Governance In Sports Organizations

Good governance

Governance is a crucial element of the efficient management of sports organization. Owing to changing characteristics of sports organizations, most notably the drive to accept business models of function, questions of proper forms of governance have attracted growing research consideration in the sports segment. Good governance is a strategy which is committed to creating a system originated in impartiality and harmony which safeguards individual’s human rights and civil freedoms. It is a subjective term which describes how organizations conduct public affairs and manage public resources in the preferred manner (Yeh & Taylor, 2011). The concept of good governance centers on the duty of governing units to satisfy the requirement of masses in contrast to selected groups. In accordance with the United Nations, good governance is evaluated by eight aspects which are involvement, rule of law, clearness, reactiveness, consensus-oriented, equity and comprehensiveness, effectiveness and responsibility. Sports governance is an evolving model which implies the function of governing sports by the involvement of several participants and stakeholders, comprising the government, industry leaders and civil society among others in the creation, legitimization, and implementation of sports programs, strategies and projects for sports quality and development (Blanco, 2017). Since sports organizations should become more professional and accept a more transparent and responsible strategy to their functions, it has become vital to understand the governance issues and the way to solve them. Sports governance gives an important way of renovating and reviving individual’s curiosity and passion to actively involved in sports, which can provide a basis of motivation and inspiration for them, particularly the young (Moore Stephens, 2014).

The aim of the work is to determine and critically evaluate the governance challenges faced by the sports sectors and acknowledge the effective approaches so as to maximize the organizational performance and develop future resilience.

The work is intended to develop an effective approach in order to enhance the present organizational performance and to develop future systematic resilience. The work is structured into five parts. In the next part, the key governance issues faced by a sports organization based on a case study have been discussed. In the third part, the governance challenges in the whole sports segment have been described. Given the premises, the paper will evaluate and reflect on three important issues which sport governance faces such as board composition, conflict of interest and shareholder accountability. Then it will provide the opportunities and guidance on sports governance as an insinuation and contribution to the area of sports literature. In the fourth part, the approaches of governance that should be taken by sports organization have been defined with using specific governance theories and ultimately in the fifth part conclusion have been made for the work.

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This study has made the usage of different theories in order to explain the ways to improvise the performance of sports organizations. However, all of the theories are based on corporate governance rather than explain regarding sports governance. Moreover, none of the single theory had explained regarding the ways to improvise the organizational performance along with the range of board roles and responsibilities. Thus, it seems like an emerging problem in this study.

In order to understand the key governance issues in a sports organization, a case on “Jacques Faul and Cricket South Africa” has been analyzed. Jacques Faul was the CEO of Cricket South Africa (CSA). CSA board comprises senior office bearers and presidents of six provincial unions and was regarded as an ultimate policy-making unit in South African cricket (Richard Ivey School of Business Foundation, 2015). However, the organization has faced various governance challenges throughout its operation. These challenges are discussed below.

Board Composition: Board composition is the core of good corporate governance. Board composition is typically concerned with the issues associated with board independence (comprising independence of board members) and diversity. In this particular case, the board composition issue is related to diversity. There were insufficient non-executive directors in the board of CSA. The activities of professional cricket were administered by the board, which comprise 11 affiliate presidents and 22 members. Furthermore, from the case, it can also be observed that the CSA board was not sufficiently independent and honorable to take essential action against any illegal activity. This resulted in a bonus scandal faced by CSA with more than R4.7 million unauthorized bonuses and this was distributed by the then CEO of CSA, Majola, without discussing with the board members. This questions the whole board structure of CSA, where there was a lack of diverse members and the existing members were reluctant to take action against him. Therefore, from the case, it can be stated that in order to achieve good governance, there is a requirement to accomplish diversity. The board which embraces diversity can obtain an advantage in their decision making by drawing an an array of abilities, experience, and different opinions. A board which comprises of directors with a different set of practical expertise (in the area of marketing, engineering and finance among others), sports industry knowledge, educational qualifications, and ethnic mix is better equipped to deal with an extensive variety of issues confronting the organization and give chief executives with guidance and consultations from different viewpoints. Furthermore, the board members must be independent enough to take proper action. Board independence mention to a corporate board which has a majority of independent external directors, which was missing in CSA (Tamang, 2018). In comparison with the inner dominated board, the external dominated board is considered to be more vigilant against such bonus scandals by observing administrative behaviors and decision making. In order to address the board composition issue, there must be proper number of independent directors, who are able to protect the interests of the shareholders and other key stakeholders of the organization. Furthermore, the directors must ensure that there is no interpersonal relationships between the executives and other company members. Whatever leadership structure is selected by an organization, the independent board is crucial for effective governance.

