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Sport Management

Sport Organizations
Attila Kajos Assistant Lecturer
Institute of Physical Education and Sport Sciences

Course Objectives
Basic Management Knowledge

The environment of an Organization


Influencing factors
Structural attributes
Structural forms
Before Strategy (PEST and SWOT analysis)
Strategy
Case study

Sport Management
Sport management elements and its environment. The three
sectors of sport.
Sport and Government. The role of state in sport development
(state and the three sectors). Reason and effect of state
intervention.
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Course Objectives
Managing Sport Organizations
The sports clubs environment. Sport and non-profit sector.
Professional sport. Media, Sponsorship, Player
management (With case study).
The role of Strategy in Sport
Tasks of a sport manager
Case study

Sport Marketing
Sport as a Complex Product
Creating the Marketing Strategy (STP)
Creating the Marketing Mix (7P)
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Used material (References)


Hoye R., Smith A., Westerbeek H., Stewart B.,
Nicholson M. (2006): Sport Management Principles
and Applications. Butterworth-Heineman (Elsevier),
Oxford
Beech, C., Chadwick S. (2004): The Business of Sport
Management. Prentice Hall Financial Times,
Pearson education

Introduction to
Management

Organization
Organization
A social unit of people, systematically structured and
managed to meet a need or to pursue collective goals on a
continuing basis.

Organizations

Institutes
Clubs (amateur/profressional)
Firms
Multinational companies

Management
To Manage means
all the activities and tasks undertaken by one or more
persons for the purpose of planning and controlling the
activities of others in order to achieve an objective or
complete an activity that could not be achieved by the
others acting independently. (Koontz et al. 1980)

Managemenet contains

Planning
Organizing
Staffing
Directing/Leading
Controlling/Monitoring
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All managers carry out the functions of planning,


organizing, staffing, leading, and controlling,
although the time spent in each function will differ
and the skills required by managers at different
organizational levels vary.
Still, all managers are engaged in getting things done
through people. ... The managerial activities,
grouped into the managerial functions of planning,
organizing, staffing, leading, and controlling, are
carried out by all managers, but the practices and
methods must be adapted to the particular tasks,
enterprises, and situation. (Weichrich, 1993)
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Types of management

Strategig Management
Operations Management
Human Resource Management
Marketing Management
Financial Management
Information Technology Management (MIS)

The factors influencing the organization I.


1. Macro-Environmental Factors (PEST/STEP)
1.
2.
3.
4.

Political environment
Economic environment
Technological envoronment
Social environment

2. Inner Factors
1.
2.
3.
4.
5.
6.
7.

Size
Information technology
History
Terms of employees
Geographic dispersion
Resources
Rate of cooperation
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The factors influencing the organization II.


3. The characteristics of the members
1.
2.
3.
4.
5.
6.
7.
8.
9.

Professionalism
Leadership knowledge
Authority
General directing and planning objectives
The capability of coping with conflicts
Tha ability and willingnes to communicate
Tha ability and willingnes to cooperate
Role flexibility
Motivational and interest structure

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The factors influencing the organization III.


4. The characteristics of the main functions
1.
2.
3.
4.
5.

Diversity
Verticality
Complexity
Durability
Freshness

5. Strategy
6. The current Organizational Structure

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The interaction of the factors


I. Macro-economical factors

II. Inner Factors

IV. The
characteristics of
the main functions

V. Strategy

III. Characteristics
of the Org.

VI. The current


Org. Structure

New Organizational Structure, Operational- and Behavioral


forms
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Environmental attributes

1. Political environment
Political environment can be analysed as all the
Government measures that can affect directlyor
indirectly the development of a company's business
and may influence negatively or positively on their
performance.
Some political Factors

Taxation Policy
Trade regulations
Governmental stability
Unemployment Policy

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2. Technological environment

Characteristics
The frequency of new scientific results
The practical adaptation of such technology
The predictability of the development
The complexity of the technology
Complex
Simple

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3. Economical Environment
Most important characteristics
Volatility
Dynamic
Static

Complexity
Simple

Easy to forecast
Stabil plans available
Task are easy to set
Specialized items
Formalized, strict rules
Strict hierarchy (autocratic)

Complex
Uncertain environment
Decentralized decision making (democratic)
Particpative
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4. Socio-cultural environment
The characteristics of
The labour market
The consumers

Sex
Age
Income
Education level

Expectation of society from the business


Cultural behavior
Religiousness
Attitude towards work
Hofstedes dimensions

Power distance
Uncertanity avoidence
Indidualism/collectivism
Masculanity/Feminity
Long-Term Orientation
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II. Inner Factors


Size and its compositives

No. of employees
Assets
Annual Revenue
Annual Income
Division of labour inside the organization

Size and alignment

The structure used


Centralizing or decentralizing
The information and communication tools used
The question of size and configuration
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History
Establishing cicumstances
The organizations connections to a single person or
some persons
The age of the organization
The most important episodes in the life of the
organization

Changes in the product line


Changes in prices
Changes in profile
Most important innovations
Changes in the leadership/ownership
Structural and/or managerial changes
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Geographic dispersion

Nuber of locations (shops, factories, plants, etc.)


The geographic positions of these locations
The distance between the locations
The differences between nations and regions
Differences of city and rural; capital and country
(especially in countries like Hungary, Belarus,
Denmark, Sweden, Norway, etc.)
Distribution and transportation cost and availability

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Structural attributes of an
Organization

Attributes
1. Division of labour
2. Division of competences
1. Span of control
2. Hierarchy of Authority
3. Line vs. Staff

3. Coordinational tools

4. Configuration
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1. Division of labour
Dividing the original working into smaller specialized
pieces, untill last process
Defining and arranging these task to individuals
(everyone has to know his/her job in the
organization)
This is one of the basics, when structuring the
organizaton
Department establishing is mainly done through
these principles

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1. Division of labour
Main dividing factors
Functions
Material (Products / Product lines)
Regional

We differentiate two types


One dimensional organization
It is only divided by one of the above factors

Two or more dimensional organization


Divided by two or more from the above mentioned factors.

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2. Division of competences
Span of control
A wide span of control: a large number of employees
reporting,
A narrow span of control: a small number employees
reporting
The appropriate span of control depends on the
experience, knowledge and skills of the employees and the
nature of the task.

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2. Division of competences
Line vs. Staff
Line positions are those in which people are involved in
producing the main goods or service or make decisions
relating to the production of the main business.
Staff positions These are positions in which people make
recommendations to others but are not directly involved in
the production of the good or service

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2. Division of competences
Categories
Line

Staff

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Line vs. Staff


Line

Staff

Pros
Hierarchy
and
competencies
and Large scale of specialization through the
responsibilities are clear and certain. The division of functions. The instruction and
connections are easy to overview and informational ways are direct. Its a creative
simple. The hierarchy avoids the fraud from and open environment, where productive
outside.
conflicts may occure.

