in the cultural sector’. Representatives of public
authorities, among others, compose the board of directors of these foundations to provide a
systematic policy which addresses investment and resources from the same direction.
The resources available for the museums located in the city come from these actors, with a
particular focus on the municipality and bank foundations. The increasing interconnections
among these actors, both public and private, determine common intents and they act, more
or less, as an unique actor. Therefore, the sustainability of the museum district depends on
the availability of resources of these actors. It implies a closed system: i.e. for the main part
museums can grow only if the actors located in that area support their growth. Only a few
museums such as the Egyptian Museum have had the possibility of attracting resources
from the central government due to the importance of this institution in Italian cultural
offerings. Moreover, few museums can attract resources from other private sponsors, as the
normative context does not sustain this type of investment considering the relative
unattractiveness of culture as compared with sports sponsorships or humanitarian activities
(O’Hagan, Harvey, 2000).
As to the dynamic of the Metropolitan museum district in Turin, the development of the
cultural offerings in the last decade (and in particular the last five years) is traceable to
different actions public and private actors have promoted. The development of the system
can be shown, in a synthetic way, by the growth of the open museums, the growth in
expenditures of different actors and the investment projects of the last few years.
First, we should consider the growth of museums open to the public from the beginning of
the 1950s to 2002 (see graph 1). The number of museums open to the public was stable
from the 1960s to the 1980s, as around 13/14 museums opened. From the beginning of the
1990s until now, there was an interesting growth resulting in more than twenty-eight
museums being opened in the city. The reasons for this growth can be seen in the
investments the Municipality of Turin made in the 1980s for opening new museums, thanks
to private initiatives supported by public authorities and, obviously, the closure of some
institutions to redefine their mission, collections and services for visitors.
° The bank foundations located in Turin are two of the ten largest bank foundations in Italy, and many experts
in the sector define the bank foundation as one of the most important actors in developing the cultural offer
(Roversi Monaco, 2003).
Graph 1 — Museums open in the city of Turin (1952-2002)
np
&
—
ot
Vin me oe
RN
8
a
6
a
Number of opened museums
0
1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002
Year
Source: our elaboration on the Cultural Observatory of Piemonte (1999, 2000, 2001, 2002)
Second, we should consider the resources allocated to this sector by different actors during
the last few years. Considering the growth rate in expenditure supported by the
Municipality, Province of Turin and Piemonte Region (see graph 2), we observe a sharp
increase in resources spent in cultural heritage/activities. Moreover, the graph shows the
role of the Province (the authority between the Municipality and Regional government) is
not well-defined in the cultural sector as there is a high variability of resources allocated to
that sector. In addition, the graph demonstrates the growth rate of resources allocated to
current operations was less than resources allocated for investments (data are available only
for region expenditures.)
Graph 2 — Growth rates of expenditure of public authorities in the cultural sector
60
=e Municipality
—s— Province
+ Region Investment
Region current operation
Growth rates of expenditure
(base:1996)
°
Years
Source: our elaboration on the Cultural Observatory of Piemonte (1999, 2000, 2001, 2002)
We note this growth is a countertrend with respect to the general public expenditure trends
that shows a general decrease in resources, due to the turnaround in public administrations
started in the last decade. In this context, although culture has assumed a different role
within the agenda of various stakeholders, it is questionable if the higher public expenditure
in this sector will be possible in the near future. However, if we compare the growth rate of
the number of museums open and the growth rate of expenditure, we note the resources
available for each museum has on average either been reduced or at best remained steady.
Third, we can observe the development of the museum sector through the way the
investment in the metropolitan museum district was done. The investment projects involved
specific interventions in the physical structure (new location, building restoring,
construction of new exposition area), the exhibition of artifacts, and development of new
services for visitors.
Table 1 - The main investment projects in the Metropolitan Museum District
Investment
(000€)
Museums Open Investment projects Timing Public and Private sponsor
Exhibition, services for
Armeria Reale Open Visitors. 1502003-2005 Municipality, Bank foundations
Building restored,
Castello di Venaria exhibition area, services State, Region, Municipality,
2003- 5
Reale Open for visitors, training 190.7002003-2006 province, Bank foundations
activities.
