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components. Both sponsorship and CSR have historically been positioned as philanthropicactivity. The definition of sponsorship though, has moved beyond a type of philanthropicactivity. According to Cornwell (1995), sponsorship has changed since the mid-80s; sponsorshiphas moved from a philanthropic orientation to a market-driven orientation. Otker (1988)explained that, “commercial sponsorship as buying and exploiting an association with an event, ateam, a group, etc., for specific marketing (communications) purposes” (p. 77). Godfrey (2009)asserted that, “the origins of CSR lie in philanthropy, the oldest social initiative among Americanprivate enterprises” (p. 700). CSR activities consist of business initiatives which further pursuesome social benefit, beyond the specific financial interest and legal obligations of the company(McWilliams & Siegel, 2000). Thus, sponsorship is focused on improving business aspects of thesponsor and the sponsored property, while CSR activities are implemented to improve aconsumer’s attitude, and positive perception of the company’s image.Sponsorship is a business relationship where support is offered in return for rights andassociation (Sleight, 1989). In the 1950s, marketing oriented sponsorship activity was launched(Lazarus, 1984). In modern sponsorship activity which has been transformed into a marketingpromotional activity (Abratt & Grobler, 1989), the sponsor and the sponsored property develop amutually beneficial business relationship (Abratt & Grobler, 1989). Cornwell (1995) explained thatsponsorship has transformed to strong marketing orientation; pursuit of ancillary activities related tothe sponsored activity; and growth of event sponsorship. Fahy, Farrelly, and Quester (2004)discussed the strategic role of sponsorship in addressing a sponsor’s marketing objectives rely onsponsor’s tangible assets, intangible asset, and capabilities. For example, State Farm sponsors awide variety of events, athletes, and sport properties. State Farm has been an NBA sponsor since2007; the second most active sponsor for the NBA. State Farm is the presenting sponsor of theleague’s games on both ESPN and TNT, athletes, arena (naming right), and activates in over 203

team markets. This insurance company has leveraged the use of the NBA well and it has made agreat impact into their sponsorship (“Fortune.com”, 2014). According to the marketing directorof State Farm, Edward Gold, “When it comes to sport, consumer pay close attention to theproperty than other activities.” Thus, the association between sponsor and sponsored should beconsidered closely than other areas. Consequently, the idea of mutual return puts sponsorshipaside from corporate support (philanthropy, charity, or patronage) which do not expect theadvancement of commercial objectives (McCarville & Copeland, 1994).According to Mitchell (1989), the beginning of CSR began in the 1920s when modernindustries extended beyond boundaries and showed stronger impact on society. CSR is stillexplained and interpreted by many experts and researchers. The idea of CSR has been discusseddifferently due to the sense of values of each era and the expectations of the role of theorganization (Kagata, 2006). Matsumura (2010) argues that through CSR activities companiesnot only give priority to maximizing profit, but also pay attention to delivering benefits to thelarger society. As noted by Mohr, Webb, and Harris (2001), CSR is “ a company’scommitment to minimizing or eliminating any harmful effects and maximizing its long-runbeneficial impact on society” (p. 47). CSR activities consist of business initiatives which furtherpursue some social benefit, beyond the specific financial interest and legal obligations of thecompany. For example, State Farm’s community outreach program helps people recover fromunexpected disaster and damage. As a Corporate Member of the American Red Cross AnnualDisaster Giving Program, State Farm assists the American Red Cross by giving 1 million tohelp ensure that the Red Cross has the resources to proactively assist with national disasterpreparation and recovery efforts. Particularly, there are two main CSR practices adopted byprofessional sports teams (1) they engage in CSR by executing community outreach programs,4

such as athlete volunteerism, community development, youth educational initiatives, andenvironmental programs (Babiak & Wolfe, 2006, 2009); (2) teams often establish independentcharitable foundations to enact their philanthropic activities. In 2010, the NBA launched a socialresponsibility initiative called ‘‘NBA Cares’’ with the commitment of donating 100 million tocharity over 5 years in the areas of literacy, youth and family development, and health-relatedcauses. Basically, the idea pertaining to sponsor’s CSR initiatives are addressed by sponsoringthird-entity (charity, non- profit organization, etc.). As far as the distinction of sponsorship andCSR activities concerned, the basic difference appear on the platform through activities occur,and the expectation of return on investment in terms of profit.Moreover, it has become more common for organizations to attempt to address theirpublic image with various CSR initiatives (Levy, 1999). Thus, sponsors should give emphasis tolinking their strategies for engagement with social activities to efforts to sponsor a particularproperty. Considering that sponsorship may be used to shape consumer perceptions, and the pushon organizations to participate in socially responsible activities and to communicate such CSRcommitment to the stakeholders, I argue that the integration of these two components couldassist in the development of successful sport sponsorship strategies.There are a number of ways the sponsor can engage in or initiate CSR activities,elucidating the communication channels of the sponsors to address CSR have a potential toinfluence consumer’s perception toward the sponsor. Today, due to high competition amongorganizations to sponsor different events, the rising of consumer rights advocacy groups, anddigitally empowered consumers, sponsor activities are apparent for public evaluation. Thus, mostcompanies are responding in different ways as they attempt to embrace CSR activities in theiragenda. Essentially, there are three major approaches that a sponsor can potentially use to5