Cons
Much of the time from the higher
The distinction of competencies and
manageent is used for coordination tasks.
responsibilities can be hard in the view of
The process of instructions and informations the entire organization.
can be very slow and roundabout, with a
The conflicts can easlily became personal.
deep horizontal structure.
It can cause personal dependence between
manager and staff.
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3. Coordination
Meanings
The act of state of coordinating or of being coordinated
Proper order of relationship
Harmonious combination or interaction, as of functions or
parts

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Coordinational tools
Type of coordinational tool

Structural

Koordincis eszkz
Hierarchiy (vertical coordintion)
AdHoc and regulal commitees,
teams, projects
Product managers and matrix type
solutions

Technocratic

Rules, Regulations, Procedures


Plans, Programmes, Guides
Blueprints, financial plans, general
budget, etc.

Person orientated

Conflict solving
Manager recruitment
Organizational structure
Organizational Culture
Training
Etc.

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4. Configuration
The organizational structure derived from the
previously mentioned
The materialization of the organization
Characteristics
Depth (the number of vertical hierarchy levels)
Width (the number of horizontal levels)
Size (the number of staff under a certain manager)

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Structures
Functional structure
CEO

Manufacturing

Sales

R&D

Accounting &
Finance

Requirements
Static environment, narrow product-line

Characteristics
Strict hierarchy, regulation, centralization, mainly vertical
coordination,

Advantages
Efficiency, easier communication

Disadvantages
Isolation of units, Egoist units, coordinational problems

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Divisional structures
Product Structure
CEO

Soup
Division

Manufaacturing

Nuts
Division

Sales

Manufacturing

Sales

Market structure
CEO

Corporate
Customers

Sales

Customer
Service

Individual
Customers

Sales

Customer
Service

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Divisional structures
Geographic Structure
CEO

West

Sales

Customer
Service

East

Sales

Customer
Service

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Divisional structure
Characteristics
Wide range of heterogeneous products, product lines,
dynamic environment
Decentralized by primer functions/products/geographicly
and centralized inside the dimensions
Horizontal coordination between groups is not typical
Coordinating with mainly technocratic tools

Advantages
Strategic and Operative tasks are easy to separte
Strong market orientation, Low horizontal coordination
costs

Disadvantages
Division egism, Harder integration of strategic and
operative goals, duplication of effort, paralell functions

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Matrix structure

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Matrix structure
Characteristics
Dynamic and heterogeneous environment, complex and risky
tasks, developed communication skills
Not strictly regulated
Two dimension working together on the problem in the point
of intersection
The managers of the dimensions must have the same
competences
Mainly personal orientated coordination is used

Advantages
Adaptivity, Innovative, Higher performance

Disatvantages
The delimination of competencies is hard, Rivalry of managers,
Overlaboured groups, Decision avoidance, Responsibility
avoidance and devolution, Needs good skills from the staff
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Before Strategy making PEST and SWOT analysis

PEST analysis
Political trends
Political, legal and regulatory issues affecting the comany
Identifying political trends, rules, etc.

Economic trends
Macroeconmic (Prosperity,Recession,Depression,Recovery)
Smaller trends (Change in income,

Cultural and Social trends


Values, beliefs, tradition of a given society (field of
operation)
Demography (population, age, free time spending, etc.)

Technology trends
On and off-market technology innovation and technology
acceptance
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Micro Environment

Suppliers

Customers
Consumers
Audience

Company

Distributors

General
Public

Competitors

Value net

The core of the Straregy

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Competitor analisys
1. Identify

The level of competition (direct, indirect)

2. Recognition and Evaluation

Monitoring system
Strategy, goals, strong and weak points, reactions, etc.

3. Competitive strategy

The group of competitors


Positioning
Unique selling proposition (USP)
Other competitive advantages

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SWOT analysis
Whai is it?
A scan of the internal and external environment
an important part of the strategic planning process.

It is used by

Management
Marketing
Finance
Logistics
etc.

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Process of SWOT
Choosing the Environmental
characteristics
Environmental
Opoortunities
Analyzing the external (macroand micro) environmnet

Analyzing the inner


(organizational) environment

Environmental
Threats
Organizational
Strengts
Organizational
Weaknesses

Comparing the factors

Acting possibilities
-Choosing the decisive alternatives
-Comparing analyss
-Decision making

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Strenghts
A firm's strengths are its resources and capabilities
that can be used as a basis for developing a
competitive advantage.
Examples

patents
strong brand names
good reputation among customers
cost advantages from proprietary know-how
exclusive access to high grade natural resources
favorable access to distribution networks
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Weaknesses
The absence of certain strengths may be viewed as a
weakness.
Examples

lack of patent protection


a weak brand name
poor reputation among customers
high cost structure
lack of access to the best natural resources
lack of access to key distribution channels

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Opportunities
The external environmental analysis may reveal
certain new opportunities for profit and growth.
Examples

an unfulfilled customer need


arrival of new technologies
loosening of regulations
removal of international trade barriers

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Threats
Changes in the external environmental also may
present threats to the firm.
Examples

shifts in consumer tastes away from the firm's products


emergence of substitute products
new regulations
increased trade barriers

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The SWOT matrix (type 1)

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SWOT matrix (type 2)

S-O strategies pursue opportunities that are a good fit to the


company's strengths.
W-O strategies overcome weaknesses to pursue
opportunities.
S-T strategies identify ways that the firm can use its strengths
to reduce its vulnerability to external threats.
W-T strategies establish a defensive plan to prevent the firm's
weaknesses from making it highly susceptible to external
threats.

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Strategy

Strategy
Strategy is
the determination of the basic long-term goals and
objectives of an enterprise, and the adoption of courses of
action and the allocation of resources necessary for
carrying out these goals (Chandler, 1962)

Strategic management
analyzes the major initiatives taken by a company's top
management on behalf of owners, involving resources and
performance in external and internal environments. (Nag
et al., 2007)

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Strategic management (Chaffe, 1985)


Involves adapting the organization to its business
environment
is fluid and complex. Change creates novel combinations
of circumstances requiring unstructured non-repetitive
responses.
affects the entire organization by providing direction.
involves both strategy formation (content) and also
strategy implementation (process).
is partially planned and partially unplanned.
is done at several levels: overall corporate strategy, and
individual business strategies
involves both conceptual and analytical thought
processes
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Strategic Management by Lamb (1984)


Strategic management is an ongoing process that
evaluates and controls the business and the
industries in which the company is involved;
Assesses its competitors and sets goals and strategies
to meet all existing and potential competitors;
and then reassesses each strategy annually or
quarterly [i.e. regularly] to determine how it has
been implemented and whether it has succeeded or
needs replacement by a new strategy to meet
changed circumstances, new technology, new
competitors, a new economic environment, or a new
social, financial, or political environment.
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How to choose the strategy?


The basis of competition (Porter, 1998)
Differentiation (higher price for few)
Cost (low price for all)
Segmentation (Niche strategy)

Main characteristics (Johnson et al., 2008)


Suitability
Feasibility
Acceptability

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Hierarchical definition of Strategy

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Vision (Shank, 2005)


A long term road map of where the organization is
headed. It creates organizational purpose and
identity.
A well writen vision is necessary for the effective
leadership of an organization.
The vision should address the following

Where does the organization plan go from here?


What business do we want to be in?
What customer needs do we want to satisfy?
What capabilities are required for the future?

