Sports Management

Question 1

Organizational Theory

Answer 1

Organisational theory is a discipline that helps us to understand why sports organisations are structured and operated in different ways. It helps us to understand why large sports organisations have different structures than small ones; while sport manufacturing organisations operate in a different way from those in the service sector; and why voluntary sport organisations may pursue different strategies from those that are designed to make a profit.

Organisation theory also helps to understand how processes such as change and decision making can be managed. In sport, organisation theory can make us better managers by providing an understanding of the way sports organisations are structured and operated. One of the key factors that influence the effectiveness of the sport organisation is whether it has an appropriate structure and design.

Question 2

Effectiveness in Sport Organisation (Goal Attainment, System Resource)

Answer 2

All organisation exist to achieve a goal or a set of goals. It may be pursuing a national championship, making a profit or developing young cultures. The ultimate goal of most professional sport organisations is to win a major championship in their sport; yet each season only one team can achieve this goal.

Four Approaches to Effectiveness in Sport Organisation:
1. Goal Attainment
2. System Resource
3. Internal Process
4. Strategic Constituency

Goal Attainment (Organisational Output):
The approach is based on the dentification of primary goals and hoe well an organisation attains and makes progress toward them. An organisation that achieves its goals is seen as being more effective than one that does not. It is this approach that has been used most extensively in evaluating the effectiveness of sport organisation. For this approach to be workable there must be a conscience among members of the organisation of the goal to be pursued. Also there must be a small enough number of goals to be manageable. Despite its simplicity and the ease it is to implement measures of organisational effectiveness, the goal attainment approach is in a number of ways problematic. First in any sport organisation there are often multiple and conflicting goals being pursued. A second problem concerns the vagueness of a sports organisation’s goals. Finally, there is a problem of which goals take within a sport and whether the sport organisation should focus on long or short term priorities.

System Resource (Organisational Input):
Rather than focusing on organisational output as the goal attainment approach does, the systems resource approach to organisational effectiveness focuses on input of an organisation, specifically its ability to attract scarce or valued resources. These resources may include members, the fans attending a game or the income generated from sales from licensed merchandise. Although secure resources are vital to the survival of sport organisation and survival is the overriding measure of effectiveness there are several problems with the system resource approach.

Question 3

Effectiveness in Sport Organisation (Internal Process Approach, Strategic Constituency Approach)

Answer 3

Internal Process Approach:
As opposed to the inputs and outputs the internal process approach focuses on throughputs, the internal activities by which inputs are converted into outputs. Indicators of effectiveness can include such things as a supervisor’s concern for his or her co-workers, feelings of group loyalty, good communication, and the personal development of subordinates (Daf 1992). Some writers propose that the internal process approach should focus on fiscal efficiency (Evans 1976). Here measures such as inventory turnover and changes in sale volume are used as the criteria for assessing effectiveness. Although the internal process is useful in comparing organisational with different outputs it does have its shortcomings. First it is often difficult to quantifiably measure criteria such as group loyalty or good communication, which from this perspective are indicators of good performance. Secondly this approach takes no account of the notation of the equifinality, the means by which two organisations with different internal processes could be equally effective in reading the same goal.
As a result, the organisation’s general manager has to work towards a compromise to ensure the future effectiveness of the organisation. A major strength of strategic constituency approach is that it acknowledges that effectiveness is a complex and multi-dimensional concept that is affected by pressures.

Strategic Constituency Approach:
Strategic constituency model (Conley Et Al 1990) is a more current means of understanding organisation effectiveness; it provides an integrative approach that takes into account the political nature of an organisation. It also acknowledges the fact that organisations consist of a number of constituents which often have different priorities and goals. In a professional sport organisation owners have different goals from players. As a result, the organisation’s general manager has to work out a compromise to ensure the future effectiveness of the organisation. A major strength of constituency approach is that it acknowledges that effectiveness is a complex and multi-dimensional concept that is affected by pressures both internal and external to the organisation. As a result it takes into account the political nature of organisations and the fact that managers have to consider all groups that have an interest in the organisation.

Question 4

The Structure of Sports Organisations

Answer 4

To be effective a sport organisation must be structured to respond to the contextual situations in which it operates. Consequently, an understanding of the different elements of structure is one of the basic tenets of organisational theory. The structure of an organisation is important because it influences the flow of information and affects collaboration, modes of coordination, allocations of power and responsibility and levels of formality (Miller 1987)

The three main dimensions of organisational structure are:
1. Complexity
2. Formalisation
3. Centralisation

Question 5

Complexity

Answer 5

This refers to the extent to which an organisation is differentiated. Meaning the way in which the organisation is divided into different divisions, departments. or individual roles; each with its own tasks and responsibilities. This differentiation may occur horizontally, spatially or vertically.

Horizontal Differentiation-
this occurs as a result of the different parts of the organisation becoming specialised into different activities. This specialisation is carried out in an attempt to increase efficiency and can occur in 2 ways. First the total work to be performed in the organisation may be divided into sperate, discrete and narrow tasks. Second the employment if specialists to perform a myriad of organisational activities and result in diversity trained individuals bringing different roles, approaches and terminology. This can present communication and coordination problems which can in turn increase complexity.

Vertical Differentiation- refers to the number of hierarchical levels in the sport organisations. The more levels that are the greater the chance for problems of communication, coordination and supervision, hence the more complex the organisation. Vertical differentiation is often directly proportional to the size of the organisation and also to the degree of horizontal differentiation. When a job is highly specialised it is difficult for the worker to relate his or her work to that of others so control of the work is often passed to the manager. This has the effect of increasing the number of vertical levels in the organisation. The number of workers that a manager can supervise is referred to as span of control.

Spatial Differentiation- refers to the degree of geographical separation of the various divisions of the same organisation. Thus an organisation based entirely on one site such as a single outlet sports shop has a very low degree of spatial differentiation. On the other hand large oganisations such a the NFL can be considered highly spatial because its franchises are widely distributed throughout the USA. In addition the NFL has part ownership of the European based world league of American Football, this makes the NFL operation a lot more difficult to coordinate and much more complex than a sports goods shop.

The more horizontally, vertically and spatially differentiated an organization is, the more complex it becomes. Increased complexity results in an organisation in which coordination and communication are more difficult and management more demanding.

