Ethical Issues of Sponsorships for Museums

Subject: Sociology
Pages: 48
Words: 15154
Reading time:
50 min
Study level: College

Abstract

The general objective of this study was to determine the ethical issues of sponsorships for museums. In line with the general objective, the study examined the following specific objectives: to determine the effectiveness of business ethics on sponsorships of museums, to determine the level of integrity in the management of museums; to determine the influence of ethical decision making on sponsorships of museums, to explore on the influence of business performance on sponsorship of museums, and to determine the effectiveness of codes of conduct on sponsorship of museums. The objectives were satisfied by collecting and analyzing pertinent data using various statistical techniques.

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This study sought to select cases, which show the possible ethical problems that may occur when museums are getting money donations from huge corporations and donors, and to describe them. To analyse the situations given from different angles, it is important to understand the key points of problems and see what differences and similarities exist, which afterwards will give a base for future suggestions on how to avoid, or at least minimize, the risk of ethical problems.

In line with the objectives, the following hypotheses were tested in the study: business ethics are not effective on sponsorship of museums; museums are not managed with a higher level of integrity, ethical decision making does not influence the sponsorship of museums, performance of the business does not influence the sponsorship of museums, and codes of conduct are not effective on sponsorship of museums.

The study relied mainly on primary data using structured questions to explain the main objective and the data was analyzed using statistical tools like SPSS, Pearson correlation and regression analysis. The results of the study revealed that sponsorships for museums are influenced by various ethical issues.

The issues include: ethical decision making, level of adherence to the codes of conduct of the business, level of adherence to the business ethics, level of integrity, and the performance of the business. Organizations that make decisions of high quality over and over again tend to be in a good position to support their decisions and act carefully as per their decisions. The ethical decision, therefore, is one of the examples of the factors that determine whether an organization will gain trust and confidence from the public. It is very essential when it comes to appealing to donors and sponsors.

Introduction and Background

Introduction to the study

In today’s world, museums play a very important role than it used to play before. Museums not only act as a key tourist attraction, but they also act as a site where people exercise their leisure activities. When consumers visit museums, they normally spend a certain amount of money to cover for the admission fees and other expenditures in the museum shops or hotels. Museums can be classified into four distinct categories, for instance, according to content, according to size, according to age and according to the institutional form.

Content refers to what is contained in the museum, i.e. artefacts, objects or pieces of art. Size refers to the carrying capacity of the museum, i.e. whether the museum is huge and can accommodate a large number of visitors or whether it is small and can only allow for a small number of visitors. Age refers to the period of time in which the museum has been in place.

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Museums that are situated in older buildings often do not attract many visitors than museums that are situated in modern buildings with spectacular architectural designs. Institutional form refers to whether the museum is public or private. Private museums always attract funding from the government or from donors. In as much as there are different classifications of museums, their functions still remain the same.1

Any museum is expected to adequately utilise the available financial resources and techniques. In many countries, there is a favourable fiscal climate that attracts many philanthropic donors. To be precise, the philanthropic donors are much more attracted to museums that conserve the national heritage of the country. The purpose of this study is to select cases, which show the possible ethical problems that may occur when museums are getting money donations from huge corporations and donors, and to describe them.

In order to analyse the situations given from different angles, it is important to understand the key points of problems and see what differences and similarities exist, which afterwards will give a base for future suggestions on how to avoid, or at least minimize, the risk of ethical problems.

The main reasons for such donations to museums are: to enhance the image of a brand/person, to aid in advertising, and to check on tax exemptions. “The corporation produces consumer and media culture by defining the relations between products and images that construct the contexts and social relations of everyday life”.2

But the experience of image consumption and the actual product is about complex interactions between the psychological (re)construction of the image and the physical process of consuming the product, which enables the individual to establish and replicate the gratification of consumption.3

Background to the study

For choosing which sponsorship to accept, museums have special committees of trustees, which are selected to overlook the sponsorship prepositions, analyze them and afterwards decide which ones to accept and which ones to decline for several reasons. In the dissertation the decision making process for the fundraisings will be shown, as well as closer look to ethical issues and guidelines for corporate sponsorships. Detailed review of business ethics and ethics in general, brand positioning, ethical decision making process, sponsorship generally, and problems currently existing in Fundraising culture will be done.

Institutional survival for both commercial institutions and non-profit institutions (e.g. museums) is strived by: creating legitimacy, cultivating informal relations with policy makers, securing a certain degree of institutional stability, realizing economic success, and generating a resonance within the audiences they choose to address.4 Annual fundraising implies raising fund for a year long project. By looking into the cases provided, the ethical sides of sponsorship will be shown and analyzed afterwards. 5

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What is Ethic?

Ethics has got three forms. The first form of ethics is descriptive ethics in which moral standards differ from one society to the other. The second form of ethics is normative ethics; it describes the norms that are accepted in one society but are denounced in another society. The third form of ethics is analytic ethics which fosters the idea that the level of morality is comparative. Business ethics is a combination of all the forms of ethics discussed above.

Business ethics is defined as the assessment of the manner in which people or organisations are expected to conduct themselves in the field of business. To be specific, business ethics assesses the various limitations that hinder an individual or organisation from satisfying the self interest, or realizing huge profits when the activities of the individuals or the businesses influence each other.6

Introduction to the organizations

In the recent years, resources mobilization has become a challenge to the museums all over the world, especially with the continued decline in public funding. The French government was the first to start cutting cultural spending in 1993. The government of the United States currently accounts for only approximately 28% of the museum’s operational spending expenses.7 The reduction of governments’ spending has led to fundraising activities to help in covering the cost of running of the museums.

Over the years, museums have been perceived by societies as the epitome of respectability hence all the stakeholders are supposed to consider ethical self regulation.8 However, a museum management organisation faced integrity challenges especially when their major sponsors and donors have been implicated in unethical practices, thus, risking the museums from losing public integrity. This case study report will provide detailed information on the moral chasm of the art museum corporate sponsorship. 9

It is important for museum cooperates to have a good public record as they represent the art galley image. The Adelphia Communication Company was once a highly valued sponsor of The National Cable Television Centre and Museum. John and Michael Rigas, the major shareholders of the company at one time pledged $2million dollars. This charitable act earned them lifetime achievement award from the museum and theatre was named after them.

A few months later, museum management faced public embarrassment and shame after John and Michael Rigases had been arrested for allegedly defrauding Adelphia Communication Company shareholders billion of dollars.10 National Cable Television Centre and Museum was accused of benefiting from stolen money and were guilty by extension.

It is evident that some of the museums are driven by financial greed and are not willing to observe their code of ethics. Siemens Ag, a multi national firm has been rocked by several corruption and criminal scandals.11 In November 2006, police officers arrested Siemens Ag top level management staff for bribery, embezzlement and tax evasion charges in Munich.6

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One year later, Siemens’ senior managers were convicted of embezzling funds amounting to 6 million Euros and bribing officials to win over turbine contracts. Such are the kinds of allegations that the company is facing. Despite the corruptions scandals, Zoo Children’s Museum and Science Museum maintains funding from Siemens Ag. Accepting funds from Siemens Ag questions the integrity of the two museums on ethical code.12

It is a fact that Semen Ag contributed in transforming of the Children Zoo and Science Museum. But Kevin Smith argues out that museum’s ethical code does not relate to how organizations run their business.13

Koch industries, is one of the worlds largest privately owned companies. In May 2008, Koch industries were alleged to have paid bribes win contracts.14 The same year, Lincoln Centre’s New York Theatre was granted a million dollars for its modernization. He also pledge $135 millions to National Museums and $10 million dollars to Metropolitan Museum.15 It is very clear that the three museums did not revisit their ethical code before appointing David Koch as a member of the trustee board, considering that Koch companies were implicated in corrupt dealings.

Mr Denis Kozlowski the former chief executive officer of Tyco International Company pledged funds to Whitney Museum of American Art and Middlebury College.16 Mr Kozlowski was noticed to charge frauds, he was involved in racketeering, grand larceny and tax evasion; he was further accused of taking more than $43 million from Tyco International Company.

The reputation of Whitney Museum of American Art was negatively portrayed when Tyco International Company contended that $2.5 million donated by Mr Kozlowski belonged to the company. Such scandals have proven right that museums do not observe their code of ethics any more.

Philip F Anschutz, the founder of quest was charged by New York attorney for improperly benefiting from initial public offer (IPO); he sold $213 million shares with the knowledge that Quest had financial problems.17 American Museum of Natural History overlooked its ethical code and still retained Mr. Anschutz as the president of the honorary trustee board.10

Dean Buntrock the founder of Waste Management was charged for fraud practices. Mr. Buntrock has been an active financial sponsor of various museums. Most recently, Mr. Buntrock was appointed the chair and the president of museum of Science and Industry trustee contravening the museum ethical code. Such cases demonstrate museums managements’ unwillingness to observe ethical conduct and integrity.