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Mission
The key question of the mission
What is the main mission and goal of the organization (an
abstract value: creating
What are the main (core) values of our organizations?
What behavioral norms it follows?
What sort of political and social role it tries to fulfill?

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The mission statement in the USA (Shank, 2005)


The mission is a written statement about the
organizations present situation. Its purpose is to
inform the stakeholders (e.g. owners, consumers,
suppliers, etc.) about the direction of the
organization.
The key question of the mission statement
What business are we currently in?
Who are our current customers?
What is the scope of our market?

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Strategy
Types of strategies
Corporate strategy (the overall strategy of the company
stated in the mission and vision)
Business strategy (strategy of a single firm or product
line/product, etc.)
Functional strategy
Marketing strategy

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Traditional Strategy Goals

Value creation and Value sharing


Building strong leadership ans good motivation
Revenue growth
Optimalizing the Value Chain
New Product Innovation
Contracting (eg. with Suppliers, distributors, etc.)
Quality of the product
Branding issues
Customer engagement
Globalization (wider range of operation)
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Tactics
Are the smaller, and mid term components of the
Strategic Goals
It gives us the answer to How?
Eg. Strategic Goal - Increase revenue

Increase productivity
Increase marketing/advertising activity
Give some reduction for regular/big customers
Increase effectiveness (with managerial tools eg.
Motivation)
Etc.

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Operations and Actions


The exact process of the decided tactics

Sale of 50% until 09.30. to 10.05.


Buy 2, get one free
Increase the bonus if the production rises with 10%
Find a better supplier for a component
Sign a contract with somebody, etc.

Short term issues


Relatively urgent issues
Need to do issues
Etc.
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Robin Hood case study questions


1. What was the original mission and vision of Robin Hood
and the Marrymen?
2. Identify Robins main problems.
1.
2.

Make a brief PEST analysis


Make a brief SWOT analysis

3. With the help of the environment scanning, identify the


main strategic and operational problems. Which ones
are the most immediate ones?
4. What strategic options does Robin Hood have?

Eg. Killing the Sheriff, Accepting the barons offer, etc.

5. What operations and actions plans do you recommend


to Robin?
6. How should Robin implement the recommended plan,
and what steps will need to be taken, to make the
recommended strategy work?
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Sport Management II.

Class Objectives
Sport Management
Sport management elements and its environment. The
three sectors of sport.
Sport and Government. The role of state in sport
development (state and the three sectors). Reason and
effect of state intervention.
Tasks of a sport manager

Managing Sport Organizations


The sports clubs environment. Sport and non-profit sector.
Professional sport. Media, Sponsorship, Player
management.
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What is sport management?


It involves the application of techniques and
strategies evident in the majority of modern
business, government and nonprofit organizations.
Sport managers engage in

strategic planning,
manage large numbers of human resources,
deal with broadcasting contracts
manage the welfare of elite athletes 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.
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Unique features of Sport (Stewart and Smith, 1999)


Phenomenon of people developing irrational passions
for sporting teams, competitions, or athletes.
Sport managers must learn to harness these passions by
appealing to peoples desire to buy tickets for events, become a
member of a club, donate time to help run a voluntary
association, or purchase sporting merchandise.

Differences in evaluation of performance


Profit vs. Sport succes
Sport managers need to be cognizant of these multiple
organizational outcomes, while at the same time be responsible
financial managers.

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
Which produces an anti-competitive behaviour.
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Unique features of Sport (Stewart and Smith, 1999)


The sport product, when it takes the form of a game or
contest, is also of variable quality.
The variable quality of sport therefore makes it hard to
guarantee quality in the 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.
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 be used by sport managers and
allied industries to influence the purchasing decisions of
individuals who follow sport
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Unique features of Sport (Stewart and Smith, 1999)

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.
Sporting organizations are relatively reluctant to
adopt new technologies unless they are related to
sports science, where on-field performance
improvements are possible.
Limited supply
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
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Sport management environmental issues


Globalisation
Media
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 and the internet;
read about game analyses, their favourite players and teams
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.

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Sport management environmental issues


Political environment
Most governments view sport as a vehicle for nationalism,
economic development, 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.
Governments also regulate the activities of sport
organizations through legislation or licensing in areas such
as industrial relations, anti-discrimination, taxation and
corporate governance.
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Lets speak about


The economic environmnet of sport

The Socio-cultural environment of sport

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The three sectors of sport


State or public sector
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 control.

Nonprofit or voluntary sector


Community based clubs, governing associations and
international sport organizations that provide competition and
participation opportunities, regulate and manage sporting
codes, and organize major championship events.

Professional or commercial sport organizations


Professional leagues and their member teams, as well as allied
organizations such as sporting apparel and equipment
manufacturers, media companies, major stadia operators and
event managers.

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The three sectors of sport

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Connections between sectors


Public and Non-profit
the State is intimately involved in providing funding to
nonprofit sport organizations for sport development and
elite athlete programmes
in return nonprofit sport organizations provide the general
community with sporting opportunities and as well as
developing athletes, coaches, officials and administrators
to sustain sporting participation.

Public and Professional


The State is 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 framework for
professional sport to take place and supporting
manufacturing and event organizations to do business.
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Connections between sectors


Non-profit and professional sectors
The non-profit sport sector supports professional sport by
providing playing talent for leagues, as well as developing
the coaches, officials and administrators to facilitate elite
competitions.
In return, the professional sport sector markets sport for
spectators and participants and in some cases provides
substantial funds from TV broadcast rights revenue.

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Sport Management issues


1. Strategic management in Sport
involves the analysis of an organizations position in the
competitive environment, the determination of its
direction and goals, the selection of an appropriate
strategy and the leveraging of its distinctive assets.
In case of sport organizations it may largely depend the
quality of their strategic decisions.
In In a competitive market, sport managers must drive
their own futures by undertaking meaningful market
analyses, establishing a clear direction and crafting
strategy that matches opportunities.
An understanding of strategic management principles and
how these can be applied in the specific industry context
of sport are essential for future sport managers
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Sport Management Issues


2. Organizational Structure
Is important because it defines where staff and volunteers
fit in with each other in terms of work tasks, decisionmaking procedures, the need for collaboration, levels of
responsibility and reporting 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 activities without unduly
affecting peoples motivation and attitudes to work.
In the complex world of sport, clarifying reporting and
communication lines between multiple groups of internal
and external stakeholders while trying to reduce
unnecessary and costly layers of management, is also an
important aspect of managing an organizations structure.
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Sport Management Issues


3. Human resource management

is essentially about ensuring an effective and satisfied


workforce
Successful sport leagues, clubs, associations, retailers and
venues rely on good human resources, both on and off the
field.
Human resource management cannot be divorced from
other key management tools, such as strategic planning or
managing organizational culture and structure, and is a
further element that students of sport management need
to understand to be effective practitioners.

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Sport Management Issues


4. Leadership
Managers at the helm of sport organizations need to be
able to influence others to
follow their visions,
empower individuals to feel part of a team working for a common
goal
be adept at working with leaders of other sport organizations to
forge alliances, deal with conflicts or coordinate common business
or development projects.

having leaders who are able to collaborate effectively with


other organizations to run a professional league, work with
governing bodies of sport, and coordinate the efforts of
government agencies, international and national sport
organizations, and other groups to deliver large scale sport
events.

