Strategic Management Status Of Strategy In Sport Management Today
Strategic Management: Status of Strategy in Sport Management Today
Contents
TOC o “1-3” h z u Introduction PAGEREF _Toc376346013 h 1Background of Sport Management PAGEREF _Toc376346014 h 2Status of Sports Management PAGEREF _Toc376346015 h 5Commercialization PAGEREF _Toc376346016 h 5Increase in the number of commercial operations in sports PAGEREF _Toc376346017 h 5Commercialization within state sports organizations PAGEREF _Toc376346018 h 6Competition PAGEREF _Toc376346019 h 6Professionalism in Sports PAGEREF _Toc376346020 h 8The contest PAGEREF _Toc376346021 h 8Leagues PAGEREF _Toc376346022 h 9Structure of Sport Management PAGEREF _Toc376346023 h 10Sponsorships PAGEREF _Toc376346024 h 12Sports Branding PAGEREF _Toc376346025 h 13Corporate Social Responsibility PAGEREF _Toc376346026 h 14Equipment PAGEREF _Toc376346027 h 15Stadium PAGEREF _Toc376346028 h 16Conclusion PAGEREF _Toc376346029 h 17
IntroductionThe sports industry has grown tremendously in the past decade and coupled with new technological advancements and developments in infrastructure it can only be bigger. With the prospects of the sports industry looking to have a brighter future in the coming days, strategies have to be put in place to facilitate a sports organization’s competitive advantage over its competitors. The concept of attracting and the maintenance of new fans or customers to sporting events has been a major hurdle in the execution of set out strategies. Although sports’ has been viewed as recession resistant, many consumers of these sports organizations are opting for fewer tickets, less spending on ancillary sports purchases and cheaper seats. On the backdrop of these developments, there have been attempts to conduct research to better understand the ways of developing effective strategies to sports management in the sports industry today. Commensurate with the development of effective strategies, emphasis must be laid upon the entertainment, as it is the core of many sporting events and should be one of the primary objectives of sports management. Sports management is the combination of skills that are related to planning, controlling, organizing, directing, leading, budgeting and evaluation within the organizational setting, and its products and services associated with sports.
A strategy is a plan of action that is designed to achieve an overall aim. Strategy has become a fulcrum in the survival of sports management in the sports industry; it has become an integral part in ensuring the sports organizations have a competitive edge over its competitors.
Strategic thinking aims at opening up to a range of options through broad thinking. Regardless of the range of possibilities, the team will react in accordance with their assumptions, goals, competencies and capabilities. Competitive advantage is used to reduce the level of uncertainty by taking a certain course of action. This essay will analyze the status of strategy in sports management today, relying on theory and research as well as examples from the sport business industry to support our arguments. This essay will evaluate changes in the sports management today and the role strategy has played in ensuring success. This essay will discuss the history and background of sport management to help give a better understanding between the past and the present in the sports management strategy.
Background of Sport ManagementSport management can be traced back to 11 BCE, where the first Olympics were held by Herod the Great, King of Judea. However, in the 1980s is when it defined itself as a discipline, through the formation of North American Society for Sport management. Professional associations have been established worldwide, with an international alliance. Gradually the sports industry evolved and took characteristics of the modern day businesses. Sports clubs, tournaments and leagues are the most prevalent structures that are used currently to organize and manage sports. The need for a systematic study of sport management was brought about by the continuous growth of the industry and the growing importance of the industry to sponsors and institutions. The need to study sport management through research conducted was necessitated by the need to train sports managers. Different scholars have offered different perspectives pertaining to study of sport management. The differences are manifested in regards to the future direction, quality and utility of sport management. The difference in the school of thought and perspectives over sports management is a prerequisite of the fact that sport management is a young discipline. The bedrock, upon which the differences are cast, is testimony to the efforts made on exploration of sport management.
The necessity for Sport management research was first brought to the fore 1957 by Walter O’Malley, who was the owner of the famous Los Angeles (L.A) Dodgers. Walter O’Malley posed the question as where he could find a person, who by virtue of his/her learning has been trained in sports related activities. This question was later passed by Professor Clifford Brownwell of Columbia University, to Dr. James Mason, who initiated the development of sport management programs at Ohio University in the United States in 1966. This set precedent to the formation of the North American Society for Sport management in during the academic year 1985-1986. The publication of the Journal of Sport management in 1987 to address issues touching on sports management in the context of management theory and practice. This journal specifically focused on sports, play, dance and exercise because of the demand by sectors of the population.