In 2009, Cynthia Corbett’s museum management was commended for observing museums ethical codes by dropping Trafigura Oil Company as their cooperate sponsor of Corbett art prize.18 The museum management did not wish to be associated with a corporation that was accused of environmental pollution. They observed their ethical code, which strongly advocated for sustainable environment.19

The British Petroleum Oil spill in Gulf of Mexico (environmental scandal of the decade, but it won’t be the last) which resulted to more than 8,000 birds, sea turtles, and marine mammals being injured or dead in the six months after the spill.20 307 workers had reported to experience various illnesses or complications – more than triple the amount previously reported by BP. Such DNA damage could increase the risk of cancer, much like exposure to pollution or cigarette smoke.

Statement of the problem

In the current society, many corporations seek for partnership with wealthy sponsors because they are driven by the desire to better their services. Big companies or corporations normally have policies that define their Corporate Social Responsibilities (CSR). The CSR defines how the company interacts with the society and the CSR policies are usually published. Business ethics is concerned with the various ethical principles or ethical problems that occur in the field of business.

In addition, business ethics checks on the behaviour of the business or the behaviour of the various stakeholders that run the business. Business ethics can be applied in the management of museums in order to ensure that they are properly managed according to the ethical standards. Ethics play the role of moderating the ethical behaviours that cannot be governed by the government’s laws.

Any museum normally wants to attract donors or sponsors. In order to do so, there has to be a well organised and spelt out ethics statement in place. The ethics statements define clearly what the business stands for or what it needs to achieve in the near future. Sponsors, therefore, will have so much confidence when they are forming a partnership with a well established business that has well defined goals and objectives.

Objectives of the study

The general objective of this study was to determine the ethical issues of sponsorships for museums. In line with the general objective, the study examined the following specific objectives:

  1. To determine the effectiveness of business ethics on sponsorships of museums;
  2. To determine the level of integrity in management of museums;
  3. To determine the influence of ethical decision making on sponsorships of museums;
  4. To explore on the influence of business performance on sponsorship of museums;
  5. To determine the effectiveness of codes of conduct on sponsorship of museums.

Hypotheses of the study

In order to meet the above objectives, the following hypotheses were tested:

  1. Ho1: Business ethics are not effective on sponsorship of museums;
  2. Ho2: Museums are not managed with a higher level of integrity;
  3. Ho3: Ethical decision making does not influence the sponsorship of museums;
  4. Ho4: Performance of the business does not influence the sponsorship of museums;
  5. Ho5: Codes of conduct are not effective on sponsorship of museums.

Justification of the Study

The findings of this study are of great value to museum managers and other stakeholders involved. It provides the museum managers with a wide exposure with regard to the assessment of the ethical issues of sponsorships for museums, thus enabling them to adopt the relevant strategies in line with the situation. The findings of this study also add to the body of knowledge of related studies about the assessment of ethical issues of sponsorships for museums.

Literature Review

Introduction

This chapter reviews the theories both empirical and theoretical that are closely linked to the ethical issues of sponsorships for museums.

Sponsorship

Sponsorship can be taken to mean any sort of help originating from a private entity.21 In the context of the field of arts, sponsorship entails an accord between a certain company and a non-profit institution in order to swap some benefits.22 The benefits include: marketing benefits, branding, and expansion of advertising. Sponsorship has both the commercial nature and the corporate nature. In the commercial nature, there are benefits that are pursued or delivered.

On the other hand, the corporate nature of sponsorship involves no pursuit or delivery of benefits. There is a flexible relationship that exists between the sponsor and the company that seeks for the sponsorship.

In the world of today, many corporations seek for partnership with wealthy sponsors because they are driven by the desire to better their services. Big companies or corporations normally have policies that define their corporate social responsibilities (CSR). The CSR defines how the company interacts with the society and the CSR policies are usually published. Companies that have CSR policies are sometimes interested to support the local museums as a sign that they are together with the society.23

It is very mandatory for museums to state their wants at the beginning; their wants should also be in collaboration with the wants of the companies that seek to sponsor them. The wants of the sponsoring company might include: incorporating the company’s logo or signs on the museum’s print-outs, or the company can decide to request the museums to offer it free tickets for any event as a reciprocation of their financial assistance.

In this case, it is beneficial for the museum to call the shots or else the sponsoring company might take advantage over it. Sponsoring always comes along with certain ethical issues that need to be paid keen attention to, so as to govern the specifics of the sponsorship deal.24

Charitable organisations work in conjunction with the local community to enhance development and generate value. The interaction with the community enables the community members to improve their living standards and engage in development oriented activities; this helps in creating a trade connection among the community members.

In some instances, the charitable organisations donate money to the various organizations within the communities; this promotes the entire community to develop and prosper in various avenues. Charitable organisations compete amongst themselves to implement the corporate social responsibilities. They do this by evaluating the various strategies adopted by different companies and then they choose the dominant strategy of them all.

This kind of approach is referred to as, benchmarking. Charitable organisations are very accountable organisations and they take full responsibility of their moves and actions. They employ the element of social accounting which takes into account the companies’ activities that promote the urgency to note the clients that they provide for. Thus, there is a great relation between the overall financial performance of a company and its corporate social responsibility.

Before completing a sponsorship deal, it is advisable to have the details of the sponsorship in writing so as to avert any future misunderstandings or defaults.25

The sponsorship agreement always entails the list of the expected benefits of both the parties, the total costs expected to be incurred, the period in which the agreement is expected to last, and the party responsible for releasing the anticipated benefits. There is always a free training program for stakeholders who source for sponsorships or funding programs for museums. The training is fully funded by the government and it ensures that the funds from the sponsors are put into good use.

Sponsorship of museums can also take the form of voluntary donations from charitable companies. For a museum to be eligible for this kind of deal, the donation from the company must be considered to be entirely charitable. The museum, therefore, is expected to comply with these rules lest the sponsoring company is infringed of corporate tax relief, thus, the museum can be susceptible to pay a value added tax for the donation from the company.26

It is purely necessary for the museum to take into account the sponsoring company’s name when giving them credit or recognition; this is very beneficial especially in fostering a healthy long lasting relationship among the business entities in the society. The specific rules pertaining to sponsorship should be adhered to in order to avert conflicts or clash of interests.

Branding and positioning of the brand

Branding involves the action of popularising the identity of an enterprise or a company.27 The brand of the product is what sells to the buyer. Branding also entails the assurances that the company makes in order to appeal to the buyer. It is very important for the companies to keep these promises in order to maintain contact with the buyer.

It normally takes a certain period of time to make or build a strong brand. The strength of the brand depends with the experiences that people have had with the product. In the context of the museums, building a brand entails keeping a high standard with regard to quality of services. Many sponsors or donors will be highly attracted to excellent performers.28

A strong brand builds a certain level of trust on the side of the consumers, who can be able to make predictions concerning the quality of the product or the performance of the product. In this regard, they can be able to identify with the brand as a sign of pride or prestige.29 It is very beneficial to have a concrete positioning of the company’s services or products so as to build up a strong brand. There is however a big difference between branding of the product and positioning of the brand.

Positioning of the brand refers to the way in which the brand is comprehended with regard to the other available substitutes in the market.30 Positioning of the brand serves as the avenue in which the essential benefits of the service or the product meet with the basic needs of the consumers.31 Positioning, therefore, acts as a strong pillar that supports a brand; the more effective the positioning is, the easier it becomes to set up a brand.32 The main aim of brand positioning is to create a positive impression of the product to the target market so that the consumers can feel associated with its benefits.

Many museums always develop a brand positioning statement for their consumers; the brand positioning statement is meant to capture the attention of the entire clientele as it spells out more concerning what the product entails.33 Branding and brand positioning is a business trend that that not only sells the business to the clients, but also to the sponsors or other stakeholders. Many large companies really want to identify with well established museums. They like giving donations or organizing charitable events in order to raise money for the museums. A museum will therefore attract sponsors or donors depending on the brand positioning statement that it has in place.34

Ethics and business ethics

Ethics has got three varieties. The first form of ethics is descriptive ethics in which moral standards differ from one society to the other. The second form of ethics is normative ethics; it describes the norms that are accepted in one society but are denounced in another society. The third form of ethics is analytic ethics which fosters the idea that the level of morality is comparative. Business ethics is a combination of all the forms of ethics discussed above.

Business ethics is defined as the assessment of the manner in which people or organisations are expected to conduct themselves in the field of business. To be specific, business ethics assesses the various limitations that hinder an individual or organisation from satisfying the self interest, or realizing huge profits when the activities of the individuals or the businesses influence each other.35

Business ethics is concerned with the various ethical principles or ethical problems that occur in the field of business. In addition, business ethics checks on the behaviour of the business or the behaviour of the various stakeholders that run the business.36 Business ethics can be applied in the management of museums in order to ensure that they are properly managed according to the ethical standards. Ethics play the role of moderating the ethical behaviours that cannot be governed by the government’s laws.37

The government normally uses laws in order to constitute the required business ethical standards; business ethics on the other hand are used by businesses to set up standards of behaviours that are not captured by the government’s laws. The development of business ethics has been enhanced by the rise of big business entities that do not pay attention to the welfare of the surrounding community.38

Business ethics refers to the moral principles that govern the operations or regulations of a business. There are certain sections of business ethics (i.e. ethics concerning advertising or promotion) that connect with marketing ethics. Business ethics can be analyzed under the framework of value-orientation by looking at the various values that the morals infringe. In addition, the stakeholder-oriented approach also provides a framework for analyzing business

Business ethics of an organisation always change over a period of time with the changing environment that people live in. Museums normally have their specific business ethics that regulate their activities or the activities of the stakeholders that are concerned. It is because of these ethical business practices that museums attract sponsors or donors to have a stake in them. Large companies or corporations normally want to include such museums in their CSR programs since they believe that when they do any charitable work to them, their efforts won’t be in vain.