Location, exhibition,
services for visitors
location, exhibition,
Galleria Sabauda Open _ preservation, services 23.0002003-2005
for visitors
A... come Ambiente Closed n.d.2003-2005 Municipality, Bank foundations
Region, Municipality, Bank
foundations
Museo Civico di Arte 1.44 Building restored,
anti Palazzo opetting: exhibition 13.0002003-2006 Municipality, Bank foundations
Madama ,
Museo di, Atte Next, Building restored, 9,6002003-2005 Municipality, Bank foundations
Orientale opening exhibition area
Museo diffuso della
Next Exhibition, preservation,
Resistenza, della oP °
5.2002000-2003 Region, Municipality, Bank
: opening services for visitors foundations
deportazione
Museo Egizio Open Exhibition restored, new: 30.0002003-2006 State, bank foundations
legal form (foundation)
Museo Nazionale del New location, .d1999-2000 Region, Municipality, Bank
Cinema exposition restoring foundations
Museo Nazionale Building and exposition
dell'Automobile restored, services for
Open __ visitors. 25.000°2003-2006 Municipality, bank foundations
3 Building and exposition
Museo Nazionale . ao
della Montagna restored, services for Region, Municipality, Bank
E Open __ visitors 3.1002003-2006 foundations
Museo Nazionale del Exposition restored, Region, Municipality, Bank
Risorgimento Italiano Open maintenance 10.0002003-2006 foundations
Museo Regionale di Expositi Region, Municipality, Bank
Scienze Naturali____ Open _for vi 7.7002001-2006 foundations
Source: author elaboration on www.torino-internazinale.org, www.comune.torino.it/musei
® The value was estimated by Bodo et alli (2003).
From interviews of museum directors has emerged the idea that many times the investment
projects do not consider the impact of the changes on the cost structure of the museum
functions: i.e. the investments follow the logic of beauty and the meaningfulness of the new
exposition of artifacts rather than the logic of the economic use of resources. Intuitively, if
the investments increase the quality of the museum offerings, it will imply an increase in
the operating costs. An example of the impact of investment projects on the operational
costs of a museum is reported in the table 2.
Table 2 — “Galleria Sabauda”: estimation of cost and revenues after the investment project
(Thousand €)
Expected/
Cost Now % Expected % now %
Personnel 768,65 73% 1.058,31 46% 137,68%
Structural costs 198,36 19% 451,18 20% 227,46%
Maintenance 49,92 5% 64,04 3% 128,29%
Scientific activity 41,38 4% 83,87 4% 202,68%
Teaching activity - 36,15 2%
Marketing and communication - 284,05 12%
Exhibitions = 309,87 14%
Total 1.058,31 100% 2287,27 100% 216,12%
Expected/
Revenues Now Expected now %
Revenues from visitors 55,34 5% 134,28 6% 242,65%
Sponsorship 330,85 31% 424,32 19% 128,25%
Total Revenues 386,19 36% 558,6 24%
Financial requirements 990,49 94% 1.728,67 76%
Total 1.058,31 100% 2287,27 100% 216,12%
Source: author’s elaboration on Guerzoni, Santagata (1999)
Defining the problem: the sustainability of the strategic development of museums
The literature review and the evidence of the empirical analysis shows museums are
intricately interconnected with the public and private actors that support investment and the
current functioning of these institutions. The myth of revenues from visitors — that many
contributions will serve as a solution to a museum’s problem — should be set aside so we
can to develop a realistic view of how this sector works.
Moreover, this interdependence has a local focus: museums in the same area have access to
the same resources. In addition, these resources are limited because the number of
financing actors seems to be limited, and the cultural organizations compete with other
sectors of public expenditures and other sectors that attract private sponsorships. They
cannot grow forever. As investments have a great impact on operating costs, the same
public authorities that financed the investment projects could have some difficulties to
support operative management of this organization, due to their role to support both
investments and current operations. What are the consequences of the development of this
sector? Will there be a high museum growth both in terms of quantity and quality of the
offerings traceable to the metropolitan museum district in Turin? If so, will it be
sustainable?
The intuitive loop - investment, growth, profitability and new investments - does not work
in the museum sector. The increase in term of quality and quantity of the museum offerings
create positive externalities, which cannot be appropriated by the institutions involved.
In order to answer to these questions, a system dynamics model is proposed to show the
sustainability of high growth strategies is questionable, and that to design a suitable policy
that guarantees long term growth, it will be necessary to overcome some myths and beliefs
set forth in the museum management literature.
