Sports Managemnt | Organizational Culture | Strategic Management

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ACKNOWLEDEGMENT

EXECUTIVE SUMMARY

INDEX

PREFACE

1. INTRODUCTION TO SPORTS MANAGEMENT

1. INTRODUCTION TO SPORTS MANAGEMENT INTRODUCTION –

WHAT IS SPORTS MANAGEMENT ?

Sport employs many millions of people around the globe, is played or watched bythe majority of the world’s population, and at the elite level, has moved from beingan amateur pastime to a significant industry. The growth and professionalization of s p o r t h a s d r i v e n c h a n g e s i n t h e c o n s u m p t i o n , p r o d u c t i o n a n d m a n a g e m e n t o f s p o r t i n g events and organizations at all levels.

Managing sport organizations at the start of the 21st century involves theapplication of techniques and strategies evident in the majority of modern business, government and nonprofit organizations. Sport managers engagein strategic planning, manage large numbers of human resources, deal with broadcasting contracts worth billions of dollars, manage the welfare of eliteathletes who sometimes earn 100 times the average working wage, and workwithin highly integrated global networks of international sports federations,national sport organizations, government agencies, media corporations,sponsors and community organizations.

Unique features of sports:
Stewart and Smith provide a list of ten unique features of sport which c a n a s s i s t u s t o u n d e r s t a n d w h y t h e m a n a g e m e n t o f s p o r t o r g a n i z a t i o n s requires the application of specific management techniques. A unique fea ture of sport is the phenomenon of people developing irrational passions for s p o r t i n g t e a m s , c o m p e t i t i o n s , o r a t h l e t e s . S p o r t h a s a s ym b o l i c s i g n i fi c a n c e i n relation to performance outcomes, success and celebrating achievement that does not occur in other areas of economic and social activity. Sport managers must learn to harness these passions by appealing to people’s desire to buy tickets for events, become a member of a club, donate time to help run a voluntary association, or purchase sporting merchandise. They must also learn to apply clear business logic and management techniques to the maintenance of traditions and connections to the nostalgic aspects of sport consumption and engagement. There are also marked differences between sport organizations and other businesses in how they evaluate performance. Private or publicly listed companies exist to make profits and increase wealth of shareholders orowners,w h e r e a s i n s p o r t , o t h e r i m p e r a t i v e s s u c h a s w i n n i n g p r e m i e r s h i p s , p r o v i d i n g services to stakeholders and members, or meeting community service obligations may take precedence over financial outcomes. Sport managers need to be cognizant of these multiple organizational outcomes, while at the sametime be responsible financial managers. Competitive balance is also a unique feature of the interdependent nature of relationships between sporting organizations that compete on the field but cooperate off the field to ensure the long term viability of both clubs and their league. In most business environments the aim is to secure the largest market share, defeat all competitors and secure a monopoly. In sport, clubs and teams need the opposition to remain in business, so they must cooperate to share revenues and playing talent, and regulate themselves to ensure the uncertainty in the outcome of games between them, so that fans’ interest will be maintained. In some ways such behaviour could be construed as anti-competitive. The sport product, when it takes the form of a game or contest, is a l s o of variable quality. While game outcomes are generally uncertain, one team might dominate, which will diminish the attractiveness of the game. The perception of those watching the game might be that the quality has also diminished as a result, particularly if it is your team that loses! The varia b l e q u a l i t y o f s p o r t t h e r e f o r e