In the first publication of the journal of sport management, Ziegler addressed various issues surrounding sport management as a field of research and study. In the publication he concluded that sports management had the prospects of relating to the development of social science and management, (Ziegler, 1987). Ziegler paid tribute to the North American Society for Sport management, as the ones who could make significant contributions to sports management. He encouraged the corporation of various stakeholders’ effect this development to ensure success. He criticized scholars of sport management for not making significant strides towards research during the 20 years (Ziegler, 1987).
Paton took this initiative to scrutinize the development of sport management critically in the original issue of the journal of sport management. Paton identified certain areas that needed improvements after his exhaustive literature review. He pointed out that an emphasis was put on leadership and leadership behavior and yet few if any, conclusions came up from this research. Paton gave recommendations concerning the improvements to be done on the theoretical base and scholars and researchers should try and make the information useful and sensible. He also recommended that researchers should examine other sectors other than the professional aspects alone. The focus should be placed on amateur sport organizations and private enterprises in the sports industry. The focus was also placed upon the direction in which sports management research was being conducted. Sports management’s scholars such as James Weese (1995) suggested that, apart from developing the field of sports management from a theoretical perspective, the research conducted should encompass practitioners in sports organizations and environments. He argued that the research should be based on practicability to help sports management in comprehending the conclusions of research.
There were suggestions that research on sports management was not at per with the growth being experienced in the sports industry. Trevor slack (1996), lamented over the emphasis by sports management scholars in athletic administration and physical education, while enterprises such as sports organization and athletic equipment was neglected. He cautioned scholars about the ultimate result of this neglect, which would limit the sport management and lack generalizability. He emphasized on the importance of grasping management concepts, strategies and theories. Slack emphasized on the need to present research pertaining to sports management to broader audiences for scrutiny from other sectors. This would help in giving sport management research credibility. Slack (1996) also made suggestions concerning how sports management can be made to stay current. He argued that aspects such as organizational strategy, organizational culture and the impact of technology in the sport industry. Slack (1998) also suggested that there should be the creation of a unique field in sports management other the overall management discipline, so that it can include being critical and reflective of scholarly research, which will help in identifying inefficiencies in sports management, specifically drawing from a practical or theoretical point of view. He also encouraged the use of theorizing research and use of established theories to test their theories. The insightful comments that were made by slack helped to facilitate a change of thought in terms of how sports management programs were perceived and to also reconsider research methods approach.
Status of Sports ManagementCommercializationSports has moved from just being a past time activity to a business venture over the past two decades, as a result of the commercialization of sports. This has made businesses to become more concerned with business principles. The process of commercialization made sports organizations to be market oriented in the pursuit of operational strategies that would help these organizations maximize profits made and at the same time cater to the needs of their customers who are the fans. The commercialization of sports has been fated as a detrimental process that dampens the true spirit of sports. However, the money made by professional players and teams is moving towards professionalism away from amateur sports. In the case of the rugby union, where there was an increase in the amount of money being paid for the right to televise. Commercialization has been instrumental in the development of sports as a business. The commercialization of sports has occurred two aspects in the sports industry:
Increase in the number of commercial operations in sportsSport management has become focused on the maximization of revenue and using this principle in the development of strategies and in decision-making processes. Hence, this has been witnessed in the unprecedented rise in expenditures on television rights, sponsorships, players’ salaries and even sports betting, in the past two decades. For example, in the year 2004, the NFL cost the Fox Television Company $712 million. This was an increase of 320% from the previous deal expenses (Fry, 2005).
Commercialization within state sports organizationsState sports organizations or not-for- profit organizations have undergone substantial changes in terms of their cultural and operational aspects of their sports organizations, as sports managers deviated from the traditional ways and used the business-like approach to the organization’s management. The decision-making in these organizations reflects that of commercial organizations. This has led to the introduction of quality management systems, performance management and strategic planning. This is evident in the evolution towards principles of good governance which is associated with the commercial sector. According Robinson (1998), he indicated that research conducted in the past suggested that the traditional differences in management between state and voluntary sectors and the commercial sector in the sports industry are no longer obvious.