Question 6

Formalisation

Answer 6

One of the ways of managing complexity is through the use of formalisation. Formalisation refers to the extent to which rules, regulations, job descriptions, policies and procedures govern the operation of the organisation. In a highly formalised organisation such as one that uses production line technique to manufacture goods or equipment, employees will have little discretion or discussion over how and when they carry out their tasks. The head coach of a WNBA team will by contrast find his or her job less formalised, with the freedom to set day to day activities.

Formalisation may not vary just among organisations but also among departments and hierarchical levels in the same organisation. Example: Adidas research and development department will operate under a less formalised conditions than its manufacturing plant. This is a direct result of the research and development department employing highly trained professionals which require a greater degree of flexibility in their modus operandi than do the less skilled production worker. Likewise, because of their need to operate quickly and in the best interest of the entire organisation senior managers are usually subjected to less formalisation than lower level managers. Formalisation allows strict workers control without the necessity of expensive close supervision. It also permits the standardisation of outputs allowing items such as athletic shoes to be designed on one continent, manufactured on another and sold in a third.

Question 7

Centralisation

Answer 7

This refers to the hierarchical level at which decisions are made in centralised organisations decisions tend to be made at the upper level of management n more decentralised organisations similar decisions will be delegated to a lower hierarchical level. As an organisation grows it quickly reaches a point whereby it becomes impossible for a single person to make decisions it would take a very long time to make minor decisions. Consequently decisions that are regarded as less crucial are delegated to lower levels, allowing senior management to concentrate on strategic decisions affecting the organisation.

Organisations that are highly decentralised are often highly formalised. This allows decisions to be made quickly while maintaining top management control of the organisation. This brings into questions exactly how decentralised such organisations are because even thought decisions are made at the lower levels the range of choice in decision making is controlled at the upper level.

Question 8

Organisations

Answer 8

The term organisation has been defined as systems of consciously coordinated activities or forces of two or more persons (Vernard 1938). However many different definitions have evolved since then. While the definitions defer they share 5 common features:
1. A collection of individuals and groups
2. Goal orientation
3. Deliberate Structure
4. Deliberate Coordination
5. Identifiable Boundaries

Question 9

Sport Organisations

Answer 9

Sport Organisations:
A deliberatly structured and coordinated system of individuals and groups with special skills and talents in the sport industry working together to achieve a common set of goals. This definition implies that organisations in the sport industry are comprised of people working together in formal groups to accomplish the goals and objectives of the organisation in the most effective and efficient manner.

Sport Organisations are Deliberately Structured:
Sport organisations need a logical and systematic arrangement of people and resources. Divisions and departments in any organisation are not hastily formulated but carefully determined and coordinated in order to construct an effective and efficient organisation. Sport organisations are deliberately coordinated. This feature implies that the work among the individuals and groups in sport organisations must be coordinated in a pattern relationship.

Sport Organisations Exists as a System of Individuals and Groups:
Organisations in the sport industry do not operate without the human element. Individuals and Grous of people with special skills are the lifeblood of these organisations. Human resources are needed to activate the non-human resources. If we took away the interaction among the individuals and groups the program would have no blood.

Sport Organisations are made up of People with Special Skills:
Sports organisations exist for a reason. Thus feature implies that individuals and groups are selected because they bring special skills. knowledge and competency to an organisation. Each member of an organisation is selected with a skill or competency that will assist the organisation in achieving its goals.

Sport Organisations are Goal Oriented:
This feature implies that sport organisations exist for a reason/ Goals refer to a future state towards which an individual, group of organisation itself strives.

Question 10

Managing and Leading Sports Organisations

Answer 10

Differences between management and Leadership:
How managers use skills in management and leadership is very essential to the success or failure of organisations in the sports industry. In a large and competitive industry such as the sport industry there is a need for sound and balanced leadhership and management approaches. The question is, how does one define and distinguish between management and leadership?

Leadership:
(Kotter 1990) maintained that the processes of management and leadership are 2 distinctive and complementary systems of action… both are necessary for success in an increasingly complex and volatile business environment.

Management:
(Hershey and Blanchard 1988) provided one of the most comprehensive definitions of management. As the process of working with and through individuals and groups to accomplish organisational goals.

They define leadership as the process of influencing activities of an individual or group in effort towards goal achievement on a given situation.

While managers are often leaders, not all leaders are necessarily managers. The term leader is broader than the term manager. Since all employees will act as leaders at some time. Anytime a person attempts to influence the behaviors of others, regardless of the reason, that person is considered a leader. When others rely on a person, that person is a leader even if he/she is not in a managerial position.

Organisations in the sport industry are very dynamic and require managers with special skills and talents in both management and leadership.

Question 11

Management as a Process in Sport Organisations

Answer 11

Most people see management as a process. The process implies that managers use a set of ongoing interactive activities, commonly known as the underlying processes of management, for accomplishing the goals and objectives of their respective organisations, departments or work units. Such processes were first introduced more than 6 decades ago (POSDCORB) this is an acronym that describes the underlying processes of Planning Organising Staffing Directing Coordination Reporting Budgeting

Question 12

Process Approach

Answer 12

Using a set of ongoing interactive activities, commonly known as the underlying processes of management, for accomplishing the goals and objectives of an organsation, department or work unit. In terms of sports organisations we will look at 5 of these processes of management. Contemporary sports management theorists use the process approach to describe the management of sport organisation. although the models differ from one to another, most generally agree about the nature of the management process. Typically the process starts with planning and ends with controlling or evaluation. Managers engage in different activities in different sequences. However, with some performing several activities simultaneously as they carry out the responsibilities of their jobs. The element that is common or universal in all the processes however and whenever they are performed is decision making.

