Social Entrepreneurship in Sport

How Sport Can Deliver Social Well-being

Vanessa Ratten

• Publisher: Routledge
• Year: 2019
• ISBN:
  9781351141024
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

The social role of sport enterprises is being increasingly recognized at both local and global levels. Sport has the ability to influence community cohesion, physical and mental health, social inclusivity, and provides positive role models across society. More businesses in sport are incorporating these social aspects into their plans as a way of differentiating themselves from their competitors. This, in turn, has led to more social innovation in sport. Recently, there has been more emphasis on social entrepreneurship in sport due to the growing need to capture its societal impact. This book explores the non-profit role sport plays in society, and demonstrates how social enterprises can both address some of the negative social outcomes of sport and support businesses as they develop their social objectives. The over-arching aim of the book is to focus on how social entrepreneurship in sport is important in developing a better global society.

1

Social entrepreneurship in sport

An introduction

Introduction

Research on social entrepreneurship experienced a significant growth in the last decade due to the recognition that entrepreneurship should have social goals (Austin et al., 2006). In conjunction with this trend has been more interest in sport business, yet linking sport to social entrepreneurship has been a slow process (Ratten, 2010). This has resulted in a gap between sport and social entrepreneurship research and practice, which needs to be filled particularly given sport’s social role in the global society. For the purposes of this chapter, social entrepreneurship in sport is viewed as a subset of overall entrepreneurship but it differs due to its social mission and can include different types such as those related to business, education, health, recreation and sponsorship.

A definitional concern around social entrepreneurship in sport is understanding its meaning compared to other types of entrepreneurship (Ratten and Babiak, 2010). There is something recognizable about social entrepreneurship in the way financial objectives are melded into social projects (Kimbu and Ngoasong, 2016). In sport the real nature of social entrepreneurship is distinctive as it incorporates non-profit auspices. However, we have not yet gotten to the sociological nature of social entrepreneurship in sport (Ratten, 2010). There are literally dozens of examples of social entrepreneurship occurring in the sport realm that make interesting practical examples. These examples make the case that social entrepreneurship is valuable to sport but it needs to be considered from an opportunity or necessity perspective depending on the circumstances (Ratten, 2011). Opportunity entrepreneurs are defined as “individuals who are pulled into entrepreneurship as they seek to exploit a perceived opportunity” (Williams and Williams, 2014:35). Within sport this can result in social entrepreneurship being used as a way to leverage social contacts and business opportunities. Necessity entrepreneurs are considered as “individuals who are pushed into entrepreneurship because all other options are absent or unsatisfactory” (Williams and Williams, 2014: 35). In a sport context this results in sports organizations being made to start social enterprises due to the perceived reputation and financial effects.

Early social entrepreneurship research came from a variety of disciplines including sociology, anthropology and business management. This made the initial research on social entrepreneurship come from a non-profit and community perspective and saw it as an eclectic field. This was a seminal approach to taking in the wider context of entrepreneurship research that had previously emphasized the economic imperatives of entrepreneurship. Based on the interest in social entrepreneurship, traditional entrepreneurship research changed to take into account more diverse perspectives. As a result the social entrepreneurship field evolved and became an interesting area to study. Sport researchers were slower on the uptake of social entrepreneurship despite the recognition of its importance (Ratten and Babiak, 2010). This was due to many of the sport journals not considering social entrepreneurship to be within their area of inquiry. This limited view of sport isolated the field from other disciplines (Ratten and Ratten, 2011). This has changed recently with great progress made in sport social enterprises and many sports organizations, both amateur and professional, are using social entrepreneurship. Thus, the reality for the sports industry is that social entrepreneurship is already a popular topic but the research on this area has been less quick to evolve.

The purpose of this chapter is to examine the role of social entrepreneurship in sport. Increasingly non-profit motives such as social value and contributing to society are gaining prominence in sport literature. This is due to more emphasis on sport business and practice being about societal contributions. The definition and use of social entrepreneurship in sport will be discussed in this chapter as a way to understand the rationale and importance of the book.

Social nature of sport

The exact nature of sport in terms of being a product or service is debatable as it constantly changes depending on the context. A better way to conceptualize sport in a general sense is as a commodity. As Vamplew (2018:659) states “sport becomes a commodity when either consumers are willing to pay to play or watch it or if it has a potential value rather than merely a use one.” This definition acknowledges that the definition of sport changes depending on an individual’s perception about its place in society. Sport has commonly been linked to leisure activities as it is viewed as a recreational pursuit that is conducted for the purpose of enjoyment. Delpy (1998:24) concurs with this view, stating that “the word ‘sport’ is in fact, a derivative of ‘disport’ meaning to divert oneself.” This reflects the feeling of sport being a fun activity and not work. Whilst this sentiment has changed in recent times as more people play sport for work reasons, there is still a belief that sport is a leisure activity. People are motivated to play sport for different reasons including for friendship, health and educational benefits. However, there are ancillary activities associated with sport meaning that people do not directly have to play sport but can watch or manage the process.