A system dynamic model to simulate the strategic growth of museums spatially
located
Before describing the content of the model proposed, some clarifications about the logic
assumed in the modeling process are needed. The system dynamics model proposed is
conceived as an exemplification of the dynamic problem previously highlighted which
emerges from a critical review of literature and from the case study. The aim of the
proposed model is not to forecast the dynamic evolution of the museum district in Turin,
but treat it only as an exemplification of the problem identified so as to focus on the
possible problems a museum district can have if they follow a high growth strategy.
The key assumptions of the model are:
e Two museums compete to acquire economic resources, given their growth
objectives.
e Museums are described through an aggregate state variable “museum offering” that
represents the entirety of activities carried out by the museum (including back office
activities such as preservation, study and documentation of artifacts and front office
activities such as services for visitors). The value range from 0 to 1: zero means that
museum is closed and | means the maximum museum offering.
e Museums compete in acquiring resources in order to increase the museum’s
offerings, given their objectives of growth.
e The objects of growth come from a negotiation process between the museum and
public authorities and private sponsors. This negotiation process was left outside the
model, in fact growth objectives are considered as constants into the model.
e The available resources are allocated for the purpose of investment or to cover
operating costs.
e Each level of quality of the museum offerings is associated with a level of operating
cost.
e The operating cost should be covered by resources available for current operation: if
resources available are not as much as the resources needed, the level of museum
offerings degenerates; otherwise if available resources are more than resources
needed, the level of museum offerings will increase.
e The growth rate of the museum offerings depends primarily on investment projects.
e The allocation criteria for investment and operative functioning is to divide the
resources available for the two museums, according to their needs.
These assumptions seem to be closed to the emerging structure of the system coming from
the case study and the theoretical contribution.
The qualitative representation of the problem (the causal loop diagram) is reported in figure
1, where two museums compete to acquire the resources needed to increase their museum
offerings (investment) and to acquire resources to cover their costs.
Figure 1 — Strategic growth of museums: the causal loop diagram
Museum offer
anan c ie sitar osaues AS Museum Offer
gee oe investments Desired M1
levestments M2 | Rt inbaimentis
Gap Museum Fung tale Gap Museum
: \ a sin :
cme si for M2 + Fund allocated to—@> for M’ . Bf offer M1
. inesimers 2 inesinets :
« iS ita
Offering M2 >» Total Fund available 4 ‘Offering M1
Gap of sources needed 4s) |
= Foi eapeiim cereal
Ms
¥ /: cost it
ies - eee + Fund atabi S
oprat nanogeet operative 4 resources avlabl or
management operative management +
gk > oper agement
4+ Total desired fund for 4
© operative management q___
Source: author’s elaboration
The qualitative representation of the problem has led to the elaboration of the system
dynamics model, composed of three main sectors of analysis:
© Museum MI and Museum M2: these sectors have the same structure. The variable
“museum offering” is a stock that grows thanks to the investment and the current
management, when museums have more resources than needed to maintain the
current level of museum offerings. This stock decreases if the resources available
are less than the resources needed to maintain the current offerings. Both these
sectors have the same parameters, with the exception of the initial level of the
museum offerings. The model tries to reproduce the typical situation, also
recognizable in Turin, where the levels of museum offerings are varied.
e Resources Allocation sector: this sector analyzes the allocation process that sets
resources for both museums according to their needs and the resources available at
each point in time. The resources for investment are considered limited (the total
amount is a stock) and the resources for current management are constantly
available each year. At the beginning, the resources needed are enough to maintain
and develop in the long term the current level of museum offerings.
The model, even through it is just a simple representation, aims to catch the main problem
regarding the development of the museum offerings: the large amount of investment
required, the impact on the operating costs, and the consequent lack of resources for the
current operative management that destroy year by year the investments made. The possible
model enlargement should be evaluated in terms of the marginal value added. For instance,
the model could consider on a more detailed level the components of the museum offerings
from the front office (services available, operating hours, etc.) to the back office (research
and preservation activities, heritage security). In addition, the model enlargement can
examine the allocation process to catch the possible delays present in the system and the
misperceptions in evaluating the resources needed for the museum, due to the difficulty in
acquiring information in the museum sector.
Simulations and Policy design
The actual strategy pursed by the Museum District in Turin reflects a high growth strategy
for the main part of the museum organizations located in the metropolitan area. This
strategy seems to be unsustainable in the long term; in fact due to the increase in museum
costs needed to maintain the higher level of museum offerings, the museum offerings
progressively decrease, eradicating the improvement achieved through the investment
process. A simulation of the actual strategy pursued in Turin is reported in the graph 3.
