Sport and Event Industry

SES 465

Week 2 – Sport and Event Industry

Developed by: E. Hope Shupp, MA, MS

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Objectives

After studying this learning module, you should be able to:

1. Describe the five components of the internal environment

2. Explain the two primary principles of total quality management

3. Explain how factors in the external environmental affect the internal business environment

4. State the differences between domestic, international and multinational environment

5. List the lowest and highest risk ways to take a business global

6. Explain the stakeholders approach to ethics

7. Discuss the four levels of social responsibility in business

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Internal Environment

The organization’s internal environment includes the factors within its boundaries that affect its performance:

Management

Mission

Resources

Systems process

Structure

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Figure 2.1

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Mission

The organization’s mission is its purpose or reason for being.

– For example, consider the YMCA mission: To put Christian principles into practice through programs that build healthy spirit, mind, and body for all. – Have you ever experienced the mission at your local YMCA?

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Stakeholders:

Employees

Alumni

Fans

Shareholders

Customers

Suppliers

Government

Mission (continued)

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Stakeholders – people whose interests are affected by organizational behavior

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A mission can also be defined as the outcome that the organization strives to attain. The other internal environmental factors include: management, resources, systems process, and structure at the means the organization uses to achieve its ends.

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Time-Out Question #1

State the mission of a sport organization. Does it differ in any way from the missions of other types

of organizations?

Submit on Canvas after the watching the YouTube video by providing two complete sentences for full credit.

(refer to page 29 in Lussier/Kimball/Sport Management, 3rd Edition, 2013, by Human Kinetics textbook)

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Organizational Resources

Human

Financial

Physical

Informational

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Human Resources

Human resources—the organization’s workforce— are responsible for achieving the organization’s mission and objectives.

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Systems Process

Systems process is the method used to transform inputs into outputs.

Inputs

Transformation

Outputs

Feedback

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Figure 2.3

Systems process – method used to transform inputs into outputs.

(1) Inputs – provide the organization with operating necessities

– Example: At the YMCA, the primary input is the labor of thousands of employees who provide services to Y members.

(2) Transformation processes – input must be transformed into outputs.

– Example: At the YMCA, employees work (input) to provide services (transformation) such as

fitness instruction, after-school sport programs, and database management to members.

(3) Outputs – different levels of satisfaction experienced by each member.

– Example: At the YMCA, the desired output is that all members experience improvements in spirit, mind, and body.

(4) Feedback – ensures that the inputs and transformation process produce the desired results (outputs), and it can lead to innovation.

– Example: YMCA members are asked to complete satisfaction surveys on the services they receive.

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Time-Out Question #2

Describe the systems process for an organization you have worked for or a team you have played on.

Submit on Canvas after the watching the YouTube video by providing two complete sentences for full credit.

(refer to page 31 in Lussier/Kimball/Sport Management, 3rd Edition, 2013, by Human Kinetics textbook)

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Structure

The structure may be organized as departments:

Finance

Marketing

Production

Personnel

Each department affects the organization as a whole, and each department affects every other department.

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Quality

Customers assess the quality of an organization’s outputs by comparing what they require (or want) from the product to their actual use of, or experience with, the product or service.

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Customer Value

Customer value is the benefit(s) that customers obtain if they buy a product or service.

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Value and Quality

Example – When the authors bought tickets to a New York Yankees–Anaheim Angels game, we did so because we expected to watch a high-quality game. This included the expectation that star players such as Alex Rodriguez and Albert Pujols would be playing with their teams.

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Total Quality Management (TQM)

Total quality management is the process through which everyone in the organization focuses on the customer in order to continually improve product value.

2 primary principles of TQM

(1) To deliver customer value

(2) To continually improve the system and its processes

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External Environment

The external environment includes factors outside the boundaries of the organization that affect its performance.

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Nine Factors in the External Environment

1. Competition 2. Suppliers 3. Workforce 4. Customers 5. Shareholders 6. Society 7. Technology 8. Economy 9. Governments

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1. Competition – Organizations must compete with their competitors for customers.

2. Suppliers – Effective managers recognize that suppliers are a key factor in their success and develop close working relationships with them.

3. Workforce – An organization’s employees have a direct impact on its performance.

4. Customers – Without customers, organizations cannot exist.

5. Shareholders – Shareholders are the owners of corporations because they have purchased a share (stock) in the corporation.

6. Society – Society expects businesses to be socially responsible and ethical.

7. Technology – Today, computers are a major part of every firm’s systems process.

8. Economy – When business activity is slow, fewer fans attend games at the stadium.

9. Governments – The difference between the door opening to opportunity and the door closing on it is often determined by the support of local government.