Conflict of Interest: Conflict of interest is another important governance issues faced by CSA. Conflict of interest in the corporate governance happens when a chief executive or another controlling member of an organization has financial interests which directly conflict with the objectives of the organization. In this case, also, it can be observed that the CEO Majola has personal financial interests which were against the corporate interests of CSA. He not only provided unauthorized bonuses to himself and other personal staff members but also not revealed this information to the remuneration committee. This conflict of interest between CEO and the organization has influenced ethics of Majola by distorting decision making and generating outcomes which weaken the trustworthiness of the board. The real issue, in this case, was that the board members and directors were unaware of the interest they were dealing with. There was a consistent struggle of egos, powers, and authorities, which resulted in turmoil in the group dynamics of CSA. Therefore, from the case, it can be observed that CSA members were divided into two where one supported Majola and others were against him. Therefore, it is important that the organizational members sign a conflict policy during the time of selection. This policy typically stipulates how executives and directors should avoid conflicts of interest. This enhances the responsibilities of board members and reduces the scope for conflict of interest in organizations (Cossin, 2017). In order to address conflict of interest the board require to have specific policy in place. This policy requires to specify procedures for dealing with key actual and potential conflicts such as improper utilization of assets. If possible the policy require to be signed by the directors and restructured frequently and the conflicts must be acknowledged at every board meeting.

The power of a manager is another important corporate governance issue faced by CSA. From the case analysis, it can be observed that there were strong executives and weak owners. There were various problems of CSA with respect to the management, which comprise managerial decisions regarding personnel selection and organizing corporate relations. In order to address this issue, there must be proper clarity on roles of the managers. Clear rules regarding the roles and responsibilities can help to control the activities of managers in every level. However, it should be noted that such practices should not make the power hierarchy complex for the organization to operate effectively.

The case also signifies issues of accountability of directors and executives towards the stakeholders. In CSA, the executives are provided with wide-ranging powers and therefore utilized an inappropriate manner. Furthermore, it seems that the ownership of the organization is being separated from control, i.e. the shareholders are unable to control the organization’s internal affairs properly. The shareholder itself was dependent on the directors and executives in order to regulate the organization on regular basis in an effective way. Therefore, the management of CSA in generally totally in the preference of executives clarify that they have a low sense of accountability. The executive, as well as directors of CSA, was less accountable to the shareholders. Good governance states that an executive or director must not exploit his/her position and should perform for the interests of the key stakeholders. All the organizational members are expected to perform ethically every time and notify promptly regarding any transaction or possible conflicts of interests and take proper corrective measure (Gay & Denning, 2014). The case also questions the responsibility of loyalty of the executives, which was compromised. This occurred because a senior executive has exercised his influence by compensation, resulted in a conflict of interest between executive and directors. This also resulted in trust issues within the organization, as Faul felt that the board members lost confidence in the judgment made by him and intended to micromanage the functions.

