Sourcing Decisions of Arts and Media Organizations - Essay Example

? Sourcing Decisions of Arts and Media Organizations of [Academic [Due Sourcing Decisions of Arts and Media Organizations The traditional arts organizations have evolved over time into contemporary art galleries, cultural promotions, arts and media exhibitions and a metamorphosis of the theatre has been observed. Hence, with such a proliferation of arts and media organizations and their operations expanded, mostly geographically and globally, into delivering more external services and social activities, there has been an increased need to outsource the funding for such large scale operations (Sorjonen 2011). Likewise, the process of fund raising and donations has rather become a commercial activity that not only has resulted in more and more charity events but has also created a market within that is funded by such large organizations. The amalgamation of social services and media and arts has been an eminent result. Hence the market for sponsorships has thrived. These can be seen by the famous charity events by BBC and FOX news (Dan 2011). Thus, activities like fundraising, donations and sponsorships are of strategic importance to such organizations which is why sourcing decisions are of integral importance to not only a firm’s financial standing but also to its public relations. It has no become a necessity to get the charity events sponsored or to sponsor a charity event for that matter, as it adds to the reputation and good will of the company. Likewise, firms involved in fundraising are evaluated on the basis of their participation in social activities and on this has become marketing an essential marketing tactics to broaden their customer base and reach of the brand. Fundraising events or sponsorships act as a contact point for several untapped markets and increases brand loyalty of the existing customer base (Pope 2010). Therefore, sourcing decisions are imperative. Because of the strategic importance of the sponsors as a strategic alliance in the business operations, businesses face several issues while making sponsorship decisions. In terms of an arts or media organization looking for a sponsor it has to be ensured that the sponsor’s objective is aligned with that of the firm because usually a sponsor will be driven by its own objectives. These may include the extended reach of its brand awareness, the objective to increase its brand exposure by having logos placed on the event’s advertisements or simply the motif of profit maximization. These objectives might sometimes conflict with the objective of the firm especially if the event is a charity event (Pope 2010). In that case both the parties will aim for different incentives thus the marketer must provide more substance than just logo pasting. Moreover, the commercial benefit of the sponsor may often be in direct conflict with the firm’s strategic goals. Hence rounds are negotiations are often common when sourcing decisions are made which however incur much costs for the firm (Simmons 2006). Therefore, the most crucial step is the decision to choose from the various candidates. A firm must choose the sponsor who is the best fit with the company’s strategic goals as well as its public image. The Consumer Involvement theory suggests that consumers make purchase decisions based on the level of involvement they have with the brand and includes the aspects of consumer behaviour like amount of time spent on choosing the product or service, research about the specific product or service, asking friends and family etc. therefore, like the advertisements and promotions, sponsorships should be based on such considerations (Krohmer 2011). Given the nature of arts and media products and services, which are high involvement decision making processes involving emotion rather than rational, the sponsorship should be based on consumers’ preferences of the emotional brands that they associate themselves. Hence if an organization is unable to identify the purchase decisions of its audience and not choose the sponsorship or base the sponsorship activities on this fundamental concern, it will end up investing in a sponsorship that does not trigger sales. Thus the evaluation model for sponsorship selection should incorporate consumer involvement as a prerequisite screening tool for making effective decisions (Krohmer 2011). For arts and media organizations the sponsor should preferably be another firm in the same field to increase its credibility. Thus it can be rightly said that a few big sponsors are better than having a lot of small ones. This is another situation for the organization where issues in management might arise. The clutter for having a lot of small sponsors is not just evident in ads and promotions but also in management within the firm. It is an added cost to negotiate and manage a lot of sponsors and can often result in loss of control of the core activities (Pope 2010). The biggest issue with having a lot of suppliers is the problem of “hollowing out” of the organization. It can hinder effective communication which may result in a failure of the organization to meet its strategic goals and also to communicate the goals to the sponsor. It may also result in inability of the firm to facilitate feedback, which is essential for its operation and also in an ability of the organization to monitor the performance of its sponsors (Ting 2010). Once negotiated, it is often an issue of utmost importance when the integration on the entire front of the firm’s operations is lacked. It is sometimes problematic when arts and media organizations fail to treat sponsors as their marketing partners (Sorjonen 2011). With the changed nature of media theatres, arts exhibitions and galleries which sometime are geographically dispersed on a much larger scale than before, the time management can often be an issue. It is essential to get the sponsor before the event is advertised as last moment sponsorship can lead to detrimental flaws in the business operations and marketing management. In order to get substantial sponsors, the organization must at least a year before planning the event. Thus sponsorship decisions must be made while developing the initial framework of the project (Sorjonen 2011). Yet another issue can be the non-compliance with the original terms of sponsorships. This is often a problem when everything is not recorded in writing and can arise in small organizations where a formal structure of work practices does not exist to an extend where a larger organization functions. Furthermore, the sourcing decisions for sponsorships are of utmost importance because the aim is to build relationship with the sponsor in order the reduce the future costs of hiring new sponsors and negotiating with them or in terms of experimenting working with a new sponsor (Simmons 2006). In terms of sourcing decisions for funding, it is again very important to consider the funding partners as important stakeholders of the organization. Funding organizations and individuals like The Open Society Institute and George Soros, who has spent a total of $48 million on funding media organizations like Investigative News