Summary articles Cases in Creative Entrepreneurship (6314M0317Y)
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Course
Cases in Creative Entrepreneurship (6314M0317Y)
Institution
Universiteit Van Amsterdam (UvA)
This is a summary of all the articles from week 1 to 6 of the business lab "Cases in Creative Entrepreneurship" made in semester 1 block 1 in study year 21/22.
Celebrity status / celebrity firms adds value to the company.
o For example investments are often influenced by hope and credulity rather than
financial criteria
When ditching vertical integration a company can choose for transactional or relational
governance. Relational is the best but is hard to set up.
Industries outside the creative industries are also becoming experience economies.
o The utilitarian/use value of products has a decreasing role in competition
o Creating experiences is becoming more important
Creative individuals have many characteristics that are associated with entrepreneurs rather
than employees. Because they have to be risk taking and brand the self as the only option to
achieve market success.
Abstract:
The opening essay to this special issue examines the role of creative industries as pioneers and highly
visible adopters of new organizational and business practices. The paper next focuses on four themes
that are especially salient to this process:
1. The first theme looks at creative industries as celebrity industries that popularize and
legitimize organizational and business practices.
2. The second theme examines the lessons that relatively low levels of value chain integration
have for other industries that are in the process of value chain transformation.
3. The third theme looks at the creative industries and the rise of the experience economy.
, 4. The fourth theme argues that historical patterns of employment and self-employment in the
creative industries foreshadow (= beduiden) many of the issues that are experienced by the
wider economy.
Introduction:
Three different ways are available for examining the influences of creative industries (Lampel, Lant, &
Shamsie, 2000). The papers in this special issue explore creative industries with these three
perspectives in mind:
One can look at creative industries as pioneers of managerial and organizational practices.
One can also look at creative industries as areas of business that are not necessarily the first
to introduce managerial innovations, but are responsible for further development and
diffusion of innovations that first arise elsewhere.
Finally, one can look at creative industries as industries that play a central role in shaping
the future of management, much as manufacturing industries shaped managerial mind sets
in the 19th century, and science-based industries in the 20th century.
1) Creative industries as celebrity industries:
There is a tendency to think of celebrities as individuals, whose name, in the words of Rein, Kottler,
and Stoller (1987) “has attention-getting, interest-riveting and profit generating value.” Rindova,
Pollock, and Hayward (2006) argue that as much as individuals can attain a celebrity status, so can
firms.
They define ‘celebrity firms’ as those firms that attract a high level of public attention and generate
positive emotional responses from stakeholder audiences.
A lot of text to just explain that companies can also achieve celebrity status which adds value to a
company. Also celebrities can start successful companies in the creative business by using their
celebrity status.
,What distinguishes these creative industries from their engineering and manufacturing predecessors
is the mystique that surrounds their core processes.
Whereas engineering and manufacturing industries relied on:
Technical skills that could be taught to potential recruits, and
Processes that could be explained to the wider public,
Creative industries rely on:
Creative individuals that are often considered to have unique talent, and
Creative processes that are mysterious if not inexplicable to outsiders.
These qualities shape the relationship between these industries and their stakeholders. In particular,
the mystique of creative industries means that investments are often disproportionately influenced
by hope and credulity, rather than financial criteria that are more compelling when celebrity status
is absent.
2) Value chain transformation in the creative industries:
Vertical integration: A company that opts for vertical integration takes complete control over one or
more stages in the production or distribution of a product.
The mobile phone industry had evolved from vertically integrated firms that fought for market share
based on price and quality of their devices, to one where the groups or alliances of firms competed
with each other.
managers in creative industries take higher than normal risks when recruiting creative talent based
on track record. This is not only because past experience does not necessarily produce the skills that
matter in future success, but also because firms that rely on track record to integrate creative
resources into their operations quickly run into escalating costs. Talent may not be able to replicate
past success, but it usually uses past success to demand higher prices for its services, while at the
same time displacing the financial risks to employers and investors.
Broadly speaking, research suggests that firms that forgo (= afzien van) vertical integration have
essentially two choices when it comes to governing interaction with resource providers:
, 1. First, they can rely on ‘transactional governance’: drafting contracts that set objectives, and
pre-specify in detail the interaction process (Mayer & Argyres, 2004).
2. Second, they can develop ‘relational governance’: which relies on trust and mutual
understanding that is reinforced by repeated interaction.
Relational governance is the better option in creative industries.
Relational governance can be very effective when it works, but data from the creative industries
suggest that it requires considerable skill and experience to set it up. Much of these data has
focused on the problems of recruiting stars, and managing talent. Considerable attention has also
been paid to the importance of networks as crucial background linkages to relational governance.
3) Creative industries and the experience economy:
One of the reasons for the increasing influence that creative industries exercise on managerial
thinking is the rise of the so called ‘experience economy’.
In 1999, just after Apple launched the iMac, Joseph Pine II and James Gilmore published a Harvard
Business Review article entitled, ‘The Experience Economy’, which expressed this shift in more detail.
Our economy, has entered a stage of economic development where experience increasingly
dominates consumption. This definition has two implications:
1. The utilitarian, or use value, of a product plays a decreasing role in competition, and
2. Creating experience is becoming progressively more important.
This in turn reduces the sharp demarcation that has traditionally existed between utilitarian
and non-utilitarian products: Products that were bought to perform functions were no longer
as easy to distinguish from products that were purchased for enjoyment.
The rise of the experience economy also changed the understanding of what constitutes a
“product”. Previously, producers and consumers in most consumer and industrial markets tended to
see products as discrete with clearly marked boundaries.
Creative industries were an exception. In these industries product boundaries are far more fluid.
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