m a k e s i t h a r d t o g u a r a n t e e q u a l i t y i n t h e marketplace relative to providers of other consumer products. Sport also enjoys a high degree of product or brand loyalty, with fans unlikely to switch sporting codes because of a poor match result, or the standard of officiating. Consumers of household products have a huge range to choose from and will readily switch brands for reasons of price or quality, whereas sporting competitions are hard to substitute. This advantage is also a negative, as sporting codes that wish to expand market share find it dif-ficult to attract new fans from other codes due to their familiarity with the customs and traditions of their existing sport affiliation. Sport engenders unique behaviours in people, such as emulating their sporting heroes in play, wearing the uniform of their favourite player, or purchasing the products that celebrity sports people endorse. This vicarious identification with the skills, abilities, and lifestyles of sports people can beused by sport managers and allied industries to influence the purchasingdecisions of individuals who follow sport. Sport fans also exhibit a high degree of optimism, at times insisting that their team, despite a string of bad losses, is only a week, game or lucky break away from winning the next championship. It could also be argued that the owners or managers of sport franchises exhibit a high degree of optimism by toting their star recruits or new coach as the path to delivering them on field success. Sporting organizations, are relatively reluctant to adopt new technologies unless they are related to sports science, where on-field performance improvements are possible. In this regard sport organizations can be considered conservative, and tied to traditions and behaviours more than other organizations. The final unique aspect of sport is its limited availability. In other industries, organizations can increase production to meet demand, but in sport, clubs are limited by season length and the number of scheduled games. This constrains their ability to maximize revenue through ticket sales and associa t e d i n c o m e . T h e i m p l i c a t i o n f o r s p o r t m a n a g e r s i s t h a t t h e y must understand t h e n a t u r e o f t h e i r b u s i n e s s , t h e l e v e l o f d e m a n d f o r t h e i r p r o d u c t a n d s e r v i c e s (whatever form that may take) and the appropriate time to deliver them.

2.Sport management environment

2.Sport management environment
Globalization has been a major force in driving change in the ways sporti s p r o d u c e d a n d c o n s u m e d . T h e e n h a n c e d i n t e g r a t i o n o f t h e w o r l d ’ s economies have enabled communication to occur between producers and consumers at greater speed and variety, and sport has been one sector to reap the benefits. Consumers of elite sport events and competitions such as the Olympic Games, World Cups for rugby, cricket and football, English Premier League Football, the National Basketball Association (NBA), and Grand Slam tournaments for tennis and golf enjoy unprecedented coverage. Aside from actually attending the events live at a stadium, fans can view these events through free to air and pay or cable television; listen to them on radio a n d t h e i n t e r n e t ; r e a d a b o u t g a m e a n a l y s e s , t h e i r f a v o u r i t e p l a y e r s a n d t e a m s through newspapers and magazines; receive progress scores, commentary or vision on their mobile phones; and sign up for special deals and information through online subscriptions using their email address. The global sport marketplace has become very crowded, and sport managers seeking to carve out a niche need to understand the global environment in which they musto p e r a t e . T h u s , o n e o f t h e t h e m e s o f t h i s b o o k i s t h e i m p a c t o f g l o b a l i z a t i o n o n the ways sport is produced, consumed and managed.

Most governments view sport as a vehicle for n a t i o n a l i s m , e c o n o m i c d e v e l opment, or social development. As such, they see it as within their purview to enact policies and legislation to support, control or regulate the activities of sport organizations. Most governments support elite training institutes to assist in developing athletes for national and international competition, provide funding to national sporting organizations, support sport organizations to bid for major events, and facilitate the building of major stadiums. In return for this support, governments can influence sports to recruit more mass participants, provide services to discrete sectors of the community, or have sports enact policies on alcohol and drug use, gambling, and general health promotion messages. Governments also regulate the activities of sport organizations through legislation or licensing in areas such as industrial relations, anti-discrimination, taxation and corporate governance. A

further theme in the book is the impact that governments can have on the way sport is produced, consumed and managed.

The management of sport organizations has undergone a relatively rapid p e r i o d o f p r o f e s s i o n a l i z a t i o n o v e r t h e l a s t 3 0 y e a r s . T h e g e n e r a l e x p a n sion of the global sports industry and commercialization of sport events and competitions, combined with the introduction of paid staff into voluntary governance structures and the growing number of people who now e a r n a l i v i n g m a n a g i n g s p o r t o r g a n i z a t i o n s o r p l a y i n g s p o r t , h a s f o r c e d sport organizations and their managers to become more professional. This is reflected in the increased number of university sport management courses, the requirement to have business skills as well as industry specific knowle d g e o r e x p e r i e n c e t o b e s u c c e s s f u l i n s p o r t m a n a g e m e n t , t h e g r o w t h o f professional and academic associations devoted to sport management, and the variety of professionals and specialists that sport managers must deal with in the course of their careers. Sport managers will work with accountants, lawyers, taxation specialists, government policy advisors, project management personnel, architects, market researchers, and media specialists, not to mention sports agents, sports scientists, coaches, officials, andv o l u n t e e r s . T h e e n s u i n g c h a p t e r s o f t h e b o o k w i l l h i g h l i g h t t h e o n g o i n g professionalization of sport management as an academic discipline and a career.

