Alex Curry

(1)

Alex Curry

130323079

Social beacon or business: Institutional complexity in

the modern football industry and organisational

strategic responses

Newcastle University

Groningen University

Advanced International Business Management Dissertation

Supervisors: Laurence Vigneau & Esha Mendiratta

04/12/17

(2)

Abstract

This research offers an empirical insight into the organisation level challenges faced by contemporary football clubs as a result of operating within a multi-institutional setting consisting of paradoxical social welfare and commercial logics. Extending upon this initial phase of research, this study explores the micro-level strategic responses to this complex environment and the resulting behavioural outcomes, analysing the mechanisms utilised in order to operate effectively amongst such complexity. This research adds to a growing stream of literature regarding the complex institutional context of modern sporting industries and how this environment influences the encompassed organisations.

This research is conducted utilising a collective case study approach comprised of football clubs of varying financial capability and traditional prestige within the traditional epicentre of the global football industry; England. Primary research is conducted through semi-structured interviews with directorate level individuals; alongside secondary research into the sample organisations’ published annual reports and online CSR disclosure.

(3)

(4)

Acknowledgments

(5)

Chapter 1: Introduction

Within current institutional logics literature, the recent conceptualisation of “institutional complexity” is a focal point. This theoretical notion centres upon the inference of multiple institutional logics to often be present with a single institutional field; therefore subjecting organisations to a diverse array of organising principles opposed to a singular set of prescribed objectives and behaviours (Greenwood et al, 2011). This diversity in institutional demands placed upon organisations is argued to cause a degree of managerial confusion in light of the required prioritisation of often-incompatible goals within multi-institutional settings (Greenwood et al, 2011; Battilana & Dorado, 2010). Consequentially, the interpretations and mechanisms of relieving the tensions incurred through diverging stakeholder demands are argued to often vary across firms; thus making the behaviour of organisations subject to these almost paradoxical demands an area intense discussion amongst current scholars (Pache & Santos, 2013).

(7)

responses to institutional complexity, presenting the applicability of differing behavioural mechanisms in alleviating the pressures of multi-institutional settings.

Within the academic arena of institutional logics theory, football clubs are widely acknowledged to be unique due to the presence of intensely conflicting stakeholder demands within their operations (Kolyperas et al, 2015; Carlsson-Wall et al, 2016).These organisations are situated within a field of co-existent commercial and social welfare institutional logics that are fundamentally divergent in the values they hold; this representative of the modern notion of co-existent yet incompatible logics to be present within institutional fields (Greenwood et al, 2011; Carlsson-Wall et al, 2016). This research therefore adopts this particular industry as an intriguing area of research regarding the organisational challenges and strategic responses involved in modern institutionally complex settings.

Institutional field of the football industry

(8)

Despite the community-focused traditions of English football, this country has been central to the exponential rises in broadcasting, merchandising and sponsoring incomes associated with the recent global commercialisation of the sport (Kennedy & Kennedy, 2012). In light of this, these entities that are traditionally embedded within the fabric of society are now placed in a position of tremendous wealth; this ultimately incurring intense rises in industry competitiveness in which strategic commercial navigation is imperative for sustainable existence (BBC News, 2013; Deloitte, 2017; Duke, 2002). This environment is ultimately regarded to be conducive in the integration of a modern commercial institutional logic into this field (Carlsson-Wall et al, 2016, Kolyperas et al, 2015).

(9)

1.2 Research aims

Based upon the current theoretical understanding within this literature stream, this research addresses this intriguing topic, aiming to demonstrate: 1) how the multi-institutional setting of the football industry, inclusive of co-existent commercial and social welfare institutional logics, create challenges for football clubs 2) the micro-level strategic organisational responses and associated behavioural outcomes to the found institutional challenges.

This research utilised both primary and secondary qualitative research. Firstly, semi-structured interviews were conducted with directorate level individuals responsible for the formation and implementation of the strategic behaviour of football clubs in England; the traditionalist centre of the now global football industry (Brietbarth & Harris, 2008). These interviews were undertaken in order to address the presence of institutional complexity within this field, the challenges this creates as well as the broad organisational level strategic responses enacted to negotiate these issues. Following this establishment of the challenges and present strategic responses within this institutional environment, the actor-level behaviours enacted through these strategies were addressed through analysis of CSR practice disclosure within the published organisational annual reports (financial years 2014-2016) and online website disclosure.

1.3 Dissertation structure

(10)

(11)

Chapter 2: Literature review

Given the outlined recognition of the football industry to be inclusive of increasingly paradoxical stakeholder demands, a key theoretical stream within this research is that of institutional logics. This literature review introduces the key perspectives and assumptions surrounding this concept. Furthermore, a pivotal component of this research revolves around the strategic mechanisms utilised in responding to complex institutional environments, therefore a review of currently acknowledged theoretical organisational responses to such macro-level complexity is included. Ultimately, this thorough understanding of the contemporary perspectives and components of institutional logics and its key tenets enables application and analysis of this theory to the football industry.

2.1 Institutional logics

The concept that organisations operate within an institutional environment is a longstanding theoretical idea, early research suggested significant social and cultural forces to shape behavioural stability and legitimate standing among organisations within a field (DiMaggio and Powell, 1983). These ultimately organise the behaviour, form and values deemed legitimate within an “iron cage”, fostering the similarities present between associated organisations as they concur to the values associated with a dominant logic (DiMaggio & Powell, 1983).

(12)

(Greenwood et al, 2011; Thornton & Ocasio, 2008). Ultimately, this offers a mechanism of rationalising organisational activity through locating practice in relation to the granted social values and assumptions of a social system. These categorised principles offer legitimacy and identity to firms, constraining and enabling particular behaviours that grant a justified position in a particular social system (Thornton & Ocasio, 2008; Friedland & Alford, 1991).

