Kathy Babiak, Associate professor, Sport Management, University of Michigan
"Does Team Ownership Affect Corporate Philanthropy in Professional Sport?"
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Abstract: Introduction: As one of the pillars of corporate social responsibility, corporate philanthropy (CP) is a vehicle for businesses to create a social impact in communities where their operations are located and to lever access to markets nationally and globally (Gautier & Pache, 2015). In the professional sport context, corporate philanthropy has experienced growth and increased focus via the formation of affiliated team charitable foundations (Babiak & Wolfe, 2009; Walters, 2009).
The emerging scholarly focus on CP in professional sport has examined its social and strategic value (Bingham & Walters, 2013; Inoue, Mahan & Kent, 2013; Ratten & Babiak, 2010). However, an overlooked aspect is the role and function played by CP influencers within firms—particularly organizational principals/owners (Galaskiewicz 1985; Gautier & Pache, 2015). Brammer, Millington and Pavelin (2006) found that top management plays a significant role in shaping the overall size of the philanthropic activities of most companies.
According to the upper echelons perspective, individual owners are more frugal and sensitive to the bottom line than agent/managers who might not have a financial stake in the firm (Lee, Sun & Moon, 2018). This perspective posits that individualized experiences, perspectives, values, and cognitions influence managerial and strategic choices such as CP (Hambrick & Mason, 1984; Hambrick, 2007).
Purpose: Using an upper echelons perspective, this study explores the relationship between ownership and the focus, impact and nature of CP in the professional sport context. In particular, our research questions examine observable individual characteristics of sport team owners using an upper echelons perspective to understand how age, education, career experience, and socioeconomic roots impact CP performance.
Methods: Time series panel data were collected from a variety of publicly available sources and compiled into a central database of 146 U.S. professional sport teams in the NBA, NFL, MLB, NHL, and MLS. Dependent variables include the level of corporate philanthropy derived from tax reporting data (2000–2016): revenues, expenditures, assets, mission/focus, and mode of social impact (categorized by charitable contributions to partners, program delivery, and/or infrastructure build). Independent variables include upper echelon attributes such as age, tenure as team owner, and educational/functional background. Moderating the relationship is the type of team ownership structure (individual, corporate, or partnership). Multi-level regression modeling will be conducted to examine associations between upper echelon attributes and the level of corporate philanthropy after adjusting for covariates (e.g., team performance and market size).
Discussion: CP is a unique phenomenon: while corporate leaders’ individual decisions determine firms’ philanthropic activities, their decisions are also partly shaped by organizational objectives and processes. Future research will explore these facets of this phenomenon. The results will provide valuable initial information on the directions and scope of CP efforts in professional sport and can offer managerial insights into effective and impactful CP delivery. These insights may be valuable to boards of directors and other CP managers in designing, structuring and executing CP in sport.
Bio: Dr. Babiak’s main line of research focuses on social responsibility and philanthropy in sport. She is the director of the Michigan Center for Sport and Social Responsibility. In this role, she works with a research team of global scholars whose work advances understanding of the role of sport organizations and business in society. Dr. Babiak’s research has examined the social impact of sport-based efforts from professional athletes, teams, leagues and team owners. Her research has explored the strategic factors motivating athletes and sport organizations to engage in pro-social behaviors, the structure and organization of these efforts, and the impact these initiatives have on the intended beneficiaries.