Special Artticle : Contribution of sport to business and society

 

Sport events, programs, activities or facilities have been increasingly touted as an important tool in addressing social issues including community development, well-being, health, education, societal equity, sustainability and peace by various organizations including for-profit companies, non-profit organizations, government and sport organizations. One good example is the collaboration between the First Lady’s Office’s Let’s Move! campaign and the NFL PLAY 60 to combat childhood obesity and make children active and healthy. The First Lady’s Office launched the Let’s Move! campaign with multiple partners including the USDA, U.S. Department of Health and Human Services in order to promote healthy eating and active and healthy lifestyles for kids. The NFL also has numerous partners including corporation, government and NPO for its PLAY 60 initiatives for youth health and fitness. In spite of the popularity and expected outcomes of these programs, there has been little empirical research to examine the actual social impacts, effectiveness or values of sports in society and measure the actual outcomes from sport-based social initiatives. This might be owing to the intangible or unobservable characteristics of the outcomes of sport-based social initiatives which deal with goods or services that are difficult to quantify or value, for example, in areas related to health, well-being, environment, 2 societal equity, education, sustainability and peace. Often, this intangibility or unobservability of the outcomes can lead to low awareness of and even skepticism toward the social initiatives from various stakeholders including the general public. Therefore, more quantifiable, standardized and systematic measurements would be useful to efficiently communicate the roles, effectiveness, impacts or values of sports for those areas in society. These measurements can help persuade policy-makers and various partner organizations including corporate sponsors, governments and nonprofit organizations (NPOs) / non-governmental organizations (NGOs), of their justified roles, investments, and outcomes in sport related social initiatives. Thus, the objectives of this dissertation work were to: a) develop a new conceptual framework to measure the contribution of sport to society and to justify the roles and resources of and benefits to actors such as corporations, NPOs/NGOs, sport organizations and government in the forms of sport-based collaboration; b) develop a more quantifiable, standardized and systematic instrument to measure the intangible social values of sport in society and offer the actual measurement outcomes of the specific sport activities by applying the instrument into a specific context of sport with a target population; and c) to empirically examine how the measured societal value of sport could be leveraged to enhance the economic and social performance of multiple sponsor/partner organizations. With the objectives in mind, I first provide an analytical framework that 1) includes an examination of various types of collaboration mechanisms including philanthropy, patronage, sponsorship, cause-related marketing, brand alliance, cobranding, social partnership, social alliances and corporate social responsibility, 2) 3 theoretically summarizes motivations, objectives and expected outcomes for business corporations, NPOs/NGOs, sport organizations and society through sport-based collaboration, 3) discusses measurement of the actual outcomes to society via/of sport and suggests five core measurement variables including social capital, collective identities, health and healthy environment, well-being and human capital as the contribution of sport to society and 4) theoretically explains why the measurement of the outcome is important and how the measurement can be leveraged for the economic performance of sponsor/partner organizations. It is important to frame this research in this way because we can pursue the win-win-win relationships among corporations, nonprofits and society via sport. In order to empirically assess this proposed framework, I developed and applied an instrument to measure the intangible social values of sport in society in terms of social capital, collective identities, health literacy, well-being and human capital. The instrument includes two types of measures including composite measures and global measures. While the composite measure is theoretically sound, there are limitations in applying it into the practical study because the length of the measure might lead to respondent fatigue and bias. In order to overcome the practical limitation of the composite measures, global measures were developed and tested for efficiency and representativeness for the composite measures. One of the most important implications from testing the instrument is the role of marketing communication in measuring and maximizing the intangible social values of sport in society because those who are not aware of a major charity sport event do not perceive any social values of sport in spite of their exposures to and participation in various sport activities. Therefore, collateral 4 marketing communication activities should be effective to make the stakeholders including the general public better aware of sport-based social initiatives and their roles in the context of cause-oriented sponsorship or CSR. Subsequently, the tested instrument was adapted into the specific measures for the social values of sport activities in the population of children with special needs to offer the measured outcomes as valued communication assets for sponsor/partner organizations who are willing to contribute to society via the forms of collaboration including sponsorship, or corporate social responsibility practices. To address the third objective of this research, (i.e., to demonstrate why the measurement of the intangible social values of sport in society is important), I used an experimental design to examine how the measured societal values of sport can be leveraged to enhance the economic and social performance of multiple sponsor/partner organizations. Contingent valuation method was adapted to measure willingness to donate (WTD) to the partnering NPOs as one economic outcome to NPOs from the sportbased collaborative social initiative. The perceived fit between a corporation and a NPO, and the perceived corporate social performance were measured as outcomes to the sponsoring corporation from the sport-based collaborative social initiative. I posit that, fit is one of the most influential variables to determine the sponsorship outcomes to corporate sponsor (e.g., Cornwell et al., 2006; Cornwell, Weeks, & Roy, 2005; Speed & Thompson, 2000). I also speculate that, stakeholder assessment of corporate social performance (CSP) (Barnett, 2007; Luo & Bhattacharya, 2009, p.198; McWilliams & Siegel, 2001) can reduce idiosyncratic risk for the firm and enhance image, customer satisfaction and brand loyalty (Brown & Dacin, 1997; Luo & Bhattacharya, 2006; 2009). 5 In conclusion, this work provides highly valued information that offers an opportunity to measure the utilitarian or functional value of sport to society. 

