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Title: Uncertainty, strategic sensemaking and organisational failure in the art market: What went wrong with LVMH's investment in Phillips auctioneers?
Authors: Samdanis, M
Lee, SH
Keywords: Strategic sensemaking;Organisational failure;Art market;Auction houses;Uncertainty
Issue Date: 2018
Publisher: Elsevier
Citation: Journal of Business Research
Abstract: Strategic decision-making in the volatile and uncertain art market is not only instigated by rational interpretation of the external environment, but also by expert-based intuition. This paper investigates organisational failure at Phillips auctioneers between 1999 and 2002, a period in which it was owned by the multinational luxury goods conglomerate Louis Vuitton Moët Hennessy (LVMH). To analyse this case, we develop a conceptual framework for strategic sensemaking in art organisations that includes the processes of scanning, interpreting, strategising, acting and adjusting, which take place in non-linear and recursive patterns in supporting continuous loops of improvement. Our analysis identifies the merits of intuitive decision-making when realising a novel artistic and entrepreneurial vision which established Phillips as a boutique auction house. However, it also highlights the limitations of emotional and opportunistic decision-making which could lead to blinded management if any of the processes of strategic sensemaking is ignored.
ISSN: 0148-2963
Appears in Collections:Brunel Business School Research Papers

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