Question 13

POSDCORB

Answer 13

1. Planning: Developing and implementing goals, objectives, strategies, procedures, policies and rules to produce goods and services in the most effective and efficient manner. Example: the general manager of a private sports club predicts the increase in enrollment at the start of the new year and arrange for the facilities to be open 18 hours instead of 15 hours.
2. Organisaing: Arranging resources (financial, human, equipment, supplies, time, space, informational) for producing goods and services in the most effective and efficient manner. Example: After conducting an assessment the general manager establishes a work unit for teaching golf at the club. A full-time coordinator is appointed who will coordinate three teaching pros and a new golf course with adequate budget.
3. Staffing: Recruiting resources (financial, human, equipment, supplies, time, space, informational) for producing goods and services in the most effective and efficient manner. Example: the general manager advertises the position 3 teaching pros, 1 maintenance person and 1 administrative assistant. The general manager then holds interviews, check references, makes job offers and then select the staff needed for the job.

Question 14

Trait Approach to Leadership

Answer 14

The trait approach is based on a set of universal characterisitcs associated with effective leaders. The traits of a leader may be classified in the areas of personality, abilities, and physical attributes. (Woodford 1982) personality is associated with social and personal traits. This approach attempts to develop a logical link between the personality traits of leaders and effective leadership. The basic assumption of the theory is that good leaders may share some common personality traits. If those personality traits could be identified they may be used as criteria in leader identification. The diagnosis of those commonalities may provide people in professional sport with ideas about who to hire as leaders of professional sports leagues. General knowledge, fairness and intelligence are among the traits most frequently mentioned. The people who challenge this approach argue that the possession of those personality traits does not always guarantee that a person will become a good leader.

Question 15

Behavioural Approach to Leadership

Answer 15

The creators of the behavioral approach to leadership believe that people need more than certain personality traits to be effective leaders. According to this approach effective leaders demonstrate one of 2 major styles or dimensions: consideration and initiating structure (Kerr and Schriesheim 1974). Consideration describes the extent to which leaders have relationships with subordinates. Such relationships are established on the basis of mutual trust, respect and consideration of subordinates’ ideas and feelings. Considerate leaders care about their employees and strongly support comradery in the workplace.

Question 16

Situational (Contingency) Approach to Leadership

Answer 16

Unlike the trait and behavioral approaches the common theme of this approach is that there is no single best style of leadership for every situation. Effective managers are those who can change their leadership styles to meet the needs of their followers and the given situation

They are several Models of the situational approach to leadership.
1. Fiedler Contingency Model 1967
2. The path-goal Model Evans 1970, House 1971
3. The Situational model Hershey, Blanchard and Johnson 2001

Question 17

1. Fiedler Contingency Model

Answer 17

Fiedler developed the first situational theory of leadership in 1967 he reported that the performance of a group depends on the interaction between leadership styles and situational variables. Leadership style is determined by a measurement instrument called the least preferred co-worker. This is a projective technique which a manager/leader is asked to think about the individual with whom the leader can work the least well. It is the individual who the manager/leader has had the most difficulty in getting a task completed. It is not about an individual that the leader likes better. It is about identifying the leader as being primarily task oriented or the leader as being relationship oriented. High scores on the instrument are associated with the relationship leadership style. And this is according to Ayman, Chemires and Fiedler 1997.

Question 18

2. Path-Goal Model

Answer 18

Like Fiedler’s model this model attempts to determine the most appropriate leadership styles for different situations. Developed (House 1971), it focuses on how a leader influences followers perceptions of work goals, self development goals, and path goal accomplishment. (House 1971 and Mitchell 1974,1977). The theory has two general propositions. First, the degree of suvordinates’ acceptance of the certain leadership style depends on whether they believe such behavior is an immediate source of satisfaction or instrumental to future satisfaction. Secondly, the leader’s behavior is motivational and affects the satisfaction and efforts of the subordinates. Two contingency variables moderate the relationship between leadership behavior and subordinate satisfaction; the personal characteristics of the subordinates and the environmental pressure and demands with which subordinates must comply in order to accomplish the work goals and to satisfy their needs.

Question 19

3. Situational Leadership Model

Answer 19

The third model in the situational approach to leadership is the Situational Leadership Model developed by Hershey, Blanchard and Johnson (2001). Unlike the Feilder and House model this model consist of 4 patterns of communication that mangers may choose to use in talking to their subordinates or followers. These 4 patterns are telling, Selling, Participating and Delegating. In order to decide which leadership style is most appropriate, managers must be able to assess the readiness of th efloowers and the ability and willingness of the followers to perform a task. Once managers have identified the readiness levels of the person or group they are attempting to influence, they can then choose the most appropriate leadership style. Telling and selling are both primarily leader oriented and one directional communication. Participating and delegating are primarily follower oriented and one directional communication. Participating and delegating are primarily follower oriented and two directional communication. From this model a manager’s primary style can be determined. The primary style is defined a the behavior pattern managers use, most often when attempting to influence the behaviors of others.

Question 20

Transactional and Transformational Approaches to Leadership

Answer 20

Unless the trait, behavioral and situational approaches the transactional and transformational approaches have more to do with a leaders impact on the organisation. The transactional and transformational approaches focus primarily on relationships that managers develop with members in their respective organisation.

Transactional Leadership refers to three types of exchanges that occur between leaders and followers:
1. Contingent Rewarding
2. Management by exception (active)
3. Management by exception (passive)

This is all according to (bass 1985 and Dorothy 1997). Leaders reward or discipline followers in exchange for flowers performing a mutually agreed upon task.

Transformational leaders raise the consciousness of their leaders about the importance of outcomes and how to reach those outcomes by going beyond their own self-interest. Transformational leaders are charismatic pr exhilarating, influential, inspirational, intellectually stimulating,and individually considerate. While most managers engage in both transactional and transformational leadership behaviors, they do so in different amounts (Bass 1985).

Transformational Leadership:
- Charisma: shares a vision and a sense of vision with followers
- Inspirational Motivation: increasing the optimism and enthusiasm of followers
- Intellectual Stimulation: encourages followers to consider new ways to look at old methods and problems
- Individual Consideration: gives personal attention to followers and make each feel important

Transactional Leadership:
- Contingent Reward: gives followers a clear understanding of what is expected of them, then arranges to exchange the rewards.
- Management by exception: monitors followers’ performances and takes corrective action when mistakes or failures are observed
- Laissez- Faire Leadership: little or no leadership or contact is made with the staff members

The sport producing sector is the core of the sport industry and supportive subsectors surround an overlap with the activity producing core. Organisations in these subsectors either provide products and services to the core organisations. Sell or trade products related to sport. This model differs conceptually from the other 2 models in that it places sport at the center and illustrates the dependence of the subsectors on the production of the sporting activity.