Museums normally bring to the fore their business ethics so that they can exempt themselves from the various scandals that normally occur in the business environment such as, financial crises or mismanagement. The ethical business practices of a museum normally manifest the philosophy of the museum.

The main goal of business ethics for a museum is to ascertain the main objective of setting up the museum. Business ethics should not be violated as its violation disregards the main goal of the business. Some of the ethical issues that are contained in the business ethics include: the interests and obligations of the company, employees, surrounding community and shareholders or stakeholders. Other issues in this context include: legal framework, CSR policies, marketing ethics and the political climate.39

Existing ethics statements in business

Museums have ethics statements that help them run their business affairs. These ethics statements spell out the nature of service provision, which should be in line with the goals or objectives of the museum.40 In addition to the ethics statements, museums normally have a well spelt out code of ethics, which act as a guiding principle of the conduct of the business. Museums normally opt to keep their assets long enough so that the future generation can also see the assets. The weight of the benefits that the people derive from the museums represents the value of the services.

Ethics statements for a business, particularly a museum normally follow some guiding principles or a certain order. Many at times, the mission statement or the vision statement are what entail the ethics statements. The core values of the business and the policy implementation strategies are also contained in the ethics statement. The ethics statement is in line with the code of ethics and always follows a specific format in order to capture all the required areas.

The ethics statement includes the definition of the mission of the business, the spelling out of the guiding principles, the definition of the mandate of the business, the governance strategy, the required behaviour standards of the members of staff, definition of the role or purpose of the business, other programs that the business runs in addition to the main program, the required stakeholders or partners of the business, dealing with issues that cause conflict of interests, and spelling out of the legal framework or other ethical issues. The ethics statements, therefore act as the main driving force of the organization’s policies or goals and objectives. No business can function smoothly without an effective ethics statement in place.

Any museum normally wants to attract donors or sponsors. In order to do so, there has to be a well organised and spelt out ethics statement in place. The ethics statements define clearly what the business stands for or what it needs to achieve in the near future. Sponsors, therefore, will have so much confidence when they are forming a partnership with a well established business that has well defined goals and objectives. In the modern business world, ethical statements are a requirement as they show the seriousness of the business society.

It is not only the investors who wish to identify with such businesses, consumers, who are always the main beneficiaries also strive to identify with them. The business environment is highly competitive, and each business strives to be a step ahead of the competitor; therefore, with such a framework (ethics statement) in place, an opportunity to outdo the competitor presents itself.

Recommendations for establishing an ethical statement

Just as mentioned above, ethical statements are the main driving force of any business. A business without an ethical statement is leading nowhere. The ethical statements define the level of seriousness of the business to meet its goals or objectives.41

The ethics statement includes the definition of the mission of the business, the spelling out of the guiding principles, the definition of the mandate of the business, the governance strategy, the required behaviour standards of the members of staff, definition of the role or purpose of the business, other programs that the business runs in addition to the main program, the required stakeholders or partners of the business, dealing with issues that cause conflict of interests, and spelling out of the legal framework or other ethical issues.

The ethics statements, therefore act as the main driving force of the organization’s policies or goals and objectives. No business can function smoothly without an effective ethics statement in place.

The ethics statement normally spells out the ethical standards that the business should stick to in all spheres of its functions. It is the responsibility of the business to put into effect the business ethics, as they expect the business’ stakeholders to do the same. Ethics statements stem from the nature of behaviour and the level of integrity that exist in the business. The level of integrity is demonstrated by decency, reverence, neutrality, uprightness, and objectivity that exist in the business.

When the workplace has a high level of ethics and professionalism, there are very limited or minimal chances for the occurrence of business misconducts, such as corruption and mismanagement. The employees and the other stakeholders of the business are expected to show the highest level of ethical standards in all aspects of their work. When this happens, chances are that the business will be in a better position to attract donors or sponsors to add more value to it.42

Ethics statements are founded on the basis of accountability and transparency. In order to achieve this, the business should constantly carry out an audit of the performance of the organization or the performance of the individual employees so as to check on the areas where flaws exist. Transparency and accountability form an integral part of the success of the organization. Each employee should be accountable to the task or the role that he/she is required to play towards contributing to the success of the entire business.

The ethical behaviour of the organization entails making certain that the surrounding community are safe and are not negatively affected by the activities of the business. In addition, the working environment should not be detrimental to the health or the welfare of the workers and the other stakeholders involved in the business.

Safety is very essential in the workplace, both within and without; therefore, every business should strive to make the business environment a safe place to work in. Donors or sponsors always want to put their money in a safe working environment in order to limit the chances of unwanted risks.

The ethics statements of a business should also observe the social and environmental factors. It is very unhealthy for a business to ignore both the social and environmental needs. It is unethical for a business to take advantage of the environment or to create a social disadvantage.43

The ethical statement should therefore spell out how the business will strive to correct the various social and environmental challenges that exist. The business should strive to make products that do not cause a harmful or a negative effect both socially and environmentally. In addition, the threshold for recruiting and maintaining employees should be in conformity with the international laws regarding labour.

Ethical decision making

Professionals who are development conscious are expected to have ethical behaviour. Ethical decision making stems from ethical behaviour of the stakeholders of the business. It is the way of making decision with regard to the moral and ethical standards in order to safeguard the interests of the business.

Many ethical decision makers are faced with big challenges in their course of ethical decision making; the challenges include: big goals to be achieved, inadequate experience, inability to make informed choices, clash of interest with the superiors of the business, and lack of cooperation among the various stakeholders of the business.

Ethical decision making represents the level of professionalism that exists in the business environment. The ethical decisions serve the role of steering the business forward in order to achieve its underlined goals or objectives. In many cases, businesses that are established on the basis of ethical decision making normally have a large base of clientele or sponsors, since a lot of people have the desire or the urge to identify or to be associated with them.44

Ethical decision making is mainly influenced by the business environment; thus, the decisions always change with the changing business environment. In addition, the ethical decisions vary from one kind of business to another; for instance, the kind of ethical decisions that are made in a museum is different from the decisions that are made in a manufacturing business. The ability to make the ethical decisions does not automatically stem from the desire to make the ethical decisions. This means that ethical decision making is a spontaneous affair rather than a planned one.

Donors or sponsors normally want to give grants to organizations or businesses that maintain a high level of ethics, integrity and principles. When a business continues to make good ethical decisions over a period of time, it gains the reputation of being an ethical business entity. This will augment the level of trust and accolade that it attracts from the expected partners.45

There are various models in place that govern ethical decision making. Utilizing models in the decision making process will limit the frequency of making decisions with haste as the models provide a methodological framework that guides the decision making process. In addition, the decision making models enables the business to come up with the best solutions for the problems or incidences that are present, to preserve those solutions and to gain more confidence from potential donors or sponsors.

An effective decision making model and an efficient code of ethics will anchor those with ethical behaviours to make ethical decisions. These decisions are always productive and justifiable. Professionals who make good ethical decisions are in a good position to market themselves as highly ethical professionals with great integrity. Moreover, they are in the best position to solicit for funds from donors or sponsors because they can be trusted.

Sternberg’s model for ethical decision making in business

As discussed in the above section, ethical decision making stems from ethical behaviour of the stakeholders of the business. It is the way of making decision with regard to the moral and ethical standards in order to safeguard the interests of the business. Many ethical decision makers are faced with big challenges in their course of ethical decision making; the challenges include: big goals to be achieved, inadequate experience, inability to make informed choices, clash of interest with the superiors of the business, and lack of cooperation among the various stakeholders of the business.46

Sternberg’s model points out that there are five fallacies of thinking. The fallacies stem from individual behaviour that is controlled by self interest. When a person makes decision as per his/her self interest, the person is considered to lack wisdom; lack of wisdom incapacitates a person from making conclusive decisions or decisions that produce solutions. The first fallacy of thinking according to Stenberg’s model is egocentrism. It is portrayed when a person makes decisions or thinks in a way that satisfies his own personal interest at the expense of the rights and interests of the others.47

Satisfaction of the individual’s self interest makes the individual vulnerable to certain risks that were not anticipated. Self interest satisfaction is not considered to be a positive or descriptive approach to ethical decision making in business. An individual should, therefore involve all the required participants before he/she makes the final decision or judgment.