This perspective therefore recognises variance amongst organisations within modern social systems; organisations granted social identity based upon the logic to which they are subscribed. The major societal institutions (the market, state, religion, family and professions) each therefore contain varying prescriptions regarding legitimate values, objectives and practices; these acting as organising principles which influence the differing behaviours of organisations subscribed to each logic (Ertimur & Coskuner-Balli, 2015). For instance, a healthcare organisation may operate under behaviours and objectives distinctly varying to that of a stock brokerage firm. This is theoretically due to the differing organising principles deemed legitimate within each social system; the overarching institutional prescriptions of a market logic variant from a healthcare logic (Thornton & Ocasio, 1999; Dunn & Jones, 2010).

2.2 - Institutional pluralism

(13)

in terms of demonstrating behaviour wholly subscribed to the values of incompatible logics. Ultimately, the legitimacy organisations seek within one social system is compromised through erroneous behaviour directed by a co-existing paradoxical logic (Greenwood et al, 2011). In light of this, the prudent and strategic adoption of practices appeasing the demands of these differing stakeholders is fundamental in gaining legitimacy amongst such multi-institutional settings (Pache & Santos, 2013).

CSR as a form of institutional complexity

Such institutional complexity stemming from the presence of co-existent incompatible logics is argued to occur primarily amongst elite organisations, these firms regularly bridging institutional fields and therefore challenged to comply with the values held by diverse stakeholders associated with contrasting logics (Ozen & Ozturk, 2016; Thornton & Ocasio, 2008). This inclusion of varying stakeholders has inevitably intensified public scrutiny of these organisations; arguably developing institutionalised demands of socially orientated behaviour (Bondy et al, 2012). This is commonly expressed as the socio-political rise of CSR (Luo & Bhattacharya, 2009). Within the United Kingdom, this CSR focuses upon modern urbanisation and a resultant lack of social cohesion; organisations institutionally challenged to negate such issues through CSR strategies that combine business and social demands to create social capital and ultimately integrate and develop communities (Matten & Moon, 2004).

(14)

market logic. This institutional environment therefore challenges firms to integrate the values and objectives of fundamentally conflicting logics; upholding their fundamental existence in profit creation while appeasing the modern institutionalised expectations of social development through CSR (Reay & Hinings, 2009; Friedman, 1970; Bouten, 2017; Porter & Kramer, 2006).

This problematic institutionalization of CSR focused social objectives into the business sphere is recognised to instigate significant institutional complexity (Fleming & Jones, 2013). The paradoxical nature of such co-existent social welfare and commercial logics makes this a prominent area of interest amongst current scholars in regards to the potential challenges it brings to contemporary businesses (Bouten, 2017). Based upon this, the complexity surrounding firms deemed to be both social and commercial institutions, such as those within the football industry, presents an intriguing research context that is strongly applicable to current institutional theory debate.

2.3 Organisational strategic responses to institutional complexity

As a consequence of this acknowledgment of the modern institutional environment to be a challenging arena inclusive of paradoxical co-existent logics, the organisational-level responses to institutional complexity as well as micro-level mechanisms of deployment are becoming an increasingly significant topic of contemporary research. Significant theoretical debate is raised over how organisational stability, legitimacy and ultimately survival is attainable while firms are subject to such paradoxical multi-institutional settings (Greenwood et al, 2011; Vermeulen et al, 2016).

(15)

therefore ability to display agency when selecting preferential responses to the various present institutional pressures (Marano & Kostova, 2016; Pederson et al, 2014). In terms of attaining the perceived legitimacy from a multitude of field-level parties, organisations have therefore have an array of possible strategic pathways variant in terms of situational responses as well as broader structural implications (Greenwood et al, 2011; Pache & Santos, 2013; Carlsson-Wall et al, 2016).

Compromise

Compromise mechanisms occur when previously contrasting organisational behaviors associated with diverging logics are allowed into contact, thus creating a degree of contradiction in regards to gaining legitimacy amongst competing multi-institutional logics (Thornton & Ocasio, 2008). This prevents ability for organisations to wholly fulfill the demands of a single logic, constantly adhering to the diverging values of others simultaneously. Resultantly, organisations compromise by combining specific elements from differing logics, partially adhering to the practices and assumptions of each involved logic in order to blend key significant values and form an acceptable balance of hybrid behaviors (Kraatz & Block, 2008; Pache & Santos, 2013). In cases of strategic management, this allows for partial subscription to the core values associated with co-existent logics and therefore the legitimacy of these social systems. The longevity of this is however questionable given the lack of full compliance to the required practices (Pache & Santos, 2013).

(16)

response to multi-institutional settings being structural in terms of the organisation-wide practices adopted, it is also inevitably situational due to ad-hoc decision making upon the resources expended upon each followed value (Carlsson-Wall et al, 2016).

Structural differentiation

A further organisational response to co-existent yet contrasting logics is that of structural

differentiation. This organisation-wide mechanism of enacting legitimate behavior adherent to conflicting values involves the separation of organisational subunits into individual behaviors; the values, mindset and practices associated with the differing logics present being compartmentalized throughout the firm structurally (Greenwood et al, 2011). This structural reconfiguring of the organisation based upon logically assigned divisions is implemented theoretically in order to negate any future discrepancies between organisational practices and logical expectations. This allows maintenance of legitimacy through dissolving any need for co-existing logics to cross paths within organisational practices, ultimately providing organisational ambidexterity of practice across contrasting institutional settings (Greenwood et al, 2011; Kraatz & Block, 2008; Simsek, 2009).

(17)

subunits due to the divergence in their practices. This can ultimately amount to a lack of productivity due to poor communication if not carefully managed (Greenwood et al, 2011).

Decoupling

A third prominently cited organisational response to institutional pluralism is decoupling strategies. This is a distinctly strategic activity involving the development of a gap between the internal core activities of the business and the practices visibly exposed to external parties (Pache & Santos, 2013; Greenwood et al, 2011). This implies that when decoupling, organisations internally enact the practices and values associated with an institutional logic that they are wholly subscribed to, whilst offering visible symbolic endorsement to another externally (Pache & Santos, 2013). This generally involves attempts to satisfy modern western institutional pressures of acknowledgment, accountability and transparency through ceremonial signaling of philanthropy and environmental and social concern (Kercher, 2007; Lyon & Maxwell, 2011). Organisations may therefore project an external image conforming to institutional values divergent to those followed internally in order to gain social legitimacy, these symbolic rituals however in reality not implemented at organisational level (Tilcsik, 2010; Pache & Santos, 2013; Greenwood et al, 2011).