Graph 3 — Simulation of the actual strategy pursued in Turin’
0,65
0,6 +
0,55 +
0,5 4
0,45 +
0,4 +
Museum Offering
o
wo
a
2
w
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
Time
—MuseumOfferingM1 —MuseumOfferingM2
Source: author’s elaboration
If the high grow rate strategy seems not sustainable in the museum sector, we should
analyze the situation and suggest possible policy designs that can increase the sustainability
of museum growth in the long term.
The model simulations have suggested some policy indications, addressed to increase the
sustainability of the system, given its structure. The first policy indication regards the
reduction of the growth objectives. This strategy tries to avoid overburdening the carrying
capacity of the system (given the resources available for current operations) and maintain
the museum offerings in the long term, thanks to the investments made. Along this stream,
we have changed the parameters of the model, reducing the growth objectives of the two
organizations being considered. The results of the simulations are reported in graph 4.
This strategy can be difficult to pursue, considering the image return the cultural sector has
for public authorities, as well as taking into consideration that investments tend to
transform these organizations in a much more spectacular way.
7 Simulation is based on the following input: resources available for operative management: 300; resources
available for investment: 4000; museum offering MI(time=0): 0,3; desired museum offering MI: 0,55;
museum offering M2 (time=0): 0,5, desired museum offering M2: 0,7.
Graph 4 - Policy design 1: Growing slowly*
0,65
0,6
0,55
Museum Offering
2
a
0,45
04
0,35
0,3 HAH VMAS
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
Time
—— MuseumOfferingM1 —— MuseumOfferingM2
Source: author’s elaboration
The second policy indication regards the reduction of cost of growth. If the investments are
projected in order to curb the increase in operative costs, the degeneration process of the
museum offerings can be slowed. The effective feasibility of this strategy requires a
combined design of investment projects, embracing management with aesthetic and
artistic/historical experts. The combination of these different perspectives and competencies
requires a new approach to the museum sector where the economy (in latu sensu) serves
artistic and aesthetic values and needs. The reduction of cost of growth can be pursed by
the search for economy of scale, gathering the activity and the services that can be
centralized and available for all museums within the metropolitan area (i.e. Wilson, Boyle,
2004). This solution requires museums to reshape their organizational structure and develop
multi-level agreements to develop inter-organizational cooperation. The cost reductions
should be evaluated considering hidden-cost that the opaque distinction among museums
and public administration owners do not let to make out.
The third policy indication regards the increase of resources for operative management and
the corresponding decrease of resources available for investments, combined with a limited
growth strategy. This strategy indicates the same resources should be allocated in a
different way to sustain the museum’s growth. This strategy shows that a step-by-step
process increases the sustainability of the system, thereby avoiding the degeneration
effects. However this strategy is extremely inconsistent with the diffused and shared mental
* Simulation is based on the following input: resources available for operative management: 300; resources
available for investment: 4000; museum offering MI (time=0): 0,3; desired museum offering M1: 0,45;
museum offering M2 (time=0): 0,5, desired museum offering M2: 0,6.
models within the sector, in which the resources for current management seem to be
synonymous with inefficiency and investments are the symbol of development of the
sector. The delay present in the system (the museum offerings decrease steadily) create
misperceptions so the degenerative process is not recognized until it becomes very evident.
Graph 5 - Policy design 2: reducing the cost of growth?
2 0,6
= 0,55 ln
9
© 05
= 0,45
E 5
2 0,4
S 0,35
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
Time
——MuseumOfferingM1 —MuseumOfferingM2
Source: author’s elaboration
is based on the following input: resources available for operative management: 300;
s available for investment: 4000; museum offering Ml(time=0): 0,3; desired museum offering M1:
0,55; museum offering M2 (time=0): 0,5, desired museum offering M2: 0,7. In other simulations the non
linear relationship between Museum Offering MX and Operative resources needed MX (where X=1,2) was
“GRAPH(MuseumOfferMX,0,0.1,[0.22,0.24,0.48,0.68, 1.27,2.06,2.85,3.71,4.58,4.96,5"Min:0;Max:5;
Zoom"])”. Instead in this simulation, the non-linear relationship is “GRAPH(MuseumOfferMX,0,0.1,
[0.22,0.24,0.35, 0.57,0.94, 1.36, 1.91,2.46,2.81,3.03,3.27"Min:0;Max:5;Zoom"])
Graph 6 - Policy design 3: increase the resources allocated for operative management"
07
0,65
0.6
0,55
0,5
0,45
0,4
0,35
0,3
Museum Offering
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
—— MuseumOfferingM1 ——MuseumOfferingM2
Source: author’s elaboration
A combination of the policy suggestions can represent a possible fourth way to develop
these organizations in the long term, by blending the reduction of cost of growth and a
more efficient use of existing resources.