The second fallacy is omnipotence. It is portrayed when an individual feels that he/she can control all situations, even those that occur unexpectedly. The individual is therefore trusted by the others, since whatever he/she says is considered to be right. Any business can be at great risk if a person like that is allowed to make decisions on its behalf. The third fallacy is omniscience. This is portrayed when an individual fells that he/she is the only person who can understand the complex issues regarding an issue and that the others’ opinions should not be taken into consideration.48

The fourth fallacy is invulnerability. This is portrayed when an individual believes that he/she cannot be caught or punished for his/her mode of behaviour.49 This feeling comes about as a result of the repeated mode of behaviour of the person that gives him/her much confidence. In addition, this fallacy can also stem from the fact that there exists a common logic of omniscience by the individual. The fifth fallacy of thinking according to Stenberg’s model is unrealistic optimism.50

This fallacy stems from the high level of creativity by the individual which gives him/her a certain feeling of optimism. Creativity leads to the enthusiasm to use money to put an idea into practice. The kind of decisions to make in this stage is whether the idea is relevant and whether the results can be achieved.

Fischer’s model for ethical decision making in fundraising

Dr. Marilyn Fischer points out that in order to make a good ethical decision; a good question has to be asked.51 The first step to take when making decisions is to identify the problem. There are three areas that need to be paid attention to when making ethical decisions. The three areas include: the mission of the organization, the relationships among the colleagues and donors, and the level of personal integrity. The mission of the organization is paid attention to in order to make sure that the decision that is to be made does not violate the overall mission of the organisation.

In addition, it is important to note how the decision is going to affect the status of relationships that exist among the business colleagues or between the business and the donors or the sponsors, or between the business and the members of the society. Lastly, it is very important to consider how the decision is going to impact on the individual’s personal integrity; for instance, whether it will lower or raise the integrity of the individual.

Fischer’s model of ethical decision making further implies that when making ethical decisions, an individual will always be guided by the culture of the business, the ethical codes that govern the business, the morals and the values of the business. Despite the fact that the model is clearly stipulated, it is still not so easy for some individuals to come up with the best decisions for the business. When the views of all the stakeholders are put into consideration, it becomes easier to make the best decision that will be greatly welcome by everybody.52

Decision making through Fischer’s model is very flexible in that it allows for mistakes, but after carefully paying attention to the three areas (the mission of the organization, the relationships among the colleagues and donors, and the level of personal integrity), it becomes easy to correct the mistakes and choose the right decision from the many alternatives. Ethical decision making is mainly influenced by the business environment; thus, the decisions always change with the changing business environment.

In addition, the ethical decisions vary from one kind of business to another; for instance, the kind of ethical decisions that are made in a museum is different from the decisions that are made in a manufacturing business. The ability to make the ethical decisions does not automatically stem from the desire to make the ethical decisions. This means that ethical decision making is a spontaneous affair rather than a planned one.

Both donors and sponsors normally want to offer financial aid to organizations or businesses that observe a high level of ethics, integrity and principles. When a business goes on with the trend of making good ethical decisions over a period of time, it assumes the status of being an ethical business entity.53 These decisions are always productive and justifiable. Professionals who make good ethical decisions are in a good position to market themselves as highly ethical professionals with great integrity.

Regulation of fundraising

It is mandatory for an organisation to preserve and uphold the interest from the public. Making decisions of high quality is one such way of attracting and creating public trust. Organizations that make decisions of high quality over and over again tend to be in a good position to support their decisions and act carefully as per their decisions. Ethical decision, therefore, is a great example of one of the key determinants of the organisation’s ability to garner confidence and assurance from the members of the society or community.

When a potential donor has a higher level of trust on an organization, he will be highly likely to make a donation to that organization. Trust, therefore is a key element when sourcing for funds; once the donor has put some trust on you, your responses will always be positive.54 Regrettably, very many donors find it so hard to build a trust on non-performing businesses.

Regulation of fundraising will ensure that expected results of the funds have been achieved, for instance, that the raised funds are put into good use. Donors or sponsors always are interested to know how the funds have been used both in the short run and in the long run. Before receiving the funds from the donor, it is a common practice to define what the money will be used for, and how that will be achieved in order to avert further misunderstanding; this is defined in the regulation protocol.

The regulation protocol always entails: the activities that need the funding in line with the mission or objective of the organization, the modes of collecting data in order to verify the results of the funds, and indicators on how the funds are used.55 Some donors or sponsors always prefer to receive constant reports in order to be updated with the progress of the organization.

The reports can either be annual reports or semi-annual reports or quarterly reports. The reports always entail: a summary of the updated activities of the organization, the efforts of the organisation toward realizing the results, and the expected challenges during the process.

Any organization is expected to perform its projects in line with its mission or goals. They always ensure that the concerned individuals who are spearheading the project always observe the requirements of the organization. An evaluation of the project being funded is always carried out by the donor or sponsor. Normally, this evaluation always takes place on the road to the completion of the funding. The results of the evaluation normally review the changes done in the way that the funds are used.56

Many people still are of the opinion that regulation of fundraising is carried out in order to impress the donors or the sponsors. Even though it is a good idea for the sponsors or donors to have an idea as to whether their money is being put to good use, the major benefit for regulation normally goes to the organisations. The keen interest from the donors or sponsors normally enables the organisation to put the funds into good use by raising the management standards.

Problems in the current funding and fundraising culture

Fundraising is normally based on the public trust and reputation that the organisation has. In addition, it is based on the performance of the organisation. Any organisation that does not perform normally does not attract sponsors or donors. Sponsors or donors normally want to give grants to organisations or businesses that maintain a high level of ethics, integrity and principles.

When a business continues to make good ethical decisions over a period of time, it gains the reputation of being an ethical business entity. This will augment the level of trust and accolade that it attracts from the expected partners. These decisions are always productive and justifiable. Professionals who make good ethical decisions are in a good position to market themselves as highly ethical professionals with great integrity.

One of the major problems associated with fundraising is the level of accountability. 57 Without accountability, it becomes so hard to be sure whether the funds are going to be put into good use. Accountability is a key element that builds the reputation of the business and lack of it makes the business to be an empty shell. Business managers who are not accountable normally squander the funds and use them for their own personal gains at the expense of the business.

It is also important for an organisation to state clearly the goals, objectives or the mission. Without clearly defined goals, the organisation is seen to be heading nowhere and very few sponsors will be interested to put their money on it. Efficient management of the funds is based on the structured policies of the business.

The policies should define the various rules or regulations that govern the management of the collected funds. Constant monitoring and evaluation is very necessary in order to make sure that the management of the funds is not compromised, and that results are achieved in the correct manner.58

Many businesses still lack the structure and the framework that appeals to the sponsors or donor. The management of the business should involve managers who are driven by the motive to achieve the goals and the missions of the business. With no positive framework in place, the desire of the business to raise funds will diminish entirely as the level of trust and commitment that they will show to the sponsors will be too minimal to warrant them the chance to raise more funds or to attract sponsors and donors. Ethical decision making stems from ethical behaviour of the stakeholders of the business.

It is the way of making decision with regard to the moral and ethical standards in order to safeguard the interests of the business. Many ethical decision makers are faced with big challenges in their course of ethical decision making; the challenges include: big goals to be achieved, inadequate experience, inability to make informed choices, clash of interest with the superiors of the business, and lack of cooperation among the various stakeholders of the business.59

Charity commissions’ guidance

The guidance of the charity commissions guard against discriminating anybody because of his/her characteristics, for instance, age, gender, occupation, etc. This guidance brought changes with regard to the way in which sponsors or donors made the choice of their beneficiary organizations. The charitable organisations should ensure that they operate in line with the government’s stipulations with regard to who to exempt from donating funds to, for instance, people with disabilities, people from a certain religion, etc.

The charity commission’s guidance advocates for constant review of the rules that govern donations, so as to be in line with the ever changing business environment. The review should, therefore, be a constant process and should capture the interests of the charitable organisation.

Charity commission’ guidance aims at formulating policies that act as a guiding principle for the charitable organizations. The choice of the beneficiary organisation is very important to note because its integrity will influence the amount of money that that should be injected to it. In many cases the donors or the sponsors work well with organisations that are highly productive and have excellent ethical standards.60 The guidance of the charity commissions guards the interests the beneficiaries of the funds too.

The charity commission’s guidance will ensure that expected results of the funds have been achieved, for instance, that the raised funds are put into good use. Sponsors and donors of a company always want to follow up on how the funds have been used and whether the funds have been used wisely. Businesses need to define their needs before sourcing for funds from the donors. This is very necessary for planning purposes so as to prevent any misunderstandings in the future. The regulation protocol stipulates how the received funds should be put into good use.

One of the major problems associated with fundraising is the level of responsibility. Without responsibility, it becomes so hard to be sure whether the funds are going to be put into good use. Responsibility is a key element that builds the reputation of the business and lack of it makes the business to be an empty shell. Business managers who are not accountable normally squander the funds and use them for their own personal gains at the expense of the business.

