Corporate Social Responsibility In Professional Sports Marketing Essay
Corporate Social Responsibility has become an increasingly important area for many companies. In terms of participated in CSR, it has been resulted a number of benefits that can ultimately improve financial performance as well as awareness for many organizations. (Porter ME, 2006) Meanwhile, it also improves lives to social issue in general. Like Lord Holme and Richard Watts have beautifully defined CSR as:
"Corporate Social Responsibility is 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" (Watts, Lord Holme and Richard, 2000)
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Until recently, corporate social responsibility is widely adopted in the professional sport industry as well. According to the uniqueness of the sport industry in society, many researchers argue that the nature and role CSR plays in a sport organization may be different than in other industries. (Babiak, K. & Wolfe, R., 2006)
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Sports possess a unique ability to unite a diverse group of individuals and the positioning of athletics in popular culture enables athletes and franchises to bring awareness to a range of social issues. As the presence of sports in todayâ€Ÿs culture continues to grow, so does its ability to deliver CSR and have a positive impact on communities across the world.
With commercial organisations increasingly dedicating resources to CSR,
there exists the opportunity for the development of a partnership approach whereby a
sport organisation is the recipient of corporate funding to undertake the role of CSR
delivery agency for the commercial organisation (Smith and Westerbeek 2007). Such a
partnership will enable a sport organisation to receive the necessary resources to deliver
CSR programmes, while the profile of the commercial organisation may benefit from
an improved public perception, increasing the potential for business success.
As in different successful sport organizations and leagues use their social responsibility efforts as a way to improve their public relations and marketing strategies. ("Sports Philanthropy" 2009) For instance, the example of basketball program from NBA- NBAcares , which reaches communities through philanthropy, hands-on service and legacy projects. As David Stern, NBA commissioner says
"To date, the league, teams and players have donated more than $210 million to charity, provided more than 2.3 million hours on hands-on service and built more than 760 places where kids can live, learn or play in communities worldwide." (2012-13 NBA Cares Community Report, 2012-2013)
However, CSR in Asia still lags behind, compare to the level of involvement of integrated in CSR activities in the West. (Eleanor Chambers, Wendy Chapple Jeremy Moon & Michael Sullivan, 2003) As for many developing countries' institutions, standards and appeals system in Asia, that caused obstacles to achieving corporate responsibility. (Kemp, 2001)
Thus, the purpose of this study is to increase understanding of how Asia countries, especially in ASIAN countries professional sport teams' CSR-related efforts. This study will evaluate the differences in different teams in different countries in the league and determine the factors and motivation that influence their involvement on CSR. Asian basketball League (ABL) was the main investigate of study, which involves six teams: Indonesia Warriors, Malaysia KL Dragons Singapore Slingers, PhilippinesÂ San Miguel Beermen, Vietnam Saigon Heat and Thailand Slammers prospectively.
The next section will talk about Literature review on CSR and implication in professional sports and then it will be methodology that discussed based on finding and analyze of the data. Next, section 4, examines limitation of the study and last, summarized research conclusion.
2. Review of Literature
This literature review explores the rationale for sports organisations employing Social Corporate Responsibility activities. As discussed in the introduction session examines CSR in professional sport industry using the Asian Basketball League (ABL) as the case study. Areas to be discussed are factors affecting CSR practice within these six teams in the league, the impact of brand ambassador on the brand image, as well as evaluation of the impact of CSR practice.
2.1 Social Corporate Responsibility - the business context
CSR creates a landing place in the mind of the target consumers. It not only caters to the brand equity awareness among consumers but also leads to a positive brand image in the mind of the potential consumers. Therefore, companies see it as tool to build connections with society and to reach more potential consumers.
In addition, most of companies believe corporate social responsibility not only because its right thing to do, but also it helps strengths their brands. The relationship between brand image and corporate social responsibility is strongest for familiarity, not for favourability. If the company is well-known in the market, its corporate social responsibility activities will help strength their brand image and reputation of the company compare to company were less well-known.