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Sport Management Issues


5. Organizational Culture
consists of the assumptions, norms and values held by
individuals and groups within an organization, which
impact upon the activities and goals in the workplace and
in many ways influence how employees work.
is related to organizational performance, excellence,
employee commitment, cooperation, efficiency, job
performance and decision-making.

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Sport Management Issues


6. Governance
Organizational governance involves the
exercise of decision-making power within organizations and
provides the system by which the elements of organizations are
controlled and directed.

Governance is a particularly important element of


managing sport organizations, many of whom are
controlled by elected groups of volunteers, as it deals
with issues of policy and direction for the enhancement
of organizational performance rather than day-to-day
operational management decision-making.
Appropriate governance systems help ensure that
elected decision-makers and paid staff seek to deliver
outcomes for the benefit of the organization and its
members and that the means used to attain these
outcomes are effectively monitored.
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Sport Management Issues


7. Performance management
Sport organizations have applied business principles to
marketing their products, planning their operations,
managing their human resource and other aspects of
organizational activity.

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The role of state in


sport development

The State (government)


Is the component of the society
Its role depends on the type of the society
(democracy vs. Dictatorial state)
Social orders
State and its apparatus
to govern members of society by establishing a bureaucracy that
enforces an array of rules and regulations
Mobilize resources through its taxing powers, and use them to
establish an economic and cultural infrastructure that allows
commerce and the arts to flourish

The Market
Civil society
informal, non-market relationships that are mainly situated around
households, neighbourhoods and local communities.

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Four Sectors
Nonprofit public sector
Driven by the state

Profit-based commercial sector


Driven by the market

Informal sector
Driven by civil society

Voluntary sector
driven by aspects of all three social orders
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The four sectors


Sport can fit into any of the four sectors depending
on first, the traditions and values that underpin the sport
experience
second, the scale of resources that each sector can
command.

What about Portugal?


In which sector sport is dominant in your country?

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State may have enormous influence over the


structure and practice of sport in one set of political
conditions, it can just as easily have minimal
influence over sport in some other situation.
Where the State is passive with respect to sport
development, there may be a flourishing sport
system in one or more of the other sectors,
depending on how highly sport is valued in each
sector.

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Why the State invests in Sport

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Sport as a public good


Public goods are those goods where one persons
consumption does not prevent another persons
consumption of the same good.
Example
a decision to visit a beach, or identify with a winning team
or athlete, will not prevent others from doing the same.
Indeed, the experience may be enhanced by others being
in proximity.

Public goods are also goods where, in their purest


form, no one can be prevented from consuming the
good.
Public goods can provide substantial benefits
throughout the whole of society, and are usually not
rationed through high prices

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94

95

Regulation and controll


Regulation of sport occurs on five levels:
1. The formulation of the rules of the game;
2. The application of immediate sanctions during the course
of the game should a breach of the rules occur;
3. Disciplinary proceedings performed by administrative
bodies who punish those who contravene the rules and
provide an opportunity for review of decisions;
4. Intervention by State or Federal Governments when a
participants behaviour infringes the criminal law or a civil
action is brought.
5. International committees such as the International
Olympic Committee or the Court of Arbitrationfor Sport
are used to resolve disputes.
96

Nonprofit sport

Goals of organizations in the nonprofit sector


to develop communities
meet the needs of identifiable and discrete groups in
those communities
work for the benefit of public good rather than
wealth creation for individuals

98

Nonprofit sector and sport


The International Classification of Nonprofit
Organizations (ICNPO) classification
(1) sports including amateur sport, training, fitness and
sport facilities and sport competition and events;
(2) recreation and social clubs such as country clubs,
playground associations, touring clubs and leisure clubs;
and
(3) service clubs such as Lions, Rotary, Kiwanis and Apex
clubs.

organizations that operate on a nonprofit basis in


sport including professional service organizations,
industry lobby groups, sport event organizations and
sport governing bodies.
99

Some large, nonprofit governing organizations

International Olympic Committee (IOC)


FIFA
UEFA
IAAF
Federao Portuguesa de Futebol (FPF)
Federao de Andebol de Portugal (FAP)

100

101

Governing bodies
Sport clubs compete against other clubs in
competition structures provided by regional or
state/provincial sporting organizations.
State-based teams compete in competitions
facilitated by national sporting organizations, and
nations compete in leagues or events provided by
international federations of sport (e.g. UEFA or FIFA)

102

Governing bodies
Mission
Promote sports at all levels in a given territory and sport
discipline.

Goal
the management,
administration
and development for a sport on a

global,
national,
state/provincial,
or regional level.

Main activity
Govern one or more sport disciplines.
103

Example
The Portuguese Football Federation
Organises the Segunda Diviso and Taa da Liga (The
Primeira Liga Liga ZON Sagres - , Liga de Honra - Liga
Orangina and Taa da Liga BWIN Cup - is organized by
LPFP /Liga Portuguesa de Futebol Profissional/
Taa de Portugal
Supertaa Cndido de Oliveira
Youth levels
Womens football
Beach Soccer
Futsal
National football teams (both men and women)
104

Sport governing organizations


volunteer-based
do not operate as top down power hierarchies, with
clubs always abiding by regional directives, or
national governing bodies agreeing with
international policy initiatives

105

Build up of a nonprofit sport club


Administrators
who fill roles as elected or appointed committee members have the
responsibility for the overall guidance, direction and supervision of the
organization.
Roles
Conducting long-term planning for the future of the club
Developing policy and procedures for club activities
Managing external relations with other sport organizations, local
governments or sponsors
Managing financial resources and legal issues on behalf of the club
Carrying out recommendations put forward by members
Communicating to members on current issues or developments
Evaluating the performance of officials, employees (if any), and other
service providers
Ensuring adequate records are kept for future transfer of
responsibilities to new committee members
Acting as role models for other club members
106

Build up of a nonprofit sport club


Coaches
working in the sport club system may be unpaid or paid,
depending on the nature of the sport and the resources of
individual clubs.

Role
developing athletes skills and knowledge, in
helping them learn tactics for success,
and enjoy their sport.

Coaches also act as


Important role models for players and athletes

107

Other roles in nonprofit sector


Officials
those people who act as referees, umpires, judges, scorers
or timekeepers to officiate over games or events.
All sports provide a structured training and accreditation
scheme for officials in much the same way as coaches to
develop their skills and experience at local,
state/provincial, national or international levels.

General volunteers
Some roles
Fundraising
Managing
Other minor work (lawn mowing, sewing, washing the
jerseys, etc.)
108

Challanges for nonprofit sport


the dependence on volunteers to sustain the sports
system
the increasing litigious nature of society and the
associated increase in costs of insurance for
nonprofit sport organizations
trend away from participating in traditional sports
significant capacity problems
additional complexity of the governance and
management requirements of these organizations

109

Professional sport

Which is the oldest football team in your country


Established in 1876

111

Development of a sport as business (Beech&Chadwick 2004)

112

The process
Foundation
The sport emerges through ancient folk tradition
(e.g.soccer)

Codification (Revolutionary)
Codification may take place as a formalisation of practice
(e.g. cricket), as the outcome of an organisational
breakaway (e.g. rugby league) or through the need to
define the game at the time of invention (e.g. snooker).