(18)

2.4 Institutional complexity within a football industry context

In terms of multi-institutional settings consistent of contrasting logics, the modern football industry is fore frontal. The modern economic positioning of these traditionally community entrenched organisations places them within an arena of co-existent yet heavily diverging commercial and social welfare logics (Kolyperas et al, 2015). Throughout the previous decade the football industry, once regarded as a local community based phenomenon, has been transformed into a massively lucrative global industry (Brietbarth & Harris, 2008; Kennedy & Kennedy, 2012). This transformation has come about as a result of intense commercialisation in which broadcasting, merchandising and sponsorship incomes have exponentially risen, creating the contemporary consumer-orientated marketplace within which football resides (Nielsen et al, 2017). Ultimately this commercialisation has left organisations traditionally occupying unique positions as a beacon of societal cohesion, gratification and inclusion, in a position comparable to regular MNCs and therefore exposed to the unregulated excesses of a free market (Brown et al, 2006; Mellor, 2008; Giulianotti, 2012).

This has formed a duality of organisational standing, creating significant issues in practising legitimate behaviour fully in consonance with the conflicting values and assumptions of social welfare and market logics.

Commercial logic in Football industry

(19)

listed companies (Shackleton, 2000). Ultimately, this represents the fact that modern footballs clubs are enforced to increasingly engage in business-like conduct, displaying the strategic acumen necessary within the commercial world out of necessity for financial prudence (Kolyperas et al, 2015).

This has developed an institutional logic inclusive of commercial principles and thus an imperative need for sustainable investment decisions in order to financially compete amongst rivals while manage escalating issues of debt and legislative financial constraints (Kennedy & Kennedy, 2012; Skirstad & Chelladurai, 2011). The need for such financial prudence and therefore business-minded conduct is exemplified by the rapid demise of many contemporary football clubs as a result of negligence towards such financial values (Guilianotti, 2012).

Social welfare logic in Football industry

Despite the integration of a commercial logic into the football industry, these organisations are recognized as a significant “vehicle for social change” capable of countering societal issues through their communication, identification and gratification power (Giulianotti, 2015; Smith & Westerbeek, 2007; Kolyperas et al, 2015). Football clubs are widely considered as flagship “social agents” due to their long-standing historical affinity with local communities, societies often integrated through their associative symbolism (Brietbarth & Harris, 2008; Sherry et al, 2015; Holt et al, 2005). This community entrenchment coupled with modern financial prowess has developed a common perception of these organisations to hold a large propensity for social capital development, this centering on the delivery of employment, education and social integration and participation (Rosca, 2011).

(20)

practices. (Skirstad & Chelladurai, 2011; Brietbarth & Harris, 2008). The enactment of such behaviours is considered fundamental in football organisations maintaining a moral presence within society, preserving the non-negotiable traditional values underpinning football club-community relations (Kennedy & Kennedy, 2012). Misener & Mason (2009) ultimately convey this institutional positioning to place football clubs under the organizing principles, practices and objectives associated with social welfare logic (Misener & Mason, 2009). The attainment of such social welfare legitimacy is understood to be imperative in a strategic sense, the fundamentally important retention of image and therefore consumer revenues within a significantly competitive financial environment dependant on this (Walters & Chadwick, 2009; Lindgreen et al, 2009).

Diverging logics

(21)

Ultimately, the recognised commercial and social positioning of football clubs is considered conducive of the theoretical notion of institutional complexity (Kolyperas et al, 2015). The apparent objectives amongst the present social welfare and commercial logics are clearly prescriptive of paradoxical behaviours; the CSR focused expectations of social logic conflicting with the imperative financial directions of commercial logic. The attainment of legitimacy and therefore effective operation within this institutional environment rests upon an ability to demonstrate effective strategic responses, balancing commercially orientated behavior alongside social (Greenwood et al, 2011; Hamil & Morrow, 2011; Kolyperas et al, 2015).

2.5 Strategic Reponses to institutional pluralism within football

Within football, external institutional pressures such as intertwined links to community groups and key constituents create an environment in which community engagement is paramount in maintaining social legitimacy as an embedded figurehead societal institution, this simultaneous to satisfying the internal commercial demands of shareholders in an era of intense industry commercialization (Kolyperas et al, 2015; Brietbarth et al, 2011). This is representative of the presence of institutional complexity, modern football challenged to operate within dysfunctional organisational setting inclusive of co-existent logics with contrasting values, assumptions and objectives (Anagnostopoulos & Shilbury, 2013). This drives such organisations to seek strategic pathways conducive in harmonizing the present institutional pressures in order to achieve legitimacy amongst these social systems.

(22)

is argued to provide greater structural autonomy and therefore increased financial and strategic decision-making independence, reducing cases of central organisational tension over resource dispersion towards commercial and social practices (Walters, 2009; Kolyperas et al, 2015). Theoretically, this mechanism allows football organisations to utilise their distinctly identifiable brands to engage in socially focused practices in a manner external to the operations and objectives of the central corporate body (Walters, 2009; Sheth & Babiak, 2009; Brietbarth & Harris, 2008). Ultimately, this is indicative of a structural differentiation strategy in which divergent logics present within the firm are utmost segmented (Greenwood et al, 2011).

2.6 Literature review summary

Institutional complexity

(23)

Within the current literature stream, there is prominent recognition of a multi-institutional environment to be present within a football context. Existing theoretical inferences recognise football organisations to be community embedded organisations with intertwined community links, these organisations traditionally subscribed to the practices and objectives associated with a social welfare logic. However, in light of the recent commercialisation of the football industry, this field is now inclusive of the commerce-orientated expectations of shareholders within a now highly financially competitive environment (Kennedy & Kennedy, 2012). This placement of social institutions into an industry centring around financial capability and strategic management is ultimately recognised to be conducive in institutional complexity; the objectives and practices associated with these co-existent social welfare and commercial logics considered paradoxical (Kolyperas et al, 2015; Brietbarth & Harris, 2008).

