The organizational paradox in advertising and the reconfiguration of project cooperation

In recent literature, projects are mostly seen as an efficient form of organization which is particularly suited for mastering tasks of high complexity and creativity and adapting to changing economic and institutional conditions. This paper challenges the assumption that inter-firm projects are persistent organizational arrangements of production in the advertising industry and presents a novel argument about the potential threats to forms of project organization in crisis situations. By exploring the cases of Frankfurt/Main and Leipzig (East Germany), we show that the organization of production is substantially affected by periods of economic crisis or political transformation. We demonstrate that inter-firm projects might be replaced by more durable organizational configurations or might not be viewed as viable options in situations of severe rupture. This applies particularly to the cooperative arrangements in the creative process and leads to an organizational paradox. Although creativity is often a pivotal force to gain competitive advantage, the advertising agencies respond to the challenges of crises by reducing cooperation with external partners to a minimum and sometimes fully rely on in-house personnel. This threatens the potential of the respective firms to develop innovative and creative ideas which would enable the firms to acquire new customers and market segments. Instead of trying to overcome crises by focusing on their creative capabilities, many advertising agencies develop a cost-cutting strategy and rely on more durable network-forms of organization instead of inter-firm projects.