Stratification (Evolutionary)
As a sport grows, the body responsible for codification sets
up or administers through merger a variety of leagues,
typically with an element of promotion and relegation, and
normally characterised by a regional dimension, especially
at lower levels. In this phase, the sport remains amateur
113

The process
Professionalisation
As a sport gains a popular appeal, the willingness of spectators
to pay to watch, and the willingness of investors to support
clubs, for altruistic reasons as well as commercial ones, allow
the payment of players.
Initially payment is in terms of expenses. This may extend to
payment for loss of earnings.

Post-professionalisation
During this phase, a senior game which is professionalised
typically sits alongside an amateur junior game.

Commercialisation
As the sport develops an overtly business context,external
organisations see the opportunity of using the sport for their
own purposes, typically marketing in the forms of sponsorship
involving governing bodies, leagues and clubs and
endorsement involving players.
114

Example English football (case study)

115

Example English Football (case study)

116

Professional sport

117

The Worlds most Valuable Soccer teams (Forbes, 2011)

1. Manchester United
2. Real Madrid
3. Arsenal
4. Bayern Munich
5. Barcelona
6. AC Milan
7. Chelsea
8. Juventus
9. Liverpool
10. Internazionale

1,864,000,000 USD (2%)


1,451,000,000 USD (10%)
1,192,000,000 USD (1%)
1,048,000,000 USD (6%)
975,000,000 USD (-2%)
838,000,000 USD (5%)
658,000,000 USD (2%)
628,000,000 USD (-4%)
552,000,000 USD (-33%)
441,000,000 USD (7%)
118

119

The highest paid soccer players (Forbes, 2012)


1.
2.
3.
4.
5.
6.

David Beckham
Cristiano Ronaldo
Lionel Messi
Wayne Rooney
Kaka
John Terry
Yaya Toure
8. Fernando Torres
9. Frank Lampard
10. Steven Gerrard

46,000,000 USD (Adidas)


42,000,000 USD (Nike)
39,000,000 USD (Adidas,Lays)
24,000,000 USD (Coca-Cola)
21,000,000 USD (EA Sports)
18,000,000 USD
18,000,000 USD
17,000,000 USD
16,000,000 USD
16,000,000 USD
120

Highest salary in 2011


1. Ronaldo
2. Leo Messi
3. Fernando Torres
4. Yaya Tour
5. Wayne Rooney
6. Kaka
7. Zlatan
8. Adebayor
9. Tevez
10. Etoo
11. Ribery
12. Terry (high def)
15. Xavi-Iniesta-Villa-Dani Alves
26. Cassilas-Cech-Buffon-Valdes
36. Frederic Kanout
37. Patrick Vieira
38. Kevin Kuranyi
40. Arjen Robben
43. zil-Kedhira-Ronaldinho

12,000,000
10,500,000
10,000,000
10,000,000
9,500,000
9,000,000
9,000,000
8,500,000
8,000,000
8,000,000
8,000,000
7,500,000
7,000,000
6,000,000
6,000,000
5,500,000
5,500,000
5,500,000
5,000,000
121

Largest sport contracts


Player

Sport

Lenght

Contract
Value

Averge /year

Averge/
game

1. Alex Rodriguez

Baseball

10 years

275 M

27,5 M

169,7 K

2. Albert Pujols

Baseball

10 years

240 M

24 M

148 K

3. Joey Votto

Baseball

10 years

225 M

22,5 M

138 K

4-8

Baseball

8-10 y

180-225 M

9. C. Ronaldo

Soccer

10 years

170 M

17 M

400 K

10-13

Baseball

20 M

14. Kimi Raikkonen F1

3 years
(Ferrari)

153 M

51 M

2,9 M

17. Leo Messi

8 years

148,8 M

18,6 M

500 K

20. Kobe Bryant

Basketball

7 years

136,4 M

19,5 M

237 K

22. Calvin Johnson

Am. Footb

8 years

132 M

16,5 M

1M

29. M. Schumacher F1

4 years

124 M

31 M

1,9 M

30. A. Ovechkin

13 years

124 M

9,5 M

116 K

Ice Hockey

122

Jobs in professional sport


Media management
Broadcasting
Media coverage contracts
Public Relations

Sponsorship management

Funding
Players sponsorship
Teams sponsorship
Leagues sponsorship
Events sponsorship
Buildings sponsorship (Emirates Stadium, Allianz Arena, etc.)

Player Management
123

Broadcasting Revenue of the Olympics

1960 Rome
1964 Tokyo
1968 Mexico City
1972 Munich
1976 Monreal
1980 Los Angeles
1988 Seoul
1992 Barcelona
1996 Atlanta
2000 Sydney
2004 Athens
2008 Beijing

1,200,000 USD
1,600,000 USD
9,800,000 USD
17,800,000 USD
34,900,000 USD
286,900,000 USD
402,600,000 USD
636,100,000 USD
898,300,000 USD
1,331,600,000 USD
1,494,000,000 USD
1,739,000,000 USD

124

Sponsorship revenues

125

Sport Management 3.

Course Objective

Human Resource Management


Leadership
Organizational Culture
Performance Management

127

Human Resource
Management

Human Resource Management


HRM
in business or sport organizations, is essenessentially
about
first, finding the right person for the right job at the right time,
and second, ensuring an appropriately trained and satisfied
workforce.

Successful sport leagues, clubs, associations, retailers and


venues all rely on good human resources, both on and off
the field to get their jobs done.
Conversely, organizations with staff who lack motivation,
are ill-suited to their work, under-paid or under-valued will
struggle to perform.

129

HRM
is a central feature of an organizations planning
system.
It cannot be divorced from other key management
tools, such as strategic planning, financial planning or
managing organizational culture and structure.
can both drive organizational success, and is a
consequence of good management and planning.
It involves a process of continual planning and
evaluation and is best viewed as part of a cycle in
which an organization aims to meet its strategic
goals.
130

HRM
For professional sport organizations
successful human resource management is equated with
profitability, long-term growth and success (on and off the
court, diamond and rink).
Better behaved athletes mean greater profitability and
overall success for professional sport teams and franchises.

For not-for-profit sport organizations


successful human resource management is usually not
always about bottom line financial performance.
It can also encompass a range of strategies and outcomes
depending on the organizational context.

131

Essentials of HRM

132

1. Human Resource Planning


Is essentially about assessing and forecasting the staffing
needs of the organization and is often referred to as the
most important phase for effective human resource
management.
In the planning phase an organization must assess
whether current staffing needs will be adequate to meet future
demand (or alternately, whether fewer staff will be required),
whether staff turnover is predictable and can be accommodated
whether the ratios of paid, full-time, part-time, casual and
volunteer staff are appropriate or adequate
whether there are annual or cyclical fluctuations in staffing that
need to be met and managed
whether specific capabilities will be required in the future that
the organization is currently lacking.
133

1. Human Resource Planning


Job analysis
Job content (primary and implied tasks)
Requirements (skills, competencies, qualifications and
experience)
Context (reporting relationships and job characteristics)

Job description
a document that covers the job content and context

Job specification
a document that covers the job requirements, especially
skills and knowledge base

134

1. Human Resource Planning


Job design principles
job simplification
intended to increase the specialization of employees, thereby
increasing efficiency and productivity.
can be viewed as a positive management tool, particularly when it
comes to evaluating the performance of an individual employee.

job rotation
partly a remedy to the boredom and dissatisfaction that can result
from simplification.
involves workers swapping jobs on a periodic basis, in order to keep
fresh and stimulated, although clearly a sport organization will only
have a finite range of jobs through which employees can rotate.

