Management of Art Galleries – Business Models - Universität St.Gallen

Introduction 7 / 225say Stone Age – distribution and marketing methods, that ridicule modern retail industry andmarketing practices. The dilettantism that galleries apply defies any description” (Bongard,1965). Famous publisher Karlheinz Schmid claims that art gallery owners have a lack ofbusiness education: “Errors, weaknesses, helplessness, embarrassments” (Schmid, 2007, p. 104).Heinze (2008) adds: “The institutionalisation of cultural management that started in the lateeighties results from the fact that limited public financial power fostered the development ofprofessionalism and business principles in the arts” (p. 9). Mandel (2007) concludes: “Despiteinnovative and artistically highly regarded offerings, the revenue of cultural enterprises is stillvery small. Often there is a lack of entrepreneurial and business thinking to becomeeconomically successful. Currently, cultural entrepreneurs think of themselves only as creativeforces, and not as managers who need to position their services at an appropriate price on themarket” (p. 10).What’s more, various researchers from the field of art management doubt if managementprinciples can be directly transferred to the art industry. Fuchs (1993) questions: “How objectiveare management principles and to what extent can they be transferred to the cultural sector?” (p.13). Others go one step further and even argue: “Some economists opine that their tool-set can beuniversally applied. However, this view disagrees with basic principles that successful managersin the art business apply” (Wyrwoll, 1994, p. 289).Secondly, in the field of business-related literature there is still a clear trend towards analysingthe relevance of the business model concept. In a very recent article Baden-Fuller & Morgan(2010) ask the question: “Are business models useful?”, and went on to focus researchers’interest on the idea of analysing the actual business model itself to answer this question (p. 156).They emphasise the importance of further research in this area because “when we do so, we cansee how this analysis of business models as models challenges the idea and ideal of any single,or fixed, taxonomy or typology of business models” (p. 167). Identifying business models andclassifying them will therefore be fruitful to the general discussion.Moreover, researchers want to test the business model concept in practice. In particular, Biegeret al. (2002) highlight the interest of the scientific community in the question of business modeldesign, and how far components within a business model must align with each other: “Aninteresting research focus derives from the question which configuration in reference to thearrangement of the business model dimensions are compatible and how this arrangementinfluences the economic performance” (p. 58). Furthermore, Magretta (2002) and Müller-Stewens & Fontin (2003) argue in favour of a continuation in the discussion of the businessmodel concept. They underline the importance of the configuration of a single dimension in thebusiness model according to the overall strategic direction. For example, if the revenue modeland service model are not aligned, negative interdependencies can occur. Gemünden & Schulz(2003) refer to these interdependencies: “We formulate the following question to describe theinterdependencies within the business model concept: Which interdependencies exist and how dothey impact the business model configuration?” (p. 170).