T h e n o t i o n t h a t c h a n g e s i n s p o r t m a n agement frequently result from developments in technology. Changes in telecommunications have already been highlighted, but further changes in technology are evident in areas such as performance enhancing drugs, information technology, coaching and high performance techniques, sports venues, and sporting equipment. These changes have forced sport managers to develop policies about their use, to protect intellectual property with a marketable value, and generally adapt their operations to incorporate their use for achieving organizational objectives. Sport managers need to unders t a n d t h e potential of technological development but also the likely impact on future operations.

Three sectors of sports:In order to make sense of the many organizations that are involved in sport management, and how these organizations may form partnerships, influence each others’ operations and conduct business, it is useful to see sport as comprising three distinct sectors. The first is the State or public sector, which includes national, state/provincial, regional and local governments, and specialist agencies that develop sport policy, provide funding to other sectors, and support specialist roles such as elite athlete development or drug con trol. The second is the non profit or voluntary sector, made up of community based clubs, governing associations and international sport organizations that provide competition and participation opportunities, regulate and manages porting codes, and organize major championship events. The third sector is professional or commercial sport organizations, comprising professional l e a g u e s a n d t h e i r m e m b e r t e a m s , a s w e l l a s a l l i e d o r g a n i z a t i o n s s u c h a s s p o r t ing apparel and equipment manufacturers, media companies, major stadia operators and event managers.

These three sectors do not operate in isolation, and in many cases there is significant overlap. For example, the State is intimately involved in pro-viding funding to nonprofit sport organizations for sport development and elite athlete programmes, and in return nonprofit sport organizations pro-v i d e t h e g e n e r a l c o m m u n i t y w i t h s p o r t i n g o p p o r t u n i t i e s a n d a s w e l l a s developing athletes, coaches, officials and administrators to sustain sporting participation. The State is also involved in commercial sport, supporting the building of major stadia and other sporting venues to provide spaces for professional sport to be played, providing a regulatory and legal frame-work for professional sport to take place and supporting manufacturing and event organizations to do business. The nonprofit sport sector supports

Figure 1.1 Three sector model of sport

professional sport by providing playing talent for leagues, as well as developing the coaches, officials and administrators to facilitate elite competitions. Indeed, in some cases the sport league itself will consist of member teams which are technically nonprofit entities, even though they support a pool of professional managers and players. In return, the professional sport sectorm a r k e t s s p o r t f o r s p e c t a t o r s a n d p a r t i c i p a n t s a n d i n s o m e c a s e s p r o v i d e s s u b - stantial funds from TV broadcast rights revenue. Figure 1.1 illustrates the three sectors and the intersections where these relationships take place.

What is different about sports management?
Sport managers utilize management techniques and theories that a r e similar to managers of other organizations, such as hospitals, government departments, banks, mining companies, car manufacturers, and welfare agencies. However, there are some aspects of strategic management, organi-zational structure, human resource management, leadership, organizational culture, governance and performance management that are unique to themanagement of sport organizations.

Strategic management

Strategic management involves the analysis of an organization’s position inthe competitive environment, the determination of its direction and goals,the selection of an appropriate strategy and the leveraging of its distinc-tive assets. The success of any sport organization may largely depend ont h e q u a l i t y o f t h e i r s t r a t e g i c d e c i s i o n s . I t c o u l d b e a r g u e d t h a t n o n p r o fi t sport organizations have been slow to embrace the concepts associated withstrategic management because sport is inherently turbulent, with on-fieldperformance and tactics tending to dominate and distract sport managersfrom the choices they need to make in the office and boardroom. In a comp e t i t i v e m a r k e t , s p o r t m a n a g e r s m u s t d r i v e t h e i r o w n f u t u r e s b y u n d e r t a k i n g me

aningful market analyses, establishing a clear direction and crafting strategy that matches opportunities.