However, despite recognition of this industry to be a complex institutional field within this current literature stream, the organisation-level challenges specifically resonating from this multi-institutional environment remain ambiguous. This in that there is very little existent theory regarding the influences this paradoxical macro-level environment has upon the micro-level organisational behaviours of football clubs. Therefore this is considered an intriguing gap within the current understanding of institutional complexity within a football industry context.

Strategic responses to institutional complexity

(24)

multiple paradoxical stakeholders (Kraatz & Block, 2008; Pache & Santos, 2013); 2)

decoupling strategies involving the symbolic adoption of socially demanded practices and

behaviour in order to satisfy externally visible organisational expectations, alongside the non-visible subscription to ulterior values and behaviours internally (Pache & Santos, 2013; Greenwood et al, 2011); 3) structural differentiation strategies in which there is organisational segmentation of institutional logics, the practices, objectives and assumptions deemed legitimate by co-existent logics compartmentalised into localised organisational departments (Greenwood et al, 2011; Kraatz & Block, 2008; ).

Within a football industry context, the current literature stream suggests strategies associated with structural differentiation to be a dominant mechanism of responding to the discussed complexity within this institutional field. These in the form of compartmentalised organisational “foundations” devoted to social practice, separating the commercial objectives and practices associated within the central organisational body from that of a social nature (Anagnostopoulos & Shilbury, 2013; Hamil & Morrow, 2011).

(25)

Chapter 3: Research methodology & methods

This chapter provides explanation and justification for the adopted research methodology and methods. These include a research methodology involving an interpretivist philosophy and inductive approach. Underpinned by this is the use of a collective case study approach and qualitative research through semi-structured interviews and online publication analysis.

3.1 Context of the case study

(26)

3.2 Research methodology

Research philosophy

The phenomenological study of institutional challenges and subsequent organisational behaviour is fundamentally subjective and therefore informed through varying human interpretations (Suddaby et al, 2010). Research involving the theoretical interpretation of such socially constructed perspectives requires an exploratory approach in which this humanistic interpretation is fostered; based upon this, an interpretivist paradigm underpins this research (Saunders, 2009). Furthermore, this research aims to utilise the interpretations found in order to extend upon existing theoretical assumptions within the literature stream of institutional logics theory in the sub-context of the football industry. Firstly, through adding to current recognition of the football industry to be a complex institutional environment by providing a theoretical understanding of the organisation-level challenges stemming from this environment. Secondly, this research aims to support and extend existing theory regarding the strategic responses of organisations to institutional complexity; this through acknowledgment of currently conceptualised strategies to be present within empirical research upon football organizations, as well as the varying behavioural outcomes these incur. Given the theoretical outcomes of this research are therefore developing novel theoretical inferences, the use of an inductive research approach in which theoretical conclusions are derived through exploratory research is justified (Djamba & Neuman, 2003).

Research design

(27)

linked to its empirical context (Yin, 2014). In this case, the institutional challenges faced by football clubs due to their unique socio-economic positioning and their subsequent strategic responses. Furthermore, the collective aspect of this research design is justified through the involvement of multiple football clubs, thus demonstrating research into the contemporary phenomenon of institutional complexity across multiple case study organisations. This collective nature is conducive of more robust research outcomes given the potential to replicate findings across multiple organisations, ultimately enhancing the generalizability of any research conclusions (Baxter & Jack, 2008).

3.3 - Research methods

This research was inclusive of two clearly distinguished stages. This involved a primary stage focused upon gaining an understanding of the challenges presented to football clubs through the multi-institutional conditions of the their field and their organisation-level strategic mechanisms employed to reconcile these paradoxical logics. Following this was a second stage offering an insight into the actor-level CSR practices emanating from the found strategic responses. In order to conduct this research, qualitative research was undertaken upon four separate case study football clubs in the form of 1) semi-structured interviews, and 2) an analysis of the online CSR disclosure of the research case study organisations.

(28)

insight offered through qualitative research is key in attaining an in-depth understanding of the intangible institutional challenges at play within football and the reactive strategies employed by these responses (Gephardt, 2004).

Semi-structured interviews

Semi-structured interviews follow a formalised structure, yet are inclusive of an exploratory nature. A conversational pattern allows divergence into surrounding topics, increased participant perspective and added context. Ultimately this provides a deeper insight into the researched concept, offering a unique context and socially constructed perspective to a particular case (Galleta, 2013). Hamil & Morrow (2011) argue this added individualistic context to be pivotal within research upon the organisation level activity of football clubs; the unique circumstances of each club in terms of context, size and ownership structure potentially restricting the publishing of in-depth interpretative activity within secondary data.

(29)

strategies induce engagement with the institutionalised social demands placed upon football clubs (Brietbarth & Harris, 2008).

Table 3.1: Semi-structured interview details.

Club Interviewee title Interview length

Sunderland AFC Managing Director 15:49 York City FC Managing Director 22:00 Blyth Spartans AFC General Manager 14:55 Organisation Alpha Managing Director 18:39

A common form of data analysis utilized in social constructivist research in which there is pre-existing phenomenological theory of a limited or perhaps incomplete nature is that of directed content analysis (Hsieh & Shannon, 2005). The key aim of such qualitative analysis is therefore to utilize current theoretical inferences in order to direct research, the ultimate findings building upon this existing theory through contribution of a more developed theoretical conceptualization regarding a particular phenomenon. This involves utilizing established inferences within current theory as key themes within the qualitative analysis and therefore applying the research findings to these in order to offer validation or extension (Hseih & Shannon, 2005). This directed content analysis model was applied to the collated qualitative data within this research.

(30)

this conducive in an institutionally complex field. In light of this, institutional complexity relating to these logics was industry was established as a key theme within this coding process. The resultant coding of the specific organisational challenges stemming from this assumed institutional environment ultimately extend this existing theoretical conceptualization through detailing the organisation level consequences of this macro-level environment (Kolyperas et al, 2015).

