Edinburgh Napier University Business School Reframing Scottish Football: Strategy and the short-term nature of the football industry Stephen Robertson Doctor of Business Administration A thesis submitted in partial fulfilment of the requirements of Edinburgh Napier University, for the award of Doctor of Business Administration July 2015 “In human behavior there was always uncertainty and risk. The goal of the Oakland front office was simply to minimize the risk. Their solution wasn’t perfect, it was just better than the hoary alternative, rendering decisions by gut feeling.” Lewis (2011 p.136) Abstract Despite football being deeply entrenched in Scottish culture it is under- researched from a business perspective. This research develops a conceptual framework that views professional football clubs from a number of different perspectives. It draws on strategic management literature since this views the firm as the intersection between internal competence, customer perception and competition within an industry. A review of previous sports business research highlighted five main themes that were used to create a structure for the analysis: on-field performance, attendance, finance, the playing squad and the manager. These themes were used as frames to view the firms within the industry from a number of different perspectives. Each frame allows a different aspect of the firm to be considered singly in turn and then collectively to develop a deeper understanding of the existing frames in use within the industry. The research is based on a pragmatic philosophy that allows mixed methods to be combined to provide both an objective and subjective view of the industry. The subjective view was drawn from five interviews with senior figures within Scottish professional football. These participants were from a number of different roles and organisations within the industry to provide a balance of experiences. The views were triangulated with a descriptive analysis of secondary data from a number of industry sources to establish patterns within and between these frames. A peer group of six clubs was selected as they competed in the Scottish Premier League in each of the seasons within an eleven-year period (2000-2011). The peer group clubs selected were: Aberdeen, Dundee United, Heart of Midlothian (Hearts), Hibernian, Kilmarnock and Motherwell. By focussing on a small group of clubs with a similar on-field record a broad study across the five frames could be carried out in detail without the findings being influenced by the impact of relegation to a lower division or sustained participation in European football. Within each of the original five frames a number of sub-components were identified and linked to the framework; this expanded the content to reflect the findings of this project. There appeared to be little link between on-field performance and attendance although progress to the later stages of cup competitions allowed clubs to connect with fans who do not regularly attend. The relationship between a club’s income and wage bill should be expanded to include interest repayments since this expenditure can be used to highlight future financial problems caused by increased debt levels. Although all of the interview participants spoke with pride of the players that had progressed from the club’s youth academy to success at the highest level the peer group clubs only produced one player each season that played more than ten matches for the club. Almost half of the players signed from the youth academy left the club without playing for the 1st Team. The importance of the relationship between the manager and club chairman was highlighted, although the speed with which managers were appointed suggests that little consideration was given to this before offering a contract. Once appointed there appeared to be little clarity over the job description and areas of responsibility. Several of the interviewees brought experience from other businesses to football but admitted that short- term decision making and entrenched behaviour made change difficult. The conclusion of the research is that by taking a firm-wide view of the club, longer-term decisions can be taken within football. Player development and supporter relationships were both identified as long-term processes that are impacted by the current short-termism. With greater role clarity for managers and a mixture of short and long-term objectives those involved in the industry are more likely to have opportunities to learn from experience and performance, across the different frames, will improve as a result. Acknowledgements There are a large number of people without whom this thesis would never have been completed. Firstly, my thanks to those who agreed to take part in the interviews. Your time, patience and generosity will not be forgotten. I would also like to thank the other players, coaches and managers who shared their knowledge and insight with me. I owe a particular debt to Gary Smith and Stuart Lovell for the doors they opened and the time they spent sharing their incredible insights into the game. My thanks to my supervisors Anne Munro and Trevor Buck. I know I tested your patience on a regular basis but you encouraged me to think and push my ideas. Thanks also to Lois Farquharson, Paul Barron and especially Jim Gallagher for their early support with this project. I owe a special debt of gratitude to Sarah Sholl for encouragement, suggestions and proof-reading. My thanks also to Sheila, Claire, Caroline, Jesus, Keith, James and Laura for their ongoing conversations and encouragement. And to those who shaped and inspired me: To Dad, who introduced me to football all those years ago. To Mum, for the encouragement to work things out for myself. To Lin, just for being my big sister. To Janey, Erin & Georgia: Thanks for putting up with me whilst I’ve been working on this. Without your help, support and encouragement I would not have finished this. Words cannot express what you mean to me. Table of Contents Abstract ............................................................................................................... 3 Acknowledgements ............................................................................................. 5 Table of Contents ................................................................................................ 6 List of Figures ................................................................................................... 11 List of Tables..................................................................................................... 12 Chapter 1: Introduction ....................................................................................... 1 1.1 Background to the study ............................................................................ 1 1.2 Research Aim & Objectives ....................................................................... 3 1.3 Thesis Structure ........................................................................................ 4 Chapter 2: Industry Context ................................................................................ 6 2.1 The Global Organisation of Football .......................................................... 6 2.2 The Organisation of Football in Scotland................................................... 7 2.3 An Overview of the Scottish Football Industry 2000-2011 ......................... 8 Chapter 3: Literature Review ............................................................................ 13 3.1 Introduction .............................................................................................. 13 3.2 Strategic Management ............................................................................ 13 3.2.1 Definitions of Strategic Management ................................................ 14 3.2.2 Strategic Management Classifications .............................................. 16 3.2.3 Sense-Making in Strategic Management .......................................... 24 3.2.4 The Importance of Frames ................................................................ 28 3.2.5 The Role of Reframing in Strategic Management ............................. 29 3.2.6 The Role of the Leader in Reframing ................................................ 30 3.2.7 The Role of Reframing in Leveraging Resources ............................. 31 3.3 Summary of Strategic Management Literature ........................................ 32 3.4 Using the Sports Industry for Academic Research .................................. 35 3.4.1 The Impact of Managerial Change .................................................... 35 3.4.2 Factors Impacting Attendance at Matches ........................................ 39 3.4.3 Supporter Classifications .................................................................. 40 3.4.4 Football and Corporate Social Responsibility ................................... 41 3.4.5 Grusky’s Framework ......................................................................... 42 3.4.6 Debt Levels within Football ............................................................... 46 3.4.7 Conceptual Frameworks of Football Clubs ....................................... 46 3.5 Summary of Sports Industry Research .................................................... 49 3.8 Literature Review Conclusion .................................................................. 52 Chapter 4: Research Methods .........................................................................