Job enlargement
the process by which employees are encouraged to enlarge their work
and add tasks, even if they are simplified and specialized. The benefit
of this approach is a happier workforce, but the downside is the
perception of overwork.

job enrichment
refers to the structuring of the job so that it maximizes employee
motivation and involvement.

135

2. Recruitment
Refers to the process by which an organization tries
to find the person most suited to the job that has
been designed.
The greater the pool of applicants, the greater the
chance the organization will find a suitable
candidate.

136

3. Selection
Selection and screening is the process condensing
the candidates that applied for the position during
the recruitment phase to a short-list.

137

4. Orientation
This phase of human resource management is
important, as
a good quality orientation and induction programme
can make an employee feel both welcome and
empowered,
but a poor programme, or no programme can make a
new employee feel as if they have travelled to a
foreign country, in which they cant speak the
language, dont know where to go and cant read any
of the signs. In short, being in a new organization can
be a daunting and frightening experience.
138

5. Training and Development


is at the heart of an organization that seeks continual
growth and improvement.
Sport organizations that do not engage in systematic
training and development programmes are destined
to operate far below their optimum, not only
because they will fall behind in current trends,
practices and skills, but because they will not see
themselves as learning organizations.

139

5. Training and Development


A process through which new and existing
employees learn the skills required for them to be
effective in their jobs.
these skills could be associated with learning how to
operate automated turnstiles at a professional sport arena
(training for the novice employee),
or learning how to creatively brand the organizations in
order to compete in a hostile marketplace (training for the
experienced existing employee).

140

5. Training and Development


Dresslers five-step training and development process for
sport organizations
1. needs analysis

the organization identifies the necessary skills for its employees,


analyses the current skills base and develops specific training
objectives.

2. developing the actual training programme

Most sport organizations, as previously noted, are too small to have


sophisticated human resource management departments that have
the skill and experience to design, develop and implement
sophisticated training programmes.

3. Validation

optional step in which the organization is able to validate that the


training programme that has been developed or contracted satisfies
the needs analysis.

4. implementation of the programme

staff are trained (this could be anything from a one day short course,
through to a two year Masters programme).

5. Evaluation

Successful or unsuccesful

141

6. Performance appraisal
It must be approached carefully by sport
organizations and human resource managers within
an organization must seek to develop a collaborative
process in which the employee, as well as the
manager, feels empowered.
Appraisal process within sport organization
Athletes and coaches are constantly rated on their
performance. In basketball the number of points,
rebounds, assists, turnovers, steals, fouls and blocked
shots are recorded meticulously.
From year to year, goals are set for athletes and their
ability to meet targets in key performance indicators can
result in an extended contract with improved conditions.
142

6. Performance appraisal
Not meeting the targets can mean a player in a sport
like baseball has to return to the minor leagues, to
return to form or to see out their playing days.
For coaches, performance appraisal is often based on
one statistic alone, the win-loss record.

143

7-8. Rewards and retention


Once a sport organization has

planned for,
recruited,
selected,
Orientated
trained
and appraised its staff

it makes good sense that it would try to retain them.


Retaining good quality staff, whether they are in a
paid or volunteer capacity, means that the
organization will be better off financially and
strategically.
144

HRM
The first six phases of the human resource
management process all contribute to retaining staff.
Poor orientation, training and performance appraisal
programmes in particular can all have a negative
impact on staff retention.

145

Leadership

Leadership
getting things done through people
exercising power in order to influence others
envisioning a bright future and taking others by the
hand towards it
leaders are made, they are not born; and they are
made just like anything else has been made in this
country by hard effort. And thats the price that we
all have to pay to achieve that goal, or any goal
(Westerbeek & Smith, 2005)
147

Leadership is:

goal oriented;
about influencing others
about empowering others
about seeing the big picture
about needing others
about strength of character

skilfully influencing and enabling others towards the


attainment of aspirational goals

148

is principally founded upon the ability to establish


direction;
Align people
to motivate
and inspire

149

Leadership challenges in sport organizations


Small community based sport clubs and regionally
based sport associations
Can small clubs survive or should they consider merging or
relocating?
How can we retain our younger members and our most
valued volunteers?
How can we attract new resources to the club in order to
pay for professional services?
How can we maintain the culture of the club?

150

National sporting organizations


Are we a national or international sport or in other
words, what is our marketplace?
What is best for our sport: a focus on elite; on mass
participation; or an equal balance between the two?
How can we better deliver our sport through the
regional and local associations and clubs? (this is a
systems question)
How can we change our systems of governance to be
better prepared for radical (short term) changes in
the sport market?

151

International federations and professional sport


Are we in the business of sport or are we simply
competing for peoples leisure time?
How much control do we need to exercise in terms of
our chain of distribution? For example, do we need
to own our sporting facilities and broadcast centres
rather than contracting with other owners?
How will the market for sport, entertainment and
leisure develop over the next decade? Where do we
need to be placed in order to become and remain
major players in those markets?
Who will be the leaders for the sport of the future?
152

Organizational culture

Organizational culture
Culture tends to be inflexible and resistant to easy or
rapid change.
Culture is shaped by an organizations circumstances,
its history and its members.
Culture is learned and shared by members of an
organization and is reflected in common
understandings and beliefs.
Culture is often covert; the deep values and beliefs
causing behaviour can be hidden from organizational
members making them difficult to identify.
Culture is manifested in a variety of ways that affect
the performance of an organization and its members.
154

Sport organizational culture


Sport organizational culture is a collection of
fundamental values, beliefs and attitudes that are
common to members of a sport organization, and
which subsequently set the behavioural standards or
norms for all members.

155

The importance of culture to sport organizations


In many countries sport has for some time been
regarded as a particularly important social
institution.
Sporting heroes are often national heroes

156

different types of sport organizations will possess


different kinds of cultures.
professional clubs and major national leagues are more
likely to emphasize dispassionate business values,
while smaller, not-for-profit associations are more likely to
value participation and fun.

Sports organizations are increasingly compelled to


join the commercial world, and are under great
pressure to adopt the operational and structural
characteristics of business enterprises.

157

Culture is important to sport organizations because a


better understanding of it can help to bring about
change.

158

Sub-cultures and sport


Professional players, for example, have a different
cultural attitude from some amateurs and spectators.
The only apparent consistency in sporting culture is
the pursuit of competition, the love of winning, and
the ability to summon strong emotional responses in
both victory and defeat.