Question 21

Ethics

Answer 21

The words ethics and morality are often used interchangeably. Often creating confusion. Ethics is considered on the level of theory or principles whereas morals are observed on the level of practice.

Question 22

Ethics and Behavior

Answer 22

In making decisions, questions arise regarding how one should think and act. The following ethical maxims offered by Laczinak (1983-1994) are helpful guides for making decisions.
1. The golden rule- act in a way that you would expect others to act towards you. Provide superior service to the fans attending a sporting event staged by your organisation.
2. The unitarian principal- acts in a way that results in the greatest good for the greatest number of people. E.x. increased resources as necessary and appropriate to pay for enhanced security at an athletic competition between two teams that are rivals.
3. Kant’s categorial imperative- act in such a way that the action taken under the circumstances would be a universal law or rule of behavior. E.x. Enabling a person to cancel a contract within three days of signing.
4. The professional ethic- take only actions that would be viewed as proper by a disinterested panel of professional colleagues. E.x. requiring athletic trainers in your organisation to be accredited by the national accreditation council.
5. The television test always asks if o would feel comfortable explaining to a national television audience why I took tis action. E.x. commenting on a recent allegation that a college had been arrested on criminal drug violations.

These maxims represents simple and quick considerations a sport manager may use when engaging in critical thinking practices and making decisions. Sports persons should make decisions based on strong theoretical and philosophical convictions. The two ethical theories to be used are teleology and deontology.

Question 23

Teleology and Deontology

Answer 23

Teleology:
Is derived from the greek word meaning end and refers to evaluating the morality of actions or inactions on the basis of results or consequences. It is referred to as a results oriented approach.
Example, donating money to charity produces a greater degree of social benefits than giving the money as a bonus to one of the wealthy executives.

Ruletoruum principles which follows the work of Jeremy Benthem and John Stewart Mills (1939) is a frequently used technological theory. With this approach, the good of the group is considered above the good of the individual therefore decisions are made by selecting the action or inaction producing the greatest social benefit. The result oriented approach is best explained by White (1988) in the principle no harm no foul. Example, if a slight contact occurs in a basketball game and there is little to no harm the greatest good is achieved by allowing play to continue.

Deontology;
Represents the concept of an individual duty owed to a person, organisation or society. Kant’s categorial imperative serves as a prime example.

According to Kant (1959) we should act in such a way that our behavior under the circumstances could be a universal law or rule of behavior. They are three ways to evaluate behavior under this framework:
1. Clearly moral action would be universal. That is it would make sense, consistently for everyone in a similar situation to take the same action.
2. The moral action would demonstrate respect for individual human beings. It would treat others not as a means but as ends in themselves.
3. The moral action would be acceptable to all rational beings. If the actions were made, the basis of a universal law receivers as well as initiators of the action would agree that it was appropriate.

A four step process to follow when trying to ascertain whether a particular decision is ethical;
1. Father as many facts related directly or indirectly to the particular situation
2. Consider whether the action ha utility
3. Respect the rights pf those involved
4. Whether the action results in justice

If your response to any of the previous questions is negative then the action is unethical and vice versa.

Question 24

Sports Marketing

Answer 24

Pitts and Stotlar (2002) defines sports marketing as the process of designing and implementing activities for production, pricing, promotion and distribution of a sport product or sport business product to satisfy the needs and desires of consumers and to achieve the company’s objectives.

Sport as a product differs from other goods and services and therefore must be marketed uniquely based on certain characteristics.
1. Aspects of the sport experience are intangible. E.x. you cannot actually touch competition

2. Sport is subjective and heterogeneous because the impressions, experiences and interpretations about a sporting event may vary from person to person.
3. Sports are inconsistent and unpredictable (because of injury or players, emotional state of players, momentum of teams and the weather. These factors contribute to the uncertain outcome of sports. Sport marketers have little control over these factors yet the unpredictability ha great appeal to spectators.
4. Sport is perishable, because the sport event as it is being played is what spectators want to see. Few people are interested in seeing yesterday’s events, consequently marketers must focus on advanced ticket sales. If the team’s performance is poor or not up to expectations gate receipts will suffer based on the perishability of sport competitions. Sport marketers often offer tangible items that serve as lasting reminders of the overall experience.
5. Sport involves emotions. Some spectators become emotionally attached to their teams and are referred to a fanatics or fans.

Question 25

Ethics and Social Responsibility

Answer 25

Every sport organisation has a purpose for existing. This purpose is defined as its mission statement which represents the values of the organisation. Sport doesn’t exist in isolation; rather it is influenced by social issues and trends, therefore the mission statement of a sport organisation must also consider the values and beliefs that are most prevalent in the environment in which it operates.

Since marketing is critical in encouraging consumers to purchase an organisation’s product and engage in organisation activities events, sport marketers should always acknowledge societal norms and concerns and should not engage in any exploiting or unethical practices. sport marketers’ practices should therefore be derived from and consistent with the mission statement and values of the organisation to ensure that the overall packaging, promotion and delivery of sport will be done in a socially responsible manner.

Marketing in an ethical and honest manner that creates a distinctive and socially responsible image is the best way to position a spots product in the markets. Being ethical and socially responsible will also increase the likelihood of the organisation achieving marketing success and consumer satisfaction.

Question 26

Developing a Sport Marketing Plan

Answer 26

Marketing plans serve as road map or game plans for an organisation’s marketing activities. Having a well developed marketing plan is key to the marketing success of sport organisations. The four primary elements of a marketing plan are product, price, place, promotion.

These are known as the marketing mix and are universally known as the 4 p’s

Product:
a tangible good, a service, or an intangible quality that satisfies consumers wants or needs.

Price:
The value of the product and the cost the consumer must accept to obtain the product, consumers determine the value of a product by balancing the expected benefits of buying the product, consumers determine the value of a product by balancing the expected benefits of buying the product against the expected cost of the product. When the benefits derived from a product against the expected cost of the product. when the benefits derived from a product against the expected cost of the product. When the benefits derived from a product exceeds the cost attached to a product then the consumer believes the product has value.

