The Olympic Effect: Employee Reactions to Their Employer's Sponsorship of a High‐Profile Global Sporting Event

• DOI: http://doi.org/10.1002/hrm.21702
• Published date: 01 July 2016
• Date: 01 July 2016

Human Resource Management, July–August 2016, Vol. 55, No. 4. Pp. 721–740

© 2015 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI:10.1002/hrm.21702

Correspondence to: Martin R. Edwards, Department of Management, King’s College London, 150 Stamford Street,

London, SE1 2NH, UK, Phone: +44(0) 207 848 4095, E-mail: martin.r.edwards@kcl.ac.uk

THE OLYMPIC EFFECT: EMPLOYEE

REACTIONS TO THEIR EMPLOYER’S

SPONSORSHIP OF A HIGH-PROFILE

GLOBAL SPORTING EVENT

MARTIN R. EDWARDS

With companies investing vast sums of money on sponsoring high-profi le sports

events, it is surprising that very little research exists to examine the possible

impact that this has on the sponsors’ employees. This two-wave panel study

explores the indirect role that Olympic sponsorship and employee support for

this sponsorship has on increases in organizational identifi cation and discre-

tionary effort—via, that is, pride and employee assessments of their employer’s

corporate social responsibility (CSR) credentials. The current study surveyed 241

employees (from three countries) in two phases across a 12-month period in the

run-up to the 2012 London Olympics. Olympic sponsorship support was found

to be positively associated with organizational pride and CSR perceptions, which

both predict increases in organizational identifi cation and discretionary effort

(controlling for earlier baseline levels of these outcomes). In addition, there is

also evidence of an indirect positive effect (through CSR perceptions and pride)

of Olympic sponsorship support on increases in organizational identifi cation and

discretionary effort. The implications of these fi ndings for decision makers con-

sidering sponsoring major sporting events are discussed; the fi ndings provide

interesting insights that can help HR functions to understand the consequences

of sports sponsorship and processes involved that explain positive employee

responses. ©2015 Wiley Periodicals, Inc.

Keywords: sports sponsorship, Olympics, corporate social responsibility,

organizational pride, organizational identifi cation

A

considerable amount of literature exists

within the marketing and advertising

field discussing the importance of orga-

nizations sponsoring sporting events

and in particular the impact that such

sponsorship should have on those outside (e.g.,

potential customers) the investing organization

(see Meenaghan, 2001; Meenaghan, McLoughlin,

& McCormack, 2013). Juxtaposed by this, how-

ever, is a relative scarcity of research within the

HR field examining the impact that sponsoring

sporting events has on employees (see Dolphin,

2003; Walliser, 2003; Walraven, Koning, & van

Bottenburg, 2012, for reviews). Although research

in the human resources (HRM)/organizational

behavior (OB) field shows that employees respond

722 HUMAN RESOURCE MANAGEMENT, JULY–AUGUST 2016

Human Resource Management DOI: 10.1002/hrm

While the Olympics

is an example of a

major global sporting

event, the investment

in this quad-annual

event represents only

a small percentage of

the annual investment

that organizations are

making.

IWB Rugby World Cup. In addition to this, there

is a collection of smaller sponsors that make sub-

stantial but smaller investments relative to the

bigger sponsors (with the Olympics, these spon-

sors would have invested only $1 million). In

total, the investment in the Summer Olympics is

considerable, the equivalent of many hundreds of

millions of dollars are invested in Olympics spon-

sorship every four years. Although these figures

seem very high, the Summer Olympics is by no

means an isolated example of a sporting event

into which companies are willing to invest vast

sums. For example, the FIFA Football World Cup

reportedly received over $1.6 billion in the four-

year period running up to 2010 with World Cup

partners paying between $24 million and $44 mil-

lion each per year (Independent Evaluation Group

[IEG], 2010). Major sponsors of other sporting

events such as the Rugby World Cup and Tour de

France reputedly invest over $20 million per year

each. Recent forecasts (PricewaterhouseCoopers

[PWC], 2011) indicate that more than $55 billion

is now being invested globally in sports sponsor-

ship each year. While the Olympics is an example

of a major global sporting event, the investment

in this quad-annual event represents only a small

percentage of the annual investment that organi-

zations are making.

As mentioned, in general, the research con-

ducted assessing the impact of sponsorship tends

to examine its effects on an external audience

such as the consumer. As Dolphin (2003) argues,

however, there is a need for research to be con-

ducted that explores whether sponsorship has a

positive impact on its employees as an internal

audience (p. 184), and as Walliser (2003) argued:

“It is more than surprising that the impact of

sponsorship on employee motivation has not

received more attention” (p. 21). With the poten-

tial to have a positive effect on numerous positive

employee outcomes (e.g., satisfaction, motiva-

tion, commitment, performance, and retention)

that are often considered to be the holy grail of

sophisticated HRM models (Guest, 1987; Guest,

2011; Peccei, van de Voorde, & van Veldhoven,

2013), such research should be of great interest

to the HR community. Walraven et al. (2012)

suggest that “despite the potential value from

the sponsor’s perspective, the effects of sponsor-

ship on relations with employees have not been

researched” (pp. 29–30). A gap therefore exists in

the HR field regarding knowledge of the impact

that the sponsorship of major sporting events has

on employees—a gap the current study aims to

help fill. This gap inthe literature seems particu-

larly important, given the increasing interest paid

by the HR function in the management of the

positively to having positive perceptions and

beliefs about how their organization is perceived

by outsiders (Carmeli, 2005; Carmeli, Gilat, &

Waldman, 2007), very little research exists that

assesses how and why employees might respond

to their employer sponsoring major prestigious

sporting events. A gap therefore exists in the

literature that the current study helps to fill;

specifically, this study involves an examination

of employee reactions to their employer being a

major sponsor of the 2012 London Olympics.

Sponsorship has been defined by Meenaghan

(1983, p. 9) as “the provision of assistance either

financial or in-kind to an activity by a commercial

organization for the purpose of achieving com-

mercial objectives” and as “the underwriting of

a special event to support corporate objectives by

enhancing corporate image, increas-

ing awareness of brands, or directly

stimulating sales of products and

services” (Javalgi, Traylor, Gross, &

Lampman, 1994, p. 48). There are a

number of reasons why an organiza-

tion may engage in sports sponsor-

ship. However, generally presented

as key aims is that sponsorship can

help enhance an organization’s cor-

porate image, increase the aware-

ness (and value) of its brand(s),

stimulate sales in its product, and

help “leverage” its corporate repu-

tation (Dolphin, 2003; Javalgi etal.

1994; Meenaghan, 1991).

There are many types of events

that organizations can choose to

sponsor, ranging from small local

charity activities to international

sporting events. Importantly, the sponsorship

of global events such as the Olympics is a key

example of the kind of high-profile event that

many organizations are willing to spend vast

sums (many millions of US dollars) of money

on (Brand Republic, 2012; Wedekind, 2008).

Interestingly, with many high-profile sports

events (e.g., the Fédération Internationale de

Football Association [FIFA] Football World Cup;

the International Rugby Board [IRB] Rugby World

Cup; Summer and Winter Olympics/Paralympic

Games), sponsorship is often organized into a

hierarchy of investor category. The highest-profile

sponsor category often found with such events is

global “Worldwide Partners”; with the Olympics,

these organizations can invest up to US$70 mil-

lion each. The next-highest-profile category is

usually official “Sponsors” followed by official

“Supporters.” This is the case, for example, with

all Olympic events, FIFA Football World Cup, and