Sports governance is the area of coaches, managers, trainers, athletes and other key stakeholders, who involve in politicization procedure of managerial activities. However, in order to maintain its performance, sports and politics must not mix with each other. Still, in the national level, certain national sports leaders and executives or senior member of sport governing unit’s clashes for the pursuit of obtaining political power and authority. These results in penalties and scandals and leads to bans from involving in sports events and tournaments. According to Marjoribanks & Farquharson (2011), sports cannot isolate and estrange itself from rigors, intricacies and complexities of politics, as sports itself flourishes under the world of politics, where people try to push, struggle, influence and compete for sports credit and authority. Sports can only be freed from politics if one considers a level of commitment and sacrifice in abandoning authority, reputation and position for greater benefit, rather than obtaining power for greed and personal goal. There are instances wherein national and international sports, leaders have been in authority for a long time period and find is hard to let go and hand over the authority to the new mantle of leadership. The variant nature of the sports gives a very complex view regarding the sports which is linked with loyalty, passion, emotions, etc. and thus challenges the global and fundamental aspects.
This is the time and situations of the arising of the conflicts when crowds of regular followers and supporters from the longer period possess supremacy of the sports leaderships are creep up by the newer brand as well as the new generation’s sports leaders. However, the loyal supporters and followers would employ all of its power and connections so as to achieve blessing and recognition from the international sports governing bodies. In the severe case, some of the sports disputes are lengthened to a legal battle and where sports are a drag in legal and unembellished controversy (DeSensi & et.al., 2010). Thus, contestations in national sports federations and associations also look for recognition and accreditation in the sports events which is affiliated by the world’s governing body. In such cases, the governing bodies of the world issues penalties, sanctions, suspension and in severe cases, the world governing bodies also provide temporary as well as lifetime bans in the national teams from making competition in national, international and local competitions.
Sports governance is also distress with the structure and system which generally fits the efficient as well as effective program, policies, and projects of the sports. However, the arrangement and structure of the governance generally depend on nature, classifications, and forms of the government and political system which is adhered by the national state. The choosing of the ideal structure of the governance is considered as one of the challenges for the sports industry (DeSensi & et.al., 2010). The usage of the governance structures either a centralized system or decentralized governance mode varies from one country to another where the success of sports program is calculated through microeconomic and macroeconomic standpoints. The centralized sports governance makes adoption of the top to a bottom approach which tries to strengthen the sports governors, policy-makers and leaders to give longer-term stability of the thrusts of sports. The centralized sports governance was advantageous to the sports leaders and governors as it allowed greater control, commands and had influenced training, scouting, and recruitment of the players and had helped in the utilization of the resources and funds (Solomon & Becker, 2004). However, centralized sports governance challenges are implied on the ability so as to make the development and success of sports at the grassroots level. In addition to that, many of the national sports programs fails as because the local coaches, players, trainers as well as athletes are not provided with the chance to demonstrate their merchandises as the players, athletes, trainers and coaches’ choices are exclusive to the pool of national training which comes from the urban centers, renowned universities and colleges as well as nation’s capital. The self-management reflaction as well as return on investments are also termed as the governance challenges which effects the organizational performance.
The challenges which are linked with the centralized structure of sports governance are linked with the tendency to possess a myopic vision of the development of sports. The fixation of the popular sports in order to achieve development and funding which undermines the lesser popular sports in order to grow as well as flourish in the centralized sports governance system (Solomon & Becker, 2004). In addition to that, a centralized structure of sports governance retains the propensity and affinity so as to eliminate the outstanding athletes, players, coaches, and trainers

in the process of selection as higher spoilage and patronage could be influential and dominant behavior while selecting the team. There is a political relationship between political leaders and sports leaders which minimize the local government’s participation and involvements in the sports development policy.

On the other hand, decentralized system of sports governance is a bottom-up approach in sports governance which results in mass-related sports developments where participatory, empowerment, stakeholdership and deliberative approaches get started and develop in the local or grassroots level and end up in the national and international sports field. This system of sports governance doesn’t rely totally on the central or national governance but it also focusses on the local government units (Jamieson, 2007). However, the decentralized system of sports governance gets challenged on the continuity and sustainability of the development of the sports in grassroots level as it has to face various issues to look after the required subsidies and funding’s in order to keep the program of the grassroots sports development into required place. This system of sports governance also generally loses the retrospection regarding the facts that those sports events which are renowned in front of the masses might not always achieve winning gold in most of the international events and competitions. Furthermore, the decentralization system of sports governance also brings challenges which are related to the capability of establishment and creation of the networks as a matter of re-invention (Jamieson, 2007). They cannot afford to execute its operation alone and thus, seeks for the help of private corporations in the form of public-private partnerships while promoting the development of sports. Moreover, this system is also not able to govern its corporations without the support and assistance of the central and national government. Lastly, it is also seen that the increase of the sports globally has made it important and essential for the sports development program and corporations to possess adequate support of finance as the absence of that could result into failure.