Network and the Columbia School of Journalism amongst many others. Thus funding is mostly received from media organizations pertaining to educational affiliations like journalism schools, and mass communication disciplines in many universities across the USA (Dan 2011). Thus, as such media organizations source funding to external factors there are a lot of problems to be faced. The foremost issues is that of finding the most reliable and capacitative funder. Art galleries, museum, theatres etc require a lot of finance. Hence sourcing funding to another business or corporate individual usually requires relationship building which is why this decision requires a lot of verification checks and balances. The funding organization needs to have sufficient and consistent finances to meet the needs of the recipient organization (Simmons 2006). Fund raising and donations also face challenges from the upsurge of social networking websites like Twitter and Facebook whereby individuals have been reported to have used the website to hack the credit card information of users to obtain money. Hence the online fundraising is a great opportunity, yet is majorly vulnerable to the scamming activities and online fraud (Gose 2011). Another issue that may arise is that of having timely funding opportunity available. This is because the organization would require funds to operate in a timely fashion and deliver the product or service in response to the proposed demand of consumers. If the organization is not responsive to the customers’ needs then it may lose potential customers. Writing a funding proposal is another possible problem if not tackled carefully. It is the core process of getting valuable funding as the decision greatly depends on the proposal (Hiles 2010). Hence some organizations do not hire professional assistance in writing funding proposals; this can be a problem if funding proposals do not deliver the objectives of the organization. Moreover, funding services can extend from funds for events management to advertisements and developing an entire promotional campaign, depending on the size of the organization, thus accountability needs to be established, both on the receiver’s and the sender’s side. This can be a huge set back in small organizations where documentation is often absent. In small art or media organizations, most of the work is client based and thus based on the customer supplier intimacy, documentation is often skipped. However, this can result in major financial and trust problems for both the parties (Hiles 2010). Sometimes art organizations like universities offering disciplines in arts are majorly operational on funding from either state or other charities or governments. This is a problem when the eligibility criteria for these disciplines are easy to meet. It may result in over utilization of the resources and whereby in countries like UK, such programmes are aimed for home students while the foreign policy aims at offering higher number of student visas, immigrations and British passports. It is rather contradictory as the international students might be at a risk and this may deter the existence of a multicultural environment in higher education programmes. Hence, while designing funding options, organizations must consider the allocation of the limited funds made available. They should be allocated based on producing the maximum welfare for its citizens (Dan 2011). Similarly, giving out donations is another important decision that is becoming more and more commercial in nature. Large conglomerates like the News Corps have made millions of dollars worth of donations to the Republican Governors Association. Moreover the analysis by the Centre for Responsive Politics reveals that corporations including the News Corp (featuring the FOX news channel, FUEL TV and many others), General Electric (having for example, NBC, CNBC networks), Time Warner and Walt Disney have all donated 5-7 digit figures to the political organizations in the election cycle of 2010 which precisely shows that the major issue faced by these media organizations is that of lobbying activities. Political influences are immense on these large conglomerates which have to adjust to the changing regimes, indulge in lobbying and political alliances (Megan 2010). Not only the financial pressure for such activities is huge but such lobbying also questions the ethics of making donations. Making donations has now rather become a commercial activity which is another way of building upon the brand equity and capture a greater market share. It is a new way of building on to the brand’s reputation; a cunning tactics used by many media organizations in particular (Krohmer 2011). Another issue in donations is to select the best charity or organization to donate to. This may involve many qualitative and quantitative criteria models and the final choices must incorporate those firms which have similar strategic goals as the company does itself or that support somewhat related objectives (Hiles 2010). Therefore, it can be concluded that sourcing decisions pertaining to sponsorships, donations and fund raising have become one of the most fundamental decisions of the geographically expanding organizations whereby operations are extending not only geographically but also globally. The nature of arts and media organizations has changed with an increased importance of these disciplines in universities, colleges and even at secondary educational levels, along with the proliferating dominance and power of media on ruling the world and the power of arts through which cultural forces are preserved as well as challenge. Hence, fund raising, sponsorships and donations have become the infrastructure of gaining brand equity and to facilitate the marketing as well as lobbying tactics of organizations. However, these issues must be resolved to achieve efficient decision making (Sorjonen 2011). List of References Dan, G., 2011. Soros Spends Over $48 Million Funding Media Organizations. [Online] Available at: [Accessed 11 November 2011]. Gose, B., 2011. As Fund Raising on Social Networks Grows, So Does Concern About Fraud. Chronicle of Philanthropy Vol.23, p.8. Hiles, T.S., 2010. Determining the success of fundraising programs. New Directions for Higher Education, pp.51-56. Krohmer, H., 2011. Emotional Brand Attachment and Brand Personality: The Relative Importance of the Actual and the Ideal Self. Journal of Marketing Vol.75, pp.35-52. Megan, W.R., 2010. Investigating Money in Politics. [Online] Available at: [Accessed 11 November 2011]. Pope, R., 2010. The making of social sponsorship. Journal of Sponsorship Vol. 3, pp.242-48. Simmons, C.J., 2006. Achieving Marketing Objectives Through Social Sponsorships. Journal of Marketing Vol.70, pp.154-89. Sorjonen, H., 2011. The Manifestation of Market Orientation and Its Antecedents in the Program Planning of Arts Organizations. International Journal of Arts Management Vol. 14, pp.4-18. Ting, L.L., 2010. An Enquiry about "Hollowing Out" Effects in Home Exports, Technology, Innovation and Employment. A Study of Taiwanese Enterprises to China. International Journal of Organizational Innovation Vol.3, pp.338-51. Read More