Public Control of Museums in New Zealand and the United Kingdom: Implications for Entrepreneurship

Public Control of Museums in New Zealand and the United Kingdom: Implications for Entrepreneurship

GEORGE THOMPSON

n this article, I explore entrepreneurship in public-sector cultural enter- I prises by comparing and contrasting how the public management and control regimes of two countries-New Zealand and the United Kingdom-affect the museums of those countries. I consider the implications of studying entrepreneurship in the context of public-sector cultural enterprises. Public, nonprofit ownership necessitates levels of accountability and control that many writers consider inimical to effective entrepreneurship. In this comparative study of the relationship between control regimes and entrepreneurship, I take up that issue. Although museums in the United Kingdom and New Zealand were found to be similar in many respects, they differed significantly in the public-sector contexts of accountability and control in which they operate. In conclusion, I discuss the implications that these differences have for entrepreneurial management of public museums.

Entrepreneurship and Public-Sector Cultural Enterprises

In the English language, the term entrepreneur has long had the meaning of “the director or manager of a public musical institution” or “one who ‘gets up’ entertainments, especially musical performances” (Oxford English Dictionary 1989). The more general meaning of “one who undertakes an

George Thompson i s a senior lecturer in accounting at the Universiry of Canterbury, New Ztaland. He has published on cultural capital and on museum-performance measurement.

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Public Control of Museums

enterprise” (OED 1989) is related to the specialized context of political economy but has also been applied to management and sociology. In view of the origins of the term, therefore, research on entrepreneurship in cultural enterprises is not so much an innovation as a reclamation.

In reclaiming entrepreneurship for the arts and culture, we should note that most cultural organizations operate in the nonprofit sectors, as publicly or privately owned entities. On the other hand, the bulk of the literature on entrepreneurship embeds the concept in the traditional economic model of a world-devoid of communal property and populated by exclusively self- interested individuals who seek to maximize profits from the purchase and sale of their privately owned goods (see, for example, Harper 1994). In sum, does this view allow entrepreneurial principles to be applied to cultural enterprises that pursue nonfinancial aims and that are largely supported by non-ownership-conferring contributions of labor and capital?

From the relatively small literature on entrepreneurship in the nonprofit and public-sector contexts, the answer seems to be “Yes.” However, on the issue of whether a “nonfinancial entrepreneurship” exists , the literature seems divided. One strand narrows entrepreneurship to market initiative within those entities. For example, Wang and Berman (2000) define entrepreneurship in local government as involving contracting-out, the sale of capacity, and profits from user-pays activity. Warner and Hebden (200 1) define “government entrepreneurship” as raising revenue outside the tax system by “bringing governmental units into active competition for private sector business” (3 18). Coming also from the traditional economics school, Bilodeau and Slivinski ( 1998) explore the circumstances under which a rational entrepreneur might prefer the nonprofit over the for-profit form of enterprise. Their argument-based on an entrepreneur’s self-interest and eschewing welfare or efficiency considera- tions-suggests that, when the product of the enterprise is a public good, it pays an entrepreneur to found a nonprofit, rather than a for-profit, firm.

The second strand of the literature assumes, either explicitly or implicitly, a broader definition of entrepreneurship. For example, Moms and Jones state: “To the extent that an undertaking demonstrates some amount of innovative- ness, risk taking and proactiveness, it can be considered an entrepreneurial event, and the person behind it an entrepreneur” (1999, 74). In addition, Borins refers to “innovators who achieved beneficial results . . . such as enhanced client well-being, improved service, and lower cost . . . and did it with integrity” (2000, 506). This seems to depart from the “tendency to link the notions of entrepreneurship and enterprise to ‘being business-like’’’ (Gibb 2000, 15), a position that, according to Gibb, “has created difficulties and some confusion” (15).

The writers seem unanimous, however, in inferring that the accountability, transparency, and control that public ownership is deemed to involve is an

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The Journal of Arts Management, Law, and Society

impediment to entrepreneurship. They assume that private commercial ownership provides a more trusting environment (Evans 2001), with less focus on the “processes and rules” and “micro-issues’’ that characterize “the current structures and cultures of audit” in the public sector (Performance and Innovation Unit 2001, 11, qtd. in Evans 2001,9). Borins suggests that “entrepreneurship could conflict with traditional values such as due process and accountability” (2000, 498). Moms and Jones suggest that “the higher the degree [of bureaucratization] the greater the potential conflict with entrepreneurship” (1999, 79).