address CSR activities: (1) the sponsor (organization) is involved in a non-sport related CSRinitiative through funding external agencies. For example, donating resources to water charitiesand literacy improvement programs; (2) the sponsor (organization) is involved with sport relatedCSR activities by funding external agencies. For example, assisting the Women’s SportsFoundation which focuses on the advancement of women and girls through sport and physicalactivities; (3) the sponsor (organization) is involved in both a non-sport related CSR initiativeand sport related CSR activities at the same time. Since this study is an initial attempt to examinethe perception of consumers regarding a sponsor’s CSR activities in relation to sportsponsorship, I plan to examine the second approach. 1In the next section, I define CSR and clarify and differentiate some of its manifestationsand applications, especially as they relate sport sponsorship. I then present the purpose of thestudy, focus of the study, research questions, and significance of the study.1.2 Corporate Social ResponsibilityCSR initiatives have the potential to offer strategic direction to managers who want toenhance their companies’ performance and competitiveness (Breitbarth & Harris, 2008).Pegoraro, O’Reilly, and Lavallet (2009) explain that involvement in CSR initiatives can be apowerful marketing tool that can build up and shape a corporation’s reputation and provide fordifferentiation in a crowded marketplace, thereby providing a competitive advantage. Socialresponsibility has also become increasingly prevalent in the sport industry (Walker & Kent,2009). Throughout the last decade, studies have been conducted in line with the integration of1Sport related CSR activities could also be associated with the sponsored property, or could be throughthe sponsor’s initiatives. In this project I am focusing on sponsor initiated activities.6

CSR in sports (Sheth & Babiak, 2009; Smith & Westerbeek, 2007; Walker et al., 2009; Irwin,Lachowetz, Cornwell & Clark, 2003).In 2005 the Federation International of Football Association (FIFA) become one of theprominent sport governing body to implement CSR initiatives by committing a significant shareof income to CSR related programs (Bradish & Cronin, 2009). By the same token, since 2005“Bigger than basketball,” a campaign from the NBA, has shown the league’s involvement inglobal community outreach initiatives that address important social issues in America and aroundthe world. The league and its teams support a wide range of programs, partners and initiatives inorder to improve the league’s image and profits, and to help cut costs for the future. Moreover,the dramatic growth of CSR activities by professional sport organizations provides someanecdotal evidence of the importance of CSR activities (Babiak & Wolfe, 2009). When we lookback 10 years, CSR did not have a significant role in sports (Kott, 2005; Robinson, 2005).CSR is defined as, “. . . a company’s commitment to minimizing or eliminating anyharmful effects and maximizing its long-run beneficial impact on society” (Mohr, Webb, &Harris, 2001, p. 47). Based on the assumption that consumers will reward organizations for theirsupport of social programs, many organizations have adopted social causes (Levy, 1999).Moreover, researchers have argued that the indirect benefit of CSR implementation by sponsorsplays an important role in establishing their credibility as social citizens both internally andexternally (Plewa et al., 2011). Luo and Bhattacharya, (2006) argued that consumers’ havepositive perception towards sustainable and ethical business practices. As such, the concept ofCSR has been identified in the literature as a mechanism for fostering positive perceptions.Researchers have reported a robust connection between the CSR activities and consumers’ futureattitudes (Becker-Olsen, Cudmore, & Hill, 2006; Klein & Dawar, 2004). Becker–Olsen et al.,7

(2006) found that proactive social initiative programs by organizations results improvement onconsumers’ responses to firms. However, prior researchers have given little attention to theunique aspects of CSR in a connection with bolstering sponsor’s image while sponsors engage inor initiate CSR activity and consumer perceptions of a sponsor1.3 Purpose of the StudyThe main purpose of the current study was to better understand stakeholder perceptionsof sponsors, specifically perceptions about the sponsors’ CSR activities, and the potential impactof such perceptions on sponsors’ image. In addition, after reviewing and examining existing CSRliterature associated with sponsorship, I provided insights into how sponsors can establishconnections with consumers through CSR activities. I reviewed and reported the extent to whichsponsors engage in social issues, and in what CSR activities sponsors engage.1.4 Research QuestionsThe current study was guided by three questions: 1) Does exposure to information aboutsport related CSR initiatives positively increase consumers’ attitude toward the sponsor to agreater extent than just having company information, or information about the company’s sportsponsorship activities? 2) Does engagement in sport related CSR activities significantly increasethe consumer’s positive perception of the sponsor image? 3) Do sport related CSR initiativesconducted by the sponsor foster a more positive attitude toward the sponsored property?1.5 Significance of the StudyThe primary significance of this study is to give direction for sponsors on how tostrengthen their image and reputation by addressing social issues. In essence, this work helpssponsors better understand their consumers’ perception and future attitudes, and the potential to8

be portrayed as a good corporate citizen. The findings of this research can serve as an importanttool for future sponsorship and related topics. The result of the study can provide input formanagers to scrutinize their current sponsorship schemes and practices.9

CHAPTER T

Sponsorship of sport properties accounts for approximately two-thirds of all sponsorship expenditures ("IEG Sponsorship Report," 2013). Working with a sport property may involve sponsoring a sport business, team, school, mega-event, athlete, facility, league, or competition (Tsiotsou, & Alexandris, 2009).