Competition
Although sports are considered one of the biggest facilitators of links between people, it is increasingly becoming clear that sports management is operating under an increasingly competitive market, with competitors other sports and leisure providers, both at local levels and abroad. The increase in the competitive nature of sports has been enhanced with technological improvements. Technological advances in travelling means customers are far more mobile than ever before. Advancement in communication has created an even bigger fan base with people viewing the events from all over the globe. Competition becomes even more prominent, sports management competes for discretionary expenditure, and hence managers are not only competing within the industry but also with alternative ways of using discretionary income. This requires a business strategy that ensures the survival of sports management in an increasing competitive business environment, (Robinson, 2008). Competition in sport management is vital and it necessitates performance related activities. This means sport organizations have to promote a cohesive culture within the organization and support innovation and creativity, which is targeted to the success of the organization. The increase in competition in sport management has made the formulation of a competitive strategy, a very important factor to ensuring the success of the sports organization.
A competitive strategy refers to a plan in which a sports organization positions itself in a favorable position, with an aim of establishing a sustained advantage over competitors. Porter’s five models analyze this situation by identifying five sectors that require competitive advantage.
Threat of substitute players with unknown records entering into the game
League rivals
The threat of potential new talented players or athletes joining other teams
Pressure from management on performance
Dropping out of key players
The SWOT analysis is also fundamental in the formulation and development of competitive strategy. SWOT analysis stands for Strength, weakness, opportunities and threats. This forms analysis of capabilities and resources are identified and matched to the competitive advantage. This form of analysis puts into consideration the internal and external environments of the sports organizations. Strategy is goal-oriented actions that match between internal and external environments, (Dwyer & Tanner, 2006). On this basis for approaches become evident:
S-O Strategy- leverage internal strengths and exploit the external opportunities
S-T Strategy- leverage internal strengths and avert the external threats
W-O Strategy- overcome internal weaknesses and exploit the external opportunities
W-T Strategy- overcome internal weaknesses and avert the external threats
Professionalism in SportsCommercialization has been one of the main causes of professionalism in sport management. The presence of strategic planning, marketing strategies and human resource strategies in sport management leads to the improvements seen today in professional practice. Professionalism in sports has been facilitated by two main factors. The first factor is the growing number of programs of training and education for individuals who want to be sports managers. This can be seen in the increase in the number of programs offering degree programs in sport management worldwide. The second factor is the academic study of sport management has initiated and carried out research aimed at the evaluation and analysis of management in sports organizations. Sport management has adopted strategies such as tighter financial controls, quality management and performance management. They have also embraced human resources strategies, to deal with personal and people skills in the execution of good generic managerial skills.
Professionalism in sports has helped sports organizations to provide considerable entertainment to their fans as well as provide a source of revenue for the owners and the players. According to Chelladurai (2005), professional sports are considered entertainment because it makes money. He suggested that there are three aspects of sport as an entertainment:
The contestThe unpredictability of the results in the competition is considered as an essential ingredient in sport entertainment. The level of excellence achieved by the players or athletes during the contests increases the value of entertainment during these competitions. This is one of the major reasons why professional sports are more entertaining than amateur sports. Sport management has devised strategies to ensure that their teams perform to expected levels of excellence by buying established or upcoming talents. In the English premier league, they have an elaborate scouting system to identify outstanding and upcoming talents from all over the world.
The spectacle
Although the contest is usually the core of the event, there is usually some form of spectacle associated with it. For example, the spectacle in the Olympic Games is the opening and closing ceremonies, in football, rugby and basketball the spectacle is in the half –times shows.
Social event
Sports offer an avenue through which people can meet not only for the contest or spectacle but for social purposes. This can be seen in various sports organizations where they have used strategies that encourage fan identity; this has been seen specifically in football, baseball, rugby and basketball.
Leagues
Sports leagues have been organized in many different ways, in line with the overall strategy of the sports industry and to complement sports organization participating in it. Team sports require the coordination of at least two different entities. Team sports are organized into leagues, which vary depending on the game. A league can adopt one of two types of schedules: a round-robin or elimination tournament. In the round-robin tournament a team plays a predetermined number of scheduled games against other league teams. The winner is determined by aggregating the results of all matches. In the elimination tournament, teams get dropped from the schedule after losing a certain number of games. This witnessed in the European champions’ league, where three league leader teams are selected and play against each other both home and away and the winner determined after teams eliminate each other.
Sport management of these leagues has to incorporate strategies to ensure that their games or matches are attended by fans. This can be seen in England, during the Football Association (FA) cup, which has over 500 entrants. The tournament is seeded, in that weaker teams play several games to determine which among them is allowed to compete against teams in the football league. The economic importance of these leagues is significant and strategies have to be put in place to substantially increase the importance of each game or match. Thereby, creating more demand for each game, (Noll, 2003). For teams playing in the lower leagues in England and are ineligible to European championships, the sport management of the leagues has devised strategies that ensure that they have enough resources, in that they schedule more games than their counterparts in division one and the premier league.