Place:
The distribution channels that allow consumers to access or obtain the product

Promotion: how it is promoted

Question 27

Step 4:Positioning the Sport Product

Answer 27

Step 4 involves postioing the sport product. According to shank (2002) positioning is defined as fixing your sport entity in the minds of consumers in the target market. The objective of positioning is to differentiate the sport product from the competing products by creating a distinctive image of the product. Distinctive images are created in consumers’ minds based on;
1. The type of consumers that purchase the product
2. The design of the prodct as well as the benefits offered by the product
3. The price of the product
4. Where the product/ event takes place

Sport images can be communicated through logos, symbols, and messages through tv and radio advertisements, public service announcements, jingles, press releases, news articles and featured articles. A sport product perceived by consumers as being unique is well positions to compete successful in selected markets provided the images are positive. The unique message should always convey messages that are positive and socially responsible.

In there landmark work on public relations theory Grunig and White (1992) suggested that effective communication practices consist of several elements;
1. Open and honest communication with the public
2. Images and messages that are socially responsible
3. Cooperation with the public and response to their interest
4. Good faith relationships with the public

Viewing marketing as a means of honest verbak and non-verbal communication that creates a distinctive and socially responsible image of a sport product is the best way to position a sport product on the market.
Positioning the sport product also involves establishing a specific niche for the product in the market. There are six distinct markets for sport.

Primary Markets are composed of:
1. Participants- athletes, coaches and game officials
2. Spectators- Stadium attendees, television viewers, radio listeners and newspaper pr magazine readers
3. Volunteers- Social hosts at sports events, statisticians and team managers

Secondary markets are composed of:
4. Advertisers- use sports to target and communcate their products to large groups of spectators
5. Cooperate sponsors- use sports to target and communicate positive and distinctive images about their products to large groups of spectators
6. Athletes endorsements of products and licensed products- use sport personalities or celebrities or distinctive symbols, logos or trademarks to have consumers perceive products and popular or prestigious

Question 28

Step 5: Picking the Players

Answer 28

Picking the players means anaysing the consumers. The sport marketer analyses the market and target consumers, a process that we can envision or call picking the players that will allow the marketing plan to be successful. This involves grouping consumers according to common characteristics. Sports consumers are heterogeneous and have different wants, needs, interests and behavior regarding sports. To appeal to the uniqueness of port consumers marketers must have information about them. Market research is done to obtain information about sport consumers in 4 areas: demographics, psychographics, media preferences and purchasing behavior. Information collected through marketing research enable marketers to segment consumers into clusters according to the selected characteristics, that process is called market segmentation and is used to identify target audiences.

1. Demographic segmentation- refers to clustering sports consumers based on their age, gender, income, race, ethnicity, education and place of residency.
2. Psychographic segmentation- refers to appealing to the consumers attitudes, interest and lifestyle. The consumer’s needs and motives, perceptions, learning experiences, and opinions. by getting inside the consumers heads and motives, perceptions, learning experiences, and opinions. By getting inside the consumers head marketers are better able to meet the needs of their target market.
3. Market segmentation- based on social media preferences would cluster consumers based on their sport media preferences, such as television, radio, internet, publications and magazines.
4. Purchasing behavior as a means of marketing segmentation refers to grouping consumers according to the frequency of behavior such as how often or frequently, they attend an event or purchase a product.

Market segmentation allows the sport marketer to identify smaller clusters of sport consumers who may exhibit similar wants, needs and interests regarding sport. This process involved target marketing which is zeroing in on specific consumers who are more likely to find a product appealing than attempting to sell products to all consumers.

Target marketing involves identifying different specific consumer groups that would most likely buy the products and therefore help sport organisations meet the goals and objectives of the marketing plan.

Question 29

Step 6: packaging the Sport Product

Answer 29

This includes presenting the sport product in the best possible manner to encourage selected target audience to purchase it. Because consumers differ it is necessary to present the product in different ways. Packaging tangible or industrial sports products involve explaining the benefits of the products, such as the strength and the longevity of certain products, the comfort and safety of helmets and the expanded sweet spot of oversized tennis rackers. However, packaging the core product of sport involves communicating the expectations of the product and providing information before the point of purchase.

Another aspect of product packaging is the manner in which product extensions are included in the overall sporting experience for instance, half time promotions, entertainment and music. This contributes to the overall packaging of the sport event. There may be consumers who are not specifically attracted to the core product, instead attracted to the way the core product is packaged.

In addition, it is important to note that another aspect of the sport product is the associated license merchandise. Many sport teams and events offer goods such as hats, t-shirts, jackets and others as well as non apparel goods such as watches, novelty items and memorabilia and decorative items that are that are perceived as extensions and representations of the teams. Therefore, sport marketing should be mindful of the various tangible and intangible extensions of their sport products or events.

Question 30

Step 7: Pricing the Sport Product

Answer 30

This is determining the value of the product by assigning it a price. Price is the element that is the most visual and flexible because of discounts, rebates and coupons. According to Pitts and Stotlar (2002) marketers such consider 4 factors when developing a pricing strategy.
1. Consumer- analyse all aspects of the consumer
2. Competitors- analyse the consumer perception of the product compared to all competing products and anaylse the competitors’ prices
3. Company- anaylse the cost in producing the product and set a minimum price to cover the cost
4. Climate- analyse external factors such as laws pertaining to pricing, government solution and the political situation

Normally, money is exchanged for products. In sport marketing, however trading is a common practice. According to Grey (1996) sport organisations/events frequently trade tickets, stadium signing and scoreboard advertisement for goods and services.
The value of a product is determine by factors other than price. Each consumer has attitudes, preferences, beliefs and a certain amount of expendable money. besides, price these factors influence how individuals determine the value of a product. Because the value of a product is unique to each consumer.
It is important to develop a pricing strategy that will appeal to as many different consumers as possible. For example, sport franchises set different prices for cooperate season ticket holder charitable organisation, group ticket purchases, mini season tickets purchases, family ticket purchases and single ticket purchases.

Question 31

8. Promoting the Sport Product

Answer 31

Promoting the sport product involves communicating the product’s image to the selected target audience. Promoting sport products involves implementing a mix of activities that will best;
1 Communicate the desired image of the product to the target audiences
2. Educate and inform the target audiences about the product and its benefits
3. Persuade the target audiences to purchase the product

Elements that compose a promotion strategy include advertising, publicity, activities and inducements, public relations, personal selling and sponsorship.