Yet, accountability, transparency, and control are regarded as being of great importance to effective governance in the public sector. For example, Dobel (2001) argues that “[tlhe ultimate purpose of governance is not efficiency, but more important values . . . [to] provide reliable, continuous commitment to public purposes, building expertise, memory, and direct accountability ( I67).”

Dobel goes on to suggest that public managers can neither afford to ignore these fundamental issues of governance nor “rely on the heroic figures of entrepreneurial managers” ( 168) to reconcile these fundamental issues of governance as needed:

New institutions and initiatives cannot be built just for efficiency or service to consumers, they must earn legitimacy by the courts and sustain accountability to the institutional mechanisms. This will require transparent public records, monitored process (not just outcomes), and sustained integrity in the use of public funds that is consistent with regime values, not just the visions and mission of entrepreneurs or self-selected community representatives. (Dobel2001, 170)

It seems, therefore, that the requirement of balancing capacity and control in the public sector conflicts with the requirements for entrepreneurship to flour- ish; moreover, this conflict is unavoidable. Rentschler and Geursen (2001) suggest that the very survival of the art museum as an organizational form depends on entrepreneurial success, which is consistent with Fitzgerald’s notion of artists as “entrepreneurs of culture” (Fitzgerald 1997, 10). If this is the case, then the conflict discussed above is vital to any understanding of art museum management and should also extend to general museums-the topic of this article.

In contemplating the effect of public policy on museum entrepreneurship, two alternative points of view can be envisioned. One view accepts the assertions in the literature that controls and scrutiny stultify entrepreneurship. From this viewpoint, different national regimes can be examined in terms of what practices harm the potential for entrepreneurship. The second view holds that the blanket assertions in the literature regarding the deleterious effect of public management tools on entrepreneurship are unproved. This leaves open the possibility that some forms of public-sector ownership and control could be at least neutral or could even enhance the prospects for entrepreneurship.

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The museum comparison that follows will be tested against these alternative viewpoints. I will first highlight the similarities between the New Zealand and the United Kingdom museum sectors and then, in the subsequent section, ana- lyze the systemic differences.

Reasons for a Good Measure of Isomorphism

There are a number of reasons why museums in New Zealand and the United Kingdom should have developed along similar lines. For example, the common link of kinship and culture between the majority of the populations of the two countries contributes to this isomorphism. Prior to 1840, the Maori formed the vast majority of the population of New Zealand. In 1840, the Treaty of Waitangi between the Maori and the British crown established New Zealand as a British colony. Over a sustained period subsequent to that, settlers arrived from the United Kingdom; they outnumbered the Maori by the 1850s and continued to expand the ratio of non-Maori to Maori well into the twentieth century (Department of Statistics 1998). From the start, the settlers set about converting New Zealand into a physical, social, political, and legal environment similar to what they had left behind. New Zealand has many legal and social institutions that are similar to those in the United Kingdom, a Westminster style of government and a population of which nearly three quar- ters have British ancestry (Department of Statistics 1998). Much of the “Britishness” that they created continues today, even though New Zealand has been a sovereign state since 1947.

The cultural environment that the British introduced included museums. The first museum appeared in 1841, and others were established in main ten- ters over the succeeding forty years (McManus 1988). The fact that museums were established so soon in this “imported community” suggests that the colonists saw them as a vital part of the society that they were reproducing. Of course, the importance of the many differences in the physical and human heritages should not be underestimated (Thompson 1999b). However, New Zealand and United Kingdom museums preserve and display an overlapping heritage in terms of knowledge of world cultures and the physical universe, as well as the social history surrounding the United Kingdom’s relationship with New Zealand.

Given these commonalities, it is not surprising that the museum sectors of both countries have developed along similar institutional lines, with a high degree of isomorphism in management practices. DiMaggio identifies three forms of isomorphism (DiMaggio 1983; Covaleski, Dirsmith, and Jablonsky 1989, two of which-the mimetic and normative-are particularly applica- ble to this discussion.’ The global nature of the museum profession would be expected to lead to mimetic isomorphism (organizations modeling themselves

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on their peers) and normative isomorphism (museum workers’ efforts to legit- imize their profession by establishing a common philosophical base upon which to standardize conditions and methods). New Zealand and United Kingdom museums do share an agreement on international standards for curating, conserving, and presenting museum objects. Museums in both countries draw on, and contribute to, an international fund of knowledge. These practices and ideals are marshalled by the International Council of Museums, professional organizations and journals, Web sites, conferences, and university education programs. This museum network helps to create a degree of isomorphism in the approaches taken by both countries with respect to museum management, including, for example, conservation, display, research, and education programs.

