INTRODUCTION

- Manchester United Football Club

is an English professional football
club

- Headquarter in Old Trafford,

Manchester City

- 20% of the UK population claimed

to be Manchester United
supporters
 INTRODUCTION
- Manchester United is one of the most successful clubs in
the history of English football
- Having won 18 Premier League titles, 4 League cups and
a record 11 FA Cups.
- The club is unique in having won a Premier League, FA
Cup and Champion League in the 1998-99 season
 INTRODUCTION
- The Munich air disaster claimed the
lives of eight players in 1958.

- In 1968, under the management of

Matt Busby, Manchester United was
the first English football club to win
the European Cup

- The current manager, Alex Ferguson,

is the most successful manager in
the club's history,
 THE GROWTH OF A BRAND
- The club was formed with the name of
Newton Heath LYR Football Club in 1878
- The club changed its name to Manchester
United in 1902 and moved to Old Trafford in
1910.
- In 1980, Martin Edwards tried to sell his
majority shareholding for £10m
- In 1991 the club was floated on the stock
exchange with a valuation of £40m
 THE GROWTH OF A BRAND
- The club was purchased by Malcolm Glazer in May 2005 in a
deal valuing the club at almost £800 million
- Manchester United had moved swiftly from a professional
football club to a truly global enterprise and has been
described as a global brand
- In 2010, Forbes magazine ranked Manchester United second
only to the New York Yankees in its list of the ten most
valuable sports team brands
 Organisational purpose

• Mission
• Vision
• Values
• Objectives
 Mission & Vision
• Compete and win at the highest level
• Buy players of high calibre
• Maximise corporate sponsorships
• Capture television rights
• Keep the club in best possible shape
• Increase customer base & shareholding
 Values & Objectives
• To spend fair amount on players and their
safety
• To make Manchester United one of the
richest club
• Ranked top
• Goal – commitment and evolution
 Appropriate purpose for a club?

• Play efficiently
• Make profit
• Profit maximisation for shareholders
• Converting global fans to customers
• Business & Football-Inseparable
 Loan and increasing shares
•  Malcolm Glazer takeover the club from
property trader Michael
Knighton and Rupert Murdoch's BSkyB
corporation in September 2003. 
 this resulted to increased his shareholding
from 3.17% to around 15% which he
almost doubled in the year up to October
2004.
• Majority of the cash used by Glazer,
incurring interest payments of over
£60 million per annum.
 Manchester United came in the form of
loans, much of which were secured
against the club's assets.
 Ownership issues
• In 2004, the board wants to accept an
offer of 623m from BSkyB co.,
unsuccessful due to leakage of negotiation

• Position became stiff by strong opposition

 supporters and other concerned unlike
the media ownership
 Meeting of new groups in 2010
• Red Knights takeover plans
 Man U fans opposed Glazer's takeover after
realizing the level of debt for debt-free club.
 Since 2005,the Manchester United Supporters’
Trust working on a way of returning ownership
of the club to supporters
 in 2010 ;United fans –met with a group of
wealthy Manchester – dubbed the "Red
Knights“ to discuss a billion-pound takeover bid
 Corporate governance
• Corporate governance is concerned with
the structures and system of control by
which managers are held accountable to
those who have a legitimate stake in an
organization
Governance chain
 Principal-agent model
• Principal-agent theory assumes that
agents will not work diligently without
carefully incentives.
• Remote distance between board members
and ultimate beneficiaries lead to
imperfect performance of company
 Principal-agent theory
• Misalignment of incentives and control
– Expectation of one group are not passed on
to the next appropriately
• Self interest
– Decisions are not in the best interests of final
beneficiary
 Principal-agent theory
• Responsibility to whom
– Trustees acting on behalf of a wider range of
stakeholders or only shareholders
• The role of institutional investors
– Investor have exerted their influence on firms
simply through the buying and selling of
shares
• Scrutiny and control
– Disclose information publicly and regulate
their activities
Five reasons for imperfection in
governance chain
• A lack of clarity on who the end
beneficiaries are
• Unequal division of power between
different ‘players’ in the chain
• With different levels of access to
information available to them
• Pursuing self-interest of potentially agents
• Using measures and targets reflecting
their own interests
 STAKE HOLDER

• Stakeholders are
individuals who have
an interest in an
company, or any
organization and are
affected by what
happens within the
institution based on
rules, policies and
regulations.
Polonsky's Model for Football club's stakeholders
 OFFICIAL SPONSERS OF MANCHESTER UNITED

1. 8.

2. 9.

3. 10.

4. 11.

5. 12.

6. 13.

7. 14.
 STAKEHOLDER MAPPING
• Stakeholder mapping identifies
stakeholder expectations and power
and helps in understanding political
priorities

• Identifies key blockers & facilitators of change.

• Identifies the relationship that needs to be established
with the various groups of stakeholders.
• Relates power and interest .
 STAKEHOLDER MAPPING –Mendelow’s Model

Level of interest
Low High

Low A B
Power Minimal effort Keep informed

High C D
Keep satisfied Key players
• According to Mendelow (1991), most of the
companies' efforts have to be focused on segment D,
called key players.

• Segment B represents stakeholders to keep informed

because it is useful to support the lobby action.

• To keep satisfy the C category insists that

stakeholders can move from a category to another, so
they can be easily switch to the D category.
 THE DEFINITION OF POWER

• “The extent to which individuals or groups

are able to persuade, induce or coerce
others into following certain courses of
action” (Johnson & Scholes 1999)
 SOURCES AND INDICATORS OF POWER

Sources of power
• Within organisations • For external stakeholders
• hierarchy (formal p.) • control of strategic resources
• influence (informal p.) • involvement in strategy
• control of strategic resources implementation
• possession of knowledge & • possession of knowledge (skills)
skills • internal links
• control of the environment
• involvement in strategy
implementation
Indicators of• power
For external stakeholders
• Within organisations • status
• status • resource dependence
• claim on resources • negotiation arrangements
• representation • symbols
• symbols