Corporate Social Responsibility in Sports Organizations

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The world today believes that companies have a responsibility to the markets in which they operate. Organizations have the power to influence and affect stakeholders’ lives. For this reason, corporations strive to make a positive impact on stakeholders who contribute to their profitability. In the twenty-first century, charitable behavior and community participation by companies is a strategic focus that makes good business. This is the reason sports organizations have adopted Corporate social responsibility (CSR). CSR is therefore a model that makes corporations publicly accountable for their social, ethical, economic and environmental effects linked to their operations (Lewis, 2003, p. 356). Sports organizations are different from other businesses because fans are more attached to their teams compared to customers. According to literature analysis, sports teams not only represent wins and losses but also aim at building a relationship with their fans through communication and the act of giving back (Nyadzayo, Leckie and McDonald, 2016). Professional sports organizations such as NFL, MLB and NBA averagely spend $100 million annually solely on corporate social responsibility initiatives (Rhodes, 2020, p. 11). This report will examine the National Basketball Association (NBA) in the USA through a lens of corporate social responsibility to understand sport management practice and the social, economic, legal and ethical duties NBA has in the USA.

National Basketball Association CSR in the USA

The National Basketball Association was initiated in 1946, with 30 teams in the United States. NBA is known in the United States and around the world for nurturing top basketball players known in history. NBA sport management practice is a culturally situated activity. It is a league that has liberated basketball, its players and has over the years cultivated a creative, free-wheeling culture in the sporting industry (Thornton-Lugo, Wooldridge and Rupp, 2017, p. 205). NBA basketball in the USA is an interesting hybrid with the best athletes globally. The game combines tactics of old coaches with the new school matrix to discover the best way to play the game.

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NBA is dedicated to demonstrating social responsibility through the league and players in realizing positive change in society. Generally, any type of sport can unify people beyond social, cultural and ethical barriers. The institutional theory states that interconnected organizations often influence the activities of other companies and act in the same way peer groups function. Sports organizations such as the NBA receive benefits from implementing CSR and society has more expectations of the organization engaging in CSR compared to other businesses (Breitbarth et al., 2015 p. 254). It means that, when sports teams receive public support, they are in turn motivated to engage in CSR to show their appreciation for it.

Economic Responsibility

Economic responsibility is a way in which organizations create solutions which facilitate business growth. It also should generate profit which will benefit the community and society (Chen et al., 2015 p. 75). The U.S economy is declining; the oil and banking industries are struggling in the Midwest, Northeast and the gulf coast. During the 2008 recession, every industry was affected including the manufacturing, construction, energy, banking to transportation industries (Sharif, Aloui and Yarovaya, 2020). With bank lending declining, tighter lending conditions were instituted that kept more restrictions on activities and spending. Similar to the 2008 recession, the current Covid-19 pandemic has significantly affected the U.S economy and the sporting industry (Sharif, Aloui and Yarovaya, 2020). At a glance, GDP in 50 states experienced a decline, with personal income decreasing by 2.7% in August (Sharif, Aloui and Yarovaya, 2020). With the current reopening of the economy, GDP has increased by 33.1% annual rate in the third quarter of 2020, from a decrease of 31.4% in the second quarter. Restrictions due to Covid-19 still apply in the U.S, meaning that the economy will take a longer time to regain its previous glory (Barry and Barry, 2020). U.S deficit in the first quarter of 2020 was at $111.5 billion. The second quarter recorded $170.5 billion, an increase of 52.9% (Makridis and Hartley, 2020). All of the above proves that there is a decline in the U.S. economy.

There are various economic impacts caused by the suspension of the 2019/2020 NBA season due to the Covid-19 pandemic. The NBA is not only losing millions of dollars from television viewership, arena purchases or advertisement revenue, but also from game ticket sales. Without games, the league lacks funds that can assist in CSR activities. With a decline in the U.S economy, NBA Cares (the league’s social responsibility program) lacks enough funds to return to charity or do service to the community as seen in the previous years.

Political Responsibility

Politically, the NBA is said to be the most political pro-sports league in the U.S. A good example is Gregg Popovich, an NBA coach who constantly launches tirades against the U.S President, Donald Trump. Additionally, premier stars of NBA such as Stephen Curry have also challenged the U.S president countless times (Popescu and Pennacchiotti, 2011). It can be termed as a political league but it is not defined by politics. NBA management has enabled players to air their political views but there are set rules to ensure they do not inflame their audience and spur political tensions. The main focus of NBA management is to ensure that players enjoy a normal life and still focus on their basketball career.

The U.S is currently set for an election in November 2020. The current political environment has seen various protests by the activists towards issues revolving around police brutality, racism and inequality in the U.S. Political tensions are rising and NBA athletes, as any other U.S citizen, are becoming more vocal towards the political situation in the country. During this season, NBA players are advocating for peaceful elections and urging their fans to vote wisely for leaders that will address racism, inequality and bring about a united nation. By speaking in the political arena, NBA players perform their corporate social responsibility to the community as they speak for themselves and on behalf of their fans and the community at large.

Social Responsibility

The United States faces various social issues ranging from racism to gender discrimination. Racism has been a problem in the United States for decades and various activists and groups have spoken about their grievances with regards to increasing racism cases. The NBA has not been left out in the fight against social injustices faced in the United States. It has been more vocal regarding social issues in the United States compared to any professional team in the league (McGowan and Mahon, 2009, p. 70). The NBA has spoken about various issues including denouncing transgender bills, advocating for gender equality and fighting against racial discrimination in the United States. About 80% of NBA players are Blacks and being a popular sports league in the United States, players are encouraged to speak publicly and address inequality, racial prejudice and police brutality that are happening in the community (Kawashiri, 2020). The highly profiled deaths in 2020 have been George Floyd and Breonna Taylor’s ones that saw NBA players voice out their frustration and concern regarding this form of discrimination.