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Time-Out Question #3

Give an example of how one sport firm’s competitors have affected the firm’s performance.

Submit on Canvas after the watching the YouTube video by providing two complete sentences for full credit.

(refer to page 33 in Lussier/Kimball/Sport Management, 3rd Edition, 2013, by Human Kinetics textbook)

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Time-Out Question #4

Give an example of how technology has affected several different sport organizations.

Submit on Canvas after the watching the YouTube video by providing two complete sentences for full credit.

(refer to page 34 in Lussier/Kimball/Sport Management, 3rd Edition, 2013, by Human Kinetics textbook)

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Types of Managers

Reactive managers make changes only when forced to by external factors.

Responsive managers prepare for change that they predict will come about.

Interactive managers believe they can create a significant part of their future and thereby control how it will affect their organization.

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Global Sport

To help coordinate global sport, the International Sport Management Alliance includes the North American Society for Sport Management (NASSM, discussed in chapter 1), the European Association for Sport Management, the Sport Management Association of Australia & New Zealand, the Fédération International de Football Association (FIFA), and the IOC.

Multinational Corporation (MNC) – You might never start your own global business, but you might become an international manager.

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Time-Out Question #5

Select a sport-oriented business and identify as many of the global practices as you can.

Submit on Canvas after the watching the YouTube video by providing two complete sentences for full credit.

(refer to page 38 in Lussier/Kimball/Sport Management, 3rd Edition, 2013, by Human Kinetics textbook)

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Global Sourcing

The difference between domestic managers and global managers is where they look for the best deal on inputs and where they think inputs can be most advantageously transformed into outputs.

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Importing and Exporting

U.S. retailers must import Adidas (based in Germany) sneakers in order to sell them. With exporting, domestic firms sell their products to foreign buyers. Companies like Spalding export their products to almost every country in the world.

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Licensing

Under a licensing agreement, one company allows another to use its intellectual assets, such as brand name, trademarks, technology, patents, or copyrights. For a fee, Disney allows companies around the world to make products using the ESPN brand, and so do professional sport teams.

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Contracting

With global contract manufacturing, a company has a foreign firm manufacture the goods but it retains the marketing process. Nike uses this approach because it doesn’t own any manufacturing facilities.

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Joint Venture

A joint venture is created when firms share ownership (partnership) of a new enterprise. For example, Dentsu of Japan announced the launch of a Football Media Service (soccer). The service is a joint venture with Infront Sports & Media.

Infront handles the distribution of Asian broadcast rights to all FIFA events between 2007 and 2014.

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Direct Investment

Direct investment occurs when a company builds or purchases operating facilities (subsidiaries) in a foreign country. In 1991, to globalize American football, the NFL developed the NFL Europe subsidiary. The NFL assigned players for development purposes to the six teams in the league. The league did produce players for the NFL, including Jon Kitna and Kurt Warner. However, on June 29, 2007, the NFL owners decided investing more money in NFL Europe was not worth the few advantages of keeping the league afloat.

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Risks in Global Sport Management

Four issues:

(1) Large global corporations are using developing countries workforce to manufacture sportswear and sports equipment

(2) Increase in number of athletes whose country of birth and origin are no longer a limitation to where the athlete plays and completes

(3) Role of extremely large global organizations such as FIFA, IOC, and NBA in organizing sports worldwide.

(4) Students of sport management should understand how globalization will affect their careers

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Ethics in Sports

There is no shortage of unethical behavior in sports. Some examples: The International Olympic Committee was corrupt in the bidding process for the 2002 Salt Lake City Olympic Games. A charge of doping against Floyd Landis during the 2006 Tour de France stripped Landis of his victory. San Francisco Giants’ home run king, Barry Bonds, never received full credit for his accomplishments because of all the allegations that he used steroids to improve his performance.

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Codes of Ethics

Codes of ethics (also called codes of conduct) state the importance of conducting business in an ethical manner and provide guidelines for ethical behavior.

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NASO’s Code of Conduct for Sports Officials

1. Officials shall bear a great responsibility for engendering public confidence in sports.

2. Officials shall be free of obligation to any interest other than the impartial and fair judging of sports competitions.

3. Officials shall hold and maintain the basic tenets of officiating, which include history, integrity, neutrality, respect, sensitivity, professionalism, discretion, and tactfulness.

4. Officials shall master both rules of the game and mechanics necessary to enforce the rules and shall exercise authority in an impartial, firm, and controlled manner.

