Una Mirada de la Problemática en el Tiempo

Sport organisations’ effectiveness was discussed by Gerrard (2005) and Smart and Wolfe (2000). Both papers illustrated the Resource-Based View (RBV) which gives insight into an organisation’s likely competitive advantage and performance.

Utility Maximisation

Research by Gerrard (2005) was of particular interest to this study. Using RBV, the author addressed not only resources which potentially achieve competitive advantage, but the efficiency with which these resources are used. The author acknowledged Amis, Pant and Slack (1997) and Smart and Wolfe (2000) for their application of RBV in a sports context. He built on this work with a study of English Premier League teams.

Gerrard (2005) presented the argument that professional sport teams must potentially negotiate tradeoffs between financial and sporting performance. He extended

previous studies by Sloane (1971) and Noll (1982) which had common themes that teams should have objectives to maximise number of games won and profit, subject to a minimum profit constraint. Gerrard noted that while instructive, these studies did not address owners’ preferences for sporting success over financial performance, but merely recognised the validity of both.

The author conducted his study using two methodologies. First, he developed a resource utilisation model for professional teams which could highlight resource allocation differences between profit maximisation teams (the implication is that this consisted of listed teams) and those which placed more emphasis on sporting

performance. This was developed using complex mathematical relationships and is not discussed here. Second, using financial ratio analysis and regression analysis, he examined links between owner status and performance.

The regression analysis used several key variables: current sporting performance; previous sporting performance; profitability; wage costs; revenue; team playing quality; team fan base; and team ownership status. The two financial ratios considered were:

Revenue efficiency = Total revenue/average league gate Wage efficiency = Total wage costs/league points.

Gerrard then empirically studied performance within the Premier League, using data on playing records and player rankings together with published financial results, to determine whether ownership status (listing) had an impact on effectiveness. In terms of the financial ratios, the results showed that listed teams had higher revenue

efficiency than non-listed teams. In terms of wage efficiency there was no significant difference.

Overall, he concluded that there was strong evidence of a relationship between ownership status (listing) and financial performance. Listed teams had lower wages, higher revenues and higher profits. He concluded that the “financial efficiency gained allowed the listed teams to improve financial performance without any significant impact on the accumulated stock of playing talent and sporting performance (Gerrard, 2005, p. 167).

Competitive Advantage

Smart and Wolfe (2000) considered the sources of competitive advantage of a college Athletic program in line with RBV. The authors quote several authorities on RBV (Barney, 1991; Conner, 1991; Grant, 1991) and RBV within a sports context (Amis, Pant, and Slack, 1997). Essentially, RBV focuses on internal tangible and intangible resources, as a source of competitive advantage. Smart and Wolfe (2000, p. 135) stated that in order for a resource to provide competitive advantage, it must possess the following attributes:

1. It must be valuable

2. It must be rare among current and potential competitors 3. it must be imperfectly imitable.

The authors suggested that sources of competitive advantage were often tied to

intangible resources such as reputation, customer loyalty, culture since these resources are hard to imitate exactly. Their study examined any link between RBV and the athletic program success. This was of interest to this thesis with regard to the

potential definition of the Board as a resource and their ability to protect intangible resources such as club culture and club image and reputation. It was also of interest in offering some examples of success measures albeit in a different sport context.

Smart and Wolfe (2000) cited Putler and Wolfe (1999) in describing four outcomes that could be perceived as program success: success on the field (win/loss records); student athlete graduation rates; athletic program ethics (absence of league

violations); and financial performance (surplus or deficit). Their study was based on analysis of a college football program and they measured outcomes over a period of ten years. They identified the percentage of games won; established the graduation rate; determined the number of league sanctions and violations and used a proxy of attendances for financial performance, as the program itself did not record revenues. In terms of RBV, they identified physical resources (stadium, training facilities and equipment); human resources (players, coaches); organisational resources (including: history, culture, relationships possessed by a group of individuals. This group was defined by the authors as ‘top management’ but operationalised in their study by senior coach). Tenure of the coach was important for strategic advantage. Their findings argued that the physical and human resources were replicatable by other teams, so that the only source of competitive advantage was organisational resource. They undertook a comparison of outcome measures for three teams to illustrate this point.

Productive Efficiency

Haas (2003), using a similar mathematical methodology to Gerrard, focussed on production efficiency of English Premier League clubs in terms of meeting the expectations of supporters and sponsors. The study used two variables as inputs to the ‘production’ process (that is the process of engaging in football competition) and defined two key outputs from that process. The methodology involved calculating an efficiency score based on outputs divided by inputs and a comparison to other teams’ efficiencies scores, creating an efficiency frontier. They then could establish which clubs operated outside the efficient frontier. Again, this study is a useful input to this thesis by discussing appropriate performance measures. It is instructive to consider how the author determined effective measures for the inputs to the production process and the outputs from that process.

Haas determined two input variables as playing talent and coaching expertise. He operationalised these inputs with proxy measures in total wages and salaries less the salary of the head coach, which he set as the second proxy measure. The two key outputs from the production process were deemed to be commercial success as

measured by total revenue and football success as measure by league points won. The author recognised the limitations of the use of proxies. He included both total revenue and premiership points as measures to allow for the fact that several teams participate in European competitions which generate revenue but do not earn competition points.

He found that only two teams were efficient under all versions of the model, and he noted that the results of these teams were good relative to the moderate expenditures on payers and coaches. He also noted that several of the more prominent teams were found to be inefficient, in that the wages and salaries were high relative to their success.