(31)

secondly through offering support or extension to inferences regarding the specific mechanisms involved within each strategy.

Following the establishment of the discussed key themes, the qualitative data in the form of interview transcripts detailing the macro-level institutional challenges and strategic responses of football clubs were rigorously analyzed. This resulted in the emergence of two organisational challenges relating to the institutional complexity within football recognized within current literature, as well as two prominent strategic responses behaviorally relating to those outlined within existing theory.

Annual report and club’s websites analyses

(32)

This qualitative analysis was again conducted through a directed content analysis approach. This approach is deemed particularly applicable to this phase of research given the current theory offering a broad understanding of areas deemed core to the social practices of football clubs; CSR practices within football to recognised to centre upon the provision of community development in the form social participation, employment opportunities and education (Rosca, 2011). These three broad focuses of social activity were adopted as key themed within this phase of research upon the sample football clubs’ annual reports (2014-2016) and website disclosure of CSR behaviours; all CSR behaviours disseminated within these publications were coded and applied to these themes. The findings of this phase of research therefore allow for the validation or contradiction to the current inference of these focuses to be key within CSR in football, as well as extend upon this existing theory through relating these actor-level CSR practices to the varying organisational strategies adopted.

3.4 Limitations & ethical considerations

Research limitations

(33)

A second limitation of this research arises from the unavoidable time constraints applied, this resulting in the small sample of four case study organisations within a single country. The fact that this research is inclusive of a small sample size of geographically isolated case study in relation to the vast overall size of the researched global industry raises questionability over the generalizability of the research conclusions to other geographic regions within the industry.

Ethical considerations

(34)

Chapter 4: Results & Findings

This chapter offers an insightful depiction of the results and findings of the undertaken qualitative research. The purpose of this qualitative data collection and analysis is to present: 1) the macro-level challenges presented to football clubs due to the football industry being a multi-institutional setting inclusive of distinctly paradoxical stakeholder expectations; 2) the organisation-level strategies adopted to negotiate such institutional complexity and resultant behavioural outcomes.

4.1 Institutional challenges to football clubs

The results of the conducted semi-structured interviews and subsequent directed content analysis within this research offer an insight into the key challenges presented to football clubs through their positioning within this multi-institutional setting.

Institutional complexity

(35)

“I suppose as the organisational overall we are a business in certain sides, we need to

be commercially viable just to be able to achieve something in the league. So yeah there’s that side of it, but at the same time we feel we do need to make a difference in the community.” - York City FC Managing Director

“We’ve got to be sustainable, so there is definitely a business element to it. But the agenda in the background is all community based. We’re not here to make as much money as possible, were here to do well as a club and at the same time use the funds we can to support the community.” - Organisation alpha

Following this establishment of the football industry to be a multi-institutional environment, the research findings are conducive in demonstrating the difficult challenges these organisations face as a result of such institutional complexity.

Resource allocation

An issue stemming from this complex institutional environment raised prominently within the conducted interviews is the managerial challenge of effective resource allocation. It is evident that the modern commercialisation of the football industry has brought intense rises in financial competition and volatility, this environment enforcing clubs to compete with industry rivals upon a financial basis in order to maintain a competitive existence. Resultantly, significant difficulties are found amongst the sample case study football clubs in navigating the commercial demands of this highly financially competitive industry, while simultaneously appeasing the long-standing social expectations of community stakeholders. The General Manager of Blyth Spartans AFC explained how that particular club is particularly challenged through the modern financial competiveness within the industry; “we need to get more funding

(36)

So it’s a massive jump for a club of this size to be able to do that, a big jump in commercial terms to compete.”

In light of this challenging institutional position, modern football organisations are found to recognise their sustainable competitive existence to be dictated primarily by financial competency and ability to fund on-pitch performance, rather than the traditionally fundamental social connection they occupy.

“Last season we were promoted from the national league north into the Northern Premier league, so each progression that the club makes, it’s a fine balancing act to be able to manage that progression as you move up. So being able to attract better players, improve our facilities at the ground. Its always the case of having to bring extra revenues in to try to buy new players, meet players wages, transfer fees, ground improvements, pitch maintenance.” - Blyth Spartans AFC

“So we will charge out, at a reasonable rate. Very competitive rates, because that is our bread and butter that makes things sustainable.”- York City FC

(37)

associated with the traditionally existent social welfare institutional logic have been jeopardised, becoming secondary to that of the commercially orientated performance budget.

“When it was the old “football in the community” scheme, and I was part of it then, staff did get made redundant on the back of the financial performance of the club when it got relegated.” - Sunderland AFC Foundation of Light Managing Director

“But competing with other clubs, there is a massive difference. Were in the same league with clubs who have totally different infrastructure. But we haven’t got that financial output from above some competitors do, all our funds are generated from within the club, like I said before through sponsorship and gate receipts really, so it is difficult to commit to further expenditure on these other activities when we don’t have that flow of money and ours can only go so far. - Blyth Spartans AFC General Manager

“From the clubs side there will be and is certain pressures where they come across potentially loss of sponsors and changes of sponsors, this is a natural thing that happens with the club. Us for instance when we were financially tied, from getting relegated from the football league to the national league, we lost funding over night, purely because that’s the way the funding pots were.” - York City FC Foundation Managing Director

(38)

Branding

A second difficulty found to arise amongst football clubs as a consequence of the modern integration of commercial values into this traditionally social welfare dominated field is that of organisational branding and image. Football clubs acknowledge themselves to be impacted by the fact that the financially focused practices they must inevitably adopt in order to survive within this now commercially competitive industry diverge from their traditional image as proponents of the “people’s game”, acting as beacons of social integration to which local communities hold a strong affinity (Taylor, 2013; Brietbarth & Harris, 2008; Mellor, 2008). This has ultimately resulted in an alteration in their social perception; the confliction between contemporary economic focused behaviour and the long-standing values of social stakeholders is recognised by football clubs to negatively impact the traditional affinity between themselves and local communities due to a principal difference in values. Consequentially, these organisations face an incurred reduction in consumer engagement. This issue is clearly of paramount importance to football clubs given the fact that their fundamental existence is built upon consumer retention (Giulianotti, 2012).