Mimetic and normative isomorphism also occur at the governmental level, which leads to common forms of public-sector administration of museums. The public sector dominates in the funding and control of most museums in New Zealand and the United Kingdom, and the two countries share many similarities in their systems of museum governorship and control. Center-right political regimes in both countries in the 1980s reinforced similarities in administrative approach. Governance is conducted in largely similar forms. The United Kingdom’s national museums and New Zealand’s national and regional museums are governed by appointed boards of trustees, and the other museums are governed variously as trusts, as incorporated societies (in New Zealand), or by committees drawn from their principal funding bodies (for example, local authorities or universities). The modes of public funding are also similar: distribution via capital and operating appropriations or grants from central or local governments. National lotteries are a significant source of funding in both countries and are administered by autonomous agencies: the Office of the National Lottery in the United Kingdom, and the Lottery Grants Board in New Zealand.

Similarities can also be observed in the control techniques employed. The public sectors of both the United Kingdom and New Zealand governments are unified centralized entities with the power to collect and distribute taxes, legislate, and oversee the departments reporting to the cabinet. Such centralized administration calls for generic forms of control. Museums are subject to the same control measures applied across the public-service sector. However, the variety of activities performed by governments necessarily calls for performance-control methods specific to different classes of activity. Under this rationale, the generic forms of control might be substituted for, or complemented by, measures designed specifically for the museum sector. Indeed, there are elements of both generic and specific forms of public control in the museum sector in New Zealand and the United Kingdom. Accompanying the similarities in their regimes of public-sector control over

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museums, there are crucial differences in public-management ideology and policy toward museums that are manifested in both generic and museum- specific, public-management measures. These factors differentially affect entrepreneurship.

Differences in Public Management of Museums

Public-sector impact on cultural institutions such as museums can involve both support and control. Support is provided via the funding that enables museums to achieve their aims, but may also be provided by public-sector agencies with guidelines established to promote planning for efficient and effective operations. Moreover, funding and other support give governments some control over the museum sector in the form of powers to appoint museum trustees, to direct expenditure, and to impose reporting obligations. These powers may also involve the museum sector in the pursuit of explicit or implicit social, cultural, and economic policies. In comparing public-sector impact on museums in the United Kingdom and New Zealand, differences are found in the nature of both government control and direction and of publicly funded support.

Government Control and Direction

Throughout the 1990s, radical reforms in both New Zealand and the United Kingdom transformed their public-sector management regimes. In New Zealand, public-management reforms leaned heavily on the adoption of accrual-accounting and service-performance reporting. Using these forms of accounting, the New Zealand government made all public entities relatively more transparent than they previously had been, at least to anyone who cared to read the reported plans and results. Such financial information aided private-sector interests in the privatization and devolution of public assets and functions. The budgeted expenditure and performance-target information (both financial and nonfinancial) provided the basis for public scrutiny of annual plans. The comparisons of results to targets formed a basis of accountability through which public-sector funders and other stakeholders could determine whether planned outputs were being achieved.

In the United Kingdom, there was a similar drive toward the creation of an administrative environment for privatization and devolution, but measures to control the core of nondevolved functions, such as museums, were more wide ranging. These included performance measurement as in New Zealand, although with crucial differences. In addition, the United Kingdom introduced a range of “seals of approval” measures not found in the New Zealand model (e.g., the Charter Mark, Investors in People [IIP], museum registration, and

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museum designation). Although ostensibly voluntary, these seals so heavily influence public funding that they effectively became compulsory for many museums. The seals are awarded pursuant of periodic inspections by experts who evaluate the museums using standard criteria. The “seals of approval” were notably absent from the New Zealand central government’s reforms, although recent developments have indicated some initial moves in this direction. First, Investors in People New Zealand Ltd has been formed to operate its United Kingdom-developed scheme in New Zealand. Of the eight New Zealand organizations currently listed as meeting the IIP standard, two are museums.* Second, the National Services Division of the Museum of New Zealand-Te Papa Tongarewa has developed “draft museums standards” in partnership with a number of other museums.