Increasingly, sports are becoming a popular means, a “ride along” vehicle in many instances, for social contributions to society. These collaborative ventures often involving corporations, NPOs/NGOs, governments and sport organizations take many forms. Following are some examples. “UNICEF and FC Barcelona signed a five-year partnership to raise awareness and funds to benefit children affected by HIV and AIDS. FC Barcelona donates €1.5 million per year over five years to help fund projects aimed at combating HIV and AIDS in Africa and Latin America. Along with the funding, the football club is featuring the UNICEF logo on its 2006-2007 jersey, the first placement of its kind in the club’s 107 year history. This commitment to UNICEF and the world’s children reinforces FC Barcelona’s motto, ‘More than a club’ ” (UNICEF, 2009). “Children’s Healthcare of Atlanta is one of the designated charities of the AT&T Classic Golf Tournament. Including the 2007 donation, the tournament has now contributed more than $15 million to its primary charity, Children’s Healthcare of Atlanta. Children’s, formerly known as Egleston Children’s Hospital, has been the primary recipient of tournament proceeds since 1981” (PGATOUR, 2009). “The world's largest corporate running series is continuing its long-standing tradition of supporting charities and institutions that contribute to an overall quality of life in the communities served by JPMorgan Chase. In 2009, the Series will donate more than $600,000 to charities and organizations in host cities around the world. The JPMorgan Chase Foundation makes a donation for each entry in the Corporate Challenge Series” (JPMorgan Chase & Co., 2009). “The Prostate Cancer Charity and the Tour of Britain, the UK’s premier professional cycling race, have joined forces to create two mass participation events- the first of their 7 kind in the UK. Cyclists of all abilities will take to their bikes and raise money to help this important cause. As the official car partner, Honda will provide a fleet of around 40 more Honda Civics, CR-Vs and Insights for the event. This partnership with Honda is also testament to the fact that the Tour of Britain is an ideal platform for brands wishing to align themselves with Britain’s best Olympic sport, while also addressing their corporate social responsibility needs” (Tour of Britain, 2009). While sports in and of themselves have always been seen as a positive societal force, new cross-sector collaborations are creating new challenges and opportunities. In fact, these collaborative activities that seek to support social good have become common place in the last three decades. Austin (2003) argues that cross-sector collaboration will be much more prevalent in this new century for several reasons. First, “the growing complexity of the socioeconomic problems facing societies transcends the capabilities of single organizations and separate sectors, Secondly, boundaries between business, civil society, and government are increasingly blurred. Third, societal expectations of business to contribute to the resolution of social problems are rising” (Austin, 2003, p.37). I, however, note that there is little research done to date examining these collaborative initiatives through sports between corporations, NPOs/NGOs, and sport organizations. The challenge and opportunity is that while business may seek to expand their social contribution, they must still be responsible to shareholders. Also, there is a need to align partners such as corporations, NPOs/NGOs, sport organization and governments in ways that lead to mutual benefit. With this objective in mind, I bring together literatures from marketing, management, economics, and more specifically sport management and consumer behavior. I intend to provide an analytical framework that includes an examination of: 1) types of cross-sector relationship mechanisms, 2) motivations and 8 objectives for actors to work together through sport, 3) evaluation of collaborative activity outcomes, and 4) benefits of measurement to actors. The emphasis on measurement and benefit to partners is important because it takes a transformative consumer orientation. Mick (2006) explains that in transformative research investigations are “framed by a fundamental problem or opportunity…and…strive to respect, uphold, and improve life in relations to the myriad conditions, demands, potentialities, and effects of consumption” (p. 2). Because sport involves production and consumption and because ultimately I measure the consumption activities in communities such as in the donating behavior of individuals, the participation of individual athletes, the awareness of audiences and the health and welfare decisions of people, I have consumer as well as organizational benefactors in mind. Thus, importantly, clear theoretical support and objective measurements of sport related outcomes will encourage corporations, and NPOs/NGOs and governments to participate in collaborative sports initiatives that are supportive of societal goals.