(39)

“If the clubs just been relegated and things aren’t going great, the public might have a misconception of the club. They see the badge and think I’m fed up at the minute and the money they’ve got etc., I’m not going to go.” - Organisation Alpha

Ultimately, this is found to present the distinctive challenge to football clubs of attaining the societal perception to be community-focused institutions in order to maintain a positive community connection and therefore consumer retention, while simultaneously enacting the imperatively important financial practices and objectives of a business within a highly performance competitive free market.

4.2 Strategic responses to institutional complexity

The aim of this phase of research was to provide a detailed insight into the organisation-level strategic responses of football clubs to the found challenges they face through operating under a paradoxical multi-institutional setting. This section therefore presents data regarding the organisation-level strategies employed, as well as the behavioural outcomes of these.

4.2.1 Organisation-level strategic responses

(40)

Structural differentiation

Within existing theory, Greenwood et al (2011) outline the notion of structural differentiation to be an organisational strategic response to institutional complexity within a field. This involves the structural and financial compartmentalisation of organisational departments based upon the institutional logic to which they are subscribed and therefore their values, practices and objectives (Kraatz & Block, 2008; Greenwood et al, 2011). In response to the discussed recognition of multiple institutional logics and resultant challenges to be present within the football industry, Sunderland AFC, York City FC, and organisation alpha were found to now employ strategic responses clearly resembling such structural differentiation.

Existing theory suggests structural independence amongst organisations compartmentalised upon the presence of varying institutional logics to be a key aspect of structural differentiation as a strategy (Kraatz & Block, 2008; Greenwood et al, 2011). The sample organisations adopting such behaviour are found to have development clear compartmentalised branches devoted purely to socially orientated practices and objectives; these acknowledged as specific CSR functions. These departments are recognised to operate as a core component of the broader organisational structure, clearly included within the organisation and its brand, however occupying a distinct identity revolving around social welfare logic opposed to commercial. This clearly exemplifies the implementation of structural independence to organisational departments subscribed to differing institutional logics, the socially orientated branches of football clubs recognised to maintain a separated identity from the central organisational body.

(41)

“In terms of like you mentioned earlier about CSR, we are kind of the club’s CSR existence.” - Sunderland AFC Foundation of Light Managing Director

“So we have the foundation the club, which is a registered charity, the remit there is to create funding opportunities, and all that funding there is used to support the community.” - Organisation alpha

Extending from this finding of structural compartmentalisation to be present amongst these football clubs, the separation of budgets within departments subscribed to the differing practices and goals of varying institutional logics within the organisational structure is also considered to be a pivotal component of structural differentiation strategies (Kraatz & Block, 2008). This theoretical aspect of this strategic activity is found to be clearly evident within these organisations; all clubs enacting such a strategy exhibiting provision of financial independence towards their socially orientated departments.

“One of the big things when the foundation was established in 2001, we made the point of being financially and structurally independent within the club.” - Sunderland AFC Foundation of Light Managing Director

“Financially and structurally they’re two separate identities basically. The foundation is the clubs own charitable arm. So the foundation uses the badge, access to players, and access to facilities. The clubs putting something back into the community, but it means on a corporate level, its separate.”- Organisation alpha

(42)

Ultimately, this demonstrates the strategic separation of the divergent objectives, principles and practices associated with co-existent social welfare and commercial institutional logics through these mechanisms; thus exemplary of structural differentiation strategies.

In terms of the response of this of this strategy to the key organisational challenges resonating from operation within this particular multi-institutional environment, a series of relevant findings are shown. The found financial independence afforded to compartmentalised departments within structural differentiation strategies is found to eliminate issues of financial neglect towards activities associated with the social welfare logic football clubs are subscribed to. Furthermore, structural independence in terms of employees and their distinguished objectives appears to enable for shielding from the commercial goals and values held elsewhere within the firm. This ultimately is found to allow for micro-level decision making within the firm; negating problematic resource allocation biases towards certain objectives.

“We do work fairly comfortably side by side, because of the financial independence. So all the staff that work at the foundation, they don’t ever drain on the clubs central performance budget, in my experience there is a nice synergy in the club because there isn’t that conflict with the club maybe thinking the foundations a drain, so from a monetary factor where the pressure might come from, that doesn’t really happen because of that independence.” - Organisation alpha

“I think it means we can make decisions based on what’s best for us at the foundation rather than how it might impact on the club as a whole” - Sunderland AFC Foundation of Light Managing Director

(43)

This is ultimately found to result in behavioural outcomes that place a large emphasis upon the prescriptions of social welfare logic alongside that of commercial principles.

When times aren’t so good like they aren’t now, I suppose our job becomes even more in important in lets us to help engage with the fans, seeing that actually yes they may not be the performing on the pitch, but we still care about the local community. - Sunderland AFC Foundation of Light Managing Director

“It definitely allows us to be able to be more flexible, like other clubs might have to put they’re playing budget into everything else, were certainly miles better in terms of community work and that because of our structuring.” - York City FC Foundation Managing Director

“I think the club are more than happy with the work that the foundation do. I think they engage around 40 thousand people around the areas, have a range of case studies. My view is that the club are more than happy with the work the foundation does to as you say to satisfy that social expectation. Now we use the power of the brand to think how can we support priority issues. So here there’s a huge issue of anti social behaviour, so we do youth group sessions. We’ve also got an issue of unemployment, so we deliver employability courses. We do it horses for courses on what the area really needs.” - Organisation Alpha

Compromise

(44)

structure, theoretically simultaneously satisfying multiple stakeholder demands at base level (Pache & Santos, 2013).

