PhD A.Y. Bulatetskaya
Perm State National Research University, Perm

Keywords: intellectual capital, professional sports organization, analyses, investment, management, business sector, sports commercialization, human capital, corporate capital, consumer capital.

Background. Modern sports are increasingly influential in the social and economic domains as they are being rapidly commercialized to meet the modern social demands in the situation when the society is more and more differentiated and stratified [13]. The growing competitiveness urges the sports organizations to rely on the competent and experienced human resource for their competitive successes and economic progress needs [6, 10]. Nowadays intellectual capital is considered an important progress/ competitiveness securing resource for business sector on the whole and commercialized professional sports organizations in particular. In modern economic environments, professional sports organizations operate both in their professional sports system and on the wider markets as the legitimate competitors making their investments in the national human capital. However, the professional sports organization progress in the economic sectors is often hampered by their incomplete integration in the economy and inefficiencies in the economic resource mobilizing and business project activity design and management aspects. Studies in the professional sports organization business theory and practice have so far provided little if any solutions on how their operations may be improved by the entrepreneurial resource mobilizing efforts, to have the professional sports organization operations fairly valuated by the relevant comprehensive sets of performance rating criteria for progress in every aspect, including progress in the intellectual capital mobilization and employment by professional sports organizations [4, 5, 7, 8].

Objective of the study was to offer the intellectual capital mobilizing mechanisms for the national professional sports organization progress in the commercialization domain.

Methods and structure of the study. We analyzed for the purposes of the study the relevant literature and study reports in management sociology, economics and sociology of sports in the context of the intellectual capital valuation, intellectual capital management and intellectual capital investment issues; with overviews of the national and international practical experiences in the intellectual capital management by professional sports organization willing to undertake or undertaking commercialization projects to support their development programs. 

Results and discussion. An intellectual capital management system efficiency is commonly recognized an important factor for progress of any business including professional sports organization, albeit the research community still needs to agree on how the intellectual capital should be defined. In general terms, intellectual capital may be interpreted as the collective knowledgebase, skills, abilities and resources of the corporate personnel that may be mobilized for the corporate progress. Opinions in the research community still differ on how the intellectual capital may be classified into elements, although we would apply for the study purposes the usual classification into the following three elements: human capital, corporate capital and consumer capital [14]. In application to the professional sports organization progress management, intellectual capital on the whole and its elements in particular are defined herein as follows [11]:

1) Human capital means the collective knowledge and skills of the training service personnel with their training experiences and practical service systems designed to meet the modern sport progress needs; innovative ideas on how the new systems, materials, equipment, technologies and other inputs may be applied for the corporate progress; and the general cultural and moral values in the context of the sports being viewed and promoted as the source of national health;

2) Corporate capital means the institutional culture and system geared to guarantee a high-quality training service,  economic efficiency and copyright protection by patents, certificates, know-how, trademarks etc. to facilitate the corporate sports services and business projects; and  

3) Consumer capital means the culture of relationships with supporters, relevant governmental agencies and sponsors to effectively encourage and facilitate the corporate commercial activity.

It should be emphasized that the human, corporate and consumer capital will be duly balanced and harmonically employed for success. Separate investments in either of these elements make no sense since they are closely interrelated and need to be synergized to secure multiplication effects of the element-specific activities on the others. The intellectual capital mobilizing professional sports organization initiatives may be classified into the following components: (1) intellectual capital valuation; (3) intellectual capital investments; and (3) intellectual capital management system. These initiatives collectively referred to herein as the intellectual capital mobilizing mechanism will be as closely correlated and balanced to secure a synergizing effect.

The intellectual capital valuation component may be defined as a complex and controversial process geared to facilitate the corporate progress on a sustainable basis. Basically, the intellectual capital valuation will help develop a long-term professional sports organization progress strategy reasonably customizable to the volatile external environments with the relevant communication toolkit. Presently the intellectual capital valuation procedures apply the relevant quantitative and qualitative rating methods and financial and non-financial accounting tools [2, 12], with a specific intellectual capital valuation toolkit being formed as required by the corporate progress goals and specific challenges on the professional sports organization’s way to success. The professional sports organization intellectual capital valuation system, in the context of the professional sports organization commercialization agenda, may include the following key components as required by the professional sports organization management system balancing considerations: see Figure 1 hereunder [11].