In conclusion, the policy analysis has shown the sustainability of these organizations
requires a radical change in the mental models well-diffused within the sector.
Conclusions
The main conclusion of this study is the discussion of the sustainability of museums, which
is questionable in the long term, and the need for development of a more effective strategy
which implies a radical change in the mental models assumed in the sector. More
particularly, these models must be concerned with the rapidity of the museum’s growth, the
way to design the investment projects, the reduction of costs of growth and the resources
allocation among investments and current operation. The change of these mental models
remains one of the most critical aspects.
Moreover, this study suggests some implications for the museum management literature. In
particular, they are traceable in the choice of the object and the framework of analysis that
should be assumed. Due to tight interconnections among the museums located in the same
area, the public and private institutions in the same area, and the relevance of this
interconnection for the sustainability of the whole system, the object of the analysis should
be moved from the single organization to the organizations located in that area. Another
°° This
resource!
imulation is based on the following input: resources available for operative management: 400;
ailable for investment: 1000; museum offering M1(time=0): 0,3; desired museum offering M1:
0,55; museum offering M2 (time=0): 0,5, desired museum offering M2: 0,7.
implication regards the multidisciplinary perspective, assumed in this study: it has
highlighted the potential of this approach to the study of museums and their functioning. In
particular, the management perspective should appropriate the theory developed in the
economics of arts.
Considering the methodology used, this study has highlighted the importance of the use of
system dynamics to capture the possible dynamic evolution of the system. This method,
identifying counterintuitive behavior, has revealed the fact that the more you invest, the
more you will decay in the long term. Therefore, strategies that have good results in the
short term can be problematic in the long term. The span of application of the system
dynamics approach to this sector can be interesting, especially to overcome the limit of
static perspective and analysis of this sector that, by nature, produce its effects in the long
term. The main limits of the application of the system dynamics methods to this field are
the restricted availability of data that structurally characterize the sector.
The limits of this study are numerous, and they suggest some further research directions.
This model does not discuss in detail the allocation process and the definition of the growth
objectives. The definition of the variable “museum offerings” can be considered much too
general and it does not catch the dynamic evolution among back-office and front-office
activities. The model could discuss the consistency of the growth process with regard to the
museum mission, stakeholders’ objectives and expectations from the institutions. The
future development of the model should also take into consideration the value that each part
produces to the ultimate meaningfulness.
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Appendix 1 — The system dynamics model
Figure 2 — The stock and flow diagram: Museum M1
InvestmentsDesiredM1
InvestReqMODM1
Resources Museup
Generations
StandardGenerationTimehtt
Gapht
RisourcesAllocatedToM1
Source: author's elaboration.
Figure 3 — The stock and flow diagram: museum M2
quiredF orMOM2
TotCumulatedinvestmentM2
o>
MugetimOfferining2
Generationfiat umOtter — RegenerationRateMuseumotfer2
‘StandardGenerationTimeM2
StandardDegenerationTimem2
StandardCostsM2 oe
EffectiveTimPGenerationm2
EffectiveTimeDygenerationM2
“~~
“~~ OperativeResoucedtleededM2
“i
NegEtfect@AMuseumOtteri2
PosE ffectOnMusétmnOtterm2
GapResourcesForOpebptiveManagemer
ia
GapM2
nw
ResourcesdllocatedToM2
Source: author’s elaboration
Figure 4- the stock and flow diagram : resources allocation
InvestmentsDesiredMit InvestmentDesirectt>
a
ResourcesAllocatedF orlnve sources AllocatedForinvestht2
‘QuotaOtResourcesallebatedF orivestments
TotalResourcesAveilableF orlnvestment
Resources Awailable
ResourcesNeededForOperativeManagm¢ent
beet
OperativeRespurcesteededht] OperativeResoulcesMeededM2
RisourcesAllocatedToM1 Resources AllocatedToM2
RisourcesAllocatedForOperativeMtanagement
Source: author’s elaboration