In addition to that, a host country which stages an Olympic Games generally gives pride and honor to the people as well as nations. It is termed as the source of joy for the citizens where they collectively work together so as to make the games successful. However, the hosting of the games brings a large number of challenges for the host country such as the building of the mega structures like Olympic villages, schedules of games, control of crowds, allocation of finance and budget, etc. (DeKnop & et. al., 2004). it is also found that many of the personnel who serves in different national federations of sports are not well-trained professionals in the management and administrations of the sports. The sports managers as well as the paid managers don’t have the proper knowledge regarding sports and are also not effective in communication skills brings about major issues and challenges in the sports firms. The international sports federation’s role in order to handle and intervene the affairs regarding national sports federations is not spelled out clearly. The international federations of sports like FIFA, IAAF, etc. generally get accused regarding intervening the affairs of respective national sports federations without taking in considerations the national needs and interests (Moore Stephens, 2014). the interventions, inefficient, ineffective and corrupt officials take the benefits of its residence in office. Thus, there is a requirement of the government interventions as it required sponsorship, facilities and also regulation and control of the government.

Moreover, there is a lack of hierarchical arrangement and coordination regarding the government sports agent’s role and that of national sports federation’s role. There is a larger number of organization and federations of national sports which make an operation independently through the governmental agents which are in charge of sports but tends to work at the time of convenience and needs. It is necessary to analyses that the sports development mainly depends on the policies which formulate to provide directions to the sports manager’s efforts and other personnel of sports which are being involved in the sports (DeKnop & et. al., 2004). However, the main challenges come into arrival as there is no effective national sports policy in order to look after the sports development. The absence of the national sports policy makes it difficult to regulate the development of sports. The usage of the outdated constitutions regarding national sports federations and organization brings about major issues which affect the sports and also change the perceptions and situations. The sports organization could only address its issues when it regularly reviews the constitutions which govern the operations (Swanson and Kent, 2014). The financial management is also termed as the greater challenge for the sports firms as a larger amount of funds is needed so as to implement the programs of training for the coaches. Apart from that, the team contingents which are intended for different international competitions are generally reduced to the lesser number because of lesser funds which are being catered for the allowance and up keeping at the time of training and competitions. The inadequate funds also have its effects on the number of incentives which is being given to the athletes and thus, minimize their level of motivations and thus affects their performance. The disputes, as well as wrangles, are also found to be in greater extends in many of the sports federations. There is involvement of various officials which wrangle over the position of leadership and review for control over the financial resources (Bandura, 2013). Some of the results of these conflicts result into the withdrawal of the sponsorships of the corporate firms, the cases of courts, neglecting of the sportsperson and also the imposition of the sanctions performed by the international federations of sports.

Apart from the above challenges, it had also been reviewed that lack of finance, management of staffs, engaging citizens, involvement of technologies and also socio-economic demographics are some of the challenges faced by the government while dealing with sports events. Although, there are huge amount of involvement of the private enterprises in the sports events which minimizes the challeges of government. However, the governance gets challenged while choosing right alternatives which bridges the gaps in between the profit-driven private sectors and rights-driven public services model. Thus, it is important for the government to make the usage of the effective approach to maximize the performance of organization and minimize the governance challenges.

Effective approach to maximize organizational performance and developing systematic resilience