Types of Corporate Cross-Sector Relationship Mechanisms

 Corporate cross-sector activities oriented toward social good usually take already established forms including sponsorship, philanthropy, corporate social responsibility (CSR) activities, cause related marketing, corporate social marketing, cause branding, cobranding, mission marketing, social partnership and social alliances (Drumwright & Murphy, 2001, p.162). I briefly review eight of the most popular mechanisms and comment on the form they take as well as the power balance suggested in the relationship. These include philanthropy/patronage, sponsorship, cause related marketing, brand alliances, social partnerships, social alliances, and corporate social responsibility.

Philanthropy/Patronage Drumwright and Murphy (2001) categorized philanthropy as either traditional or strategic. While the former is referred to as “the paradigmatic case of a company initiative with low emphasis on economic goals,” the latter “represents the tying of the philanthropy function and budget to the company’s strategic objectives and markets” (Drumwright & Murphy, 2001, p.165). Seitanidi and Ryan (2007) define corporate philanthropy as corporate contributions to non-profit organizations (NPOs) in cash, products, material or labor with no or little expectation of public recognition for its behaviors (Seitanidi & Ryan, 2007). The balance in this relationship between corporations and NPOs is not symmetrical because corporate motivation for those behaviors is based on one-way giving (Seitanidi & Ryan, 2007). Patronage, a similar concept, is referred to as “a more altruistic and less commercial form of business support than sponsorship” by the Association for Business Support for the Arts (ABSA, 1997, p.3; Seitanidi & Ryan, 2007, p. 250). As it originated from a class-based ancient Roman arts society, the “patron” also has an asymmetric relationship with the NPO (Seitanidi & Ryan, 2007). Sponsorship While modern-day sponsorship may have roots in philanthropy, it has evolved to become a market-driven phenomenon. Sponsorship is defined as “a cash and/or in-kind fee paid to property (typically a sports, entertainment, non-profit event or organization) in return for access to the exploitable commercial potential associated with that property” (IEG, 2000, p.1). Seitanidi and Ryan (2007) subdivide sponsorship as commercial sponsorship and socio-sponsorship. Both supposedly have symmetric relationships with 10 properties based on exchange compensations such as sales promotion, advertising, reputation and image. While commercial sponsorship is motivated as “tools of sales promotion and advertising” (p.249) to expect a predominantly tangible benefit, sociosponsorship is related to corporate social responsibility and intangible outcomes. Sociosponsorship aims to increase intangible benefits such as reputation and image with limited tangible benefits (Seitanidi & Ryan, 2007). Also, socio-sponsorship is defined as “the vehicle through which resources are justifiably allocated from the profit to the nonprofit sector, when the company’s primary intent is the attainment of social responsibility, accompanied by compensation rewards” (Seitanidi, 1999, p.33). Following these definitions and observation of enacted sponsorships, this is a major form of CSR through alignment with sports. Cause Related Marketing Varadarajan and Menon (1988) define cause related marketing as “the process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specific amount to a designated cause when customers engage in revenue providing exchanges that satisfy organizational and individual objectives”(p.60). There is also argued to be a symmetric relationship between corporations and NPOs based on mutual benefits such as increased sales for the company and increased funds for the NPO (Seitanidi & Ryan, 2007). This accepted definition of cause related marketing is narrower than the constituent terms suggested because it is limited to transactional exchanges. Narrowed to transactional exchanges, cause related marketing activities may have limited scope in international projects. Brand Alliances 11 Rao, Qu, and Ruekert (1999) define brand alliances as “all circumstances in which two or more brand names are presented jointly to the consumer” (p. 259). It includes joint promotion, dual branding and co-branding (Washburn, Till, & Priluck, 2004). Joint promotion is referred to as a circumstance where partner brands are presented as complementing one another, such as in the case of Smirnoff Vodka and Ocean Spray Cranberry Juice (Rao et al., 1999). Dual branding describes the circumstance where two brands share the same space, such as in the