Performance indicators were a key feature of both the New Zealand and United Kingdom reforms. However, they have been put to different uses. In New Zealand, service-performance reporting was introduced to achieve transparency, to compel entities to express plans in terms of annual outputs and outcomes, and to encourage adherence to planned outputs. In the United Kingdom, performance indicators were invoked in schemes to compel management to plan outputs that adhere to central-government policy statements and to achieve standardization of planned outputs across entities performing similar functions. In the United Kingdom, a central authority, rather than the subject entity (the museum), decides on the performance indicators (both in reports and as part of the “seal of approval” schemes); in New Zealand, the reporting entity (the museum) formulates the indicators without prescription by any central authority. Consequently, the performance results in the United Kingdom can be used to form the basis of cross-entity comparisons or league tables; by contrast, the diversity and incomparability of performance indicators frustrates attempts to compare entities in New Zealand’s museum sector (Thompson 1999a).

The New Zealand regime relies on annual agreements by museums with their governmental funders on quantitatively measured outputs for a specific period. This provides the basis for the accountability of the museum to its principal funders. However, reported outputs represent only a small part of what museums actually do, which leaves museum staff with significant discretion. In the United Kingdom, by contrast, the comprehensive checklists used in inspections for registration (or Investors in People or the Charter Mark) strike closer to the heart of museum activity. The United Kingdom’s checklists are more conducive to a long-term strategic view of museum performance because they are unconstrained by limits imposed by the single- period performance reporting in New Zealand. This approach allows measures of “capacity to perform” (Thompson l999a; 200 l ) or “capability” (Controller and Auditor-General 2001) (such as qualifications of staff and quality of the collection management, which reflect a longer-term perspective)

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to be included in museum planning, control, and accountability. The degree of specificity imposed by central authorities under the United Kingdom regime clearly reduces the museum’s discretion to act outside the formal constraints of funder control. Yet, this creates a more comprehensive performance model, which may be of assistance in internal museum-planning processes and may help to prevent a museum from lagging behind in the achievement of mini- mum standards.

The dual roles of the funding/advisory bodies in the United Kingdom allows further central influence. For example, the Museums, Archives and Libraries Commission admits that its control over funding persuades museums to follow their policy advice (see, for example, DCMS 1999, para. 38). In New Zealand, museum funding is more diffuse and relatively less coupled to a national policy. Arguably, such uncoupling allows for more originality in the application of museum funding than does the United Kingdom’s top-down directed museum sector.

Publicly Funded Support

It has been noted that the sources of public financial support by direct funding to museums in the two countries are broadly similar. However, a marked difference can be seen in the provision of indirect, nonfinancial support. In the United Kingdom a number of publicly funded organizations provide guidance over a range of museum expertise. Some notable examples are the eight regional “museums, libraries and archives” councils that advise and promote museums; the Museum Documentation Association, which has established and maintains “Spectrum,” a documentation standard designed for museum collection records; and the Cultural Heritage National Training Organization (CHNTO), which provides vocational qualifications for museum workers and validates university courses in museum studies and heritage management.

Central coordination is arguably desirable for some museum activities. For example, without a coordinating body like the Museum Documentation Association, New Zealand museums have tackled documentation problems in their own ways, employing a range of different software packages and archiv- ing methods (Thompson 1999a). Lacking such a coordinating body, it has been difficult for New Zealand to establish a national database of information, and development expenditure has been duplicated many times over as each museum has attempted to reinvent the wheel. Similarly, New Zealand’s lack of an institution like the United Kingdom’s CHNTO means that training may be inadequately coordinated and benchmarked.

The public body charged with museum support and guidance in New Zealand is “National Services,” an activity of The Museum of New Zealand, Te Papa Tongarewa (Te Papa). A board appointed by the Minister for Arts,

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Culture and Heritage governs Te Papa. The modus operandi of National Services is to engage in “partnerships” with other New Zealand museums to support projects in “priority areas.” Two of these priority areas align squarely with those under the purview of the United Kingdom support agencies. One involves the development of draft quality standards for museum operations, and the other assists museums in conducting training workshops and devel- oping a national training framework. National Services has also assisted museums on projects concerning Maori heritage and culture, on marketing and promotion, and recently with revenue-generation initiatives.

