What British Estates Can Teach us About Management | SchiffGold

If one were to view Chatsworth Estate and Dyrham Park from a distance, the two historic estates might seem similar. However, from guest experience to governing structure, the ways these places differ provides some crucial insights into the economics of change and institutional structure. Dyrham Park was purchased by the British National Trust in 1956, yet the Chatsworth Estate remains under the private ownership of the Duke of Devonshire. Dyrham Park had suffered financial issues for years, and the National Trust takes control of historic buildings to protect them from disrepair. The Chatsworth Estate has been turned into an incredibly successful moneymaker for the Duke who owns it. While both sites are valuable, the Chatsworth Estate pulls ahead in almost every key category and displays the dominance of flexible private ownership.

Even when entering both estates, the list of ticket prices tell two different stories. Dyrham Park has the typical options, based on age and family status. The Chatsworth Estate, on the other hand, has numerous experience options, divided up by the visitors’ interests and price flexibility. Visitors can walk around the whole grounds of the estate for free, pay a small fee to tour the gardens, or pay a bit more to go inside the main manor house. They can pay for guided tours and experiences. The price differentiation offered allows customers of all different types to create a unique experience. While deciding upon and maintaining this slightly more complex menu certainly has some costs, it also splits up customers effectively and brings in far more profit than a basic pay-to-enter scheme. Dyrham Park is tied down to the more minimal scheme because they are run by a national organization, which has less resources and time to spend trying to find the optimal selection of choices to offer. While the National Trust is interested in turning a profit, its large scale both reduces their positive incentive to run the house optimally, and their consequences for running it poorly. 

While Dyrham Park has some features and attractions, the Chatsworth Estate is filled to the brim with a wider variety of unique attractions and products. Without detracting from the history or natural beauty of the surrounding area, the Chatsworth Estate provides visitors with almost anything they could want there. From tastefully inserted food carts and cafes, to well-selected leather goods, to a shop selling all produce farmed on the grounds, the Chatsworth house is marketing something to every customer. Even beyond what can be bought, the gardens are extremely multifaceted and unique. The current Duke and the Dukes of previous generations have left marks of their own personality through a massive water feature, titanic stacked rocks, and some modern art sculptures. While no National Trust public relations executive would have thought these were good choices, the guests love them. The place is able to be unique because it is directed by someone who understands its uniqueness deeply. The Chatsworth estate has succeeded in part because the insider knowledge of those running it has allowed them to take big gambles and win. The National Trust has no on-the-spot knowledge or primal urge to win, so Dyrham Park will always remain “nice” and never rise to what it could be.

When control is centralized, the incentive to manage anything as hands-on as it should be is diminished. While those with an Austrian perspective would often say that the government is too hands-on with private business, it is important to remember that the government is actually less hands-on than the business owner who would have actually run the business. When we view the government in the role of the business-owner it is usurping, it becomes easier to see the inadequacy of central control. For example, communist Russian shoe manufacturers making all the shoes one size to more cheaply fulfill a government order is just as much an example of the loss of business-owner incentive as it is of overreach of the state. While regulations and government are necessary, the ability of more localized units of people to act is the underlying cause of growth.

The difference between the privately owned house and the National Trust owned house underscores how incentive structure fundamentally rewrites outcomes. The Duke of Chatsworth Estate is constantly reassessing his opportunity costs and trying to find the best possible use for his land, and the National Trust must simply fulfill the requirement to maintain and preserve. There is nothing wrong with the National Trust or its mission, but it cannot match the results of a privately owned property. The ability to take locally-informed risks in the pursuit of excellence will always be extremely difficult for any form of central planning unit. 

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