Strategies have also been instrumental in ensuring that there is a competitive balance, through revenue sharing in professional sport leagues. In the U.S, the National Football League (NFL) and the Major League Baseball (MLB) have adopted a strategy in which sports teams share gate revenues. In England and Germany, football leagues share revenues from selling broadcasting rights this is done according to the rules stipulated by their governing bodies. The performance of this strategy plays a small role in the amount of revenue a team receives, (Feess & Stähler, 2005).
Structure of Sport ManagementThe structure of the sport management refers to the division of labor and coordination of different responsibilities and tasks. The structure of sports management can be associated with its environment or the strategy it implements. This means that the structure responds to the core task of sports management or adjusts to external demands faced by the sports organization. For example, in the case of a football club, the formation of a competitive team will constitute the formation of an essential condition that guides the clubs’ everyday activities. It is also important to note that the club’s environment will have an impact in determining and defining activities within the organization. Hence, the formation of a competitive team aims at the satisfaction of members and fans, as well as various operatives operating in the club’s external environment, (Gomez et al, 2008). The sports industry is arguably one of the most complex industries, because it incorporates the public, private and voluntary sectors.
England is considered to be the birthplace of modern sport management and sports, because most of the sporting events can be traced back to England, from track and field to football. The influence of England’s sporting culture was brought by its dominance over its colonies in the 18th and 19th centuries. During the 18th century sports clubs were developed by England, and membership into this clubs was limited to those politically and economically powerful within the English society. These early clubs organized one-time events or annual events that brought together the members of these clubs. In the 19th century, changes were effected with clubs having acquired standardized rules and organized seasons of competitions. Many sports and events have organizational roots in the club sport system, this includes European football and the U.S collegiate athletics, (Crosset & Hums, 2010). Although the practice is fading as time goes by it is still a popular way to organize sports and recreational activities.
Sports organization usually organizes social events such as dinners and dances, recreational adult leagues, academies and youth leagues for their members. Sport management structures are gradually being replaced by other management structures. For example Elite European club teams such as Real Madrid, Manchester City, Manchester United and Olympiakos are increasingly being controlled by wealthy individuals, away from the once dominant management structure of the club system. Even Olympic Games have changed from the early days and now resemble tournament structures, (King, 1997). Clubs are no longer local in nature. This is evident in the feature of players from different parts of the world. A deeper look into players for most teams in the premier league in England, suggests that the clubs list players, from not only England, but also from other parts of the world. The strategic plan for the sports organization today is dependent upon the organization’s culture, leadership, the size of the organization and the complexity of the organization’s environment.
SponsorshipsThe benefits of sports management are twofold. The first, is that sponsorship is an important source of revenue because sports requires financing and even companies that are deemed well off welcome the additional income generated as a result of sponsorship related activities. The importance can be seen in the fact that sponsorship is one of the most important sources of revenue for the Olympic Games. The second reason is, sport gains from the media exposure and publicity, as this is an area in which sponsoring companies seek to capitalize on, they are likely to take measures to ensure publicity is improved for the event being sponsored, and by doing so increasing awareness of the event and the company. An example of this is of snooker which is the fourth most televised sports in the UK, was a result of joint publicity, (Robinson, 2008).
Sponsorship is a marketing strategy that aims to pursue corporate and commercial objectives by associating with a certain organization, brand, product and even personalities. It implies that there exists a transaction between the parties that are involved. In the sports industry anything is up for sponsorship, but only if it has a link with the objectives of the sponsor. For example, the Arsenal’s Emirates stadium was built by Fly emirates airlines, we can also see this when Adidas sponsored the All Blacks rugby team, (Robinson, 2008).
In 2004, it was estimated that sponsorship was at $695 million, with football receiving the greatest amount of sponsorship. Overs the decade cases of sponsorship have increased tremendously, it is estimated that between 1981 and 2001 the UK sports sponsorship market increase by over 80 per cent, (Mintel, 2004). The growth in terms of sponsorships has been attributed to the following reasons:
The value of sponsorship in increasing a business’s profile and generating sales.
Escalating costs of advertising media have pushed businesses to sponsorship which is believed to be a cost effective marketing communication tool.
Government policies on tobacco and alcohol caused many manufacturers of such products to look for alternatives of promotional media.
Greater media coverage of the sponsored events
Inefficiencies in traditional media coverage, for example viewers flipping channels during advertisements.
