Examining the Interface of the NCAA: Corporate Social Responsibility,

Institutional Logic and Organizational Legitimacy Model

Nicholas Schlereth, University of New Mexico (Ph.D & MBA Candidate)

Fritz G. Polite Ph.D., MPA, Shenandoah University Jacob Young, Shenandoah University (MBA Candidate)

• Current Business Model of NCAA• Corporate Social Responsibility• Institutional Logic• Organizational Legitimacy• Proposed Modifications to Business Model

Overview

Our purpose is to govern competition in a fair, safe, equitable and sportsmanlike manner, and to integrate

intercollegiate athletics into higher education so that the educational experience of the student-athlete is paramount.

NCAA Core Purpose

NCAA Strategic Plan, 2014

The Association – through its member institutions, conferences and national office staff – shares a belief in and commitment to:

• The collegiate model of athletics in which students participate as an avocation, balancing their academic, social and athletics experiences.

• The highest levels of integrity and sportsman- ship. • • The pursuit of excellence in both academics and athletics. • • The supporting role that intercollegiate athletics plays in the higher education mission and in enhancing the sense of community and strengthening the identity of member institutions.

• • An inclusive culture that fosters equitable participation for student-athletes and career opportunities for coaches and administrators from diverse backgrounds.

• • Respect for institutional autonomy and philosophical differences. • • Presidential leadership of intercollegiate athletics at the campus, conference and national levels.

NCAA Core Values

NCAA Strategic Plan, 2014

• “ It sends a really powerful message that we’ve got players, who most would agree, have met the highest standard for academics that all the NCAA people talk about, and these players are saying this model is not right. In a multi-billion dollar business where everyone gets their fair market value and can bargain for it, what is the excuse we have for athletes not being in the same boat?” Jay Bilas on the Northwestern NLRB Case

Hypocrisy- Fair Market

2014 Adjusted Graduation Gap Report: NCAA FBS FootballConference (# of

Schools)All AGG Black AGG White AGG

Big XII -18 -25 -3

SEC (14) -18 -23 0

ACC -21 -25 -6

Big Ten (14) -21 -28 -11

Pac-12 (12) -23 -29 -12

Mean -20 -26 -7

Southall et al., (2014)

2013-14 Adjusted Graduation Gap Report: NCAA D-I Basketball

Conference B+W AGG Black AGG White AGG

Big East -22.6 -28.7 -29.9

Atlantic-10 -24.3 -30.8 -15.3

Mountain West -25.7 -30.8 -15.3

Big 12 -29.1 -36.9 -7.3

PAC-12 -31.1 -41.2 -23.1

Conference-USA -32.1 -31.1 -29.3

Southeastern -34.3 -35.9 -22.1

Atlantic Coast -35.1 -38.7 -18.1

Big Ten -36.8 -47.8 -13.2

American -43.5 -45.3 -47.4

Average -31.1 -37.0 -22.3

Southall et al. (2014)

• “We just don’t take care of our coaches the way we should” (Low, 2015)

– University of Arizona Athletic Director, Greg Byrne

“I have no respect for the agents, they are nothing more than Pimps”- University of Alabama Head Coach, Nick Saban- Tennessee cuts 6 women from scholarships- 3 were freshman enrolled in their first semester, 3 never made to campus (New Track Coach/Director).

- Manzel- Boo-Boo for alleged $$ -> autograph signing, while Manzel Jerseys sold for $75.00 on line and in book stores (Exposed by Jay Bilas)

Enough Said

FBS Athletic Department Revenue

U.S. Dept of Education (2014)

Athletic Financial Aid

NCAA (2014)

Top Revenue Producing Schools

U.S. Dept of Education (2014)

• NCAA• Media Rights– ESPN, CBS, FOX, & NBC

• Wide Variety of Sponsors• Ticket Sales

Where Does The Money Come From?

NCAA Revenue Distribution

NCAA (2014)

College Football Playoff Payouts

Dosh (2015)

Largest Football Stadiums in NCAA

Lawrence (2014)

• Coaches Salaries– Reward Systems

• Athletic Department Employee Salaries

Where Does the Money Go?

Top Paid FBS Football Coaches

USA Today (2014)

Top Paid Basketball Coaches

USA Today (2014)

• Recent push for more business involvement, corporate funding and participation amongst those involved in business and academia (reduced Federal Funding- increased operating costs).

• Despite the push, it has been historically the responsibility of higher education to teach the principles of a democratic society, social responsibility and accountability (Boyer, 1990).

Responsibility & Accountability

• Notion of strategic management, corporate responsibility, and stakeholder management have become critical links to business models (Katsoulakos & Katsoulakos, 2007)– These models originate from conceptual models within the business literature

Literature Review

• Corporate Social Responsibility (CSR):– Organizations have to be more socially conscious to the impact of social contributions to general society in conjunction with profits (Lewis, 2003).