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NBA entity is a legal cartel operating on behalf of individual teams and team owners. Its league structure defines the organization, just like any business in the corporate world (Kartun et al., 2017). The NBA league has a commissioner and corporate structure but every individual effectively operates under teams. Team owners occupy the highest rank in NBA organization while players are unionized employees. The Commissioner of NBA is Adam Silver and the organization is legally operating in the United States. Apart from being legally transparent, the NBA has been a popular known brand, which fans trust, for decades. NBA corporate social responsibility is to pay taxes, adhere to labour laws and regular inspections by the United States government.

Ethical Responsibility

Ethics in any organization helps to protect the welfare of people by having set guidelines and enforcing them to regulate the conduct of people in the professional setting (Cleret, McNamee and Page, 2015). Ethical practice is the coin not only in psychology but also in the sports realm. Every organization should have ethical guidelines and compliance systems that ensure the good conduct of every member. Most organizations struggle with internal culture owing to different reasons. Establishing a solid compliant corporate culture is essential to ensure discipline for every member of the organization, from the manager to the NBA player.

NBA has faced various ethical challenges and one outstanding example was seen during a dramatic matchup between Toronto Raptors and Golden State Warriors. During this game, Kyle Lowry, a player of Toronto Raptors, accidentally landed on Mark Stevens (billionaire owner of Golden State Warriors) while trying to save the ball. In retaliation, Mark Stevens hit Lowry coupled with a series of verbal abuse. Normally, fans are banned for life for verbal harassment. Commissioner Silver had the task of judging this case. Caught in an ethical dilemma where he had to discipline his boss and failure to which would mean a crippled culture and loss of respect to his workforce. In light of this case, commissioner Silver charged Mr. Stevens with a $500,000 fine, suspended from team activities for a whole year and was forced to sell his shares (Lee and McFarlin, 2016, p. 69). This passed a clear message that it is not important which position one holds in the NBA, ethical standards must be upheld. NBA Commissioner had a corporate social responsibility to the fans, his workforce and the community to act ethically in such a dilemma.

Conclusion and Application in Sports

Professional sports play an important role in society as sports organizations continue to be viewed as businesses. Increasing commercialization in sports has brought great scrutiny from the public. It no longer works with traditional elements of gaming but has to have a strategy to thrive in the business world. Sports contain social, economic and ethical elements that are keenly observed by stakeholders. This report has examined the NBA, located in the USA, through a lens of corporate social responsibility. The report developed an understanding of sport management practices as well as the economic, legal, ethical and social responsibilities NBA has in the USA. CSR as a strategy has been employed by the NBA in the U.S which has positively impacted the brand’s image over the years.

References

Cleret, L., McNamee, M. and Page, S. (2015) ‘“Sports integrity” needs sports ethics (and sports philosophers and sports ethicists too)’, Sports, Ethics and Philosophy, 9(1), pp. 1−5. Web.

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Breitbarth, T. et al. (2015) ‘Corporate social responsibility and governance in sport: “Oh, the things you can find, if you don’t stay behind!”’, Corporate Governance, 15(2), pp. 254−273.

Barry, A. and Barry, M. (2020) ‘To what extent does the COVID-19 pandemic impact the GDP of the United States’, Journal of Economics & Management Research, 1(3), 1−3.

Chen, B.H. et al. (2015) ‘Constructing the corporate social responsibility indicators of professional sport organization’, International Journal of Business Administration, 6(5), pp. 75−81.

Kawashiri, K. (2020) ‘The societal influence of the NBA’, Pop Culture Intersections, 54.

Kartun, L.K. et al. (2017) Corporate social responsibility in professional sport: investigating partnerships and the desire for authenticity. Doctoral dissertation. George Mason University.

Lee, J.S. and McFarlin, J.K. (2016) ‘Sports scandals from the top-down: comparative analysis of management, owner, and athletic discipline in the NFL & NBA’, Jeffrey S. Moorad Sports Law Journal, 23(1), pp. 69−105.

Lewis, S. (2003) ‘Reputation and corporate responsibility’, Journal of Communication Management, 7(4), pp. 356−366.

Makridis, C. and Hartley, J.S. (2020) The cost of Covid-19: a rough estimate of the 2020 US GDP impact. Web.

Nyadzayo, M.W., Leckie, C. and McDonald, H. (2016) ‘CSR, relationship quality, loyalty and psychological connection in sports’, Marketing Intelligence & Planning, 34(6), pp. 883−898.

Popescu, A.M. and Pennacchiotti, M. (2011) Dancing with the stars, NBA games, politics: an exploration of Twitter users’ response to events. Web.

Rhodes, K.L. (2020) ‘Impactful corporate social responsibility in Major League Baseball’, The Sport Journal, 41(2).

Sharif, A., Aloui, C. and Yarovaya, L. (2020) ‘Covid-19 pandemic, oil prices, stock market and policy uncertainty nexus in the us economy: fresh evidence from the wavelet-based approach’, International Review of Financial Analysis, 70, 101496. Web.

Thornton-Lugo, M.A., Wooldridge, C. and Rupp, D.E. (2017) ‘Corporate social responsibility and sports’, in Svyantek, D.J. (ed.), Sports and understanding organizations. London: Routledge, pp. 99−110.

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