Advertising- one way paid messages about the sport product

Publicity- nonpaid commination about a sport product in which the sponsor is not usually identified and the message reaches the public because it is newsworthy.

Activities & Inducements- promotions to encourage consumers to purchase the sport product

Public Relations- the overall plan for communicating a positive image about a product to the public, including implementing, community, media activities and programmes.

Question 32

Step 9: Placing the Sport Product

Answer 32

Analysing the place of the sport product. Place refers to the location of the sport product, the point of origin for distributing the product, the geographic location of the target and other channels that are important to consider regarding how target audiences may access the product as well as the media distribution outlets consumers may use.

Factors relating to the physical location of the sport can have a favorable or unfavorable impact on the marketing plan. To ensure a favorable impact the sport facility must be easily accessible, have an attractive physical appearance, have a pleasant, convenient and functional environment and have safe, pleasant surroundings.

Sport is unique in the way it is distributed to consumers. The production and the consumption of the product occurs simultaneously for spectators attending sporting events in arenas/stadiums. The sport product is also distributed to consumers regionally and globally through the electronic media of television, radio and internet broadcast.

Ticket distribution is another aspect of sport distribution. The objective of a ticket distribution system is to make consumers purchases accessible, easy, quick and confinement. Some approaches used by sport organisations include using outside companies such as ticket master; ticket outlets at local banks, shopping malls, grocery stores, mobile van units that transport ticket personnel and operations to various locations; onsite stadium and arena ticket sales with expanded hours of operations to various locations; onsite stadium and arena ticket sales with expanded hours of operation, toll free telephone number and will call pick up arrangements.

Question 33

Step 10: Promise of the Sport Marketing Plan

Answer 33

Step 10 is evaluating the extent to which the marketing plan met its promise to help achieve the organisation’s mission. This evaluation requires obtaining feedback about the marketing plan. The feedback must then be anaylsed and evaluated. The evaluation should focus on determining the extent to which the plan helped the organisation. For example, Reebok might establish a mission “to diversify its products to appeal to girls and women” based on a core value of “establishing positive relationships with all segments of the community.” Obtaining feedback from girls and women about the Reebok TV advertisement would be a good way to evaluate this element of the marketing plan. The evaluation might conclude that the TV advertisement achieved the mission and did so in a manner that was consistent with the core values. To evaluate the effectiveness of the marketing plans for some of the Black college sport events that specifically seek to empower the Black community sociologically and economically, marketers may evaluate the number of students who attended the event, examine the financial contributions the events made to the respective HBCU universities, and examine the economic contributions of the event to the local economies.

Question 34

Challenges and Directions in Sport Marketing

Answer 34

In many segments of the sport industry, sport marketers are pressured to increase their product sales in order to generate increased revenues for their organisations. This pressure poses a challenge. Because sport marketers are involved in persuading consumers to buy, they run the risk of exaggerating or mispresenting their products in an effort to sell them. Today and in the future, sport marketers should recognise this risk and monitor their marketing strategies to ensure that they communicate honest images and messages about their products that are consistent with the core values of their organisations.

Sport, like other businesses, operates in a global market and must respond to the rapidly changing racial and ethnic demographics in the societies in which it operates. One factor that sport marketers must be aware of is the influence of race and ethnic identity on sport consumption. A person’s race or ethnicity generally exerts a profound influence on that person’s thoughts, attitudes, and behaviors, including those that pertain to sport consumption. Racial and ethnic influences may be internal or external, Armstrong (2001, 2002).

The changing demographic and psychographic characteristics of sport consumers will increase the overall diversity to which sport marketers must respond as they seek to develop successful marketing plans. The trend of increased diversity in the national and global market will pose a special challenge and yet a unique opportunity for sport managers and marketers in the 21st century (Armstrong, 2001; Desensi, 1994). The increased diversity in the environments in which sport operates will require not only that sort marketers be equipped with marketing fundamentals, but also that they have the skills to adapt them to multicultural sport consumers. This requires developing appropriate and acceptable intercultural communications, packaging features, positioning strategies and distribution channels to reach culturally diverse consumers in domestic and international environments (Armstrong, 2001; McCarthy & Stillman, 1998; Sutton & Wattlington, 1994: Turco, 1996).

Sport marketers of the future will need to examine ways of attracting a diverse base of sport consumers and create multicultural sport spectating and participating experiences. To help achieve this objective, directors of college and university sport management programs must recruit, financially support. and graduate students from demographically and psychotechnical diverse backgrounds to ensure a pool of culturally diverse, qualified applicants from which leaders in the sport industry can hire sport marketers.

Question 35

Definition of Economics

Answer 35

Many people somewhat intimidated by the word economics. For some, it brings back memories of studying how intangible items such as widgets and utils and produced and sold. However, this stereotype if fsr from the whole story. Economics is one of the few academic disciplines that can be applied to almost any human action. Within the field of sport management, economics can help us understand issues such as the price paid by consumers for a pair of shorts in a sporting goods store, the escalating salaries of Major League Baseball players, and the decisions made by a high school athlete to forgo college and play professionally.

Question 36

Economics of Sport

Answer 36

The economics of sport may be defined as the study of how people within the sport industry deal with scarcity. This statement leads to the obvious question: What is scarcity? Scarcity is present in today’s world because there are not enough resources to meet the wants and needs of society. For example, a health club may want 200 different machines available to its members. Unfortunately, die to the scarce amount of resources available to club management, it may have the ability to provide only 50 machines. Economics helps determine how the health club management will decide to distribute its scarce resources not only on machines but also on staff salaries, rent, utilities, and office supplies.

Scarcity is an important issues in sport management because it is encountered by all managers.
managers have a maximum quantity of resources available for their use. Even the ultra-rich New York Yankees have a maximum amount of resources that they are willing to devote to players’ salaries.

It should be noted that the most successful managers are the ones who make the best use of these limited resources. while the fact that the Yankees have the most resources gives them an advantage in winning the World Series, it does not guarantee a championship, as was demonstrated in the 2001 World Series when they lost to the Arizona Diamondbacks. Their management must make wise decisions on how to allocate these resources most efficiently in order to be successful.

