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Management Models for Culture Communication Culture Communication for Management Models

Management Models for Culture Communication Culture Communication for Management Models. The “Economics of Culture”. is a discipline which only recently acquired attention all over the world in business and political economy.

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Management Models for Culture Communication Culture Communication for Management Models

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  1. Management Models for Culture Communication • Culture Communication for Management Models M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  2. The “Economics • of Culture” • is a discipline which only recently acquired attention all over the world in business and political economy. • Still different scientists noticed its importance and the strong interrelation between its main components – economy and culture M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  3. John Maynard Keynes • “Our experience demonstrated clearly that such activities cannot be accomplished if they depend on the only profit and financial success. The usage and the eventual distruction of the God-given talent which submits to the aim of profit is one of the worst crimes of modern capitalism. • The public financing must regard also the expences (“improductive” ex-facte) but linked to the creation of the values outside the market (which for this reason cannot be appraised by the market in sense to assign them a price)” (“Art and the State”) M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  4. Adam Smith • The production and the conservation of these goods not only cannot be regulated by the “invisible hand” because it needs the special cost supported by the State, but the quota of this cost must grow while the nation well-being grows. • William Baumol: ...the problem is not whether the theatre or the dance must be supported by the State but in what measure in must be realized. M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  5. Italian experience “the State considers the theatrical activity to be of relevant general interest because it is aimed to favour musical, cultural and social education of society” (Law n° 800 1967 art.1) In 1985 a Common Performance Fund (CPF) was instituted (Law n°163 1985). Its aim is to deliver a definite and organic sistemation to the financial interventions of the State in favour of the performing art. M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  6. In 1985-2008 the CPF reduced by 64,71%, M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  7. Public financing: partitioning criteria M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  8. The cost of personnel in performing art (2008) M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  9. USA: Change in Unresticted Net Assets (CUNA) M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  10. In Russia In 2009 the financing of culture entities was equal to 114 mlrd rubles, but these funds were destinated majorly to the reconstruction of Bolshoi Theatre and the stage construction in Mariinski Theatre M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  11. Performing Art and Balanced Scorecard • The importance of this instrument derives from: • International crisis and the reduction of the public financing • Optimization of the costs structure necessity M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  12. According to the data of World Bank Since June, 8 2007 till March, 9 2009 the financial losses on the stocks all over the world were equal to $ 31.000 miliards Overall GDP of USA, China, Japan and India 12 M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  13. has been elaborated on the base of research results obtained by professors of Harvard School of Economics Robert Kaplan and David Norton in 1990 . The research was conducted with the only aim: discover new ways of business efficiency increasing and business goals achieving. Balanced Scorecard 13 M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  14. Norton and Kaplan based their research on the following hypothesis: by means of only financial indicators the management does not obtain sufficient information for right and timely decision making 14 M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  15. This hypothesis is founded In 1978 the difference between the balance-sheet and market value of american companies was equal to 5%, in 1998 - 72%. In Italy in 2005 the stock (S&P Mib) value of the enterprises was three times greater than their tangible assets value 15 M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  16. According to Fortune in 2007 Balanced Scorecardwas used as the principal strategy implementation tool in 402 companies from Fortune-500list: Coca-Cola, BP, General Electric, McDonalds, L'Oreal, BMW, Boeing, Samsung Electronics and others. 16 M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  17. According to BalancedScorecard approach The strategic development of the firm is analyzed under four interconnected aspects: Finance; Relations with clients; Internal processes; Innovations and personnel development 17 M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  18. The main pricniple ofBalanced Scorecard 18 Which became the reason of high efficiency of this management technology is it is possible to manage only what you can measure M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  19. BALANCED SCORECARD • Operational volume (output) • Public = number of spectators • Production = number of performances • Production = number of tickets • Average repeating per ticket = numero di rappresentazioni/numero titoli • Economy (input and costs) • Artistic costs impact = artistic costs/ total costs • Structure costs impact = structure costs/ total costs • Personnel costs impact = personnel costs / total costs • Revenues partitioning = revenues per category / total revenues • Covering with proper resources = proper resources / total costs • Revenues per spectator = proper revenues / number of spectators • Public contributes per spectator = public contributes / number of spectators • Efficiency • Productivity of labour = number of performances / personnel • Productivity of labour = number of performances / personnel • Unitary cost per performance = total costs / number of performances • Unitary costper spectator = total costs / number of spectators M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  20. BALANCED SCORECARD (2) • Artistic dimension: success and quality • Innovation = number of new performances • Rehersal average time = number of days / number of tickets • Filling grade = number of spectators / max number • Frequency = number of performances / days • Presences in subscription = number of entries in subscription • Subscription impact = number entries in subscription / number of spectators • Audience variation = spectators, subscriptions X / spectators, subscriptions X-1 • Fund raising • Revenues = Revenues from tickets / total revenues • Public financing = Public contributes / total revenues • Private financing = Private contributes / total revenues M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  21. Problems of BSC application in Russia:following the fashion Some companies announce enormous successes after BSC introduction – turnover increased by 35-50% in 2 months. Certainly, such affirmations are nothing but PR, BSC is the strategy implementation system and it is impossible to expect such high operational benefits. 21 M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

  22. Problems of BSC application in Russia:elaboration and implementation gap The majority of consultants work on the elaboration of BSC and not its implementation and the customer is not able to realize it by his own. the percentage of really implemented BSC projects in Russian companies is about 3% Source: Managers’ Society “Executive”, 2008 22 M. Cecchi, P. Malyzhenkov, HSE, Moscow, 7 April 2010

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