case of Tim Horton’s and Wendy’s (Levin & Levin, 2000). Co-branding involves the physical integration of two brands, such as in the case of Ruffle’s potato chips with K.C. Masterpiece barbeque sauce flavoring (Levin & Levin, 2000) . “Brand alliances build brand equity by transferring new associations between partner brands or involving a short or long term association between two or more individual brands or other distinctive proprietary assets” (Dickinson & Barker, 2007, p. 77). In many instances, associations between nonprofit and commercial entities are designed to develop the reputation of the commercial ally because non-profit brands have higher levels of trust and confidence that can be transferred (Austin, 2000). One could, however, imagine a charity being the recipient of corporate reputation, when for example, a small local charity, which might be little known to the public receives support from a major corporate brand. This could easily be the case in cross-sector partnerships for sport. Social Partnership Since arising in their modern form, with high social awareness of activities, social partnerships have been recognized as a popular collaboration method between corporations and NPOs (Brehm, 2001). Waddock (1988) defined social partnership as 12 “a commitment by a corporation or a group of corporations to work with organizations from a different economic sector (public or non-profit) in terms of resources, time and effort to benefit all partners by addressing social issues beyond traditional boundaries and goals of corporations” (p.18). The term “partnership” suggests equality in the relationship, but resource contributions may determine the power balance. Social partnerships are a natural form for many social sport investments since they frequently involve publicprivate collaborations for sport facilities – and other initiatives .Sport facilities are commonly supported by corporations seeking goodwill in the community and brand awareness for products (Cornwell, 2008). Social Alliances Andreasen and Drumwright (2001) define social alliances as “any formal or informal agreement between a non-profit organization and for-profit organizations to carry out a marketing program or activity where: Both parties expect the outcome to advance their organization’s mission; the corporation is not fully compensated for its participation; there is a general social benefit expected” (Andreasen & Drumwright, 2001, p.100). Drumwright and Murphy (2001) refer to social alliance as “collaborative efforts between companies and nonprofits that encompass close, mutually beneficial, long-term partnerships designed to accomplish strategic goals for both entities involving the sharing of resources, knowledge, and capabilities” (Drumwright & Murphy, 2001, p.169). Power imbalances have been frequently identified in social alliances and may restrict their potential, especially when it results in partner resources not being recognized or utilized (Berger, Cunningham & Drumwright, 2004). Thus, power balance is a critical condition in social alliances when corporations seek to impose a strategy on the social initiative. 13 Corporate Social Responsibility (CSR) There have been numerous efforts to define CSR over the past fifty years (e.g., Bowen, 1953; Carroll, 1979; Holme & Watts, 2000). Carroll (1979) proposed a definition of CSR as the social responsibility of business encompassing “the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time” (p.500). Holme and Watts (2000) defined CSR as “the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large”(p. 8). The first definition implies pressure to perform CSR activities while the latter suggests a volunteering participation. These definitions highlight CSR “writ large” as motivated behavior that may take many forms and would certainly apply to cross-sector collaborations in sport for social cause. Based on the definitions of various corporate cross-sector mechanisms, I summarize that CSR activities, and / or actions based on CSR intentions, have a long history as a relationship mechanism between business and society. It is also the case that CSR, in a general sense, is a bigger, broader and more general concept than philanthropy, sponsorship, cause related marketing, social alliances and social partnerships. Therefore, I have adopted CSR as a general frame for the implementation of corporate cross-sector partnerships and include socially-oriented strategic philanthropy, sponsorship, causerelated marketing, brand alliances, social alliances and social partnerships as mechanisms for each partner to enact social responsibility. Thus, CSR becomes a centerpiece of our subsequent analysis of the firm.