Question 37

Macroeconomics and the Sport Industry

Answer 37

Macroeconomics- is the study of the problems and workings of the economy as a whole (Taylor, 2001)

Macroeconomics can be thought of as the “big picture” of economics. Topics such as economic growth and recession, the unemployment rate, and interest rates all come under the study of macroeconomics. While an individual sport business may be more focused on issues such as profits, employee costs, and the price of its product, it should also be concerned with the macroeconomic environment in which it operates. For example, companies such as Spalding, Rawlings, and New Balance that produce sport products may see their labor costs increase when unemployment is low. in another instance, country clubs may experience an increase in membership applications due to a strong economy. Both of these scenarios show how macroeconomics conditions may affect individual sport organisations.

The most important aspect of macroeconomics is the measurement of the value of goods and services produced by a country, as explained by the real gross domestic product (GDP). For the year 2000, the real GDP of the United States was approximately $9.3 trillion (Taylor, 2001). As mentioned earlier, there have been several estimates of the sport and recreation industry’s real GDP.

Successful sport managers must have the ability to determine how economic expansions and recessions will affect their individual businesses.

Inflation Rate:
Another aspect of macroeconomics that sport managers should be concerned with is the inflation rate. The inflation rate is the percentage increase in the overall price level of goods and services over a given period of time, usually one year (Taylor 2001).

Question 38

Sports Facility and Event Management

Answer 38

The difference between sport and entertainment events have diminished to the point where these productions have more in common with each other than they have variations. Not only are these events similar but the skills and competencies required to manage them are also similar.

What types of skills and knowledge should a facility or event manager possess? Each area is unique, but they are also interwoven to the point that it is sometimes difficult to identify which skill is being performed at any time. In fact, most of the time at least two and perhaps three of them are occurring simultaneously.

Types of Facilities:
The many types of sport facilities can be categorized in many ways. Some facilities are single purpose in that they are designed for only one sport. Minute Maid Park (Houston Astros) and Heinz Field (Pittsburgh Steelers) are examples of single purpose facilities, as are softball complexes, golf courses and bowling alleys.

Question 39

Sport Tourism

Answer 39

Since the mid-1990s there has been a growing emphasis on sport-related travel both in the sport and tourism industries and among academics as a topic for study. The Travel Industry Association of America (TIA), one of the foremost research agencies for tourism in the United States, conducted its first study specifically aimed at sport-related travel in 1999 (TIA, 1999). TIA estimated that between 1994 and 1999, 75.3 million U.S adults traveled to take part in an organised sport event either as spectators or participants.

Sport-related travel as a phenomenon stretches back over the centuries. The Greeks traveled to take part in the ancient Greek Games from as early as 900 BC, and the Romans staged immensely popular sport competitions on a regular basis drawing large crowds of spectators (Coakley, 1990). However, in recent years, the term sport tourism has become more widely used to describe this type of tourism, and it has gradually become a specialised sector of the sport and tourism industries.

Sport tourism as defined today, encompasses three main types of travel and sport participation;
- Active sport tourism: a trip which the tourist takes part in sport such as golf

• Event sport tourism: a trip in which the tourist watches a sport event such as the Super Bowl
• Nostalgia sport tourism: in which the tourist visits a sport-themed attraction such as the Baseball Hall of Fame in Cooperstown, New York (Gibson, 1998, a and b).

Sport excursionist- person who travels for sport and is away from home for less than 24 hours

Sport tourist- person who travels for sport and is away from home for more than 24 hours

Tourism sport- persons participating in sport as a secondary activity. The trip is their prime motivation not the sport.

Institutionalized rule set- Loy (1968) described this as the presribed rules associated with a particular sport

Question 40

Microeconomics and the Sport Industry

Answer 40

Microeconomics- is the study of the behavior of individual businesses and households.

Microeconomics is the study of the behavior of individual businesses and households (Keat & Young, 2000). It uses economic theories to explain specific industries such as sport and recreation, automobile manufacturing, and health care. Microeconomics studies variables such as price, revenues, costs, and profits for individual industries and organisations. For example, microeconomics helps to explain why you may walk into two sporting goods stores and see different prices for the same model of running shoe.

Question 41

Supply-Demand Model

Answer 41

Microeconomics often uses models to explain the behavior of producers and consumers. Theses models are simplified descriptions of how markets operate. There are two fundamental aspects of a market: demand and supply. The supply-demand model is the most widely used and most powerful model in economics.

An accurate supply-demand model can provide information on the amount of a product or service that consumers are willing to buy at different prices, and the final price that consumers will pay.

Demand:
Demand is the relationship between the price of a product and the amount of the product that consumers are willing to buy. The amount that consumers are willing to buy at various prices will be referred to as the quantity demanded. In general, consumers will demand less of a product as its price increases, and they will demand more of a product as its price falls. This is known as the law of demand. Demand can be shown through either a tabular or graphic representation.

Supply:
Supply is the relationship between the price of a product and the amount of the product that supplies are willing to produce and sell. The amount that suppliers are willing to produce and sell at various prices is known as quantity supplied. overall, suppliers will increase production as the price of the product increases and decreases production as the price falls. This is referred to as the law of supply.

Market Equilibrium- The price at which the quantity demanded equals the quantity supplied.

Market Surplus- a price at which the quantity supplied of a product is greater than the quantity demanded

Market Shortage- a price at which the quantity demanded of a product is greater than the quantity supplied.

Question 42

Market Structures

Answer 42

The structure of markets is another important aspect of microeconomics. There are many different types of markets within the sport industry. For example, the market for the purchasing of stadium naming rights is much different from the market for athletic footwear. Economists attempt to group markets based on characteristics such as the number of sellers, the ability of sellers to differentiate their products from those of the competition, and the ability of producers to enter and exit the market.

Perfectly competitive market- a market that has a large number of suppliers and consumers; all suppliers produce an identical product, information is shared by all parties, and the market is easily entered and exited by suppliers.

Monopolistically competitive market- a market that has a large number of suppliers and consumers; information is shared by all parties, the market is easily entered and exited by suppliers, and the product may be differentiated across suppliers.