5. Officials shall uphold the honor and dignity of the profession in all interactions with student-athletes, coaches, school administrators, colleagues, and the public.

Reprinted, by permission, from NASO.

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NASO’s Code of Conduct for Sports Officials (continued)

6. Officials shall display and execute superior communication skills, both verbal and nonverbal.

7. Officials shall recognize that anything that may lead to a conflict of interest, either real or apparent, must be avoided. Gifts, favors, special treatment, privileges, employment, or a personal relationship with a school or team that can compromise the perceived impartiality of officiating must be avoided.

8. Officials shall prepare themselves both physically and mentally, shall dress neatly and appropriately, and shall comport themselves in a manner consistent with the high standards of the profession.

9. Officials shall not be party to actions designed to unfairly limit or restrain access to officiating, officiating assignments, or association membership. This includes selection for positions of leadership based on economic factors, race, creed, color, age, sex, physical handicap, country, or national origin.

Reprinted, by permission, from NASO.

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NASO’s Code of Conduct for Sports Officials (continued)

10. Officials shall be punctual and professional in the fulfillment of all contractual obligations.

11. Officials shall work with each other and their governing bodies in a constructive and cooperative manner.

12. Officials shall resist every temptation and outside pressure to use their position as an official to benefit themselves.

13. Officials shall never participate in any form of illegal gambling on sports contests, may never gamble on any sporting even in which they have either direct or indirect involvement, and may never gamble on events involving high school athletics.

14. Officials shall no make false or misleading statements regarding their qualifications, rating, credentials, experience, training, or competence.

15. Officials shall accept responsibility for all actions taken.

Reprinted, by permission, from NASO.

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Time-Out Question #6

Examine a recent scandal in the sport industry, preferably a local one, and identify which decisions

led to unethical behavior and why.

Submit on Canvas after the watching the YouTube video by providing two complete sentences for full credit.

(refer to page 46 in Lussier/Kimball/Sport Management, 3rd Edition, 2013, by Human Kinetics textbook)

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Social Responsibility

Social responsibility is the conscious effort to operate in a manner that creates a win–win situation for all stakeholders.

Examples: Boston Red Sox top-level managers and star players work with the Dana-Farber Cancer Institute to help children, and Indianapolis Colts players work with kids through other organizations. Nike works to improve conditions for factory workers in an Indonesian athletic shoe factory.

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Four Levels of Social Responsibility

1. Social obstruction: Managers behave unethically and illegally.

2. Social obligation: Managers meet only the minimum legal requirements.

3. Social reaction: Managers respond to societal requests.

4. Social involvement: Managers voluntarily initiate socially responsible acts.

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Social Obstruction

Bruce Pearl, head basketball coach at the University of Tennessee, was fired in March of 2011 for recruiting violations. Pearl admitted lying to NCAA investigators when they were looking into possible recruiting violations committed by the Tennessee coaching staff.

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Social Reaction

For example, each year a local sporting goods store, Sports Stuff, and other retailers give merchandise to the Holy Cross Athletic Association. The athletic association raffles off the merchandise to raise money for its sport teams.

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Social Involvement

The NFL is an active participant with the United Way and has aired many commercials showing players working with children at United Way– supported agencies.

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Socially Responsible Coaches and Managers

Paul “Bear” Bryant, former football coach at the University of Alabama, said, “We have the opportunity to teach intangible lessons to our players that will be priceless to them in future years. We are in a position to teach these young people intrinsic values that cannot be learned at home, school, or any place outside of the athletic field.”

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Time-Out Question #7

Select a sport organization and identify its level of social responsibility for a current issue.

Submit on Canvas after the watching the YouTube video by providing two complete sentences for full credit.

(refer to page 49 in Lussier/Kimball/Sport Management, 3rd Edition, 2013, by Human Kinetics textbook)

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Conclusion

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After reviewing these slides, you should be able to:

1. Describe the five components of the internal environment

2. Explain the two primary principles of total quality management

3. Explain how factors in the external environmental affect the internal business environment

4. State the differences between domestic, international and multinational environment

5. List the lowest and highest risk ways to take a business global

6. Explain the stakeholders approach to ethics

7. Discuss the four levels of social responsibility in business

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Reference Information

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• Primary Resource

– Applied Sport Management Skills,3rd

Edition, Lussier & Kimball, 2013, by Human Kinetics.

• Secondary Resource

– Contemporary Sport Management, 5th

Edition, Pedersen & Thibalt, 2014, by Human Kinetics.

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