– Increasingly pervasive phenomenon on the European and North American economic and political landscape (Doh & Guay, 2006).

Literature Review

• Social Responsibility- involves moral and legal accountability on the part of individuals for self and others.

• Characteristics:- Reliability, trustworthiness, and concern or regard for others.

• An emergence of social consciousness leading to social responsibility is paramount for future leaders, managers and administrators (Polite, Waller, Trendafilova & Spearman, 2011).

Social Responsibility & Accountability

• Framework based on “Corporate Social Responsibility Framework” by Doh & Guay (2006) and Babiak & Wolfe (2006)

• These frameworks address the importance of educational organizations utilizing their respective platforms for addressing social issues.

Theoretical Framework

• The message being delivered through the organizational culture to stakeholders regarding organizational behavior and reasoning for the behaviors. (Schein, 2010)

• Institutional Theory– Method for instilling organizational values (Scott, 1987)

–Reinforced by reward systems (Porter & Lawler, 1968)

Institutional Logic

• David Beaty, Head Football Coach, University of Kansas (Haney, 2015)

– Base Salary: $800,000– Big 12 Win: $25,000– Bowl Eligibility: $100,000

• What message does this send to members of the organization?

Unique Reward System

• An organization perceived to be pursuing socially acceptable goals with socially acceptable methods (Epstein and Votaw 1978)

• Assertions about the organization rest on the assumption of the norms of rationality (Thompson, 1967)

• Attributed to the organization by its constituents (Perrow, 1970)

What are legitimate organizations?

• Substantive Management– Role Performance– Coercive Isomorphism– Altering Resource Dependencies

– Altering Socially Institutionalized Practices

• Symbolic Management– Espousing Socially Acceptable Goals

– Denial and Concealment– Redefining Means and Ends

– Offering Accounts– Offering Apologies– Ceremonial Conformity(Ashforth & Gibbs, 1990)

Means by which organizations seek legitimacy

Key Differences in Legitimation as a Function of the Purpose of Legitimation

Purpose of Legitimation

To Extend Legitimac

y

To Maintain Legitimacy

To Defend Legitimacy

Legitimacy Problematic

Nonproblematic Problematic

Constituent scrutiny High Low HighIntensity of Legitimation

activitiesHigh Low High

Mix of legitimation activities

Proactive:Substantive and symbolic

Routinized:Substantive and symbolic

Reactive:Primarily symbolic (at least in short-run)

(Ashforth & Gibbs, 1990)

Legitimacy Institutional LogicCorporate Social ResponsibilityDeephouse (1996)

Ashford & Gibbs (1990)Pfeffer & Salancik (1978)Meyer & Rowan (1977)

Zucker (1977)Weick (1976)

March & Olsen (1976)Berger & Luckmann (1967)

Downs (1967)Thompson (1967)Dalton (1959)Parson (1956)Homans (1950)

Westermann-Behaylo, Berman & Buren III

(2014)Waddock (2008)

Scott et. al. (2000)Gumport (2000)

Thornton & Ocasto (1999)

Alford & Rao (1997)Schein (1980)

Berger & Luckmann (1967)

Cyert & March (1963)March & Simon (1958)

Blau (1955)Gulick (1937)

Polite, et. al. (2011)Babiak, K., & Trendafilova, S.

(2010)Katsoulakos & Katsoulakos (2007)

Doh & Guay (2006)Azapagic, A. (2003)Allison, J. (1995)

Brown, B., & Perry, S. (1994)Ansoff, H. I. (1965)Bowen, H. R. (1953)Broad, C. D. (1930)

National Collegiate Athletic Association

Top Paid College Football Coaches 2012-2013Name University SalariesNick Saban Alabama $7,160,187

Mark DantonioMichigan State $5,636,145

Bob Stoops Oklahoma $5,058,333Kevin Sumlin Texas A&M $5,006,000Charlie Strong Texas $5,000,270Urban Meyer Ohio State $4,536,640Les Miles LSU $4,369,582James Franklin Penn State $4,300,000Kirk Ferentz Iowa $4,075,000

Steve SpurrierSouth Carolina $4,016,900

Total$49,159,05

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Athletic Department Revenue Generation at FBS Level of NCAAYear Revenue2013 $5,577,085,4892012 $5,278,037,8852011 $4,952,347,0312010 $4,473,177,8462009 $4,222,969,513

Total$24,503,617,76

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ESPN Cost Per Viewer BCS v. CFP

SystemCost/Viewer Viewers Year

BCS  $1.9878.1

Million 2013/2014

CFP $5.41112.4 Million 2014/2015

NCAA Amateur Model

Institutional LogicWestermann-Behaylo, Et. Al. (2014)Townley (1997)

Organizational LegitimacyDeephouse (1996)Ashforth & Gibbs (1990)

CSRDoh & Guay (2006)Katsoulakos & Katsoulakos (2007)

Questions?