Closing legitimacy gaps through sport: the case of Multi-National Enterprises

Dr Christos Anagnostopoulos

Tom Bason

Posted: November 17, 2014

Arguably, one of the ‘hottest’ topics in the modern business world is the practice of corporate social responsibility (CSR). The ever-growing desire among corporations to be seen – or, ideally, to actually be – socially responsible stems from a number of factors, including their wish to close the ‘legitimacy gap’. Such a ‘gap’ occurs when organisational goals, methods of operation, and outcomes are not in accordance with the expectations of those stakeholders who confer legitimacy upon the corporation. The foundations of many multi-national enterprises (MNEs) have been shaken, and their legitimacy corroded, in the aftermath of corporate scandals (for example, Enron, WorldCom, Parmalat), but also given that the controversial operations of some of these MNEs have been blamed for the current economic climate.

If the above is true, how can these MNEs close their legitimacy gap? Although this is a rather complex question, one word that seems to be moving rapidly to the top of agendas in modern corporate boardrooms is ‘sport’. Sometimes with a more critical eye (see, Levermore, 2010), scholars have argued that sport is a suitable vehicle for the employment of CSR (see, Smith & Westerbeek, 2007) – a point that is reflected in the fact that entire departments of many MNEs are now devoted to the practice (or communication) of CSR. But to what extent does this ‘acknowledgment’ – that is, that sport can help close the legitimacy gap – translate into concrete actions from MNEs? Do these corporations really deploy sport for their CSR agendas? And, if so, how do they do that?

We recently tried to shed some light on the abovementioned issues through a study that tracked MNEs’ CSR engagement through sport over a ten-year period. We looked at companies listed on the UK FTSE 100 and searched their annual reports, annual reviews and CSR reports between 2003 and 2012 for any mention of CSR through sport. We reported our preliminary results during the European Association of Sport Management conference that was held in Coventry in September of 2014 (www.easm2014.com). The highlights of this study were as follows:

1. Of the 100 firms, 92 reported having used sport as part of their CSR agendas at some point during the period; they used a total of 59 sports across 62 nations. During this time there has been a general rise in sport-based CSR activity throughout the period, even when accounting for the varying number of reports available in each year.

2. Three streams were identified as the means through which CSR via sport occurs: (a) philanthropy – in-kind, financial and equipment donations, raising money, working with a charity or building facilities; (b) sponsorships – sponsoring a charity event, team, individual or competition, or working with a governing body; and (c) personnel engagement – involving employees in sport.

3. Interestingly, the last of these streams was the most common, with 82 of the firms in the study engaging their employees at some point during the examined period. The philanthropy stream grew the least over the 10-year period, while MNEs continue to sponsor sporting events (mainly major ones, such as the Olympic Games) in an effort to fulfill their CSR agendas

4. Young people appear to be the main beneficiaries of these CSR initiatives, although increasing emphasis is being given to women, and less to elderly people. Sport participation, health and education appear to be the intended ‘outcomes’ of these programmes, although focus varies amongst the 32 different industries that we examined.

The full and detailed version of this study will soon appear in an academic outlet. In the meantime, it is possible to firmly identify the general rise in CSR through sport, showing that the corporate world has practically acknowledged that the sporting context is a powerful vehicle for the employment of CSR, and that corporations have started moving away from simply donating money toward using more strategic initiatives.

Perhaps more importantly, for those CSR champions within firms, examining how similar corporations are using sport as part of their CSR strategies may offer a much-needed benchmark, or an always-useful element of differentiation. On the other hand, for officers/managers in both for-profit and not-for-profit sporting organisations, looking at how they can identify programmes and initiatives that firms outside sport are willing to invest funds in will help ensure that their often scarce resources eventually find a powerful ally.

ILevermore, R. (2010), “CSR for development through sport: Examining its potential and limitations”, Third World Quarterly, Vol. 31 No. 2, pp. 223-241.

IISmith, A., and Westerbeek, H. (2007), “Sport as a vehicle for deploying corporate social responsibility", Journal of Corporate Citizenship, Vol. 25, pp. 43-54.

About Christos Anagnostopoulos

Christos Anagnostopoulos is an associate professor in sport management at Molde University College (Norway) and an associate lecturer in management at the University of Central Lancashire (Cyprus). He holds a PhD from Coventry University and a Master’s by Research in sport management and the business of football from Birkbeck, University of London. He is an Early Researcher Award-winner of the European Association for Sport Management and head of the Sports Unit at the Athens Institute for Education and Research. His research falls within the fields of organisational theory and organisational behaviour with an emphasis on strategic management processes within organisations. He is interested in corporate social responsibility in and through sport, as well as in the management of team sport organisations. He is one of the guest editors of a special issue on governance and CSR management in sport (to appear in Corporate Governance: The International Journal of Business in Society, in April 2015). Christos can be contacted at christos.anagnostopoulos@himolde.no

About Tom Bason

Tom Bason is a Lecturer in Sport Management in the department of Organisations, Relationships and Behaviour within Coventry Business School. He holds an MBA in International Sport Management from Coventry University and is in the first year of his PhD at Birmingham University. His research interests lie in sporting mega-events, and the economic and political impact of both bidding and hosting events such as the Olympic Games and FIFA World Cup. Tom can be contact at tom.bason@coventry.ac.uk.