The charity commission’s guidance always entails: the activities that need the funding in line with the mission or objective of the organization, the modes of collecting data in order to verify the results of the funds, and indicators on how the funds are used.61 Some donors or sponsors always prefer to receive constant reports in order to be updated with the progress of the organization.62

Existing codes of conduct within fundraising

Charitable organizations that want to engage in sponsoring or donating to an organization always adopt the highest level of integrity so as to make sure that the process of fundraising is courteous, straightforward, open, and lawful. 63 All matters that relate to the raising of funds must be treated with confidentiality and released only when required. Fundraisers or donors need to maintain the highest level of integrity, sincerity and reliability. In the same way, the beneficiary organizations should also demonstrate the same behaviour. This is very necessary to build confidence and trust by the charitable organisations.

In addition, organisations ought to display a higher level of professionalism and dignity. This will help improve their reputation and their chances of getting funds from charitable donors. Respect ensures that the organisations play in line with their stipulated missions and vision. Organisations are expected to disclose all the relevant information to the charitable organisations with great honesty.

Openness is also a key determinant to whether an organisation can attract donors or sponsors. Openness is tied to honesty and it refers to the ability to disclose all the necessary information required by the donor organisation. The charitable organisation will be held accountable for any funds it donates, thus, they strive to work with beneficiary organisations that are transparent and candid.

Businesses like museums always have codes of conduct that help them run their business affairs. These codes of conduct spell out the nature of behaviour, which should be in line with the goals or objectives of the museum.64 In addition to the code of conduct, museums normally have a well spelt out code of ethics, which act as a guiding principle of the conduct of the business. Museums normally opt to keep their assets long enough so that the future generation can also see the assets. The weight of the benefits that the people derive from the museums represents the value of the services.65

The codes of conduct for a business normally follow some guiding principles or a certain order. Many at times, the mission statement or the vision statement are what entail the ethics statements. The core values of the business and the policy implementation strategies are also contained in the ethics statement. The codes of conduct are in line with the ethical statement and always follow a specific format in order to capture all the required areas.

In the modern business world, codes of conduct are a requirement as they show the seriousness of the business society. Both the investors and consumers, who are always the main beneficiary, wish to identify with such businesses. The business environment is highly competitive, and each business strives to be a step ahead of the competitor; therefore, with such a framework (ethics statement) in place, an opportunity to outdo the competitor presents itself.

Reflections on the literature

Sponsorship is defined as any sort of financial assistance and grant that come from a private entity. In the context of the field of arts, sponsorship entails an accord between a certain company and a non-profit institution in order to swap some benefits. Branding involves the action of popularising the identity of an enterprise or a company.

The brand of the product is what sells to the buyer. Business ethics is concerned with the various ethical principles or ethical problems that occur in the field of business. Museums have ethics statements that help them run their business affairs. These ethics statements spell out the nature of service provision, which should be in line with the goals or objectives of the museum. 66

Ethics statements are founded on the basis of accountability and transparency. In order to achieve this, the business should constantly carry out an audit of the performance of the organization or the performance of the individual employees so as to check on the areas where flaws exist. Ethical decision making stems from ethical behaviour of the stakeholders of the business. It is the way of making decision with regard to the moral and ethical standards in order to safeguard the interests of the business.

Organizations that make decisions of high quality over and over again tend to be in a good position to support their decisions and act carefully as per their decisions. Ethical decision, therefore, has proved to be a factor that is instrumental in determining whether an organization or business will achieve confidence and assurance from the community.

Research Methodology

Introduction

Methodology is the process of instructing the ways to do the research.67 It is, therefore, convenient for conducting the research and for analyzing the research questions. The process of methodology insists that much care should be given to the kinds and nature of procedures to be adhered to in accomplishing a given set of procedures or an objective. This section contains the research design, study population and the sampling techniques that will be used to collect data for the study. It also details the data analysis methods, ethical considerations, validity and reliability of data and the limitation of the study.

Research philosophy

For this part, choosing a philosophy of research design is the choice between the positivist and the social constructionist. The positivist view shows that social worlds exist externally, and its properties are supposed to be measured objectively, rather than being inferred subjectively through feelings, intuition, or reflection. The basic beliefs for positivist view are that the observer is independent, and science is free of value. The researchers should always concentrate on facts, look for causality and basic laws, reduce phenomenon to simplest elements, and form hypotheses and test them.68

Preferred methods for positivism consist of making concepts operational and taking large samples. The view of the social constructionists is that reality is a one-sided phenomenon and can be constructed socially in order to gain a new significance to the people. The researchers should concentrate on meaning, look for understanding for what really happened and develop ideas with regard to the data.

Preferred methods for the social constructionists include using different approaches to establish different views of phenomenon and small samples evaluated in depth or over time. For the case of analyzing the ethical issues of sponsorships for museums, the philosophy of the social constructionists was used for carrying out the research. Because it tends to produce qualitative data, and the data are subjective since the gathering process would also be subjective due to the involvement of the researcher.

Case study

Case study is an approach of methodology that is applied when a comprehensive research or investigation is required.69 Case study is widely applied in sociological studies, but of late it is commonly applied in research institutions. Case study approach has procedures to be followed; hence, the researcher is required to stick to the guiding rules and principles so as to produce the best results. Through case study approach, the researcher has access to a wide range of data sources; as a result of this, case study results are always very comprehensive and in-depth.

Case study research does not entail sampling; hence it is beneficial to select the cases in a relevant manner in order to maximize on what should be learnt. Through case study approach, relevant issues that form the basis of the study are thoroughly exploited. In addition, issues that appear to be more complex are brought to light through the use of case study as a research approach. The basic steps to be followed when structuring a case study approach are:

  1. the research questions should be clearly stated and defined;
  2. choose the cases and the data collection and analysis techniques;
  3. arrange to gather data;
  4. process and analyze the collected data;
  5. make a report with regard to the analyzed data.

There are three types of case studies. The first one is the intrinsic study which is carried out when the expected results are supposed to elaborate clearly on the case. The second type is the instrumental case in which the case acts as a fountain of knowledge to support the research. The third type of case study is the collective approach in which the phenomenon is explained by a surplus of independent case studies.

The research strategy

First, with regard to the qualitative research, areas of study were chosen with determination, paying attention to whether the areas of study are in line with the features that have been predetermined. Next, the part played by the researchers was to obtain a higher critical care. This is mainly done in qualitative research due to the fact that there is every chance of the researcher assuming a transcendental or a ‘neutral’ position.

Thus, this appears to be more elusive both in philosophical and/or practical terms. It is for this reason that the qualitative researchers are frequently pressed to mirror on their part in the research procedures and make things obvious in their research analyses.

Consequently, a wide variety of forms can be taken by qualitative data analysis; the forms range within quantitative research in its coverage on meaning, signs, and language. Moreover, qualitative research procedures evaluate contextually and holistically, instead of being isolationist and reductionist.

Nevertheless, transparent and systematic methods to analysis are ever considered as crucial for cogency. However, the most customary division between the employment of quantitative and qualitative research particularly in the social sciences is that quantitative methods are employed to evaluate the main hypotheses. This is so to establish content correctness and to evaluate measures that the researcher believes he/she should evaluate. This is regarded as one of the striking benefits of qualitative research.

Logic and conceptual system development

For this part, choosing a logic and conceptual system of the research design is a choice between the positivist and the social constructionist. The positivist view shows that social worlds exist externally, and its properties are supposed to be measured objectively, rather than being inferred subjectively through feelings, intuition, or reflection. The basic beliefs for the positivist view are that the observer is independent, and science is free of value. The researchers should concentrate on facts, look for causality and basic laws, reduce phenomenon to simplest elements, and form hypotheses and test them.

Preferred methods for positivism consist of making concepts operational and taking large samples. While on the other hand, social constructionists hold the view that reality is subjective and it is socially constructed and given meaning by people. It is best explored through a clear focus on the ways that people make sense of the world via language. The basic beliefs for the social constructionists are that the observer is part of what is observed and science is driven by human interest.

Research Process

For the research process, the choices of the two processes: deductive and inductive processes can be used for carrying out the research. A deductive approach is described as a study in which the theory is tested by the empirical observation, and is referred to as moving from the general to the specific.

Deductive research establishes a theory and then checks on the data; it uses quantitative data and it is a very structured approach. On the other hand, inductive approach is a study in which the theory is developed from observation of reality and is the opposite of deductive research; it moves from the specific observations to the general statements.

Inductive approach does not start with the theory, and is very flexible using qualitative data. This study mainly used the inductive process for the case of exploring the influence of wellness tourism’s participation for the elderly because the theory is developed from the observations of the reality, and during the process, there are qualitative data that are used for data analysis.

Research design

In line with the main objective of this study which is to identify the ethical issues of sponsorships for museums, this study employed a cross-sectional research design. This kind of research design enables the researcher to find out the relationships between the variables in the research process.

Statistical method

Descriptive statistics and inferential statistics were both applied in the study in order to test the hypotheses.

