Key answer tips
Part (a)
The use of the PESTEL model would give the correct focus though other similar models were also useful and would have been awarded credit. Make sure you apply the model to the scenario and avoid straying into internal issues (e.g. strengths and weaknesses of the museum).
(a) The PESTEL framework may be used to explore the macro-environmental influences that might affect an organisation. There are six main influences in the framework: political, economic, social, technological, environmental and legal. However, these influences are inter-linked and so, for example, political developments and environmental requirements are often implemented through enacting legislation.
Candidates will be given credit for identifying the main macro-environmental influences that affect the NM, whether or not they are classified under the same influences as the examiner’s model answer.
Political
Monitoring, understanding and adapting to the political environment is absolutely essential for the National Museum. It is currently very reliant on government funding and so is significantly affected by the recently elected government’s decision to gradually reduce that funding. The implications of this were recognised by the Board of Trustees and led to the appointment of a new Director General. Unfortunately, senior staff at the museum did not share this perception of the significance of the funding changes. Their opposition to change, which culminated in the Director
General’s resignation, has led to further political ramifications. The government is now threatening heavier funding cuts and further political trustee appointments.
Furthermore, it does appear that the political context has changed for the foreseeable future. The government has only just been elected and the opposition also agrees that the reliance of museums on government funding has to be reduced.
The political appointment of two (and possibly more) trustees is also important to the National Museum. It was significant that it was the two trustees appointed by the government who supported the Director General and his proposed changes. Finally, the continued funding of the government will now largely depend on performance measures – such as accessibility – which have been determined by a political agenda.
The museum must strive to meet these objectives even if they are not shared by senior staff. The old ways – built around an assessment of Heritage Collections –appear to have gone forever and senior staff members need to recognise this.
Economic
Up to now the National Museum has been largely sheltered from the economic environment. It has been funded by the government, not the marketplace, and that funding has been largely determined by stable internal factors, such as artefacts in the Heritage Collection. Evidence from the scenario and Figure 1, suggests that this funding is stable, increasing on an annual basis to reflect inflation. However, the progressive reduction of government funding will mean that the museum will be exposed to economic realities. It will have to set realistic admission charges.
Resources will also have to be used effectively and new opportunities identified and exploited for increasing income. The Director General included a number of these ideas in his proposals. However, it will be difficult to set a charge that will attract sufficient customers to cover the museum’s costs, particularly as visitors have been used to paying only a nominal entry charge.
Social
The social environment is important to the museum from at least two different perspectives. The first is that social inclusion is an important part of the government’s targets. The government is committed to increasing museum attendance by both lower social classes and by younger people who they feel need to be made more aware of their heritage. The visitor information shown in Figure 3 suggests that not only are visitor numbers declining in total, but the average age of these visitors is increasing. The percentage of visitors aged 22 and under visiting the
NM has decreased from 19% of the total visitors (in 20X4) to just over 12% in 20X7.The museum needs to identify what it needs to do to attract such groups to the museum. The Director General had suggested free admission. This could be combined with popular exhibitions (perhaps tied in with television programmes or films) and ‘hands-on’ opportunities. It appears that the immediate neighbourhood of
the museum now houses many of the people the government would like as visitors and so, from this angle, the location of the museum is an advantage. However, the comment of the Director of Art and Architecture about popularity and historical significance hardly bodes well for the future.
The decay of the neighbourhood and the increased crime rate may also deter fee-paying visitors. The museum is becoming increasingly isolated in its environment,with many of its traditional middle-class customers moving away from the area and reluctant to visit. The extensive reporting of a recent assault on a visitor is also likely to deter visitors. The museum needs to react to these issues by ensuring that good and safe transport links are maintained to the museum and by improving security both in the museum and in its immediate vicinity. Visitors need to feel safe and secure. If the museum believes this to be unachievable, then it might consider moving to a new site.
Technological
It is estimated that only 10% of the museum’s collection is on view to visitors.Technology provides opportunities for displaying and viewing artefacts on-line. It provides an opportunity for the museum to become a virtual museum – allowing visitors from all over the world access to images and information about its collections. Indeed, such an approach should also help the museum achieve some of its technology and accessibility targets set by the government. Technology can also be used to increase marketing activity, providing on-line access to products and allowing these products to be bought through a secure payment facility. The appropriate use of technology frees the museum from its physical space constraints and also overcomes issues associated with its physical location.
Environmental
It can be argued that all contemporary organisations have to be aware of environmental issues and the impact their activities have on the environment. These are likely to be exacerbated by the museum being located in an old building which itself requires regular maintenance and upgrading to reflect government requirements. It is also very unlikely that such an old building will be energy efficient and so heating costs are likely to be high and to continue to increase. The museum needs to adopt appropriate policies on recycling and energy conservation, but it may be difficult to achieve these targets in the context of an old building. Consequently, environmental issues may combine with social issues to encourage the possible relocation of the museum to a modern building in a more appropriate location.However, the museum building is also of architectural importance, and so some acceptable alternative use for the building might also have to be suggested.
Legal
Legal issues affect the museum in at least two ways. Firstly, there is already evidence that the museum has had to adapt to legal requirements for disability access and to reflect health and safety requirements. Some of these requirements appear to have required changes in the building which have been met with disapproval. It is likely that modifications will be expensive and relatively awkward, leading again to unsightly and aesthetically unpleasing modifications to the building. Further tightening of legislation might be expected from a government with a mandate for social inclusion. For example, it might specify that all documentation should be available in Braille or in different languages. Legislation concerning fire safety, heating, cooking and food preparation might also exist or be expected.
Secondly, the museum is run by a Board of Trustees. There are legal requirements about the behaviour of such trustees. The museum must be aware of these and ensure that their work is properly scoped and monitored. Trustees have, and must accept, ultimate responsibility for directing the affairs of the museum, ensuring that it is solvent, well-run, and meeting the needs for which it has been set up. The museum is a charity and it is the responsibility of the trustees to ensure that its operation complies with the charity law of the country.
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