After the reviewing of the governance issues, various sports organization, associations and federations have conducted different reforms in its governance and structures like limiting the terms of the members, changing the age of retirements as well as choosing of active athletes as well as presidents in the international federations (Schinke & et.al., 2004). It is also suggested that there is the requirement of more number of stakeholders who are benefitted from media and corporate sponsors. Moreover, it is also suggested that there should be the introduction of three control system which includes decision hierarchy, mutual monitoring systems and board of directors which could make the operation of the sports organization in an effective manner (Swanson and Kent, 2014). It is also suggested that there should be the separations of the management and control functions where boards need to be responsible for the function of controlling and in handling the function of management. It is reviewed that the performance of board of sports organization is found to be more effective and better in the conduction of their responsibilities rather than ineffective boards in the fields such as financial management, conduction of meeting, strategic planning, setting and reviewing of the mission, selection of the members of boards and also marketing. It had been found that board-executive relationships are seen as positive by the effective boards and minimum by the ineffective boards (Bandura, 2013). Thus, board leadership, mutual trusts, information controls, and responsibilities are known to be the key elements in the relationship between board-executives and are related to the performance of the board. It had also been stated that government should give its importance on return on investments and manage the sports events in an effective manner so as to enhance the organizational performance of the sports industry.

It is reviewed that the organizational performance of the sports industry could be enhanced if the management of the sports is professionalized. The need for professional training in the management of sports or the appointment of the management positions should be enforced and needs to be emphasized (Jovanova-Simeva, 2015). Such kinds of the undertaking are in the hands of the authorities of the governments which are responsible for the formulation of policy and also its implementations. The sports management should also formulate and enforce the national policies on the sports fields so as to regulate the management of the sports. Different areas of governance need to be addressed such as dismal performances in the events of international sports and wrangling in the organization of sports (Shearer, 2014.). It is important for the sports organization to get involved in various sports management tasks in order to eliminate duplications and conflicts in the organizational roles. The policy should also highlight the different plans and strategies on the development of the sports. Since, it is noted that conflicts are one of the disturbing elements in the sports organizations so the policy should put forward solid measures, tactics, and structures so as to resolve the conflicts prevailing in the sports organizations (Schinke & et.al., 2004). The acquisition, as well as effective utilization of the resources in the jurisdiction of the management of sports, should be apprehended. The resources such as money, manpower, time as well as other required resources should be used in a clear manner which is specified in the documents of policy so as to avoid the abuse (Thibault, 2009). Moreover, there needs to be the selection of the suitable and skilled personnel taking into consideration the importance and complexity of the documents of the policy. There is also a need to establish the national training programmes for the personnel of sports so as to achieve success. This establishment could be possible with the joint efforts of the governments, national sports organization and also other international bodies in order to get recognition with all of the concerned parties. Since funding the programmers of sports is one of the major issues in sports developments and thus, there needs to be the raising of the alternative ways to explore the required funds. The alternative ways of the funds rising for the programs of sports could be possible by organizing sports clinics, seminars and coaching courses which can be helpful in generating of the money. The gate collection could be maximized and there should be the hiring of the sports facilities for both national and international events. Apart from this, governance should rethink regarding the revenues and cut the budgets so as to increase the productivity and also enhance the efficiency based on the reduction of cost. The government should also engage the citizens and local communities in the service delivery and decision making regarding the sports sectors so as to enhance the diverse constituency.

It had been analyses that different governance theory could be taken into consideration so as to evaluate the effective approach to maximize the performance of the sports industry. The agency theory could be used so as to frame the relationship between the owners and managers and thus minimize the conflicts prevailing in between them (Thibault, 2009). In these perspectives, the board is taken as a mechanism which monitors the behaviors of the managers and makes an assurance if the activities of the managers are performed according to the interests of the owners. This could help in enhancing the performance of sports firms (Ratten, 2016). Agency theory also states that the board of directors should monitor the managers and ensure if the organization gets to engage in the activities which are relevant to the expectations of the community. Thus, this theory stated that the role of boards must include the process of hiring, replacing, monitoring, assessing and also compensating the managers, making the missions, evaluation, and approval of the programs, allocation of the resources and managing of the finance (Winand & et.al., 2016). When such a role is played by the boards of the sports organization then the performance gets enhanced in an extending manner. Thus, the agency theory addresses the controlling and monitoring role of the boards but pays lesser attention in monitoring the managers and gets influenced by the external environments. However, the usage of other governance theory helps in overcoming those issues.