Blyth Spartans AFC was found to adopt this more singular approach to their commercial and social activity. This is exhibited through the found integration of the practices and objectives associated with the commercial demands of this industry and the social welfare provision expected by community stakeholders under a universal structural and monetary umbrella. Ultimately, this therefore involves constant strategic decision-making and compromise by top management teams within the club regarding the objectives and practices of each co-existent logic that are to be allocated resources and prioritised within organisational behaviour.

“So basically what we do at the start of the season is sit down and we work out our budget for the playing side for wages etc., transfer fees. We sit down and look at a forecast of income and expenditure, and then whatever is left is then given to the manager as a playing budget, so its very much trying to just break even as a business. After that we can look at social stuff we can do.” -Blyth Spartans AFC General Manager

(45)

“So because of our budgets all of our social activity has to be non funded, so we do things that don’t cost money to us” - Blyth Spartans AFC General Manager

“We have to sort of look at the social side non-financially, so anything socially focused we do it can’t really cost us anything. We very much have to respect what we’ve got and don’t commit to do stuff that isn’t within the confines of our budget.”- Blyth Spartans AFC General Manager

In summary, this phase of research displays the finding of both structural differentiation and compromise strategic activity to be present amongst the sample football clubs. The key components of these strategies are found to revolve around the management of organisational structures and budgets in relation to present institutional logics; structural differentiation demonstrated to involve clear compartmentalisation of the divergent objectives and practices associated with commercial and social logics through structural and financial independence, this opposed to the singular structural and financial umbrella found with compromise strategies.

(46)

4.2.2 Strategic CSR practice outcomes associated with strategic responses

Following this demonstration of structural differentiation and compromise strategies within football to be conducive in largely differing organisational behaviours in terms of resource allocation; the eventual CSR behaviour emanating from these strategies are also found to be highly contrasting.

The found CSR practices associated with the strategic responses adopted amongst the sample football organisations ultimately offer further support to the finding of compromise responses to institutional complexity within football to be conducive in behavioural outcomes highly benevolent towards the objectives associated with the present commercial institutional logic and distanced from that of the social welfare logic, this in comparison to the outcomes of structural differentiation strategies. Diagram 1 represents the finding of the firms that adopted

structural differentiation strategies as a response to the present institutional challenges to

(47)

Diagram 4.1: Sample football organisations’ disclosed CSR practices Education - Ministry of food programme to educate parents and children upon healthy eating and nutrition.

- Football scholarship programme to partner with local collages. - Alternative provision school caters for students on the margins of mainstream education.

- Partnership with South Tyneside College to provide coaching and playing courses.

Employment

- Provide young people with a free employability courses.

- “World of Work” zone provides a work-based learning environment.

Social inclusion & Integration - Social inclusion of military veterans through participation in sport - “Beacon of Light” facility to increase Education - Visit hundreds of schools each academic year across the region, offering a variety of in school coaching or educational workshops within school time.

Social inclusion & integration

- 25% club ownership by York City Supporters society ltd in order to strengthen the bonds between York City Football Club and the community.

- “Walking football” programme to involve elderly people and prevent social isolation. - “Holiday hunger” programme to ensure children in deprived areas are fed and engaged during school holidays.

Education

- Work with non-mainstream school settings such as Pupil Referral Units, Special Educational Needs schools, and Child and Adolescent Mental Health Services to can cater for young people.

Employment

- Youth Employment Initiative project: targeted at 15 – 29 year olds who are not in employment, education or training.

- “Team Talk”: Aimed at engaging males recently made redundant across Teesside, focuses on engaging local champions in

communities that would assist with tackling social isolation and loneliness.

Employability

- Volunteering scheme to local community residents; local people can work for the club on volunteer basis to enhance work skills and employability.

- Increased accessibility and inclusion through offering of free transport to matches for supporters; aimed at decreasing cases of economic exclusion. Complex institutional environment Strategic response: Structural differentiation Organisationa l Challenges: Resource allocation & branding Strategic response: Compromise Sunderland

(48)

(49)

Chapter 5: Discussion

The aim of this research is to utilise the theoretical lens of institutional logics in order to assess: 1) the organisation-level challenges presented to contemporary football clubs through operating within a multi-institutional setting inclusive of paradoxical social welfare and commercial logics, 2) the micro-level organisational responses to this environment in terms of organisation level strategies and the resultant behavioural CSR outcomes. This chapter provides discussion of the organisational challenges and strategic responses of contemporary football clubs found within this research in relation to these initial aims. This allows for significant theoretical observations and contributions to be made regarding institutional logics theory within the subfield of the football industry.

5.1 Institutional complexity within the football industry

(50)

fundamental need to exhibit largely community-focused behaviour in order to deliver the social engagement upon which their societal existence is built. These competing institutional demands are found to develop confusion amongst the management of these organisations in terms of their operational activity when seeking legitimacy within these drastically differing social systems.

However, in order to extend upon this current broad assumption and therefore contribute to a greater understanding of institutional complexity within this context, this research offers an understanding of the influences this challenging institutional environment has at the organisation level. The empirical accounts within this research emphasis two distinct organisational challenges that are faced by football clubs as a direct result of the paradoxical organising principles present within their institutional field.

(51)

Stemming from this difficulty in resource management is a second found challenge revolving around the organisational image and branding of football clubs. The found resource demands of their modern industry environment in which commercially orientated behaviours are of imperative importance are perceived to be of a conflicting nature to that of their traditional social practices. These organisations are traditionally assumed to operate as social institutions, ingrained within the local community and its ethos of societal inclusion and integration across divisions (Brietbarth & Harris, 2008; Taylor, 2013). However the findings of this research show that this this acknowledged social perception of football clubs to be a beacon of community engagement is effectively damaged through behaviour erroneous towards the integrative values placed upon football clubs by society. This loss of community connection can be considered as fundamentally detrimental to the sustainable existence of football organisations, two of their key revenue streams in gate receipts and sponsorship being image dependant (Kennedy & Kennedy, 2012). This is ultimately found to challenge football clubs to sustain an image of being socially integrative and engaging in order to retain consumer affinity whilst remaining financially prudent in order to fund competitive industry performance.