Sports Branding
The importance of economic sport branding cannot be underestimated due to its influence on the sport management’s economic success. Sports fans have a strong emotional link to their sports teams compared to most industries. In an effort to capitalize on the emotional response, sport management has tried to position itself as a brand. The performance on the field by the sports teams remains an important aspect in building the sports organization’s brand equity. The making of a sports brand beyond the local market is one of the most important assets for sport management, (Bauer et al, 2005). Sport management has devised over the past decades certain strategies to ensure that their brand is successful. It has affected strategies such as brand reputation and brand affinity in an attempt to present itself in the global field. This can be seen in the case of Manchester united which is a football team in England. It has a brand value of $1.83 billion as of the year 2010 (Desbordes & Richelieu, 2012).
Corporate Social ResponsibilityThe stakeholder theory suggests that corporate social responsibility should be a requirement for organizations by ensuring they consider the interests of all stakeholders, (Gregg, 2001). Sports being a social activity, offers a bridge across social and economic gaps. Corporate social responsibility offers sports management with unique features in which they can use to formulate and develop strategies. It offers sport management a platform in which they can implement policies and strategies that can help boost the general outlook and perspective of the sports organization. Hence, the use of sports as a tool of corporate social responsibility of sport management is contingent on social responsibilities intrinsic to sports itself, (Smith & Westerbeek, 2007). Below are some of the ways in which sport management engages in corporate social responsibility:
The independence of playing outcomes
Sport management need to formulate strategies and policies which guarantee that the outcomes of these games are not compromised by non-playing interests, such as gambling.
Safety of the fans and participants
Sport management must ensure that the physical safety of its participants and spectators. This includes the incorporation of strategies and measures for the protection of young participants from potential physical, verbal or sexual abuse.
Rules of fair play
One of the core values of sports is that it should offer equal opportunities to all those who are involved. It involves outlawing performance enhancing drugs and make sure that there is equitable access for all members of the community.
Environmental conservation and protection
Sports in most cases can be demanding towards the physical environment. This creates a notion of attempts to conserve or contribute to the conservation of the physical environment. Sport management has been instrumental in conservation efforts, for example Manchester city installed wind powered turbines to help in the conservation of the environments at its Etihad stadium.
Developmental focus of the participants
One of the key aspects of the social impact of sports is the developmental opportunities it affords to its participants. Strategic policies to formalize the commitment to personal, social and physical development are fundamental to corporate social responsibility.
Pathways for playing
Sport management has the responsibility of providing opportunities for development of activities for junior and senior sports programs.
Equipment
Equipment’s are a critical aspect in any sports organization. There should be careful planning and evaluation of space for equipment usage. The size and space requirements should be accounted for well in advance before the equipment are purchased. Sports equipment and supplies require that a sports organization invest substantial amounts of money because such items are critical to the safety of the players or athletes. It also helps in the facilitation of good playing conditions with players having attained certain levels of fitness that make them competitive. Sports equipment includes the gears, shoes and the gym facilities that a sports organization uses to train or during the match day. The strategic placement of the sports brand of the club by sport managers can help in securing endorsements for certain equipment that can be used in the sports organization. There are many companies offering various types of sports equipment such as Adidas, Nike, Rawlings and New balance just to name a few. This equipment helps sport management in ensuring that targets are met by meeting certain performance standards that are set.
StadiumThe importance of the physical environment in the consumption of sports events cannot be underestimated. The atmosphere surrounding the stadium not only adds value to the core product but also creates a unique entertainment value. The infrastructure surrounding the stadium also plays an important factor in the perception of a customer or participants. Over the past decades, the sports industry has experienced the development of large and state of the art stadium in order to attract more participants and spectators into the field. A lot of investments are made in financing the construction of stadiums. Sport management has to consider a lot of variables, from the past, future and present prospects of the sports organization. The playing surface of the stadium has to be of required standards and the sitting booths for the spectators have to be constructed in such a way that it meets the needs of the different types of spectators. The construction of the stadium must also be in a strategic position in which it will ensure that, when games or matches are played, the attendance in the stadium is worthwhile. The stadium should be constructed in such a way that it caters for the different stakeholders of the sports organization such as the media. The stadium should also be constructed in such a way that it anticipates any eventuality. Sport management incorporates the putting all these factors and merging them together to form a strategic plan that will market the sports organization.
Conclusion
The models used in sport management should render the process of decision-making to be more certain and less complex when they implemented. The prospect and concept of choosing and filtering effective strategies is not new to sport management, it is however critical to obtain a certain level of expertise in the evaluation and measurement of the effectiveness of the management plans. The challenge of achieving this is that there are a numb