New Zealand’s support arrangement differs from the United Kingdom’s in three respects. First, the scale of the National Services operation is small, even given the expectation that New Zealand’s smaller population would justify a proportionately smaller scale of museum support. Second, with a staff of only four, National Services is arguably unable to provide the range and depth of expert guidance provided by the more specialized United Kingdom agencies. Third, some have questioned whether, as a department of Te Papa, National Services is sufficiently independent (Thompson 1999a). The manager of National Services is a member of the strategic unit of eight managers that reports to Te Papa’s chief executive. In 2001, National Services constituted only 1.7 percent of the museum’s total operating expenses (Museum of New Zealand Te Papa Tongarewa 2001). Within Te Papa, consequently, National Services must compete for funding and attention as a minor player in an enterprise whose main task is to run a museum of its own.

Arguably, there is a conflict of interest between the role of Te Papa as a museum-with its mission to be “a forum for the nation to present, explore, and preserve the heritage of its cultures and knowledge of the natural environment”-and the role of National Services to pursue “projects to improve the services provided by museums in their local communities” (Museum of New Zealand Te Papa Tongarewa 2001). National Services has participated in an impressive number of projects over the last six years across its five priority areas, involving partnerships with a range of provincial and local museums. However, the levels of funding, skill, and independence under the National Services arrangement are less substantial in comparison with the support provided by the various United Kingdom agencies.

Conclusion

The combined effect of the United Kingdom’s inspection-based measures and support organizations is a movement toward standardization of museum practice. Greater centralized direction, guidance, and control is provided to museums in the United Kingdom than to those in New Zealand. In New Zealand, decision making and control is less coupled to central-policy

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implementation. Directors have more autonomy, and the system allows for more variation in practice. Both governments have implemented periodic performance evaluation of museums, but the methods of operation differ. Although performance measurement has been a key device in the reforms of both countries, this tool has been employed for different purposes. The United Kingdom employs performance indicators to compel management to plan outputs that adhere to central-government policy statements and to achieve standardization of planned outputs across entities performing similar functions. In addition, it supplements periodic performance measurement and reporting with a range of “quality assurance” tools, such as the Charter Mark, museum registration, and benchmarking initiatives. The centrally imposed performance indicators and the “seals of approval” mechanisms effectively coordinate a wide range of factors against centralized policy and standards.

In contrast, New Zealand employs periodic performance-evaluation methods (via accrual accounting and service performance reporting) under conditions of minimal specific direction. In New Zealand, service-performance reporting enhances transparency and encourages entities to express plans in terms of outputs and to adhere to those plans. However, it does not require museums to adhere to centrally directed policies. Moreover, quality assurance tools have not been a part of New Zealand’s public-sector control regime, although recent initiatives of Te Papa’s National Services division-such as the development of a set of museum standards, attention to the concept of capability, and encouragement of museums to seek IIP status-indicate that New Zealand is moving in that direction.

The United Kingdom provides specialist museum-support services through a variety of publicly funded support agencies such as museums, libraries, archives councils, CHNTO, and the Museum Documentation Association. New Zealand, on the other hand, has not attempted to develop independent agencies that deal specifically with museum concerns. This may reflect both a presumption that the control measures applied across the public-service sector would suffice to ensure museum effectiveness and an expectation that mar- kets, the third sector, and the profession would provide adequate technical support. The National Services division of Te Papa works to provide some guidance to the other museums, but this is arguably constrained by limitations on funding, staffing, and institutional loyalty.

In this article, I have suggested two perspectives concerning the relationship between public policy and entrepreneurship. The first perspective is that some forms of public accountability repress entrepreneurship. From this view, it could be argued that New Zealand’s greater decentralization and fewer specific measures should provide an environment more conducive to entrepreneurship than in the United Kingdom. The second perspective is that public- sector accountability regimes may actually encourage entrepreneurship by

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requiring the sort of planning and scrutiny that shakes managements out of any tendency to opt for mediocrity, and by providing professional support that will make museum managers more effective. From this perspective, the evidence suggests that the United Kingdom’s “quality control” services and its centralized guidance and facilities give its museums an entrepreneurial edge.

NOTES

I . In this context, the third, coercive isomorphism (pressures from external constituents to force organizations in the field to adopt the same bureaucratic processes) is an influence relating more to occurrences within as opposed to between the two countries.

2. Available at <http://www.iipnz.co.nz/nz-organisations.htm>,

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Public Control of Museums in New Zealand and the United Kingdom: Implications for Entrepreneurship