Descriptive statistics

Descriptive statistics is mostly applicable for analyzing numerical data. It uses distribution frequencies, distribution of variables and measures of central tendencies. The characteristics of the sample chosen will be used to compute frequencies and percentages with regard to the questionnaires.70

Inferential statistics

Inferential statistics gives the researcher the chance to convert the data into statistical format so that important patterns or trends are captured and analyzed. Regression analysis is utilized in inferential statistics. Regression analysis is employed to check on the relationship between a dependent variable and independent variable. It allows for the researcher to predict and forecast the expected changes to a dependent variable when one independent variable changes.71

Data Collection and Instrumentation

The study mostly relied on secondary data from newspaper articles and publications.

Data Analysis Methods

Data from the survey were entered into the Excel spreadsheet program for future analysis. Data was analyzed using SPSS, regression and correlation analysis.

Limitation of data collection methods

There have been a lot of concerns on additional budgetary expenses for collection of the data, regardless of whether the gathered data is really genuine or not and whether there may be an explicit conclusion when interpreting and analyzing the data. In addition, some employees were reluctant to offer some information they deemed confidential and unsafe in the hands of their competitors. This posed a great challenge to the research as the researcher had to take a longer time to find employees who were willing to give out adequate information.

Validity and reliability

Validity of the data represents the data integrity and it connotes that the data is accurate and much consistent. Validity has been explained as a descriptive evaluation of the association between actions and interpretations and empirical evidence deduced from the data. More precaution was taken especially when a comparison was made between employee commitment and job attitude. Reliability of the data is the outcome of a series of actions which commences with the proper explanation of the issues to be resolved. This may push on to a clear recognition of the yardsticks concerned. It contains the target samples to be chosen, the proper sampling strategy and the sampling methods to be employed.

Findings, Data Analysis and Interpretation

Introduction

This section covers the analysis of the data, presentation and interpretation. The results were analyzed using SPPS, ANOVA, regression and correlation analysis.

Summary of descriptive statistics

Descriptive statistics using the measures of central tendencies were computed from the results gathered from the secondary sources. The secondary sources of information focused on the ethical issues of sponsorships for museums.

Results for the ethical issues of sponsorships for museums

The secondary sources of information with regard to the ethical issues of sponsorships for museums were analysed and the results checked. The secondary sources were very helpful in generating the desired information. The summary of the results is in Table 4.1 below.

Table 4.1Descriptive statistics for ethical issues of sponsorships for museums.

Mean Standard deviation
Business ethics 113.20 14.30
Level of integrity 102.12 11.30
Ethical decision making 103.10 10.80
Performance 127.20 15.30
Codes of conduct 114.35 14.22

The results show that from the sample of 237 sources of information, the mean for the role of business ethics on sponsorships of museums is 113.20 with a standard deviation of 14.30. From this computation, it can be deduced that many employees believe that strict adherence to the business ethics, enables it to attract sponsors and donors; this is indicated by the higher value of the standard deviation.

In addition, the calculated arithmetic means for the role of level of integrity, ethical decision making and codes on conduct on sponsorship of museums are less than the calculated arithmetic mean for the role of the organisation’s performance on sponsorships for museums. It is, therefore, evident that sponsorships for museums is largely affected by the performance of the organisation. Thus, performance of the organisation influences sponsorship (Mean=127.20, SD=15.30) than codes of conduct (Mean=114.35, SD=14.22), ethical decision making (Mean=103.10, SD=10.80), and level of integrity (Mean=102.12, SD=11.30).

Inferential statistics

The results of inferential statistics were used to establish the relationship that exists among the variables that analyzes the ethical issues of sponsorships for museums; in addition, inferential statistics was used to ascertain the connection among the variables. The results are summarized in Table 4.2 below.

Table 4.2 Pearson correlation matrix for ethical issues of sponsorships for museums.

Sponsorships for museums
Pearson correlation Sig (2-tailed)
Business ethics 0.273 0.044*
Level of integrity 0.598 0.000**
Ethical decision making 0.268 0.042*
Performance 0.585 0.000**
Codes of conduct 0.386 0.003**

Note:

  1. * = p<0.05
  2. ** = p<0.01

The results in Table 4.2 show that there are major correlations between level of integrity and sponsorships for museums (r = 0.598, p < 0.01), performance of the organisation and sponsorships for museums (r = 0.585, p < 0.01), codes of conduct and sponsorships for museums (r = 0.386, p < 0.01) and between ethical decision making and sponsorships of museums (r = 0.268, p < 0.05). There was also a significant relationship between business ethics and sponsorships for museums (r = 0.273, p < 0.05).

A regression analysis between sponsorships for the museums and the variables was done. The results are summarised in Table 4.3 below.

Table 4.3 Multiple regression results: sponsorship for museums and the variables.

Multiple R 0.602
R Square 0.361
Adjusted R Square 0.332
Standard Error 12.961
F 5.295
Sig F 0.00**
Variable Beta T Sig T
Business ethics -0.2164 -0.2670 0.03969*
Level of integrity -0.2684 -2.4021 0.0108*
Ethical decision making -0.3189 -3.0942 0.0029**
Performance -0.1537 -1.2951 0.0701
Codes of conduct -0.1806 -1.1092 0.0229*

Note:

  1. * = p<0.05
  2. ** = p<0.01

The result found out that the multiple R-value is 0.602. The R-Square value of 0.361 indicates that 36.1% of the variables explained the dependent variable. The F-statistic (5.295) is statistically significant at 0.01 level; meaning that the variables significantly enlighten 36.1% of the variance in sponsorships for museums. Ethical decision making is the best predictor of sponsorship of museums as it has a beta coefficient value of -0.3189 and is statistically significant at the 0.01 level.

In addition, level of integrity, business ethics and codes of conduct are statistically significant at 0.05. The negative value of the beta coefficient of codes of conduct indicates that sponsorship for museums is greatly influenced by the adherence to the codes of conduct. In the same manner, the negative beta value of business ethics coefficient shows that adherence to the business ethics is greatly important to sponsorships of museums.

Conclusions and Recommendations

Introduction

This chapter presents the summary of the findings and discussion of the results in accordance to the objectives of this study. Finally, the chapter contains the conclusions and recommendations.

Summary of findings

The general objective of this study was to determine the ethical issues of sponsorships for museums. In line with the general objective, the study examined the following specific objectives: to determine the effectiveness of business ethics on sponsorships of museums; to determine the level of integrity in management of museums; to determine the influence of ethical decision making on sponsorships of museums; to explore on the influence of performance on sponsorship of museums; and to determine the effectiveness of codes of conduct on sponsorship of museums.

The objectives were satisfied by collecting and analyzing pertinent data using various statistical techniques. In line with the objectives, the following hypotheses were tested: business ethics are not effective on sponsorship of museums; museums are not managed with a higher level of integrity; ethical decision making does not influence the sponsorship of museums; performance does not influence the sponsorship of museums; and codes of conduct are not effective on sponsorship of museums.

Museums play a very important role than it used to play before. Museums not only act as a key tourist attraction, but they also act as a site where people exercise their leisure activities. When consumers visit museums, they normally spend a certain amount of money to cover for the admission fees and other expenditure in the museum shops or hotels. Museums can be classified into four distinct categories, for instance, according to content, according to size, according to age and according to the institutional form.

Any museum is expected to adequately utilise the available financial resources and techniques. In many countries, there is a favourable fiscal climate that attracts many philanthropic donors. To be precise, the philanthropic donors are much more attracted to museums that conserve the national heritage of the country.

This study sought to select cases, which show the possible ethical problems that may occur when museums are getting money donations from huge corporations and donors, and to describe them. In order to analyse the situations given from different angles, it is important to understand the key points of problems and see what differences and similarities exist, which afterwards will give a base for future suggestions on how to avoid, or at least minimize, the risk of ethical problems.

Institutional survival for both commercial institutions and non-profit institutions (e.g. museums) is strived by: creating legitimacy, cultivating informal relations with policy makers, securing a certain degree of institutional stability, realizing economic success, and generating a resonance within the audiences they choose to address.

Ethics has got three forms. The first form of ethics is descriptive ethics in which moral standards differ from one society to the other. The second form of ethics is normative ethics; it describes the norms that are accepted in one society but are denounced in another society. The third form of ethics is analytic ethics which fosters the idea that the level of morality is comparative. Business ethics is a combination of all the forms of ethics discussed above.

Business ethics is defined as the assessment of the manner in which people or organisations are expected to conduct themselves in the field of business. To be specific, business ethics assesses the various limitations that hinder an individual or organisation from satisfying the self interest, or realizing huge profits when the activities of the individuals or the businesses influence each other.

Conclusion

Sponsorship is defined as the financial grant or assistance that comes from a private entity. In the context of the field of arts, sponsorship entails an accord between a certain company and a non-profit institution in order to swap some benefits. Branding involves the action of popularising the identity of an enterprise or a company.

The brand of the product is what sells to the buyer. Business ethics is concerned with the various ethical principles or ethical problems that occur in the field of business. Museums have ethics statements that help them run their business affairs. These ethics statements spell out the nature of service provision, which should be in line with the goals or objectives of the museum.