The different types of sport products include player, spectator and associated categories (Vamplew, 2018). Player products involve a set of rules and terms of engagement that govern how sport is consumed. Vamplew (2018:659) highlights how player products “can be divided into five subcategories comprising, games, equipment and costume, instruction and assistance, facilities and clubs.” Sport is a game and its length depends on the participation of its players. Most games have a set of instructions that need to be followed. Games can be solitary or involve a group of participants. Usually organized sport games have a referee or umpire who checks that the game is being played properly and according to the rules, and typically most sport games involve physical activity but with the increase in computer games this has changed. Electronic games are gaining in popularity and act as a complementary product to physical games, although there are people who prefer just electronic games and are not interested in physical activity.

Equipment can range from the balls, racquets, or bats needed to play the sport to associated devices that increase performance. Increasingly, sport equipment is becoming more technologically advanced in terms of materials used and how it is manufactured. This is also seen in the real-time usage of video replays to aid decisions made by umpires in sport. Many sports though still have the same type of equipment that was used when the sport began and this has not changed much at all. This helps to create a better benchmark of current and past performance. Newer sports like skateboarding have become popular due to changing living conditions such as increased numbers of people living in the inner city. Costume involves the clothing needed to play a game and uniforms are worn by players as a way to signal the team they belong to but also for functional reasons. In sport there is a link between fashion and uniform that means the style of clothing constantly changes. This is evident in the length and style of sport clothing and the colors worn by players. In football the length of shorts has constantly changed and this is linked to fashion trends. Other sporting events, such as the tennis at Wimbledon, traditionally require players to wear white whilst the Australian Open tennis, the first event of the season, prides itself on allowing players to wear all colors, including fluorescent or unusual combinations.

Sports organizations face challenges in balancing social and business objectives. Based on the discussion in this chapter, there is a diverse range of ways that sports organizations can be involved in social entrepreneurship. This underpins the practical way social entrepreneurship needs to be managed in sport including for health, social responsibility and other reasons. Edwards and Rowe (2019:1) state “sport has become a popular policy tool for social outreach, intervention and prevention for all.” Despite the view of sport being more aligned with business principles, there is still a need for sport to espouse social values (Suseno and Ratten, 2007). This is important as sport can be used as a social policy tool to help alleviate physical, mental and religious differences. Thus, the social consequences of sport and its related activities have an impact on society. As Delpy (1998:24) states “due to its universal appeal, sport is regarded as the world’s largest social phenomenon.” This means that sport, in terms of both direct and indirect activity, is one of the world’s greatest social activities but, unlike other industry segments, it also has an emotional effect due to its entrepreneurial nature.

Social entrepreneurship

Social entrepreneurship has many different types of definitions that align with the topic of interest. Depending on the context, social entrepreneurship can be defined from a business, economics, engineering, science and technology perspective using either a narrow or a broad approach. The narrow approach defines it as involving entrepreneurial activities in the non-profit sector (Galera and Borzaga, 2009). This restricts entrepreneurial behavior in order to focus explicitly on those businesses with a social mission (Suseno and Ratten, 2007). Most non-profit organizations have social objectives but the magnitude differs depending on the size. Thus, it is essential to also consider a broad definition that relies on a mindset that combines profit and social goals. Generally, social entrepreneurship can be defined as “the recognition, evaluation and exploitation of opportunities stemming from the basic and long-standing needs of society” (Pathak and Muralidharan, 2017:3). This broad definition acknowledges that the opportunity recognition process is at the heart of social entrepreneurship but it differs from other types of entrepreneurship due to its societal effects. There are different kinds of social goals derived from social entrepreneurship including education and health initiatives. This helps make sport more impactful on society due to the way it bridges community and business concerns.

In order to help fill gaps in society, social entrepreneurship can be used as a form of value creation. This is due to social entrepreneurship involving the recognition of opportunities that have a social purpose but also provide a community benefit (Luke and Chu, 2013). Whilst the core premise of social entrepreneurship is the pursuit of business activities that involve social changing practices there also needs to be engagement with the community in order for change to occur. This change means that in the sport context, social entrepreneurship involves the notion of profit and non-profit goals in the attainment of a societal objective. The key difference between entrepreneurship and social entrepreneurship is in the emphasis on collective benefits rather than purely individual ones.