Historically, the responsibility of firms was purely to maximize profit for shareholders. In 1962 Friedman considered maximization of shareholder wealth as the sole objective and responsibility of the well managed firm (Blackburn 1994). And later, Ullmann (1985) described CSR as "the extent to which an organization meets the needs, expectations, and demands of certain external constituencies beyond directly linked to the company's products markets"
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In 1979, Archie B. Carroll, argued that CSR compose of four observed sub-categories of corporate obligations: economic, legal, ethical and discretionary. In his model, he suggested economic responsibility is paramount because companies must be profitable in order to maintain business and contribute society. Followed by legal, it is clear, all companies have to follow the law and regulations, and then ethical, Carroll defined ethical responsibilities as going beyond economic and legal responsibility as "additional behaviours and actives that are not necessarily codified into law but nevertheless are expected of business by society's members" discretionary. Finally, the discretionary is about actives that go beyond social expectations
2.2 Social Corporate Responsibility and sport
Sport is not as simple as playing the actual game, it goes beyond than what happens in the field of play. the players or associations, they continue their commitment to business by behaving ethically and contributing to economic development while improving the quality of life of the local community and society at large (Making Good Business Sense by Lord Holme and Richard Watts). The recent trend of sport organization involving in CSR has various impacts on the entire society. In England, football clubs are showing great commitment in giving back to their communities. They hold project such as "Playing for Success" that focuses on social inclusion and educational-based initiative. This shows that football clubs can be a positive role in the community to contribute to a better future. (McGuire and Fenoglio 2004; Brown et al. 2006). In executing their CSR projects, these organizations use well-known players and depict them as role-model so that they can promote the image of their league and teams as well. It also gives an opportunity for players to build close relations with fans off the field and passing positive messages to their supporters.
2.2.1 Unique Features in the Justification for Deploying CSR
In recent years, professional sports organizations are entering into socially responsible initiative at a rapid pace.Nearly all professional sports teams have established charitable foundations over the past decade and a half. From football to basketball, almost all teams within each sports league have established their own foundations because it benefits both community and the sports organizations. Consumers also increasingly expect companies to make a boarder contribution to society. Due to it unique position in the market, it has unique ability to influence positive change in communities around world. Smith and Westerbeek present seven unique features that sport used on CSR:
In addition, sports leagues also have seen the rise in individual athlete foundations. Because of sport's unique ability to influence communities; it has increased CSR in order to improve their image and continue to draw support from fans. Babiak and Wolfe revealed how CSR is becoming institutionalized in professional sports and identified the internal resources and external pressures from customers, team employees, corporate partners and other stakeholders to become increasingly engaged in CSR. They also highlighted in their paper or newsletter that professional sport teams and league have unique resources for them to post their CSR programs. These resources include: ticket donations, signage, facilities, events access to media, suite holders, vendors, and sponsors, and the professional staff of the team (layers, trainers, accountants and owners)
CSR take a lot of resources and efforts to company, therefore after the implementation of such program, it is important to evaluate it as many firms tend to lose focus on big projext, evaluation is also important in assessing whether the program is fruitful, this leads to the result on the first research question:
Q1: After engaging in the practice, does the organization achieve the fundamental purpose of CSR? how to measure it?
2.2.2 Factors affecting CSR Practices
However, I believe that the following factors are quite different in the realm of professional sport and are of particular relevance to CSR design, implementation and impact in sport: passion, economics, transparency and stakeholder management. (Babiak and Wolfe)
One differentiating attribute of the sport industry may have to do with the passion and interest the game, team or players among fans and consumers (Cashman 2004) fans can be influenced by their idols on and off the court/field. For example, healthful living may generate a larger, more attentive audience than would employee in other fields. Consequently, the passion and identification that sport teams generate can be beneficial to communities as a whole by encouraging and strengthening community integration.
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There are some unique economic elements of the sport industry that result in different expectation of sport than of other industries. Many sport leagues as being cartels, having close to monopoly power and with special protection from government. Sport leagues often receive public funds for related infrastructure, which will lead some stakeholders to have higher perception of the role and responsibility of professional sports teams and provide social benefit and return to community.
Almost everything achieved by the leadership of a sport team such as how much money spent on player signings, player salaries, as well as team outcome, it has to open to public especially to the fans. In addition, off the court/field behaviour of a team's employees also Influence by athletes life style and behaviours .therefore, sport organizations engage in CSR activities to maximize and improve their image. And consumers are easily to forgive and forget well-known brands when they made mistakes.
