When does Medici hurt Da Vinci?

Not quite an everyday title for a scientific paper. But scientific it was and so well received it got published in Academy of Management Journal. “The title was deliberately chosen to go against the almost universally accepted idea of corporate social responsibility being the univocal win-win approach,” explains assistant professor Yuliya Shymko. “CSR is not always a recipe for value creation. Sometimes corporate philanthropy or CSR initiatives make their recipients look bad. The question then is: what can they do to mitigate this negative effect?”

Transformation of the public space

ducation, culture and healthcare used to be state responsibilities. But in a climate of public spending cuts and austerity, these areas became a shared responsibility, with companies not only being allowed to, but also encouraged to actively participate.

“I had the impression that the dominant narrative was that it was all for the better,” Yuliya recalls. “Management literature seemed to focus mainly on the benefactors or sponsors and their rationale for engaging in CSR initiatives. I don’t remember reading much about what this growing corporate influence meant for the recipients, e.g. museums, theatres or universities, about how it impacted arts, research and teaching, and to what extent we should allow this influence to be exercised. I wondered whether it was really a shift from good to great. That’s what triggered this study.”

Russian theatre and peer recognition

To analyse how the relationship with corporate donors affects the recipients, Yuliya and co-author Thomas Roulet decided to focus on the context of Russian theatres. “Initially we wanted to look at the impact of corporate funding on a theatre’s artistic performance, but how would you measure it? So we decided to use peer recognition instead, which basically is an indicator of a theatre’s perceived aesthetic authenticity or legitimacy, if you like.”

In doing so, they borrowed from the framework of French sociologist Pierre Bourdieu, who was the first to study the economic sociology of the field of cultural production. He distinguishes between art for art’s sake, void of any economic or financial considerations, and cultural mass production. For him, authenticity, as a marker of artistic value, depends on a cultural organisation’s adherence to the unwritten code of conduct that implies an indifference to economic or commercial imperatives. “In Russia, more than elsewhere, theatre is glorified as the voice of resistance and intellectual candour,” Yuliya says and smiles. “Even today theatre has this aura, although the theatre landscape has undergone quite some change due to economic and political liberalisation, with many theatres no longer being able to rely on subsidies alone.”

Corporate philanthropy viewed with suspicion

In order to get a picture of the Russian theatre community and its implicit norms and values, Yuliya and Thomas first carried out a qualitative study involving interviews with theatre professionals and a literature review. “We found that, while most theatres desperately need corporate funding, sponsorship is often viewed negatively. Theatres relying on corporate benefaction are seen as being mainly driven by economic motives, rather than their cultural and aesthetic mission. Also, having corporate donors suggests ties with government officials, which may hint at corruption.”

A further quantitative study actually evaluated the impact of corporate sponsorship on peer recognition and the potentially moderating effect of sponsorship characteristics, such as (1) the sponsorship format, i.e. project-centric sponsorships, providing financial support to individual productions, or organisation-centric sponsorships, supporting the recipients general operations, (2) the duration of the sponsoring and (3) the industry to which the donor belongs.
The study used data from 449 theatres (80% of Russia’s drama and music theatres) and their corporate donors over the period 2004-2011. To capture peer recognition, they looked at the number of nominations that theatres obtained from participating in the Golden Mask Festival, Russia’s largest and most prestigious theatre festival, which is said to favour those ensembles that embrace the tradition of Russian theatre and that resist the commoditisation of cultural production.

The fewer sponsors the better, but …

The results confirmed the hypotheses: the stronger its perceived ties with corporate sponsors, the less likely a theatre is to receive peer recognition through a nomination.

  • The number of donors is important: everything else equal, each additional corporate donor reduces the chance of a recipient being nominated for the award by more than 10 percent.
  • The negative effect on peer recognition is more pronounced for organisation-centric than it is for project-centric sponsorships. “This doesn’t come as a surprise. The influence of a sponsor financing the organisation rather than one specific project is seen as more pervasive. The recipient then seems to have lost its autonomy,” Yuliya explains. 
  • Similarly, the longer the duration of the sponsorship, the stronger its negative effect.
  • Not all sponsors are equal: the negative impact is greater for sponsors from industries with a bad reputation, such as the gas, oil and mining industries in Russia. Theatres accepting money from such sponsors have compromised themselves even more in the eyes of their peers.

“Put positively, the negative effect of corporate funding on peer recognition can’t be completely eliminated, but it can be somewhat reduced by carefully considering the characteristics of the sponsor and the sponsorship agreement,” Yuliya concludes. “The recipient is then perceived to have taken measures to protect its artistic autonomy.” 

The bigger picture

As well as contributing to academic literature, this paper increases our theoretical and practical understanding of the phenomenon of corporate philanthropy. While the empirical study is limited to Russian theatre, its conceptual framework and findings can be applied to other countries, and to any domain characterised by a certain code of conduct or distinct professional ethos, such as literature, education and healthcare.

Perhaps more than anything else, the results provide food for thought for policy makers, sponsors and recipients alike, as Yuliya is keen to point out: “Do we really want to transfer the entire responsibility for the financial support of artistic development and innovation to the private sector? On the one hand there’s a risk that innovative productions and ideas are silenced by the cultural or academic community if they’re supported by private money, as our study shows. On the other hand donors are not immune to peer pressure either. They want to be seen as respectable citizens, so they’ll sponsor organisations that support that image, while conforming to the tastes of their peers. There’s a real danger of cultural and intellectual homogenisation.”

Whose wall is it anyway?

Damned if you do and damned if you don’t. In an effort to reduce the negative impact of corporate ties, cultural and academic organisations risk finding themselves underfunded. So, should they accept corporate sponsorship or not? “Ever since the dawn of patronage this has been an issue. I’m afraid there are no cut-and-dried answers, really,” Yuliya says apologetically. “When you consider being sponsored, you should carefully weigh the pros and cons, and the whats and hows. In a way, economic hardship is a price you pay for your artistic and intellectual independence or authenticity.”

And she goes on: “Let me conclude with an anecdote borrowed from the film Frida, about Mexican painter Frida Kahlo and her turbulent marriage to Diego Rivera. In the 1930’s, Rivera had become quite famous for his large socially-themed frescos (“murales publicos”) and he was commissioned by Nicolas Rockefeller to paint a mural for the new RCA Building at the Rockefeller Center in New York City. Rivera was given carte blanche, but when Rockefeller discovered the mural included a portrait of Vladimir Lenin, he got cold feet and asked Rivera to alter it. Rivera wouldn’t budge, though, saying he refused to compromise his vision. After all, it was his painting. To which Rockefeller replied: yes, but on my wall! What I want to say is this: at least try and make sure your artistic or intellectual survival doesn’t entirely depend on walls that belong to others. It’s important to also have your own wall to paint on.”
Source: Shymko, Y. & Roulet, T. (2016). When does Medici hurt Da Vinci? Mitigating the signalling effect of extraneous stakeholder relationships in the field of cultural production. Academy of Management Journal (published online). You can obtain the paper from the authors. Anyone who is interested in the statistics underlying the reported results, will find valuable background information as well as a comprehensive overview and description of all the variables considered in the analysis, along with their descriptive statistics.

About the authors:
Yuliya Shymko is assistant professor of Strategy and International Management at Vlerick Business School and visiting professor of Sociology and Globalisation at IE University. Thomas Roulet is Senior Lecturer in Management at King’s College London and International Research Fellow at the Saïd Business School, University of Oxford.

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