159

160

161

Case: A Cultural map of Ferrari Formula One

162

163

164

165

166

167

168

Performance
management

Sport and performance


Sport is consumed by strong emotional attachments
that are linked to the past through nostalgia and
tradition.
Romantic visions, emotion and passion can override
commercial logic and economic rationality.
Predictability and certainty, which are goals to be
aimed for in the commercial world, particularly with
respect to product quality, are not always valued in
the sporting world.
Sport is not driven by the need to optimize profit in
the ways that large commercial businesses are.
170

Models to choose from


Profit maximization model
A club is simply a firm in a perfectly competitive product
market and that profit is the single driving motivational
force.

Utility maximization model


The rivalry between clubs, and their desire to win as many
matches as possible.

171

Systematic approach to Perf.Man.


Identifying strengths and weaknesses
Revealing the ways in which overall organizational
performance can be improved.
Deciding where scarce resources should be allocated
in order to achieve the best possible outcome.
In short the use of some sort of performance
management model is crucial to the long-term
success of sport organizations.

172

Strategic perspective
We should initially focus our attention on what the
organization wants to achieve.
Performance management system should be linked
to an organizations vision, goals and objectives.
Main question
What is the main goal of the organization?
Profit
Winning games
Promotion
173

Building a performance management model for professional teams

174

Building a performance management model for professional teams

175

Input Output approach to Perf. Man.


This involves looking at things like quality, quantity,
efficiency, costbenefit ratios, and employee
productivity.
This approach provides a checklist of essential
performance dimensions that need to be addressed.
It ensures that no one measure is dominant, and also
provides for measures that not only focus on internal
processes, but also look at the organizations
relationships with key suppliers and customers.

176

177

Balanced and multi-dimensional approach to Perf. Man.

The aim to a performance measurement system that


balances
external and easily quantifiable measures like market
share and return on investment
against internal and more ephemeral factors like
administrative processes and staff development.

178

Dimensions
Financial Perspective
financial measures are nevertheless a fundamental starting
point for evaluating the economic sustainability of an
organization.
They can range from total sales, operating income and net cash
flow, to return on assets, debt to equity ratio and net profit.
This dimension answers the question how do we look to
shareholders?

Customer Perspective
identifying the customer and market segments in which the
business will compete
and to develop measures that will indicate how well the
organization competes in these segments.
These measures will include total sales in each segment, market
share, customer acquisition, customer retention, and customer
satisfaction.
This dimension addresses the question how do customers see
us?

179

Dimensions
Internal-Business-Process Perspective
This requires management to identify the critical internal
processes in which the organization must excel in order to
secure a competitive advantage.
This dimension addresses the question what must we excel at?

Learning and Growth Perspective


crucial to the long-term success of organizations
In a turbulent business environment there is an ever-increasing
likelihood that the technologies and processes required to
sustain a market advantage and competitive edge may race
ahead of the technical and managerial and processes.
In order to close this gap organizations will have to invest in reskilling employees, enhancing information technology and
systems, and aligning organizational procedures and routines
This dimension addresses the question can we continue to
improve and create value?
180

Costs and benefits of a Perf. Man. system


Planning and implementing a performance management system
can be costly, since
it involves a lot of time-intensive analysis of an organizations processes
and activities.

It can also become a bureaucratic nightmare since


it can produce hundreds of microscopic statements about the way things
should be done, and how they must be measured.

At the same time, a well thought out performance management


system can provide a number of long-term benefits.
it makes sure that the core activities of an organization are directly linked
to its primary aims and goals.
it can motivate employees by setting targets which are rewarded when
they are attained.
it ensures greater accountability by clearly identifying not only what is to
be achieved, but also who is responsible for making it happen
it completes the management cycle by making sure processes are
monitored, and outcomes are measured against some sort of minimum
performance standard.
it forces management to come up with a quantifiable measure of its key
outputs, and eliminate ambiguous aims and nebulous objectives.
181

Case

182

A performance management model appropriate for sport (a 9


point model)

1. Wins, awards, and successes.


2. Financial sustainability.
3. Market distribution, or the extent to which a sport
league, association or club is able to facilitate the
consumption of its particular sporting practice.
4. Market size and share.
5. Customer satisfaction
6. Internal procedures and processes. (e.g. recruitment,
retention and motivation of members)
7. Product improvement
8. Staff development and learning
9. The economic, social and environmental impact that a
sport league, association or club has on its surrounding
community.
183

Case

184

Sport Marketing

Marketing Orientation
Successful marketing programmes are market driven.
In other words, you must find out what your
stakeholders want from their sport and respond to
those needs.
To be market driven means developing client
information surveys, including client information in
planning and decision making, investigating the
competition and developing market strategies.

186

Benefits of being market driven are:

having an innovative and responsive organisation


keeping up with the competition
retaining full membership numbers
having a high level of involvement and loyalty by the
consumers or members as a result of you listening
and responding to their needs.
Challenges from being market driven are:
the time and commitment it takes to find out what
consumers and members want.
the result sometimes clashes with what you think they
should want
187

The 4 (5) Ps of Sport Marketing

Product
Price
Promotion
Place (distribution)

188

The sport product

189

Sport product
A good, a service or any combination of the two that
is designed to provide benefits to a
Sports spectator
Participant
Sponsor

190

Simplified Model of the Consumer-Supplier Relationship in the


Sports Industry

191

The sports marketing exchange process

192

Types of sport products


CORE
Sport Events
Sporting goods

Hardgoods:
equipment, accessories
Softgoods: apparel, clothes & footwear
Collectibles and Memorabilia

Sports training & services


Fitness and Health Services
Sports Camps and Instruction

193

Types of sport products


PERIPHERAL
Athletes
Arenas / stadia
Sports information
TV, Newspapers, Internet, Magazines,Radio, etc.
ESPN

Sport betting ($100 b /year ?)


$12b online sport betting

Sport video games / online sport


Fantasy leagues

Towards digital sports ?


Online informations + games +gambling
194

Price
Pricing sport effectively is difficult and complex.
Consumers make decisions about whether to buy
the sport based on perceived value, comparison with
other competitive products, what friends think of it,
whether it is unique or a copy, and other factors.
Players, coaches and officials also have to consider
the cost of their sport against the benefits of being
involved.

195

Factors
Like any business, sport has production costs what it
takes to put the sport package together. Consider all of
these factors when determining a pricing formula or
pricing policy.
Market research has found that price does not generally
have a major influence on the decision of the passionate
consumer to attend a fixture. But pricing must be in line
with the pricing of other similar events.
Consumers also equate price with value: discounted or
free products can be equated with little or no value, so
run the danger of cheapening the product. Consider this
whenever applying a pricing formula, particularly if you
are thinking about offering freebies as incentives.
196

Factors
Players, coaches and officials will weigh up the
benefits of being involved against the cost.
Look at this from their point of view, and think about
what is in it for them rather than what is in it for your
sport/organisation. There are many competing
leisure activities for the active participant nowadays,
so consider how cost might negatively affect their
involvement in your sport

197

Promotion
Promotion is often seen as the exciting part of the
marketing mix but can be confused with marketing
itself.
This occurs because promotion is the most visible
part of the process.
Promotion is often wrongly portrayed as being
advertising only.
The main aim of promotion is to inform those you
are targeting and to encourage involvement in the
sport.
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Sports promotion methods

advertising (print, television, radio, internet)s


Ponsorship
direct marketing
special deals
special packages involving other goods and services
pre-match entertainment
Media
corporate boxes
merchandising (caps, key rings, collectibles, posters, clothing, etc.)
game programmes
meet-the-players days
exhibition games
old-timer days
autographed photos
Competitions
coaching clinics.
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Place
Place relates to where and how consumers buy the
product (also called the distribution function.) How
do your target market get tickets or get involved in
the sport?
Your sports place concerns the facility (location,
layout, access, and amenities), rather than the
physical channels of marketing (wholesales and
retailers) which is primarily the sport spectator
marketing are.a

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Public Relations
Public relations help determine the position of your
sport: it is a long-term means of building the desired
image for your sport or organisation.
Public relations play a crucial role in the way your
sport is received by consumers.
Building good relationships with the media are vital
in public relations.

