Stakeholder Analysis and Sport Organisations

Anna-Maria Strittmatter, Josef Fahlén, Barrie Houlihan, Anna-Maria Strittmatter, Josef Fahlén, Barrie Houlihan

• Publisher: Routledge
• Year: 2021
• ISBN:
  9781000511888
• Edition: 1
• Topic: Commerce
• Subtopic: Comportement organisationnel

This book provides a critical examination of the origins and development of stakeholder theory within sport management research and expands the existing literature by providing insights on stakeholding in sport from various perspectives, such as governance, communication and marketing.

Examining cases from around the world and from a wide range of different sporting contexts, each chapter reflects on key insights derived from stakeholder theory before offering an analysis of the limitations of the theory and the ways in which it might be fruitfully extended or developed. It offers suggestions on how the literature on stakeholding in sport can be advanced in order to provide knowledge relevant not only to sport studies but also to organisation theory more broadly and points to future avenues of inquiry in order to extend the reach of stakeholder theory and other inter-organisational perspectives in sport management research.

Stakeholder Analysis and Sport Organisations is fascinating reading for any advanced student, researcher, policy-maker or practitioner with an interest in sport management, sport governance, sport development or organisational theory.

Part I

Introduction

Chapter 1

Introduction

Barrie Houlihan, Anna-Maria Strittmatter and Josef Fahlén

DOI: 10.4324/9781003111917-2

This collection of studies was prompted by three concerns regarding the application of stakeholding theory in the field of sport studies. The first concern was the increasing frequency with which stakeholding theory was used in the analysis of decision-making in relation to a variety of issues in sport including governance (Alm 2013, Ferkins and Shilbury 2015, King 2016), social capital/civic culture (Jarvie 2003), athletes’ rights (Thibault, Kihl and Babiak 2010) and hosting major sports events (Leopkey and Parent 2009, Naraine, Schenk and Parent 2016). The widespread use of the concept and associated theory not only in the analysis of sport decision-making but equally widely across the field of management is testament to the richness of stakeholder theory and its adaptability to different contexts and time periods. Given the increasing application of stakeholder theory, it was considered timely for an assessment of the value of the theory and the underpinning concepts.

The second concern relates to the precision of the concepts of ‘a stake’, ‘stakeholder’ and ‘stakeholding’ and the wide variety of definitions attached to them. As Miles (2017, p. 437) notes, ‘Whilst this profusion of definitions is indicative of its widespread appeal resulting in multi-contextual applications, theorists recognise that this is also highly problematic’. A view that is shared by Fassim (2009, pp. 116–117) who argued that the ‘stakeholder model is seen as suffering from vagueness in scope and ambiguity due to the possible interpretations of the basic stakeholder concept’. While the flexibility of the concepts has the advantage of allowing application across a range of contexts, it also has the disadvantage of making the transition from rich description to theory-building more challenging.

The third concern focuses on the relationship between stakeholding theory and other theories that take the pattern or network of interorganisational relationships as their focus. Stakeholding theory is often adopted without a clear analysis of its strengths relative to alternative theories of interorganisational relations: the utility of the theory is often implicit and assumed rather than demonstrated through a comparison with, or critique of, competing theories. Well-regarded alternative theories include interorganisational theory (Benson 1982, Aldrich 1976) which has stimulated a large body of theorising in relation to the interplay of interests in the policy process. Network theory has also generated considerable insights into interorganisational relations and policy, and management decision-making processes. As Adam and Kriesi (2007, p. 129) commented, ‘The image of the policy network represents an intuitively comprehensible metaphor: regular communication and frequent exchange of information lead to established relationships between actors and the coordination of their mutual interests’. One use of network theory is to describe the patterning of interaction between public and private actors in policy sub-systems, an approach that is usually linked to macro-level theories of power distribution such as neo-corporatism, neo-pluralism and neo-Marxism. There are a number analytical frameworks and models of actor interaction that come under the broad umbrella of network theory including policy communities and the advocacy coalition framework (ACF), while theories such as neo-institutionalism have also proved insightful in the analysis of the interorganisational relations. The alternatives or complements to stakeholder theory will be discussed later in this chapter, but the next section provides a critical discussion of the definition of concepts and the application of stakeholder theory.

Stakeholder theory: definitions, applications and insights

Stakeholder theory was developed in the mid-1980s by Freeman (1984) partly as a response and challenge to the dominance of the view of Milton Friedman (1962) that only shareholders’ interests should influence corporate decision-making. The work of both Friedman and Freeman was primarily normative designed to identify a set of protocols for effective/profitable management of businesses. That the application of stakeholder theory has moved beyond the confines of business enterprises and has moved from the normative to a more analytical application is testament to its adaptability and its capacity to generate useful insights into both organisational behaviour and interorganisational relations.

Freeman argued for both a top-down view of corporate decision-making (the role of senior managers in managing stakeholders for the benefit of the business) and a moral view of management (how senior managers should behave). When Freeman, Harrison and Zyglidopoulos (2018, p. 15) discuss power, their primary reference point is the customer: ‘In a sense, all stakeholders hold “customer-like” power in that, in a society that allows freedom of choice, they can decide whom to trade with’. Stakeholders are defined as groups (and sometimes individuals) who are considered to ‘have a valid interest (a stake) in the activities and outcomes of a firm and whom the firm relies on in order to achieve its objectives’ (Freeman, Harrison and Zyglidopoulos 2018, p. 15). A distinction is drawn between primary and secondary stakeholders. While primary stakeholders are those that are directly involved in value creation (they have an economic stake) and include customers, employees, suppliers and financiers, secondary stakeholders are those that are not directly involved in the creation of value, but nonetheless ‘have a legitimate interest in what the firm does’ (Freeman, Harrison and Zyglidopoulos 2018, p. 17) and would include media, trade unions, government and consumer organisations. Secondary stakeholders may well influence the operation of the firm (for example, government may affect the operation of the firm through changes to environmental or health and safety regulations). The underpinning assumption is that the successful firm is one that recognises and appreciates the contribution of primary and secondary stakeholders. Leaving aside the empirical question of whether management sensitivity to the interests of stakeholders moves beyond the rhetorical level, there remain a number of significant aspects of stakeholder theory that require clarification. Of particular importance is the question of who determines the validity of claims to stakehood. The impression given in much of the literature on stakeholding is that the stakeholders achieve their legitimacy through recognition by the management of the focal organisation rather through the effective assertion of their interests (see, for example, Luke 1994, Rowell 1996 on the co-option of environmental interests by oil companies and Houlihan 2004, Jackson and Richie 2007 on the incorporation and controlling of athletes by international sport organisations). In other words, most stakeholders are best conceptualised as passive objects rather than active subjects. As Holzer (2008, p. 62) noted, ‘To reduce resulting uncertainties, corporations negotiate their environments: they seek to turn stakeseekers into stakeholders with whom they can establish routine relationships’. However, Freeman does acknowledge a degree of agency on the part of stakeholders resulting from resource dependency. ‘They may have resources the firm needs, such as money, talent, time, knowledge, or physical goods, and they can choose to engage with the firm that they believe...