STAKEHOLDER INFLUENCE EFFECTS ON THE PERFORMANCE OF FOOTBALL CLUBS IN CAMEROON

 

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

Football is considered as one of the most popular sports in most African countries in general and Cameroon in particular. It is by far the most widely followed sport in Cameroon judging from its viewership, the number of fans it has and the growing number of people who attend games in stadiums (Desai & Vahed). Due to this importance, there has been a rising level of interest in the football business from across the scientific community particularly given the proposition that football performance directly interrelates with the way in which the clubs manage their stakeholders (COELLI et al., 2005).

A football club, as a continuous project, entails the efficient management of resources (time, human and financial resources) to achieve specific results or outcomes, seen as their performance. While football clubs have usually been focused on the ‘on field’ performance, recently they have started to reflect on a more integrated vision, which takes into account also the ‘off field’ performance (Wolfe and Putler, 2002). This correlates with Sloane (1971) assertion that the main objective of professional football clubs involves competitive results while El- Hodiri and Quirk (1971) propose that financial profit is the main factor responsible for their survival. However, Vrooman (1997) details the importance of combining these two aspects for the evolution of professional football clubs. Accordingly, football clubs have started to re-think their relationships with stakeholders (e.g. shareholders, players and management team, football federation, fans, local community, local public authorities, nonprofit organizations, etc.).

According to stakeholders’ management literature, creating compatibility between a football club, the local community and other stakeholders’ priorities produces a good fit between the club and its environment, increasing, thus, the probability of the club’s success (Shulman and Bowen, 2001). Stakeholder management is critical to the success of every professional football club. Stakeholders are defined as any group or individual who can affect or is affected by the achievement of the organization’s objectives (Carley, 2006). In the football sector, these stakeholders are usually numerous, and can vary significantly in the degree of influence on the performance of the clubs. The process of efficiently managing football clubs fundamentally requires the identification of the various stakeholders and the best means of interacting with them to optimise the management of material, human and financial resources. The clear identification of stakeholders and their respective individual roles needs to be well defined by club decision makers so as to maximise the interventions and responsibilities assumed by individual stakeholders that then in turn demand greater efficiency of the club (Winand et al., 2010).

Managing stakeholders represent a major challenge to many football clubs (Neil, 2011). A vital part of stakeholder management is managing their competing expectations which have a tendency to change from time to time (Theophile and Jaya, 2015); for instance, the aim of shareholders maybe to make more profit via sales of top players while that of fans is to enjoy good spectacle in the field and victory for the club. According to Aaltonen et al., (2008) cited in Theophile and Jaya, (2015), the advantage of stakeholder management includes eliminating conflicting interests among stakeholders, reducing the pressure of management to produce short-term results, reducing the cost associated with a high turn-over among stakeholders and providing football clubs with committed stakeholders in an environment characterized by increasing competition.

Furthermore, the success or failure of a professional football in a championship is influenced very strongly by the expectations and perceptions of the stakeholders involved and failure to balance or address the concerns of the stakeholders often results to poor performance. Young and Jordan, (2008) stated that, the major causes of poor performance in football clubs was due the following; poor definition of the objectives, an inadequate project schedule, too much uncontrolled change, insufficient control, a lack of resources, ineffective communication among stakeholders, an unclear role of the participants, a lack of top management support, too many teams focusing on technical solutions and neglecting the needs of the people. Most of these could be associated with either uninformed or ineffective stakeholder management; for instance, the early involvement and considerations of the interests of shareholders may influence adversely the expectations of fans and supporters of the club (Theophile and Jaya, 2015). The IFC (2007), singled out that, a lack of understanding of the various interest groups (stakeholders), the drivers of their actions and their influence on professional club’s performance is the beginning of failure of the club.

1.2 Statement of the Study

Sports particularly football as an opened system, have been subject to the impacts of a wider socio-political environment and the demands and pressures stemming from external stakeholders such as community groups, local residents, landowners, environmentalists, regulatory agencies, local and national governments (Morris et al., 2002).

Management of relationships with stakeholders is one of the key parts of the management of football clubs. It is not easy for football clubs to manage these relationships, because they have to satisfy the needs of several stakeholders at the same time and, moreover, they have to think about the satisfaction (fulfilment) of their own needs. This is generally a very complex process and incorrect management of these relationships can result to poor performance of the club. Professional football clubs are very specific and it is, therefore, very demanding for managers to maintain and develop within them individual relationships with stakeholders.

Professional football clubs in Cameroon face a lot of challenges which affect their on-field performance; amongst which include inadequate finances to run the club, poor or insufficient sporting infrastructures, poor management of clubs and stakeholders, etc. All these challenges cause most football clubs to perform poorly in most championship within the country (organised by Fecafoot and the Cameroon professional football league-LPFC) or at the continental scene (African Champions’ League or the African Club Confederations Cup).

Different stakeholders in the football sector participate at different levels and forms in the running of football clubs which has a great effect on the performance of the clubs; for instance, shareholders provide the equity to run the club, coaches and players provide skills to achieve the clubs’ objectives, fans provide support, and sponsors provide financial and materials aid.

Previous research on stakeholder management’s effects has focused primarily on financial performance and not on performance of the organization as a whole. Researchers have found contradictory results, however. There have been positive relationships between stakeholder management and firm financial performance in several studies (Laplume et al., 2008). Other studies have shown neutral or mixed results (Bird et al., 2007; Berman et al., 999), while Greenley and Foxall (1997) show that there is a negative association between football club stakeholders management and the financial performance of the football clubs.

The studies above clearly demonstrate the existing contradictions in this research area. Some come to the conclusion that there is a positive correlation between stakeholder management and financial outcome, whilst others have found negative or mixed connections. The inconsistent results might be explained by the lack of a coherent conceptualization of the term stakeholder management. Further research should, therefore, focus on a wider conceptualization and also follow the insights of Freeman and McVea (2001) that argue that future research should focus on detailed company situations, for example studies of a specific industry, and not on abstract theory development.

Researchers also call for more studies on small and medium sized entities, non-profit firms and private firms and to go beyond financial performance measures and include additional organisational outcomes (Coombs and Gilley, 2005; Laplume et al., 2008).

Non-profit firms should be of specific interest in this research area, due to the lack of a for-profit aim. Since there is no profit maximization goal in a non-profit organisations, other organisational outcomes than financial are relevant to assess performance (Sarstedt and Schloderer, 2010). It is for this reasons that this study seeks to identify the effects of stakeholder’s influence on the performance of privately own football clubs in Cameroon.

1.3 Research questions

The main research question of this study is; to what extent do stakeholders influence affect the performance of football clubs in Cameroon?

Specific research questions include;

1. How do the contributions from shareholders and sponsors influence the performance of football clubs in Cameroon?
2. To what extent does the media and the football governing body influences football club performance in Cameroon?
3. How important is the role players and coaches play in the performance of football clubs in Cameroon?
4. How do supporters and support associations of football clubs influence club decisions?

1.4       Objectives of the study

The main objective of this study is to assess the effect of stakeholder influence on the performance of football clubs in Cameroon.

Specific objectives include;

1. To determine how the contributions from shareholders and sponsors influence performance of football clubs in Cameroon
2. To evaluate how the media and the football governing body influences football club performance in Cameroon?
3. To examine the role of players and coaches play in the performance of football clubs in Cameroon
4. To investigate how supporters and support associations of football clubs influence club decisions

1.5  Research Hypothesis

The research hypothesis of this study, which is stated on the null form, is;

H_o: Stakeholders’ influence has no significant effect on the performance of football clubs in Cameroon.