(52)

Harris, 2008). In terms of extending upon this narrow inference with current literature, the findings of this research contribute to a theoretical understanding of the challenges firms occupying such multi-institutional status are faced with at the organisation-level; specific issues of resource allocation and branding found to directly emanate from the complexity surrounding this institutional field. In order to further this theoretical contribution, an insight into the ways in which football organisations strategically manage these recognised challenges is required.

5.2 Organisational strategic responses to institutional complexity

A key tenet of this paper is to contribute an empirical understanding of the particular strategic responses adopted amongst modern organisations that operate within multi-institutional settings, and furthermore the varying behavioural outcomes of these differing strategies. Amongst the researched case study football clubs, two forms of organisational-level strategic response to the institutional pressures applied by the various field proponents were found with varying behavioural outcomes in terms of CSR activity; these can be categorised as structural

differentiation and compromise strategies.

(53)

therefore undertaken with the aim of attaining “organisational ambidexterity” within an institutional field, argued to be effective amongst organisations seeking legitimacy across a multitude of varying institutional stakeholder requirements and expectations (Simsek, 2009; Greenwood et al, 2011; Kraatz & Block, 2008). The empirical accounts of such strategic activity amongst football clubs within this research firstly support existing literature in regards to acknowledgment of the key mechanisms involved in delivering structural differentiation. However, also contribute extension to existing theory through outlining the behavioural outcomes of this this strategic response and therefore its importance in negotiating complex institutional environments (Greenwood et al, 2011; Kraatz & Block, 2008).

(54)

differentiation, eliminating top-down compromises regarding organisational practice in relation to co-existent organising principles within proper structural differentiation (Greenwood et al, 2011; Kraatz & Block, 2008).

(55)

Alongside the finding of structural differentiation to be an effective strategic response to the co-existent institutional logics within football, organisational activity exhibiting compromise strategy was found to be present amongst these organisations. Compromise responses to institutional complexity involve the development of hybrid behaviours inclusive of the very core objectives and values of co-existent institutional logics within a singular financial and structural body, compromising upon the acknowledged and practiced prescriptions when seeking legitimacy across paradoxical field proponents (Pache & Santos, 2013). Such organisation-level strategy was found to be present within Blyth Spartans AFC; institutional complexity and the resultant challenges of resource allocation and branding responded to through the decision-making of a singular management team under an organisationally universal budget. This therefore involves constant compromise upon the diverging prescriptions of co-existent commercial and social welfare logics, therefore prioritising certain objectives and values in regards to finance and personnel allocation.

(56)

the CSR practices stemming from the adoption of such an organisation-level behavioural response support this recognition of commercially dominant behaviour; the found CSR practices of Blyth Spartans AFC involving non-funded initiatives that are not inclusive of any external institutions or specific community groups. In light of this managerial recognition of commercial prioritisation within the organisation as well as the finding of CSR outcomes that are not conducive in “community development”, it is clear that compromises responses amongst football clubs are conducive in behavioural outcomes explicitly dominated by commercial institutional logic (Ismail, 2009).

(57)

Chapter 6: Conclusions

The overarching conclusions of this research address and evaluate the organisation-level challenges such multi-institutional environments create for modern organisations, as well as the behavioural aspects and outcomes of the subsequent strategic responses employed. Furthermore in doing so, two key contributions are made to the current institutional logics literature stream.

The football industry is acknowledged to be an institutional arena of differing values and objectives, football clubs pressured to enact almost paradoxical roles due to their traditional positioning as social agents alongside contemporary commercialised status (Kolyperas et al, 2015; Brietbarth & Harris, 2008). This inference is supported in this research; the football industry concluded to be a paradoxical context inclusive of distinctly diverging values and practices. The modern commercialization of this industry has drastically increased the financial prowess amongst these organisations, developing an environment of intensified competition and therefore inherent requirements of investment towards industry performance in order to avoid the financial consequences of industry relegation. However, simultaneous to this football clubs are challenged to seek social legitimacy through meeting the long-standing demands of a traditionally community entrenched social institution. Ultimately, this environment is concluded to be conducive in developing a complex institutional field, empirically supporting recent theoretical acknowledgment of multiple co-existent logics to often be present within institutional fields (Greenwood et al, 2011).

(58)

level challenges such environments incur. The commercial and social welfare demands placed upon football clubs are found to enforce top management teams into constant endeavor in order to harmonize the diverging organizing principles prescribed by commercial and social welfare institutional logics. These considerations come together to create a dysfunctional micro-level context in which organisations are required to undertake strategic prioritization regarding the finite financial and personnel resources they possess. Ultimately, this internal animosity challenges football clubs in terms of their resource allocation when seeking legitimacy amongst their social systems.

(59)

ultimately challenges football clubs to present a socially engaging image while simultaneously enacting the imperative organising principles of a commercial logic.

The second contribution of this research to existing institutional logics literature centres upon the finding of varying behavioural outcomes amongst the adopted strategic responses to these challenges. The research findings display structural differentiation to be the dominantly adopted strategic behaviour within the football industry. This strategy is conducive in compartmentalising the paradoxical objectives present within this institutional field; the structural and financial independence afforded to the social “departments” within these organisations shielding the values they hold from broader financial objectives or changes. Ultimately, this enables the avoidance of resource prioritisation amongst top management teams and resultant enabling for continual community engagement. This notion is further supported through the finding of the CSR programmes of organisations utilising such a strategy to be conducive in distinct community development focuses; these initiatives exhibiting both tangible and intangible resource investment in external societal institution engagement (Ismail, 2009; Misener & Mason, 2009).

Alex Curry

Alex Curry

130323079

Social beacon or business: Institutional complexity in

the modern football industry and organisational

strategic responses

Newcastle University

Groningen University

Advanced International Business Management Dissertation

Supervisors: Laurence Vigneau & Esha Mendiratta

04/12/17

Abstract

Acknowledgments

Table of contents

Chapter 1: Introduction

Chapter 2: Literature review

Chapter 3: Research methodology & methods

Chapter 4: Results & Findings

Chapter 5: Discussion

Chapter 6: Conclusions