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Uncertainty, strategic sensemaking and organisational failure in the art market: What went wrong with LVMH's investment in Phillips auctioneers?

Samdanis, Marios, Lee, Soo Hee (2018) Uncertainty, strategic sensemaking and organisational failure in the art market: What went wrong with LVMH's investment in Phillips auctioneers? Journal of Business Research, 98 . pp. 475-488. ISSN 0148-2963. (doi:10.1016/j.jbusres.2018.08.030) (KAR id:69753)

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https://dx.doi.org/10.1016/j.jbusres.2018.08.030

Abstract

Strategic decision-making in volatile and uncertain environments, such as the art market, is not only instigated by rational interpretation of the external environment, but also by expert-based intuition. This paper investigates organisational failure at Phillips auctioneers between 1999 and 2002, a period in which it was owned by the multinational luxury goods conglomerate Louis Vuitton Moët Hennessy (LVMH). We developed a framework for strategic sensemaking in art organisations that includes the processes of scanning, interpreting, strategising, acting and adjusting, which can take place in non-linear and recursive patterns in order to support continuous loops of improvement. Our analysis identifies the merits of intuitive decisionmaking when realising a novel artistic and entrepreneurial vision, such as that which established Phillips as a boutique auction house. However, it also highlights the limitations of emotional and opportunistic decision-making which leads to blinded management if one or more of the processes of strategic sensemaking are ignored.

Item Type: Article
DOI/Identification number: 10.1016/j.jbusres.2018.08.030
Uncontrolled keywords: Strategic sensemaking; organisational failure; art market; auction houses; uncertainty
Subjects: H Social Sciences > HF Commerce > HF5351 Business
N Visual Arts > NX Arts in general
Divisions: Faculties > Social Sciences > Kent Business School
Depositing User: Soo Hee Lee
Date Deposited: 23 Oct 2018 08:37 UTC
Last Modified: 06 May 2020 03:18 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/69753 (The current URI for this page, for reference purposes)
Lee, Soo Hee: https://orcid.org/0000-0001-6053-6710
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