The purpose of the project

Marketing is important in nonprofit arts and cultural management. But who are we marketing to?

Nonprofit arts organizations usually depend on multiple constituencies for tangible and intangible resources. They respond to a diverse array of stakeholders whose claims or interests are economic, moral or legal. Strategy scholars argue that organization’s environment can be best understood in stakeholder terms and organizations need to always evolve with stakeholders’ concerns. However, in the nonprofit arts sector many issues are tied with stakeholders. Conflicts and ambiguities between stakeholder concerns in the organizations are often observed[1]. Given the typically small levels of resources in non-profit organizations that call for a careful use, those organizations need to pay attention to everything and to detect the relative shifts in the stakeholder environment so as to apportion energies toward those stakeholders at issues.

To understand the relationship between stakeholder management and organizational performance, this research takes the perspective that marketing is a social process that can facilitate effective stakeholder management. We follow the “market orientation” dictum provided in strategy research to investigate how arts organizations behave toward stakeholders, and the relationship between organizations’ stakeholder management and organizational performance.

It is clear that learning organizations should have strong capabilities in aligning with stakeholders’ beliefs, and should adapt their behaviors accordingly. Successful organizations will have developed ambidextrous capability in dealing with conflicting and ambiguous stakeholder demands. We are also aware of that nonprofit arts organizations, regardless of size, are in different life stages that are usually in transition. Those in the early stage will act differently toward stakeholders from those in later stages.

The result of this research hopes to offer new insights into three areas. First, it offers a context-specific investigation into the use of stakeholder management in nonprofit arts organizations. Second, the concept of stakeholder and its implications on organizations’ strategic behaviors is explored. Third, the relationship between strategic orientations toward stakeholders and organizational performance are investigated. To engage with stakeholders, we believe that administrators in nonprofit arts organizations need not only to exploit their current programs but also to explore new opportunities to attend to the underserved stakeholder networks.

[1] In Artful Leadership (Indiana University Press, 1996), Tschirhart discussed in book length about stakeholder problems in nonprofit arts organizations.

paper abstract

The notion of market orientation has been the philosophical foundation of marketing strategies. It not only demonstrates organizations’ attitudes and behaviors toward the markets but is also instrumental in examining a firm’s strategic directions. Investigation of market orientation facilitates an advanced knowledge to the current state of organizations’ marketing mindset in the presence of environmental change.

Extant research in this area, however, has been greatly emphasized on business sector. Limited attention has been given to nonprofit area, specifically the arts and cultural sector. Early research borrows the utilities of market orientation in the for-profit sector yet disregards the fundamental difference between nonprofit and for-profit. Until recently a series of studies highlight different issues and encourage more exploration into the use of the concept in the nonprofit context. Inspired by the notion that nonprofit organization delivers services that satisfy individual and societal needs, this paper sets out to investigate the use of market orientation in the US nonprofit arts context. A key postulate central to the argument is that market orientation in the nonprofit arts setting actually is inherent in a stakeholder environment. Organization’s sustainability significantly depends on its capability to align with stakeholders interests and to adapt its strategic behaviors in the same regard.

To propose the use of market orientation in the nonprofit arts and cultural context, this dissertation explores dimensions of market orientation with the implications of stakeholder concept and multi-fold performance consequences considered. A refined set of components for market orientation in the nonprofit arts is proposed and alternative conceptual frameworks are developed. Given the diverse and sometimes conflicting stakeholder interests, this paper also proposes to examine the issue of organizational capabilities in aligning with stakeholder interests and adapting strategic behaviors.

Informants for this study are arts and cultural organizations in the urban areas of Pacific Rim states of America including California, Oregon, Washington and the British Columbia of Canada. Both qualitative and quantitative analyses are employed for framework development and hypotheses testing.

This research offers new insights in three areas. First, it offers a context-specific investigation into the use of market orientation in arts and cultural sector. Second, the concept of stakeholder and its implications in marketing is explored. Because of the strategic nature of market orientation in which organizational capability is detrimental, the effects of managerial alignment and strategic adaptability are explored. Third, the relationship between different strategic orientations and organization performance are investigated. To engage with stakeholders, arts executives need not only to exploit the advantages of current programs but also to explore new opportunities to attend to the underserved stakeholder networks.

Keywords: market orientation, strategic orientation, stakeholders, marketing strategy, arts marketing, nonprofit marketing, arts and culture