A thesis submitted in partial fulfilment of the requirements for the degree of Doctor of Philosophy Halcro, K. 2008. Stakeholders: a source of competitive advantage? An analysis of the influence of stakeholders on the strategies of independent, rural, Scottish museums during their organisational life cycle. PhD thesis. Queen Margaret University. Accessed from: http://etheses.qmu.ac.uk/99/ Repository Use Policy The full-text may be used and/or reproduced, and given to third parties for personal research or study, educational or not-for-profit purposes providing that: • The full-text is not changed in any way • A full bibliographic reference is made • A hyperlink is given to the original metadata page in eResearch eResearch policies on access and re-use can be viewed on our Policies page: http://eresearch.qmu.ac.uk/policies.html http://etheses.qmu.ac.uk STAKEHOLDERS: A SOURCE OF COMPETITIVE ADVANTAGE? AN ANALYSIS OF THE INFLUENCE OF STAKEHOLDERS ON THE STRATEGIES OF INDEPENDENT, RURAL, SCOTTISH MUSEUMS DURING THEIR ORGANISATIONAL LIFE CYCLE K HALCRO A thesis in submitted in partial fulfilment of the requirements of Doctor of Philosophy QUEEN MARGARET UNIVERSITY 2008 310 ABSTRACT Data indicates that Scottish museum attendance is rising annually, yet anecdotal comments appear to contradict this evidence. Explanations for this dichotomy are inevitably complex and varied, but variations in organisational performance have been explained by the Resource-Based View, which argues an organisation’s competitive advantage stems from its ability to access and use resources. This perspective is examined through the concept of stakeholder theory. This thesis investigates the influence stakeholders have on independent, rural Scottish museums during the organisational life cycle, and whether this is a source of competitive advantage. The research involved an exploratory survey to scope the characteristics and environment in which Scotland’s museums were operating, but also a typology for further research. The outcome was to adopt a phenomenological approach to investigate fourteen independent, rural, museums strategies during the organisational life cycle, drawing on stakeholder models proposed by Mitchell, Agle & Wood (1997) and Jawahar & McLaughlin (2001). This process involved interviewing 141 stakeholders to discuss their experiences in shaping these museums’ strategies. Using narrative analysis, it emerged that these museums’ strategies were influenced by different stakeholders during the organisational life cycle and this is reflected in a model developed from these findings. Growth museums were characterised by either an entrepreneurial leader or a board of trustees working in collaboration with key paid staff to access resources, particularly funding. By contrast, mature stage museums were dominated by a definitive stakeholder centred on a group of trustees who also occupied other stakeholder groups, notably volunteers and the community. This definitive stakeholder provided these museums with many of their resources, which proved to be an organisational strength, but also a weakness. The museum in decline and which ceased trading during this study, closed as a result of losing the definitive stakeholder’s confidence and withdrawing funding. It was evident that stakeholders did influence museum strategy, but the definitive stakeholder explained a museum’s competitive advantage. Keywords: museums, strategy, competitive advantage, organisational life cycle, stakeholders ACKNOWLEDGEMENTS I am indebted to numerous people who have helped me during this research, some named, others anonymous, but I gratefully acknowledge their help and encouragement, particularly the help of the Business Faculty at Queen Margaret University. 311 First of all my thanks must go to my supervisory team: Professor David Kirk, Professor David Edgar and Professor Ian Carradice whose constructive criticism and supportive comments sustained me through the trials and tribulations of this work. Your ideas and feedback provided me with inspiration and hope; thanks are not enough. It is unfair to single out specific people at the museums I visited, but I would particularly cite the following whose willingness to be involved and encouragement to others to participate enriched this work: Helen Armitage, Susan Bradman, Alistair Bruce, Janet Butterworth, Pat Duncan, Robert Ferguson, Jim Fleming, Ian Garner, Ian Haveron, Lorna Jappy, Brian Lessels, Ann Matheson, Brian Montgomery, and Tony Watson. One group who deserve my gratitude are my former colleagues and directors at Museum of Communication, Burntisland who proved such a useful sounding board. Finally my wife, Susan and my daughters, Emily and Kirsty who encouraged and motivated me; it seems clichéd to say