UNIVERSITY OF LJUBLJANA SCHOOL OF ECONOMICS AND BUSINESS MASTER’S THESIS CORPORATE SOCIAL RESPONSIBILITY IN SPORTS ORGANIZATIONS: THE ANALYSIS OF THE SURF INDUSTRY Ljubljana, October 2019 MARIA LUCIA LAVARONI AUTHORSHIP STATEMENT The undersigned Maria Lucia Lavaroni, a student at the University of Ljubljana, School of Economics and Business, (hereafter: SEB LU), author of this written final work of studies with the title Corporate Social Responsibility in Sports Organizations: The Analysis of the Surf Industry, prepared under supervision of prof. dr. Tomaž Čater D E C L A R E 1. this written final work of studies to be based on the results of my own research; 2. the printed form of this written final work of studies to be identical to its electronic form; 3. the text of this written final work of studies to be language-edited and technically in adherence with the SEB LU’s Technical Guidelines for Written Works, which means that I cited and / or quoted works and opinions of other authors in this written final work of studies in accordance with the SEB LU’s Technical Guidelines for Written Works; 4. to be aware of the fact that plagiarism (in written or graphical form) is a criminal offence and can be prosecuted in accordance with the Criminal Code of the Republic of Slovenia; 5. to be aware of the consequences a proven plagiarism charge based on the this written final work could have for my status at the SEB LU in accordance with the relevant SEB LU Rules; 6. to have obtained all the necessary permits to use the data and works of other authors which are (in written or graphical form) referred to in this written final work of studies and to have clearly marked them; 7. to have acted in accordance with ethical principles during the preparation of this written final work of studies and to have, where necessary, obtained permission of the Ethics Committee; 8. my consent to use the electronic form of this written final work of studies for the detection of content similarity with other written works, using similarity detection software that is connected with the SEB LU Study Information System; 9. to transfer to the University of Ljubljana free of charge, non-exclusively, geographically and time-wise unlimited the right of saving this written final work of studies in the electronic form, the right of its reproduction, as well as the right of making this written final work of studies available to the public on the World Wide Web via the Repository of the University of Ljubljana; 10. my consent to publication of my personal data that are included in this written final work of studies and in this declaration, when this written final work of studies is published. Ljubljana, October 24th, 2019 Author’s signature: TABLE OF CONTENTS INTRODUCTION ............................................................................................................... 1 1 THEORETICAL FRAMEWORK ............................................................................. 3 1.1 Concept of Corporate Social Responsibility ....................................................... 4 1.1.1 The responsibility of companies .................................................................... 10 1.1.2 Benefits of CSR ............................................................................................. 13 1.1.3 CSR measures ................................................................................................ 14 1.2 CSR and sport ..................................................................................................... 20 1.2.1 Sports’ industry analysis ................................................................................ 22 1.2.2 In-depth analysis of the surf companies ........................................................ 26 1.2.3 Partnerships and examples............................................................................. 31 1.2.4 Limitations of CSR in the sports industry ..................................................... 35 1.3 Relationship between CSR and financial performance ................................... 36 1.4 Globalization effect on CSR ............................................................................... 40 1.5 Impacts on competitive advantage .................................................................... 43 2 RESEARCH ON CORPORATE SOCIAL RESPONSIBILITY IN SPORTS ORGANIZATIONS ................................................................................................. 45 2.1 Research methodology ........................................................................................ 46 2.1.1 Purpose of the research .................................................................................. 47 2.1.2 Research approach ......................................................................................... 48 2.1.3 Data collection ............................................................................................... 49 2.1.4 Structure of the sample .................................................................................. 50 2.2 Research results .................................................................................................. 51 3 RECOMMENDATIONS BASED ON RESEARCH RESULTS .......................... 55 CONCLUSION .................................................................................................................. 57 REFERENCE LIST .......................................................................................................... 58 APPENDIXES .................................................................................................................... 65 LIST OF FIGURES Figure 1: The Pyramid of Corporate Social Responsibility .................................................. 7 Figure 2: The Three-Domain Model of Corporate Social Responsibility ............................. 9 Figure 3: Sustainable Development Goals .......................................................................... 17 Figure 4: Market growth outlook by respondents’ region. .................................................. 23 Figure 5: Market Growth outlook by stakeholder. .............................................................. 25 Figure 6: Global expansion of the “Big Three” Australian surf enterprises, 1969 – 1990. 28 Figure 7: Environmental Profit & Loss (The E P&L). ........................................................ 34 Figure 8: The “smile curve” in value creation ..................................................................... 41 Figure 9: Change in real income between 1988 and 2008 at various percentiles of global income distribution (calculated in 2005 international dollars). .......................... 42 i Figure 10: Value Creation Dimensions. .............................................................................. 45 Figure 11: The Research Process. ....................................................................................... 47 Figure 12: Does Your organization adopt a CSR strategy? ................................................ 51 Figure 13: In Your opinion, which is the primary motivational factor behind the adoption of CSR strategy? ................................................................................................. 53 Figure 14: Please evaluate how the following factors have developed in the last 3–4 years in your organization. ........................................................................................... 54 LIST OF TABLES Table 1: Comparison of the main surf companies………………………………..………. 30 Table 2: Overview of Empirical Findings…………………..…………………………..... 38 Table 3: Report of active social responsibility programs. ................................................... 52 LIST OF ABBREVIATIONS sl. – Slovene AR – (sl. Obogatena resničnost); Augmented Reality BiTC - Business in the Community CAGR – (sl. Skupna Letna Stopnja Rasti); Compound Annual Growth Rate CED – (sl. Odbor za gospodarski razvoj); Committee for Economic Development CEO – (sl. Generalni direktor); Chief Executive Officer CFP – (sl. Finančna uspesnost podjetij); Corporate Financial Performance CSP – (sl. Družbena uspesnost podjetji); Corporate Social Performance CSR – (sl. Družbena odgovornost podjetji); Corporate Social Responsibility DJSI - Dow Jones Sustainability Index E PL&L – (sl. Okoljski dobiček in izguba); Environmental Profit & Loss ESG – (sl.Okoljski, družbeni in upravni); Environmental, Social and Governance FDI – (sl. Tuje Neposredne Investicije); Foreign Direct Investments FTSE - Financial Times Stock Exchange GHG – (sl. Toplogredni plini); Greenhouse Gas GRI - Global Reporting Initiative IOC – (Mednarodni Olimpijski Komite); International Olympic Committee IT – (sl. Informacijska technogija); Information Technology NGO – (sl. Nevladna organizacija); Non-governmental Organization NPO – (sl. Neprofitna organizacija); Non-Profit Organization OECD – (sl. Organizacija za gospodarsko sodelovanje in razvoj); Organization of Economic Co-operation and Development SRB - Social Responsibilities of the Businessman PAT - Positive Accounting Theory ii PPP - (Pariteta kupne moči); Purchasing Power Parity PRI – (sl. Načelo odgovorne naložbe); Principles for Responsible Investment PVC – (sl. Polivinilklorid); Polyvinyl PWC – PriceWaterhouseCoopers R&D – (sl. Raziskava in razvoj); Research and Development SAM - Sustainable Asset Management SDG - Sustainable Development Goals UK – (sl. Združeno Kraljestvo); United Kingdom UN – (sl. Organizacija združenih narodov); United Nations USD – (sl. Ameriški dolar);