Ethics statements are founded on the basis of accountability and transparency. In order to achieve this, the business should constantly carry out an audit of the performance of the organization or the performance of the individual employees so as to check on the areas where flaws exist. Ethical decision making stems from ethical behaviour of the stakeholders of the business. It is the way of making decision with regard to the moral and ethical standards in order to safeguard the interests of the business.

Organizations that make decisions of high quality over and over again tend to be in a good position to support their decisions and act carefully as per their decisions. Ethical decision, therefore, in one of the examples of the factors that determine whether an organization will gain trust and confidence from the public.

It is evident from the case studies identified that museum management does not observe the set ethical codes, which has led to increase of the cases related to corporate fraud and corruptions. Creation of good associations is main idea of branding; artistic activists have often criticized museums managements for not observing their ethical codes and allowing corrupt dealings. Most of members of museums boards of trustees have been accused of corporate fraud and tax evasions hence they can not pass the integrity test. Art risks selling its soul, but without organisations such as BP e.g. the arts might simply cease to exist.

Public trust is very essential for an organisation. The trust stems from the ethical practices and strict adherence to the codes of conduct. Performance of the organisation also influences its ability to attract donors and sponsors. Organisations that are not productive are always ignored in their plights for funds.

In the modern business world, codes of conduct are a requirement as they show the seriousness of the business society. When a business continues to make good ethical decisions over a period of time, it gains the reputation of being an ethical business entity. This will augment the level of trust and accolade that it attracts from the expected partners. These decisions are always productive and justifiable. Professionals who make good ethical decisions are in a good position to market themselves as highly ethical professionals with great integrity.

One of the major problems associated with fundraising is the level of accountability. Without accountability, it becomes so hard to be sure whether the funds are going to be put into good use. Accountability is a key element that builds the reputation of the business and lack of it makes the business to be an empty shell.

Any museum normally wants to attract donors or sponsors. In order to do so, there has to be a well organised and spelt out ethics statement in place. The ethics statements define clearly what the business stands for or what it needs to achieve in the near future. Sponsors, therefore, will have so much confidence when they are forming a partnership with a well established business that has well defined goals and objectives. An effective decision making model and an efficient code of ethics will anchor those with ethical behaviours to make ethical decisions.

These decisions are always productive and justifiable. Professionals who make good ethical decisions are in a good position to market themselves as highly ethical professionals with great integrity. Moreover, they are in the best position to solicit for funds from donors or sponsors because they can be trusted.

Recommendations

Sponsorship for museums is a broad subject that needs consultations from all the stakeholders. The results of the study have revealed that sponsorships for museums are influenced by various ethical issues. The issues include: ethical decision making, level of adherence to the codes of conduct of the business, level of adherence to business ethics, level of integrity and performance of the business. These ethical issues will determine the fate of the business, as they should be complied with.

It is highly recommended for museums to observe their codes of conduct in the same way that they should adhere to the business ethics. This is very necessary as it helps to build the level of public trust and public confidence. In the same way, museums should make sound ethical decisions, especially when management of finance is concerned.

These decisions will point out where the business is headed to, thus, charitable organisations normally take note of these decisions. Moreover, museums should adopt a culture of high integrity so as to appeal to the donors. It is also recommended that the level of performance of the museums should be high in order to prove that the management is effective. The recommendations are summarised below:

  1. Companies might give generous donations, but museums must live up to their ethical commitments.
  2. Museums management should verify the integrity of the corporate sponsors to make sure they don’t contravene their ethical code.
  3. Museums need a policy guide lines that regulate cooperate museum funding. In case of new policies guidelines are well implemented and ethical code are upheld, improved governance will prevail whilst public faith in museums corporate sponsorship and philanthropy will be restored.
  4. There should be some ethical considerations for particular sponsors, which should be discussion to keep happening according to the changing context of the world we live in.

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Georges, Enderle. International Business Ethics. Notre Dame: University of Notre Dame Press, 1999.

Ghoshal, Sumantra. “Bad management theories are destroying good management practices.” Academy of Management Learning & Education 4, no. 1 (2005): 75-91.

Greenfield, Kent. The Failure of Corporate Law fundamental flaws & progressive possibilities. Chicago: The University of Chicago Press, 2006.

Ilene, Grabel. “International private capital flows and developing countries.” In Rethinking Development Economics 2003, edited by Ha-Joon Chang 325–45. London: Anthem Press, 2003.

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James, Cuno. Whose Muse? Art museums and the public trust. Princeton, NJ: Princeton University Press, 2004.

James, Twitchell. Branded Nation: the marketing of Mega church. New York: Simon and Schuster, 2004.

Koch, Bloomberg. “Brothers Flout Law Getting Richer with Secret Iran Sales.” Bloomberg. Web.

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Martinez, Jill. “Financing a Global Guggenheim Museum.” In The showbiz years 2001, edited by Jonathan Glancey, 4-11. South Carolina: University of South Carolina press, 2001.

Merrill, Thomas, and Henry Smith. “What Happened to Property in Law and Economics.” Yale Law Journal 111, no. 2 (2001): 357–398.

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Pierre, Bourdieu, and Haacke Hans. Free Exchange. Cambridge: Polity Press, 1995.

Rachels, James. The elements of moral philosophy. New York: Random House, 1986.

Rectanus, Mark. Culture incorporated Museums, Artists and Corporate sponsorships. London: University of Minnesota Press, 2010.

Rest, James. Development in judging moral issues. Minneapolis, MN: University of Minnesota Press, 1979.

Rest, James. Moral development: Advances in research and theory. New York: Praeger, 1986.

Richard, George. Business Ethics. London: SAGE Publications, 1999.

Sargeant, Adrian, and Stephen Lee. “Improving public trust in the voluntary sector: an empirical analysis.” International Journal of Nonprofit and Voluntary Sector Marketing 7, no. 1 (2002): 68–83.

Saunders, Mark, Philip Lewis and Adrian Thornhill. Research Methods for Business Students. New York: Prentice Hall, 2009.

Serenko, Alexander, and Nick Bontis. “A citation-based ranking of the business ethics scholarly journals.” International Journal of Business Governance and Ethics 4, no. 4 (2009): 390–399.

Simpsons, Solicitors. “Ethical Problems.” Simpson. Web.

Smith, Adam. The theory of moral sentiments. New York: Augustus M. Kelley, 1966.

Sternberg, Robert, and Todd Lubart. Defying the Crowd: Cultivating creativity in a culture of conformity. New York: Free Press, 1995.

Sternberg, Robert. “WICS: A model for leadership in organizations.” Academy of Management Learning and Education 1, no. 2 (2003): 386-401.

Strom, Stephanie. In Charity, Where Does a C.E.O. End and a Company Start?. London: SAGE Publications, 2012.

Toppe, Christopher, and Arthur Kirsch. Keeping the Trust: Confidence in Charitable Organizations in an Age of Scrutiny. Washington DC: Independent Sector, 2002.

Weiss, Joseph. Business Ethics: A Stakeholder and Issues Management Approach With Cases. Mason, OH: South-Western Cengage Learning, 2006.

Appendix

This study review focused on Vodafone telecom, Adelphia Communication Company founders, John and Michael Rigas; Koch industries, headed by David Koch and Siemens Ag. The review also highlighted cases involving Denis Kozlowski, the former chief executive officer of Tyco International Company; Quebec advertising company founder, Jean Brault; Philip F Anschutz, the founder of Quest Trafigura Oil Company; and Dean Buntrock, the founder of Waste Management Company. The study review also made conclusions and recommendations based on the cases that were studied.

There have been growing criticism and controversies on the issue of museums reaching out to corporate sponsors for financial aid. Activists in art industry have accused museums management and corporate sponsors of compromising the integrity and goals of art museums. Tate museum management accepted funding from Vodafone despite tax evasion scandal amounting to 6 billion pounds being exposed.

The artistic activists questioned the legitimacy position of Tate museum ignoring ethical codes and decided to accept sponsorship from a corporation that was implicated in tax scandals. Accepting funds from such organizations damages a museum’s reputation which took years to build.

The British Petroleum Oil spill in Gulf of Mexico (environmental scandal of the decade, but it won’t be the last) which resulted to more than 8,000 birds, sea turtles, and marine mammals being injured or dead in the six months after the spill. 307 workers had reported to experience various illnesses or complications – more than triple the amount previously reported by BP. Such DNA damage could increase the risk of cancer, much like exposure to pollution or cigarette smoke.