Resource dependency theory stated that the survival of the organization is linked with the capabilities of the organizations so as to acquire and maintain the resources which are required for the organization. in this theory, the board of directors minimizes the external uncertainty, bring resources, give access to the required information’s and also highlights their organizations (Hoye & Cuskelly, 2007). This theory mainly explains the roles of non-profit board and gets engaged in the administrative functions. In addition to that, the institutional theory gives its higher importance in guiding the organizational behaviors where attending meetings, filing the required documents and avoiding of the conflicts are emphasized in a higher extends. This could be helpful in settling the disputes prevailing in between the stakeholders and enhance the organizational performance (Winand & et.al., 2016). But since all of the issues and challenges could not be completely eradicated with the help of this theory so stakeholder theory is considered. This theory helps in understanding the role of boards in the sports organizations. This theory contends that sports organizations need to govern the relationships with the different stakeholders who include shareholders, members, suppliers, general public, etc. the organization could only achieve success if the brand identifies, acknowledges and also satisfies the stakeholder’s needs (Ratten, 2016). Moreover, the board should spend the majority of its time on having communication, negotiation and developing the programs with the various stakeholders. Thus, it can be evaluated after reviewing the various theories that no single theory could enhance the performance of the organization but a multi-theoretical approach could be helpful in maximizing the current organizational performance.

Resiliency is very essential in the sports fields where it means being able to come back easily after the disappointment and injury or other negative incidents. It is termed as the key psychological aspects of the sports as it can help in the success of athletes. Although failure is known as the part of the game when an athlete starts to give higher emphasis on its failure then their performance gets suffered. The performance errors might cause the athlete to minimize their control of the emotions and also confidence (Jovanova-Simeva, 2015). This negative emotion leads to larger errors and destroys their performance too. Thus, the development of systematic resilience helps the sportspersons while facing the adversity. Resilience not only helps the athletes in facing the challenges but it is also needed so as to build confidence, maintain work ethics, provides success and can also help the youths in their overall success in the field of life and academics apart from the achievements in athletics. It is thus important for good governance to develop systematic resilience in the sports industry (Hoye & Cuskelly, 2007). Resilience could be helpful for the athletes as it helps in putting behind the past and make a focus on the present and future. The resilience is termed as the strength to achieve success over adversity and is an effective way to improvise the time endurance and also jumps.

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Conclusion

Sports is known as one of the essential fields of governance which is also a critical element in order to manage the sports organization, monitor the activities of the organization, deliver the benefits related to the organization and guide the sustainability of the organization. Sports have the capability to reflect and showcase the values, spirits and also the excellence of the society and nations. It has become highly important for the organization to manage, govern and also administrate the knowledge regarding the challenges and issues related to sports. Although the management of sports is known to be related to the young scientific discipline actually it is one of the bigger businesses and employs a larger number of people for various occupations. Most of the professionals of the sports are sportspersons, officials, instructors, coaches, etc. yet, the higher need to employ the sports managers is growing in a greater extends mainly considering different challenges faced by the sports organization. the acquiring of the awareness sense regarding the concerns related to sports governance helps in providing the ability so as to control, moderate, regulate as well as make a balance regarding decentralization, centralization, division, unification, and division of the opinions of the world and national public.

Although, there are no possibilities so as to eliminate or eradicate every issues and challenges related with the sports management strategies could be utilized to minimize the effects of challenges and also ensures the efficiency and effectiveness of the management of the sports. The usage of the appropriate strategy is possible when each of the programs is being managed by the trained personnel who have the required knowledge and skills regarding the sports management and are committed in order to make the usage of the appropriate procedures, policies, and approaches in order to enhance the sport’s standards. Sports governance which is secured due to trust, honesty, transparency, and accountability generally minimize the factionalism and divisiveness prospects which are differenced because of culture, geography, and philosophy. It is important for the sports organization to make the equilibrium in between centralization and decentralization system of sports governance. The sports governance legitimacy makes the involvement of various efforts of collective and cooperative sectors of sports stakeholders which includes private sectors, civil society, governments as well as industry which benefits the citizen’s despite socio-economic class, geopolitical arrangements and also physical attributes. The sports governance which makes the inclusion of all the people in the loops and makes it as the sports for everyone is known as its actual hallmark for its legitimacy and effectiveness.

References

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