SPORTENTIAL – Potential in Sports

Theoretical Bases

Sponsorship is based on Exchange Theory
Sponsorship activities principally rely on exchange theory (McCarville & Copeland, 1994), an appropriate transfer of value between parties through the sponsorship.

Sustainable Competitive Advantage
Sport sponsorship has proven to be effective in shaping competitive advantages in the market (Amis, Pant & Slack, 1997).

Movement from philanthropy to ROI
Well documented in the literature and most recently by Sweet in the April 29 Sport Business Journal (p. 27). ROI Drawing Closer Attention from Sponsors. “Many sport sponsors say they are taking a closer look at their return on investment, especially in light of the slow economy and a sport landscape that offers a wider variety of opportunities.”
Stadium naming rights fees, that had seen tremendous growth during the past 10 years, experienced a 16% decrease in value in 2001 (Bernstein, 2001a).
In addition, the downward movement in many corporate stocks and projected earnings shortfalls and decreased company profitability may cause some shareholders to question sport sponsorship as an appropriate expenditure of funds.

The work of Kuzma, Shanklin, and McCally (1993) laid a framework based on a construct for sport organization engaged in packaging and selling sponsorship with an underlying premise focused on sponsor objectives.

Berrett and Slack (1999) contend that a multitude of unique factors within the sponsor’s infrastructure have a substantial influence on sponsorship decisions and tactics. Similarly, Ludwig and Karabetsos (1999) reported a high level of variability with sponsor objectives for the 1996 Olympic Games in Atlanta.

This is represented in the Model through the Input module.
Research in the field has suggested that a variety of corporate objectives can be pursued through sport sponsorship including (Stotlar, 2001, Pope & Voges, 2000; Thwaites & Aguilar-Manjarrez, 1997; Copeland, Frisby, & McCarville, 1996; Irwin & Sutton, 1994; Kuzma, Shanklin & McCally, 1993):
hospitality,
trade relations,
enhanced corporate image,
increased marketshare,
client acquisition,
product awareness
on-site sales

Come back next week for Part two on 5 June 2009

David K. Stotlar
University of Northern Colorado
david.stotlar@unco.edu

The words Efficiency and Effectiveness are being used a lot in randomly order, and for different situations. Their meaning is different though, and in the scope of measuring the professional level of sport organizations the aspect ‘efficiency’ is selected to determine the professional level of the target group. In some cases the sport organizations may already be successful in other respects (organizing championships), but not necessarily efficient.

Efficiency (Robinson, 2004): the amount of output that is achieved for a given resource input.
“While all organizations are concerned with efficiency, it becomes a singular concern in times of crisis”. (Chelladurai 2001)

Indicator of professionalization: Sport organizations are being identified as professional, if they are efficient with their available resources. This means that for example organizations with lots of financial resources are not always being identified as professional. One needs to relate the output with the input. Organizations that prove to be efficient prove at the same time to have people with the knowledge and expertise to benefit maximal of their resources. It means that the management of the organization is well educated, and that there is a strategy for their (core) activities.

One relates the professional level of a sport organization quickly to the output, or the result of a particular process. This could mean that if, let’s say, a Volleyball organization manages to win a bid for the organization of a World Championship, this confederation could be considered very professional. The result with regards to the financial, commercial and image aspects would be very good. But this does not say anything about their statutory objectives, not directly linked to this event.

So if the same Volleyball organization would not establish any progress in reaching their statutory objectives, the confederation would score very low on the professional status. This combination (commercial and statutory, societal objectives) is, as reported by Chappelet & Bayle
(2005, p39), the case for all nonprofit sports organizations. These organizations require specific performance management for two reasons:
1. The performance that a sport organization seek to attain is not primarily financial.
2. The decision-taking system is based on (unpaid) volunteerism and on democratic governance.

Chappelet & Bayle (2005, p55) use six dimensions for the measuring of the Global Performance of National Sport Federations:
1. Statutory performance (quantitative and qualitative method of measurement)
Objective→ Obtaining the best sport results, developing the number of members
2. Organizational performance (qualitative)
Objective→ to respond to the statutory mission, strategic plan and environmental requirements
3. Economic and Financial performance (qualitative)
Objective→ Obtaining and managing financial resources
4. Promotional performance (quantitative)
Objective→ Improving media impact
5. Internal social performance (quantitative and qualitative)
Objective→ Improving the social climate and the involvement of all actors
6. Societal performance (qualitative)
Objective→ Contributing toward a better-functioning society, by achieving the statutory objective(s)
Indicator of professionalization: The performance dimensions are of direct influence on the professional status of the CSF. A low score on the majority of these dimensions relate to mismanagement of the organization. It’s output is not parallel towards it’s own statutes, strategic plan and doesn’t contribute towards a better-functioning society.