Oligopolistic market- a market that has a small number of suppliers and a large number of consumers.

Question 43

Financial Management

Answer 43

Is the application of skills in the manipulation, use and control of funds (Mock et all, 1968).

Even after an organisation decides how to use the money, the financial manager must decide the method for distributing the money. For example, the Bears may decided to spend the money on a free agent. However, they still must structure the player’s contract. the financial manager would try to determine the differences in cost between giving they player a large signing bonus up front and structuring the deal in such a way that the player will not receive most of the contract until a few years into the future.

Question 44

Structure of Sport Business & Profit vs Nonprofit Organisations

Answer 44

Structure of Sport Business:
In order to make financial decisions, the organization must understand it structure and current nature.

Profit Vs Nonprofit Organizations:
One of the key distinguishing characteristics of organisations is whether they are for-profit or nonprofit organisations. Profit oriented organisations include sporting goods companies, professional sports teams and some sport participation facilities.

In contrast, the pursuit of profit as the primary goal is a violation of the laws governing non-profit organisations. Some nonprofit organisations on sport include most sport teams below the professional level (College, high school), some membership clubs and municipal sport organisations. The primary purpose of these organisations is generally to encourage sport participation among those who would not be served adequately by profit organisations.

While nonprofit organisations cannot pursue profitability as a primary goal, they can be profitable. Some people believe that nonprofit organisations mut end up with no profit at the end of the year, but this is not true. However, laws do govern what they can do with this profit. For example, a nonprofit ski slope cannot give a bonus to an executive based on profitability, but it can reinvest the money in new ski lifts in order to better serve its nonprofit purpose.

Question 45

Sole Proprietorships, Partnerships and Corporations

Answer 45

While nonprofit organizations do not have owners, a distinguishing feature among profit-oriented companies is the partnership structure. Among profit-oriented companies in sport, many organisations are corporations. Corporations have multiple owners who own stock in the company. In some cases, the stock is publicly traded, so anyone can buy an ownership interest in the company. However, some corporations have only a limited number of stockholders, and the stock is not publicly available.

Question 46

Single-Entity Structure

Answer 46

Single-entity Structure- the configuration of a professional sport league in which all of the teams work together as a single unit.

While professional sport teams are all members of a particular league and often share certain revenue sources and expenses, each team is generally operated as a separate entity.

The advantage of using the single-entity structure in these fledging leagues is that it allows the leagues to work thither more efficiently and make decisions that focus more on what is good for the league than on what is good for an individual team.

In addition, it allows the league to set limits for player salaries in a way that would be illegal if they were not using the single-entity structure.

Question 47

Financial Statements and Balance Sheets

Answer 47

While the structure of the business will have some impact on how the business reports financial information, almost all sport organisations develop certain financial statements for their organisations on a regular basis.

Balance Sheet:
The balance sheet represents the financial condition of the organisation as of a particular date. Although the balance sheet is generally reported at the end of a given financial period, a financial manager can generate a balance sheet any time such information is needed. The balance sheet includes three categories; assets, liabilities and owner’s equity.

Assets are the financial resources of the company and include both current assets and long-term assets. Current assets are generated items that are cash or expected to be converted into cash within the next year to meet current obligations.

Liabilities are obligations to pay money to others for goods or services. In other words, liabilities are what are owed to others. Current liabilities are those that are due to be paid in the next year, while long-term liabilities are those that are due sometime after the current year.

Owner’s equity is the owners share of the business resources. it includes both the money the owner has personally put into the company and earning from sporting goods store that the owner decided to leave in the company (retained earning).

Question 48

Sources of Revenues and Expenses for Sport Organisation

Answer 48

Sources of Revenues:
Some of the revenue sources that are unique in sport are a number of items relate to game attendance, media rights, sponsorships and licensing. While events outside of sport typically see the ticket price as the major source of revenue related to event attendance, this is not always true. The total price of attendance od often much greater than the cost of the ticket.

1. Most sport organisations charge fans an additional dee for parking during the event.
2. Fans typically spend money on concessions at the stadium. Purchasing hotdogs, beer, soda, and so on is considered by many fans to be an important part of the game experience.

Sources of Expenses:
Two sources of expenses that are most critical for most sport organisations are the cost of sport facilities and the cost of salaries. Sport facilities can be very expensive. While most sport organisations try to get local communities to help pay for stadia, many are finding they have to pay at least part of the cost. This results in long-term debt payments, which can affect the financial stability of the organisation for many years.

Sports facilities are also costly to maintain. This is particularly a problem on large open-air facilities that may not be used for much of the year but must be maintained year-round (KO).

The increase in salaries in both professional and college sports during the last 30 years has been dramatic (Howard & Crompton, 1995). Players’ and coaches’ salaries often make up more than 50% of the expenses in professional sports, and college coaches are often by far the highest-paid employees on campus.

Question 49

Privatization

Answer 49

An unprecedented boom in the number of new sport/ entertainment facilities in the United States has occurred over the past 10-15 years. The trend began with professional team facilities and has now spread to universities and the minor leagues. A number of new sport/entertainment facilities have also been erected overseas. Individuals who are not in the facility management business often own these new facilities, or they are publicly managed. As a result, the operational efficiency of these facilities is often less than optimum, causing a drain on financial resources.

Question 50

Sociodemographic Characteristics of Sport Tourists

Answer 50

A consistent finding in various studies over the years suggests that active sport tourist in particular tend to be relatively affluent, college educated, white and male (Gibson 1998b). Jo Gosline, sales manager of the National Golf Foundation, reported that ‘traveling golfers are relatively affluent; almost one third have annual household incomes greater than $50,000” (Morse Et al 1992).

Question 51

Sociocultural Impacts of Sport Tourism

Answer 51

It is well documented in tourism studies that tourism can have both positive and negative effects on a host community. Some of the positive effects relate to economics, with tourism being a major source of income and employment for an area. Tourism may also lead to a renewed sense of pride among community members, whether it is in relation to showcasing their town or city to visitors or the rightened sense of excitement and community identity that frequently accompanies an event, especially if residents take an active role in it through volunteering (Garnham, 1996).

Psychic income- the pride people have in their community generated by hosting a sport event.