Success In the sport industry necessitates the ability to work within a complex set of stakeholder relationships, a team cannot operate without the cooperation of many organizations. Build up good relationship with stakeholders such as the media, players, various levels of government, sponsors, fans, and local communities, can benefit from CSR activities.
The above discussion has shown that these four factors are important for companies engaged to CSR. However there are no general rules that can be applied in all countries with different culture and norms. Therefore this leads us to the second research question:
Q2: Based on Which factors affect CSR most in Singapore?
2.2.3 Impact of Brand Ambassador Behavior on Brand Image
However, players do not always present positive images to their supporters. This poses as a problem as reputation is the single most valued asset of an organization and an individual. (Gibson, Gonzales&Castanon, 2006) Simply, positive reputations are beneficial to the success of individuals and organizations whereas negative reputations can damage and destroy individuals and organizations (Gibson, Gonzales&Castanon, 2006). 5 A real example of player misconduct problem would be the NBA famous "Palace of Auburn Hills fight" .In November 2004 NBA fans witnessed one of the ugliest player-fan altercations in the history of sports. Several NBA players fought with fans both on the court and in the stands. Most notably, Ron Artest, a player from Indiana Pacer, ran into the stands to fight with a fan. This incident results in five NBA players and seven fans charged with misdemeanors that included assault and battery ("Five Pacers", 2004). The main perpetrator, Ron Artest, was given the longest suspension. He was eventually suspended for a total of 86 games and the players involved were suspended as well after paying more than $11 million fine. Artest himself lost nearly $5 million. It was one of the worst moments in NBA as well as in sports-history that gave enormous impact on NBA reputation. (Richard A. McGowan, 2009)
There are many other examples where players act inappropriately and therefore, affecting their image and the company's image in the public eyes. An NBA well-known player, Kobe Bryant, once had reputation damage in 2004 when he was sued with rape charges. Although charges were eventually dropped, Bryant lost a sponsorship from McDonalds and it has taken him years to rebuild his image and reputation ("McDonalds cuts," 2004). Another example is the current Manchester United football player, Wayne Rooney who lost his sponsorship contract with Nike, Coca-Cola and EA Sports after his sex scandal was made public. (Greig Box Turnbull 2009). After several hard years of rebuilding their reputation, these two notable athletes are now often seen in charity activities while setting up their own charitable foundations. They believe that investing heavily in corporate social responsibility actions will help them improve their reputation.
If consumers like the brand, the CSR imitatively become more effective. Brand ambassadors are the living personality and representation of the brand therefore, their behaviour and attitude have significant impact to the brand image. This lead the third research question:
Q3: Does the use of brand ambassadors in CSR enhance the affinity of the brand?
2.3 Social Corporate Responsibility in sport - a case study
Babiak and Wolfe have highlighted in their paper that professional sport teams and leagues have unique resources for them to deploy their CSR programs and generate perhaps greater awareness for social issues than businesses in other industries. Their study suggests that sport companies or organizations use CSR as a means to further the strategic position of the sport organization and also, they are favour using a multipronged approach to deliver their community outreach efforts during those events and expect to benefit from these activities from both an altruistic and strategic perspective.
CSR initiates - comparing approaches
Different leagues have programs that benefits community by outreach initiatives. The NBA'S "Read to Achieve" program is a community outreach initiative implemented by individual teams to encourage youth to read, "Basketball without Borders" initiative involves a summer camp for young people designed to promote friendship, goodwill and education through sport. In this year thanks giving day, the NBA and its teams and players are out in their communities hosting hundreds of charitable events across the country.
Same as in local basketball organization, Singapore Slingers have passionately pursued a "grass roots" foundation in the community. Over the past five years, the Singapore Slingers have teamed up with over 480 schools, organizations, and sponsors (with some being repeat hosts and partners); giving approximately 3,000 volunteer hours from all of our players reaching out to nearly 42,000 people.
Recently, Singapore Slingers take time out with youth prisoners in SportsCares Foundation Progamme and joined youth mental wellness initiative WholeTree Foundation. The increase in social responsibility activities which helps the team enhances the image among fans and also benefits organization.
There is no doubt that there will still increase in emphasis on CSR and philanthropy in professional sport, not only NBAcares in NBA, but also local basketball team as well as other sports will participate into CSR.
4. Limitation of study
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