QUALITY

Since the last thirty years there is a strong expansion on the sport- and leisure market, with new distribution and communication channels, all reasons for more attention for quality in sport. The sport market was penetrated with a variety of new sports like fitness, aerobics, steps, tae bo, skateboarding, snowboarding etc. All these innovations were initiated and organized by commercial organizations, which used other formulas than the traditional sport associations. They were led by managers, with commercial backgrounds. Different management techniques, like quality management and marketing were introduced in the sport sector. People tend to use the word “quality” a lot, but with different meanings, like with the words “professionalization” and “efficiency”.
Quality is being used generally, which automatically results in a lack of content until it is being related to a performance. And when the relation is there, it will be obvious that the classification of quality is very subjective and related to a certain time. For example: Twenty years ago the pollution of cars were not related to the quality of the car, as the environmental pollution was not on the (political) agenda. Nowadays the pollution of a car is a quality criterion.

Robinson (2004) mentions that different quality gurus have their own definition, approach and standards for quality. But they have argued that the principles of quality management are the way forward to ensure organizational success.

The Olympic Committee of the Netherlands (NOC*NSF; 1999) defines professionalization in sport organizations as a process where three aspects are considered important:

1) paid labor: The honorarium (for a 40 hour workweek) should be at least equivalent to the official minimum wage

2) general acceptance of regulations, education and qualifications. The development of these aspects will result in a standardization of the different functions in sports

3) increase of quality of work/ performance.The increase of the quality of work is of influence on different dimensions within an organization like the product or the process within an organization.

So what is quality in sports?

Lucassen and Van Bottenburg (2004, Chapter 5) define four different quality dimensions:
1. Product orientated (internal)→ this was developed in the industrial sector. The final
products were being analyzed if they complied with product specifications, developed by technicians.
2. Process orientated (internal)→ A next step of the product orientated dimension was to control the whole production process. Deficiencies of the product were caused during the production process. Therefore one should have more attention to the process than just the product. The International Standard Organization (ISO) paid a lot of attention to this. The ISO quality system says more about quality of the company and its employees, than the product itself.
3. User orientated (external)→this dimension focuses on the users, as being decisive whether a product has quality or not. The Service Quality Model (SERVQUAL) prioritizes the user’s expectations of a product. Quality becomes a more subjective aspect.
4. Society orientated (external)→Since the last years of the twentieth century there is more attention for societal responsibility of organizations.

Next to the commercial activities which result in more profit, organizations have activities for people and the environment. This is more and more expected from the society.

Indicator of professionalization: All four dimensions of quality are indicators of professionalization. In the case of sport organizations, the product is their specific sport, which they are statutory obliged to develop (produce) on the continental level. Upgrading of the board and the development of a strategic plan will benefit the control on the “production process”. The users are the members of the sports organizations, like athletes and officials. They will decide if the product is up to par, or not. Sport organizations become more and more society orientated. Cases of corruption and doping have tremendous negative influence on the sport and it’s responsible sport organizations.
So we can speak of “integral quality” if there is attention for all four quality dimensions.

This article is part of the thesis written by Remco Tevreden, as part of the international program MEMOS (Executive Masters in Sports Organisation Management).

In the early days sport was only government funded, not market oriented like in the 21
St century. Some excellent athletes quit at the height of their careers because they were uncertain about life post retirement. The situation began to change in the United States. The Americans created around the period of the industrial revolution their typical American sports with their own rules, like
Baseball, American football, Basketball and Volleyball.
The popularity of these sports increased drastically after World War II. American Football stadiums with capacities of more than 50.000 spectators were built and the media published the matches. Especially universities made lots of money, and they saw this as a profit making business. American Football was more popular than baseball, and the annual Super Bowl became the most important sport event of the United States. In 1991 the top 20 most watched TV-programs had nine games of the Super Bowl competition. The professionalization (or professionalism) of sports has encouraged the emergence of a sports management market and business-structured systems.

In this modern era, an era with enormous developments in sport, there are lots of sport organizations dealing with common organizational problems. Unfortunately there are quite some sport organizations re-inventing the wheel over and over again, where it concerns professionalization.

But what is professionalization?

Who is a professional? What attributes constitute professional status? It seems that sport organizations and people involved in sports us the same terminology, with different (personal) definitions, based on different perceptions. A profession is a special kind of occupation. Professionalization or Professionalism refers to the orientations and actions of sport organizations. According to Warrior (2002), professional development is the process whereby all individuals within an organization improve their competencies.

The author Bayle defines professionalization as “the technical management of dossiers and the actions delegated to permanent staff: salaried staff, staff made available by the State or volunteers with time and specific competencies”

It can be concluded that there is no global accepted definition for professionalization in sports. There are different key factors or indicators, which are accepted to be an essential part of the professional level of a sports organization. I would like to mention five indicators selected, which could be used in order to classify sports organizations, with regards to their professional status.

The indicators chosen are:
1. Quality
2. Performance
3. Efficiency
4. Human Resources
5. Good Governance

Each of these can be divided in different aspects to analyze separately. Visit this website www.sportential.com next week for part 2.

This article is part of the thesis written by Remco Tevreden, as part of the international program MEMOS (Executive Masters in Sports Organisation Management).