Social entrepreneurship involves two main activities, “instituting or increasing user fees, and … revenue augmentation through non-profit ventures – with the net effect in both cases to increase ‘earned income’” (Zietlow, 2001:20). These activities affect the way social entrepreneurship applies in practice, being based on adopting then sustaining a social value through engaging in a business activity. The ability to recognize a social value may be based on having a heightened sense of social responsibility (Brickson, 2007). Thus, social entrepreneurs need to act boldly by continually learning about new innovations. This can be a relentless pursuit that depends on accessing the right kinds of resources (Brooker and Joppe, 2014).

There are two main typologies to understanding the role of social entrepreneurship in society–social orientation and socio-economic orientation (Goyal et al., 2016). The social orientation school of thought focuses on how social issues need to be addressed through change processes. This means highlighting the social impact of businesses by encouraging outreach activities. In order to implement social change there needs to be an evaluation of the cash flow that comes from philanthropic endeavors. This includes the beneficial arrangements that social organizations have that enable them to design better social projects. The second school of thought involves socio-economic change, which encapsulates the view that financial incentives are required to drive social value creation (Brickson, 2007). In this perspective, a sustainable business model is needed to change the way resources are used for social needs. This includes having specific metrics in place that enable an innovative value-driven approach to take shape (Brooker and Joppe, 2014). This may involve an element of risk as some of the metrics are designed to meet social needs.

There are numerous ways to conceptualize social entrepreneurship with no common approach existing in the literature (Galera and Borzaga, 2009). Most definitions tend to focus on behavior, sustainability, or market approaches. In the behavioral perspective, leadership plays a role in encouraging enterprises to become socially orientated. This is evident in Roberts and Woods (2005) who view social entrepreneurship as the pursuit of transformational social change that is conducted by visionary individuals. This sense of passion is seen in the way enterprises pursue opportunities that are socially orientated (Kimbu and Ngoasong, 2016). To do this organizations need to construct their behavior in a way that delivers social value through exploiting opportunities (Weerawardena and Mort, 2006). Thus, the perspective of social opportunities is evaluated through reconfiguring resources that can achieve social missions (Tracey and Phillips, 2007). Organizations, in order to be considered as socially constructed, need to often rely on government subsidies. The sustainability-focused definitions of social entrepreneurship highlight pro-social motives that assure long-term wealth generation. Thus, social outcomes are emphasized that involve accepting risks but pursuing value creation. To address social needs, organizations need to combine resources in new ways. This includes innovative use of resources to enable learning to occur. Khervieux et al. (2010) suggest that both economic and social considerations are required in social enterprises.

Santos (2012) proposed a positive theory of social entrepreneurship to highlight the need for value creation instead of value capture. This means that organizations should pursue sustainable solutions that can enable social improvement. Another approach to define social entrepreneurship is the market-based approach to social entrepreneurship, which stresses the need for social value to be created through market-based solutions (Alcantara and Kshetri, 2013). Thus, social entrepreneurship is a contemporary way to include a charity perspective within social problem-solving. This approach is complemented by Marshall (2011), who defines social entrepreneurship through the commercial exchange of goods or services that create social value. Thus, the discovery of opportunities needs to be based both on social need and the ability to do this in the marketplace through social ventures.

Social ventures

Embracing entrepreneurship and using social ventures as a business strategy has become popular amongst sports organizations. This especially occurs in amateur and community sports organizations where engagement with the local region is a survival strategy. Social ventures are defined as “an entrepreneurial form of organization that combines social, or public benefit aims with business-like management” (Margiono et al., 2017:1). The key differentiating factor between social ventures and other third sector organizations is that the individuals in the venture have a right to appropriate profits in a way they deem fit. This means the profits are often reinvested in other interests as a way to further maximize overall profits. Other third sector organizations include charities, credit unions and religious organizations (Seanor et al., 2013). These organizations normally do not distribute profits or are privately owned (Margiono et al., 2017).

Margiono et al. (2017) suggest there are four main characteristics of social ventures: (1) mission to create public/social value, (2) private ownership logic, (3) public or private funding and (4) public or private control. The first characteristic focuses on creating a form of public or social value that is different to purely financial value. Sports clubs are often seen as a key part of community and play an important role in capturing value. For local sports clubs, their social mission might be to instill a healthy lifestyle amongst participants through social engagement. Other sports clubs might be a result of local council initiatives that aim to increase active lifestyles. Thus, the social mission of sports clubs will differ depending on the type of sport played and the location. The social mission can be embedded in sport in a number of different ways, such as increasing the social impact of a sport to l...