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Marketing Strategy

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1. Analyse the Market


Study the environment and your position in it.
Understanding consumer behaviour is fundamental to
marketing.
Sports consumption is complicated watching and
participating are often intertwined.
Success will come from wide consultation, and from meeting
the needs of your stakeholders:

Do you understand the needs of those you want to serve/attract?


Start by knowing what stakeholders value and consider important.
Then communicate how you are going to meet their needs.
Dont tell them things that you believe should be important.

The first step in defining your market is answering this


question:
To whom do we have to market our sport and our strengths?
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Identify and describe the stakeholder


1.What general information do you have about your
stakeholders?
2.What current information do you have on New Zealanders
who participate in or follow your particular sport?
3.Who has access to this information and what is it used for?
4.What are the gaps in stakeholder information that you think
need tobe filled?
5.What do your stakeholders need or want from your
organisation?
6.How have the wants of your stakeholders changed since
your organisation or sport began?
7.What reasons have been given for stakeholders leaving or
not participating?
8.Who are your potential stakeholders? Who wants or needs
the service, but not in the way in which it is available today?
9.How many of your stakeholders also have an interest in
another leisure or sporting activity?

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Analyse your current Marketing Mix


Product
What is your core business?
What are the range of products and services you offer?
How often is the range of products reviewed and by what
means?
How regularly do you monitor/evaluate the quality of these
products and services?

Price
What is the cost of your sport, including membership?
How does this cost compare to other sports or alternative nonsport or leisure activities?
How have you arrived at these prices? (For example, historical,
market rates ability to pay?)
What ideas or practises/policies have you regarding a graduated
pricing system for spectators?
Are there different rates for different participant segments?
Are there benefits for volunteers, such as free entry to big
events?

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Analyse your current Marketing Mix


Promotion
For each part of your sport list the ways in which they are
currently promoted to the various stakeholders?
Have these strategies been developed as part of an
integrated promotional plan, or on a more arbitrary basis?
How often are these promotional methods evaluated and
adjusted as a consequence?
Does the promotion change if the on-field performance
does not match the promotional material?

Place
Are there any barriers to access?

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2. Segment the Market


Segmentation means being aware of the different groups
you are going to interact with and targeting the groups
you want to serve.
When you have different market segments, you go after
them differently, developing a different marketing
strategy for each group.
You should develop and maintain a membership
database for your information.
Sport takes in a wide market and consumer
demographics can be as broad as the general public.
Making sense of this for your sport and subsequently
doing some effective market segmentation is important.
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Example
A public swimming pool is a good example to
illustrate market segmentation. The different users of
a swimming pool are:

sauna and spa users


fitness programme participants
team sport membersc
ompetitive swimmers
Children
parents with children
social clubs
Learners
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3. Analysing the Competition


Competition may come from other sports and the many
other leisure opportunities on offer.
There are benefits to be gained from analysing the
competition and, increasingly, from sports working
together more effectively.
These benefits include:

Improving the quality of your service.


Picking up on new popular trends/innovations.
Avoiding duplication of services if the market cannot sustain it.
Staging co-operative events with other agencies pooling
resources, running events together.
Pricing policies.
Identifying your strengths and limitations in comparison with
others
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4. Put together a plan


Developing policies, practises and programmes
targeted at satisfying consumers and gaining their
loyalty is essential for sport.
Consider carefully the information you have
gathered, particularly the wants of stakeholders.
Take time over this it is tempting to assume that
information gathered confirms what is already being
done (when it is not), or that it is not so important
(when it is!).

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Process for developing a marketing plan


A) Developing Goals
Responding to market demand with new goals and strategies
must fit into the mission and strategic plan of your organisation.
It should also fit the environment in which your organisation
works.

Your marketing goals will show how you intend to stand


out. Develop marketing goals by:
Identifying how we put ourselves across to the stakeholder we
want to attract.
Identifying our uniqueness or competitive advantage/s.
Cultivating strengths and articulating them meaningfully to the
market.
Identifying needs which are not being satisfied.
Respecting stakeholder values and satisfactions, rather than
reflecting the executives or organisations own views and egos
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b. Identifying Objectives
Develop targets or results that focus on specific
market segments, andaim to reach the objective you
have identified. These should be SMART:
Specific
Measurable
Attainable
Realistic
Time framed

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c) Planning for Action


Illustrate how the objectives will be achieved.
What marketing strategies will be applied to reach
these objectives?
Consider resources, skills, time and priorities
necessary to achieve the objectives.

Who has to do what, when and with what results?


What tools do they need?
What resources are required to meet the goals?
How will progress be measured?

There is not much value in trying to attract different


market segments with the same approach. It is
better to think widely while considering the
implications on resources and time.
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5. Monitor and Evaluate


Developing ways to measure your progress is
essential in judging the success of marketing
strategies. Consider these points:
How are you doing in relation to your timetable?
Set in place feedback mechanisms is everyone doing
what was planned, how do they let you know?
Link the targets to clear and measurable outcomes which
have been set at the planning stage.
Were the targets met or exceeded?

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Developing Evaluation Processes


Consider the examples you developed for the action
plan.
Plan an evaluation process for these based on the
following table

215

Sponsorship
Corporate supporters (also known as sponsors) need
to be encouraged or convinced to buy or join up in
the same way as other stakeholders.
Asking for sponsorship is not enough; you have to
offer something in return.
The benefits that sponsors are looking for will be
different from those sought by other stakeholders.
Members seek immediate service such as
competitions and social activities.
Sponsors, however, will want to use the sport to
promote its product to the market the sports
organisation appeals to.
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Sponsorship
Promotions should be pitched at highlighting the
commercial value to a sponsor: the more a sports
organisation can attract an appropriate market, the
more attractive they will be to a corporate sponsor.
Sports sponsorship is the support of a sport,
organisation, event or competition by an outside
body or person for the benefit of both parties.
Additional funds, or a wider market, are the obvious
benefits to the sports body.
The benefit to the sponsor is often less tangible.
The sporting body usually makes the sponsorship
approach, not the potential sponsor.
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Sponsorship
To establish what you could offer a potential sponsor,
consider the following:

Name
Image
Goodwill
Personality
symbols/logos
Synergy
Audiences
a market
heroes
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Sponsorship

Consider also the tangible benefits:


direct sales exclusive selling rights
special offers to members
image building naming rights
political benefit opportunity to entertain business
or government clients
media coverage indirect advertising
product demonstration at events

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