it, but this work belongs to you. Thank you 312 DECLARATION While registered as a candidate for the degree for which submission is hereby made I have not been a registered candidate for another award of any degree awarding body. No material contained within thesis has been used in any submission for an academic award. Keith Halcro Queen Margaret University September 2008 313 CONTENTS Abstract Acknowledgements i Declaration ii Contents iii List of Tables ix List of Figures xi Appendices xii Organisations, acronyms and websites xiii Thesis structure xiv 1 INTRODUCTION 1.1 Introduction 1 1.2 The research problem 1 1.3.1 Contribution to knowledge 4 1.3.2 Contribution to research 4 1.3.3 Contribution to practice 6 1.3.4 Contribution to policy 7 1.4 Aim and objectives of the research 8 1.5 Research approach 9 1.5.1 Background to research approach 9 1.5.2 Secondary research 10 1.5.3 Primary research 11 1.6 Summary 11 2 STRATEGY 2.1 Introduction 13 2.2 For whom does the firm/museum exist? 14 2.3 Strategy 15 2.4 Competitive advantage 18 2.4.1 Competitive advantage and museums 19 2.4.2 Competitive advantage amongst independent, rural 20 museums 2.5 Competitive advantage and schools of thought 21 2.5.1 Positioning School 22 2.5.2 Resource-Based View 24 2.5.3 Competence-Based Theory 27 2.6 Resource-Based View and Museums 28 2.7 Resource-Based View and Stakeholder Theory 30 2.8 Organisational life cycle 32 2.9 Strategy in context 35 2.9.1 Strategy and not-for-profit organisations 35 2.9.2 Strategy and tourism organisations 37 2.10 Summary 38 3 STAKEHOLDING 3.1 Introduction 40 314 3.2 Origins of stakeholding theory 40 3.3 Definition of stakeholding 41 3.4 Stakeholder theory 42 3.5 Stakeholder attributes 46 3.6 The organisation-stakeholder relationship 50 3.7 Managing the organisation-stakeholder relationship 57 3.8.1 Stakeholders in context 58 3.8.2 Stakeholders in the not-for-profit sector 59 3.8.3 Stakeholders in the tourism sector 61 3.9 Criticism of stakeholder theory 62 3.10 Summary 63 4 MUSEUMS 4.1 Introduction 65 4.2 Definition of a museum 66 4.2.1 Theoretical definition 66 4.2.2 Practical definition 67 4.3 The museum’s historical role and purpose 69 4.3.1 The museum’s historical role and purpose (300 B.C. 69 – 1918) 4.3.2 The museum’s historical role and purpose (1918 – 71 1945) 4.3.3 The museum’s historical role and purpose (1945 – 71 1979) 4.3.4 The museum’s historical role and purpose (1979 – 72 1990) 4.3.5 The museum’s historical role and purpose (1990 – 75 2007) 4.4 The size and scope of the United Kingdom’s museum 76 sector 4.5 The size and scope of Scotland’s museum sector 78 4.6 Stakeholder theory within museum literature 82 4.7 Stakeholders within Scottish museums 83 4.7.1 Stakeholder: UK Government 83 4.7.1.1 Stakeholder: UK Government as policy maker 83 4.7.1.2 Stakeholder: UK Government as legislator 84 4.7.1.3 Stakeholder: UK Government as funder 85 4.7.2 Stakeholder: Scottish Executive 86 4.7.2.1 Stakeholder: Scottish Executive as policy maker and 86 legislator 4.7.2.2 Stakeholder: Scottish Executive as funder 90 4.7.3 Stakeholder: Scottish local authorities 91 4.7.4 Stakeholder: Scottish Museums Council 93 4.7.5 Stakeholder: Visitors 94 4.7.6 Stakeholder: Governing body 96 4.7.7 Stakeholder: Staff 97 4.7.7.1 Stakeholder: Staff - Curator/management 98 4.7.7.2 Stakeholder: Staff – paid 99 4.7.7.3 Stakeholder: Staff – volunteers 100 4.7.8 Stakeholder: Community 102 315 4.8 Summary 103 5 METHODOLOGY 5.1 Introduction 105 5.2 The nature of the research 105 5.3 Research philosophy 106 5.3.1 Theory 107 5.3.2 Epistemology and Ontology 109 5.3.3 Values 110 5.3.4 Practical considerations 110 5.4 Research strategy 110 5.4.1 Exploratory stage – Survey Scotland’s museums 112 5.4.2 Survey Scotland’s museums - postal questionnaire 112 5.4.2.1 Postal questionnaire 113 5.4.2.2 Limitations of postal questionnaire 114 5.4.2.3 Postal questionnaires in museum research 115 5.4.2.4 The National Audit: A collective insight 116 5.5 Survey Scotland’s museums - data collection 117 5.5.1 The creation of a database 117 5.5.2 Design of postal questionnaire 118 5.5.3 The Pilot Study 119 5.5.4 Response 121 5.5.5 Data analysis 122 5.5.6 Limitations to the data 123 5.6 Phenomenological approach mainland Scotland’s, 125 independent, rural museums 5.6.1 Data collection 126 5.6.2 The sample 126 5.6.3 The pilot 128 5.6.4 Museum visits 129 5.6.5 Data analysis 131 5.6.6 Limitations to the data 133 5.7 Research ethics 134 5.8 Summary 135 6 FINDINGS AND ANALYSIS 6.1 Introduction 137 6.2 Findings 2001Survey 137 6.2.1 Characteristics 137 6.2.2 Stakeholders 143 6.2.3 Environment 150 6.2.4 Justification for selecting independent, rural 155 museums 6.3 Findings and Analysis - 14 Independent, Rural 157 Museums in Mainland Scotland 6.4 Collective findings