Figure 1. Professional sports organization’s intellectual capital valuation system

Thus, for example, the financial component of intellectual capital may be rated by the traditional economic performance rating indices including the efficiency (profitability) rates; material/ technical provisioning factors; financial performance rates versus the actual operational needs etc.

Human capital may be rated by the personnel qualification rates, labor remuneration rates; individual training service efficiency rates etc. Corporate capital may be rated by the competitive success rates in different sport disciplines; efficiency rates of the modern training technologies and their quality ratings, copyrights etc. And the consumer capital may be rated by benefits of the institutional reforms and training service management projects including the supporter community growth rates, modern research findings/ technologies application rates etc.

The proposed professional sports organization’s intellectual capital valuation procedure will make it possible to design the professional sports organization progress strategy with the interim tactical progress goals and business processes that need to be customizable to the specific professional sports organization design and management phases. With the growing competition on the corporate professional sports service market, a special priority will be given to the ability to fairly valuate, develop and effectively employ the available human capital as a basic element of the intellectual capital for success of the other elements. Every individual human capital will be rated on a micro-valuation basis followed by the individual human capital being summed up to obtain a corporate human capital rate.

Intellectual capital investments comprise the second of the above intellectual capital components, with investments in human capital ranked first and foremost among the other intellectual capital investments [1, 3]. In case of professional sports organization, such investments are dominated by the contractual costs to recruit professional athletes, with their title holding/ registration right transfers, and with the human capital investments basically limited to the costs of the contractual acquisitions of such titles.

To systematize the contractual costs of the above acquisitions of the professional athlete’s registration title holding/ disposure, the professional sports organization may be governed by the corporate asset lifecycle concept. This concept implies a matrix of investment objects lifecycles with the relevant grouped operational costs and listed actions need to be taken at every stage of an investment object lifecycle. Such systematization will make it possible to reasonably cover every cost element in the professional sports organization human capital investment process so as to make the cost-accounting mechanism perfectly clear and transparent, with every non-eligible/ inadequate spending being tracked and corrected on a timely and effective basis [3].

And the intellectual capital management comprises the third intellectual capital mobilization element that may be interpreted as the intellectual capital building, efficiency securing and value adding activity [9]. The professional sports organization intellectual capital management strategy may be designed using either of the following approaches: scenario approach; decomposing approach; and integrated approach. One of these approaches will be selected so as to expand the intellectual capital management options and quality, diversify the intellectual capital structure and facilitate the intellectual capital management strategy development and implementation procedures using the creative resource of the company personnel. Generally the choice of the intellectual capital management approach will be dictated by the professional sports organization experience and maturity, since the intellectual capital elementary structure and role of every intellectual capital element depends on the professional sports organization lifecycle and success of the professional sports organization innovative initiatives, their priorities, ambitions and specific progress goals.

Conclusion. The study analyzes the structure of a professional sports organization’s intellectual capital with its three core interrelated elements, each of them dependent on both others to form a sort of a closed cycle that needs to be taken into account by the professional sports organization in the intellectual capital mobilizing efforts for success of the professional sports organization commercialization initiatives.

References

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Abstract

Objective of the study was to offer the intellectual capital mobilizing mechanisms for the national professional sports organization progress in the commercialization domain.

Methods and structure of research. The authors analyzed for the purposes of the study the relevant literature and study reports in management sociology, economics and sociology of sports in the context of the intellectual capital valuation, intellectual capital management and intellectual capital investment issues; with overviews of the national and international practical experiences in the intellectual capital management by professional sports organization willing to undertake or undertaking commercialization projects to support their development programs. 

Results of the study. It is noted that the processes that involve intellectual capital include three components: valuation, investment and management. It was found that these components, as well as the elements of the intellectual capital structure, are interconnected and define each other: the process of intellectual capital management is finite and impossible without an initial valuation and investment; the process of employment of intellectual capital is necessary for rational management and is determined by accurate valuation, and intellectual capital management is impossible without investment and valuation.

Conclusion. The presence of each of the listed elements of the mechanism of implementation of intellectual capital necessitates the presence of two other ones, which forms a certain closed cycle that determines the essence of the mechanism for implementation of intellectual capital in sports organizations as entrepreneurial structures.