Impact of Business Owners Prior Experiences

Personal preference in sponsorship decisions were identified as being important. An example from interviewee E below, will illustrate how a personal preference and involvement directly or through family with an organisation can influence decision making regarding sponsorship:

“And [Charity name] we chose because I was probably a leading voice here, but my daughter [daughter’s name] when she was first born... was critically ill. When she was about nine days old, … she was in intensive care and general anaesthetics and so on. I have always wanted to support a paediatric unit and it makes sense to support the one that is local to us here [at work]. So that’s the reason why we chose [Charity name].” (Interviewee E)

In this case, we can get a sense of the deep appreciation of the work and efforts performed by the nursing staff at a critical time in interviewee E’s life.

Table 3 shows the responses to the Pre Interview questions of whether the business owner has been involved in a sport or sport based activities, either personally or through family and whether they went on to invest in GSC. All the business owners, except for Interviewee V had answered

“yes” to currently personally involvement in sport. Interviewees E, R and V were involved through family. This indicates that there is at least some connection or involvement with sport.

TABLE 3. Likelihood of investment in GSC when Director / Owner participates in sport or

However, when the interviewees were asked if they had invested in a GSC previously, all five business owners answered “No”. This does not mean that in these five cases, the business owners’

personal preference was not part of the decision-making criteria. To explore this further, interviewees were asked about their decision.

For four of the five owners interviewed, the decision to invest/not invest in sponsorship of GSCs was primarily down to the preferences of the owner. For one of the businesses (i.e. Interviewee E) there were other shareholders, who also had decision making responsibility. However, Interviewee E stated that if one of the owners had a cause they wanted to support it was generally due to the fact of personal interest or previous involvement and they had to make the case. This data seems to indicate that despite either the interviewees themselves or family members being involved with a sport or GSC, this alone was not a strong enough rationale for their business to invest in a GSC.

So whilst sport and local GSCs might be a part of someone’s life, given that no interviewee invested in GSCs and the response from Interview E above, it seems that the decision to sponsor a community based organisation was a very personal and emotional decision.

Similar to the findings in Webb & Carter (2001), the responses from the interviewees indicate that sponsoring a community based organisation where a business can offer their core business resources, is a visible action and can easily justified as a marketing proposition expected to bring some benefit to the business. Therefore, a second, highly motivational factor for sponsorship is the sense of using business resources and skills to help someone achieve and move forward with their life. Interviewee I’s reflection focused on “the likelihood of high impact” and is a good case that illustrates the point:

“One of our first charities helped young people who are on the fringe areas of the city, into work with city firms. And it was certainly felt that by working with them, and improving things like website engagement, online PR, that more young people were going to be aware of the scheme, charity, and more, younger people would find employment within City [banking] based firms. And although it is difficult to measure, at the point of starting the project, but they were, the charity was able to put some figures on what an extra ten people in employment means for the economy, versus those ten people not being in employment in the fringe areas of the City, and that was significant. So again, it’s about impact.” (Interviewee I)

Given each of the business owners having a personal connection with sport but deciding not to sponsor a GSC, it is important to understand their attitudes toward sport and their community. All five business owners agreed that sport is good for themselves and young people. Additionally, each business owner supports community based organisations in some way and to varying degrees.

When asked about their level of perceived involvement in the community based on a high, medium and low measure, three of the business owners (i.e. Interviewees C, E and V) would rate their involvement in the community as medium. These same three personally support community based organisations. Therefore, there seem to be no obvious adverse attitudes that would create a barrier for any business owners in sporting a local GSC in their community as they seem open to supporting community organisations and see sport as beneficial.

It is important to note at this point that personal preference can also be the choice to not do something if a business owner thinks the action creates additional risk, additional work, or there is a high opportunity cost of pursuing an activity in place of one with known results. This can be important for identifying why business owners did not invest in GSCs. For example, Interviewee I noted:

“A prevention would probably come through not investing, by us not being involved ...[or] impacted at any level by a grassroots community sports organisation, which is the feeling at the moment”. (Interviewee I)

Additionally, O'Reilly, Heslop, & Nadeau, (2011) note that the location of sport related event does not matter so much but more importantly, sponsorship occurs when there is an alignment of goals between organisations. This was found to be true for Interviewee R who noted how the personal characteristic between the owner and the office holders of a community based organisation would be part of their sponsorship decision making process. Interviewee R states that there would be no sponsorship when “Values are not aligned”.

Furthermore, as Olson & Thjømøe (2011) found, having similar attitudes will assist the relationship between organisation and sponsor creating better outcomes for all. In line with this, Interviewee R was clear in stating that being aligned with an organisation and its people affected their decision to sponsor. They made the following conclusion:

“It’s a mirror image of what would draw you to it, would push you away.

So, like one of them I said before was you know, do I like the people, so another on is, well if I don’t like the people, I sure as hell won’t be involved with it, and actually it doesn’t matter how good the opportunity is, I think that’s probably the reality. Yeah, another one, is it going to be easy for me to get involved, or is it going to be a headache or is it create a load of work, or whatever. So I think it’s kind of a mirror image of those other things. If I didn’t think there was going to be a return, if you didn’t trust the people or like the people, those would be the kinds of things I think.” (Interviewee R)

What can also be drawn from Interviewee R’s comments is the importance of an evaluation criteria for getting involved. Evaluation criteria has been found to be more likely to be based on heuristics to assess the value of relationship opportunities (Johnston & Paulsen, 2014; Daellenbach et al., 2013). Interviewee R’s quote suggests that they use their understanding of the situation and alignment based on prior experience to determine their sponsorship decisions. The effort to find alignment and benefit also seemed like a factor preventing sponsorship of GSCs. As noted, four (i.e. Interviewees C, E, I and V) of the five business owners already had existing sponsorship relationships with community based organisations. These business owners suggested that

continuing or improving their existing sponsorship relationships meant expending less energy, time and financial and non-financial resources versus establishing new ones. This finding is supported by Mack (1999) which found that small business continued to sponsor the same events for long time frames. The decision to continue with existing partners is the easy choice of SMEs and if they are not already involved with a GSCs they seem to be less willing to sponsor one by leaving a current sponsorship arrangement.

In relation to marketing activity, each business owner expressed a level of personal interest and preference in their decision making. Interviewee R noted that they would consider sponsorship engagements when there was a link between personal and professional interests. Interviewee E also agreed and commented that the value of their previous involvement of working with charities was keeping those network links. Similarly, Interviewee V remarked that the separation between business and personal is not clear from an SME perspective, whether that relates to personal preferences feeding into business decisions or economic impacts of decisions. What was common and clear among all the business owners was the fact of using an evaluation process into what the business gains from these activities. SMEs who choose to work with charities and community organisations try to develop a distinct competitive advantage to create a public display of the benefits of their involvement with their chosen community based organisation whether that be the staff or beneficiaries of the organisation, or the employees of the SME involved with the sponsorship programme, their clients, customers and even suppliers. Stoian & Gilman (2017) also observe that by engaging employees in sponsorship activity, there is the potential for SME growth and development of a competitive advantage.

In large corporations, where the decision maker has some form of vested interest they will most likely be in favour of that decision (Vance et al, 2016). The same seems to apply to the SMEs in this research. However, the difference between the large corporate and the SME is that for a corporation, sponsorship expenses can be absorbed by the rest of the business, even if it does not produce planned outcomes. For an SME, however, all decisions directly affect the livelihood of the owner and so if the decision does not involve a profitable outcome or tangible benefit, then the owner is unlikely to invest in that activity. This can be illustrated by the agreement by all business owners that an evaluation process is important when making business decisions.