Footnotes

  1. Mark Rectanus, Culture incorporated Museums, Artists and Corporate sponsorships (London: University of Minnesota Press, 2010), 23.
  2. Mark Rectanus, Culture incorporated Museums, Artists and Corporate sponsorships (London: University of Minnesota Press, 2010), 23.
  3. Michael Baker and Susan Hart, Product strategy and management (London: Prentice-Hall Europe, 1999), 13-16.
  4. Michael Baker and Susan Hart, Product strategy and management (London: Prentice-Hall Europe, 1999), 13-16.
  5. Bourdieu Pierre and Haacke Hans, Free Exchange (Cambridge: Polity Press, 1995), 18.
  6. Cuno, James, Whose Muse? Art museums and the public trust (Princeton, NJ: Princeton University Press, 2004), 32.
  7. Jill Martinez, “Financing a Global Guggenheim Museum,” in The showbiz years 2001, ed. Jonathan Glancey (South Carolina: University of South Carolina press, 2001), 7.
  8. Simpsons Solicitors, “Ethical Problems,” Simpson. Web.
  9. Edward Freeman, Strategic management: A stakeholder approach (Boston: Pitman, 1984), 23-27.
  10. Ariana Eunjung, Corporate Scandals Tainting Donations: Mind full (London: SAGE Publications, 2012), 2.
  11. Steve Akana, “Case Analysis: The Bribery Scandal at Siemens AG, Document Transcript,” Slideshare. Web.
  12. Michael Baker and Susan Hart, Product strategy and management (London: Prentice-Hall Europe, 1999), 13-16.
  13. Sumantra Ghoshal, “Bad management theories are destroying good management practices,” Academy of Management Learning & Education, 4, no. 1 (2005): 75-91.
  14. Bloomberg Koch, “Brothers Flout Law Getting Richer with Secret Iran Sales,” Bloomberg. Web.
  15. Michael Baker and Susan Hart, Product strategy and management (London: Prentice-Hall Europe, 1999), 13-16.
  16. Stephanie Strom, In Charity, Where Does a C.E.O. End and a Company Start? (London: SAGE Publications, 2012), 1-2.
  17. Twitchell James, Branded Nation: the marketing of Mega church (New York: Simon and Schuster, 2004), 45-48.
  18. James Rachels, The elements of moral philosophy (New York: Random House, 1986), 11-17.
  19. Michael Baker and Susan Hart, Product strategy and management (London: Prentice-Hall Europe, 1999), 13-16.
  20. Jill Martinez, “Financing a Global Guggenheim Museum,” in The showbiz years 2001, ed. Jonathan Glancey (South Carolina: University of South Carolina press, 2001), 4-5.
  21. Enderle Georges, International Business Ethics (Notre Dame: University of Notre Dame Press, 1999), 1.
  22. George Richard, Business Ethics (London: SAGE Publications, 1999), 32.
  23. Peter Drucker, “What is business ethics,” The Public Interest Spring, 1, no. 63 (1981): 18–36.
  24. Kent Greenfield, The Failure of Corporate Law fundamental flaws & progressive possibilities (Chicago: The University of Chicago Press, 2006), 46-51.
  25. Karin Cetina and Alex Preda, The sociology of financial markets (Oxford: Oxford University Press, 2005), 57-64.
  26. Peter Montiel, Macroeconomics in Emerging Markets (Cambridge: Cambridge University Press, 2003) 214–238.
  27. Twitchell James, Branded Nation: the marketing of Mega church (New York: Simon and Schuster, 2004), 45-48.
  28. Grabel Ilene, “International private capital flows and developing countries,” in Rethinking Development Economics 2003, ed. Ha-Joon Chang (London: Anthem Press, 2003), 325–45.
  29. Barry Eichengreen, “Capital Account Liberalization: What Do Cross-Country Studies Tell Us,” The World Bank Economic Review, 15, no. 3 (2001): 341.
  30. Twitchell James, Branded Nation: the marketing of Mega church (New York: Simon and Schuster, 2004), 45-48.
  31. Jerry Markham, A financial history of Modern US Corporate Scandals (New York: M.E. Sharpe, 2006), 91-102.
  32. Raymond Fisman and Edward Miguel, Economic Gangsters: Corruption, Violence and the Poverty of Nations (Princeton: Princeton University Press, 2008), 37-41.
  33. Robert Cooter and Thomas Ulen, Law and Economics (New York: Harper Collins, 1988), 56-72.
  34. Thomas Merrill and Henry Smith, “What Happened to Property in Law and Economics,” Yale Law Journal, 111, no. 2 (2001): 357–398.
  35. Alexander Serenko and Nick Bontis, “A citation-based ranking of the business ethics scholarly journals,” International Journal of Business Governance and Ethics, 4, no. 4 (2009): 390–399.
  36. Cory Jacques, Activist Business Ethics (Boston: Springer, 2004), 14-18.
  37. Joseph Weiss, Business Ethics: A Stakeholder and Issues Management Approach With Cases (Mason, OH: South-Western Cengage Learning, 2006), 57-71.
  38. James Rest, Moral development: Advances in research and theory (New York: Praeger, 1986), 23-26.
  39. Kent Greenfield, The Failure of Corporate Law fundamental flaws & progressive possibilities (Chicago: The University of Chicago Press, 2006), 46-51.
  40. Kent Greenfield, The Failure of Corporate Law fundamental flaws & progressive possibilities (Chicago: The University of Chicago Press, 2006), 46-51.
  41. Thomas Merrill and Henry Smith, “What Happened to Property in Law and Economics,” Yale Law Journal, 111, no. 2 (2001): 357–398.
  42. James Rest, Moral development: Advances in research and theory (New York: Praeger, 1986), 23-26.
  43. Kent Greenfield, The Failure of Corporate Law fundamental flaws & progressive possibilities (Chicago: The University of Chicago Press, 2006), 46-51.
  44. James Rest, Moral development: Advances in research and theory (New York: Praeger, 1986), 23-26.
  45. James Rest, Moral development: Advances in research and theory (New York: Praeger, 1986), 23-26.
  46. Robert Sternberg, “WICS: A model for leadership in organizations,” Academy of Management Learning and Education, 1, no. 2 (2003): 386-401.
  47. Robert Sternberg and Todd Lubart, Defying the Crowd: Cultivating creativity in a culture of conformity (New York: Free Press, 1995), 132.
  48. James Rest, Development in judging moral issues (Minneapolis, MN: University of Minnesota Press, 1979), 21-27.
  49. Robert Sternberg, “WICS: A model for leadership in organizations,” Academy of Management Learning and Education, 1, no. 2 (2003): 386-401.
  50. Adam Smith, The theory of moral sentiments. (New York: Augustus M. Kelley, 1966), 140-148.
  51. Marilyn Fischer, Ethical Decision Making in Fundraising (New Jersey: John Wiley and Sons, 2000), 112-118.
  52. Adrian Sargeant and Stephen Lee, “Improving public trust in the voluntary sector: an empirical analysis,” International Journal of Nonprofit and Voluntary Sector Marketing, 7, no. 1 (2002): 68–83.
  53. Marilyn Fischer, Ethical Decision Making in Fundraising (New Jersey: John Wiley and Sons, 2000), 112-118.
  54. Adrian Sargeant and Stephen Lee S, “Improving public trust in the voluntary sector: an empirical analysis,” International Journal of Nonprofit and Voluntary Sector Marketing, 7, no. 1 (2002): 68–83.
  55. Christopher Toppe and Arthur Kirsch, Keeping the Trust: Confidence in Charitable Organizations in an Age of Scrutiny (Washington DC: Independent Sector, 2002), 101.
  56. James Rachels, The elements of moral philosophy (New York: Random House, 1986), 11-17.
  57. James Rachels, The elements of moral philosophy (New York: Random House, 1986), 11-17.
  58. Mark Rectanus, Culture incorporated Museums, Artists and Corporate sponsorships (London: University of Minnesota Press, 2010) 21-27.
  59. Kent Greenfield, The Failure of Corporate Law fundamental flaws & progressive possibilities (Chicago: The University of Chicago Press, 2006), 46-51.
  60. James Rachels, The elements of moral philosophy (New York: Random House, 1986), 11-17.
  61. Thomas Merrill and Henry Smith, “What Happened to Property in Law and Economics,” Yale Law Journal, 111, no. 2 (2001): 357–398.
  62. Wu Chin-tao, Privatizing Culture: corporate intervention since the 1980s (London: Verso, 2003) 12-19.
  63. James Rachels, The elements of moral philosophy (New York: Random House, 1986), 11-17.
  64. Thomas Merrill and Henry Smith, “What Happened to Property in Law and Economics,” Yale Law Journal, 111, no. 2 (2001): 357–398.
  65. James Coleman “Toward an Integrated Theory of White-Collar Crime.” American Journal of Sociology, 93, no. 2 (1987): 406–439.
  66. James Rachels, The elements of moral philosophy (New York: Random House, 1986), 11-17.
  67. Mark Saunders, Philip Lewis and Adrian Thornhill, Research Methods for Business Students (New York: Prentice Hall, 2009), 79.
  68. Mark Saunders, Philip Lewis and Adrian Thornhill, Research Methods for Business Students (New York: Prentice Hall, 2009), 79.
  69. Mark Saunders, Philip Lewis and Adrian Thornhill, Research Methods for Business Students (New York: Prentice Hall, 2009), 92.
  70. Mark Saunders, Philip Lewis and Adrian Thornhill, Research Methods for Business Students (New York: Prentice Hall, 2009), 100.
  71. Mark Saunders, Philip Lewis and Adrian Thornhill, Research Methods for Business Students (New York: Prentice Hall, 2009), 105.