Organizational structure
An organization’s structure is important because it defines where staff andvolunteers ‘fit in’ with each other in terms of work tasks, decision makingprocedures, the need for collaboration, levels of responsibility and report -ing mechanisms. Finding the right structure for a sport organization involves balancing the need to formalize procedures while fostering innovation and creativity, and ensuring adequate control of employee and volunteer activi-ties without unduly affecting people’s motivation and attitudes to work. Inthe complex world of sport, clarifying reporting and communication lines between multiple groups of internal and external stakeholders while tryingto reduce unnecessary and costly layers of management, is also an importantaspect of managing an organization’s structure. The relatively unique mix of paid staff and volunteers in the sport industry adds a layer of complexity tomanaging the structure of many sport organizations.

Human resource management

Human resource management, in mainstream business or sport organizations, is essentially about ensuring an effective and satisfied workforce.However, the sheer size of some sport organizations, as well as the difficul-ties in managing a mix of volunteers and paid staff in the sport industry,make human resource management a complex issue for sport

managers.Successful sport leagues, clubs, associations, retailers and venues rely ong o o d h u m a n r e s o u r c e s , b o t h o n a n d o f f t h e fi e l d . H u m a n r e s o u r c e m a n agement cannot b e d i v o r c e d f r o m o t h e r k e y m a n a g e m e n t t o o l s , s u c h a s strategic planning or managing organizational culture and structure, and is a further element that students of sport management need to understand to beeffective practitioners.

Leadership

Managers at the helm of sport organizations need to be able to i n fl u e n c e others to follow their visions, empower individuals to feel part of a teamw o r k i n g f o r a c o m m o n g o a l , a n d b e a d e p t a t w o r k i n g w i t h l e a d e r s o f other sport organizations to forge alliances, deal with conflicts or coordinate common business or development projects. The sport industry thriveson organizations having leaders who are able to collaborate effectively witho t h e r o r g a n i z a t i o n s t o r u n a p r o f e s s i o n a l l e a g u e , w o r k w i t h g o v e r n i n g b o d i e s of sport, and coordinate the efforts of government agencies, internationaland national sport organizations, and other groups to deliver large scales p o r t e v e n t s . S p o r t m a n a g e m e n t s t u d e n t s w i s h i n g t o w o r k i n l e a d e r s h i p r o l e

sn e e d t o u n d e r s t a n d t h e w a ys i n w h i c h l e a d e r s h i p s k i l l s c a n b e d e v e l o p e d a n d how these principles can be applied.

Organizational culture

Organizational culture consists of the assumptions, norms and values held by individuals and groups within an organization, which impact upon the a c t i v i t i e s a n d g o a l s i n t h e w o r k p l a c e a n d i n m a n y w a y s i n fl u e n c e h o w employees work. Organizational culture is related to organizational performance, excellence, employee commitment, cooperation, efficiency, jobperformanceanddecision-making. However, howorganizationalculturecan be defined, diagnosed, and changed is subject to much debate in the busi-ness and academic world. Due to the strong traditions of sporting endeavourand behaviour, managers of sport organizations, particularly those such asprofessional sport franchises or traditional sports, must be cognizant of thepower of organizational culture as both an inhibitor and driver of performance.

Performance management

Sport organizations over the last 30 years have undergone an evolution to become more professionally structured and managed. Sport organizationshave applied business principles to marketing their products, planning theiroperations, managing their human resource and other aspects of organiza-tional activity. The unique nature of sport organizations and the variationi n m i s s i o n s a n d p u r p o s e s h a s led to the development of a variety of criteria with which to assess the performance of sport organizations. Sport management students need to understand the ways in which organizationalperformance can be conceptualized, analysed and reported and how theseprinciples can be applied in the sport industry.

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