Management control in pulsating organisations—A multiple case study of popular culture events

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Management control in pulsating organisations—A multiple case study of popular culture events Martin Carlsson-Wall a,∗ , Kalle Kraus a , Louise Karlsson b a b

Department of Accounting, Stockholm School of Economics, Box 6501, 113 83 Stockholm, Sweden EY Sweden, Box 7850, 103 99 Stockholm, Sweden

a r t i c l e

i n f o

Keywords: Management control systems Minimal structure Operational representation Popular culture Pulsating organisations Sport events

a b s t r a c t Major events comprise an important aspect of popular culture. The pulsating nature of event organisations implies that they quickly expand at the time of the event and then contract. By examining six sport event organisations, detailed action planning was found to be crucial to ensure that both the structure and flexibility were guaranteed when the event took place. Detailed action planning served as the backbone in the chain of control in each case, connecting the evaluation based on non-financial measures with the budgeting, and with policies and procedures that were applied during the process. It created a shared understanding of the breakdown of responsibilities and duties and made it possible to clarify the role each individual played within the system and to determine when and how improvisation was needed. Our findings thereby provide important boundary conditions to the literature on ‘minimal structures’ by making it clear that ‘minimal’ management controls are not sufficient to handle the balance between structure and flexibility in pulsating organisations, which often rely on thousands of inexperienced employees to work together for a very short period of time. Detailed action planning helped create ‘operational representation’ (Bigley and Roberts, 2001), i.e. the basic cognitive infrastructure permitting individuals and groups to effectively integrate their behaviours with those of others on a moment-to-moment basis as the event unfolds. We also contribute by explaining important management control differences across the six organisations through the distinction between participation- and spectator-driven events. © 2016 Elsevier Ltd. All rights reserved.

1. Introduction More than 20 years have passed since Hopwood’s (1994) call for research on how accounting is implicated in everyday life. Since then an emerging accounting literature has focused on one important aspect of everyday life, namely that of popular culture activities (Jeacle, 2012; Jeacle and Carter, 2014). Examples include cinema and film (Jeacle, 2009, 2014), drinking (Jackson et al., 2012), fashion (Jeacle, 2015; Jeacle and Carter, 2012; Walker and Carnegie, 2007), popular literature (Evans and Fraser, 2012), popular music (Jacobs and Evans, 2012; Smith and Jacobs, 2011) sports (Andon and Free, 2012, 2014; Cooper and Johnston, 2012) and travel (Jeacle and Carter, 2011). An important aspect of many of these activities is the occurrence of major events, such as the American Oscars, the Woodstock Music and Art Fair and the Olympic games, in which interest has grown substantially over the years (Jago and Shaw,

∗ Corresponding author. E-mail addresses: [email protected] (M. Carlsson-Wall), [email protected] (K. Kraus), [email protected] (L. Karlsson).

1998). For instance, the Eurovision Song Contest of 2015 held in Vienna reached a massive 197 million people in 40 countries.1 Event organisations are of analytical relevance for the literature on management control systems (MCS) owing to the pulsating nature of the activities that such organisations have to cope with (Hanlon and Jago, 2000). The term ‘pulsating organisation’ reflects organisations that quickly expand and then contract (Crawford, 1991; Toffler, 1990). Pulsating organisations are, thus, quite different from the conventional organisations that comprise the subject of the majority of the existing management control literature, i.e. organisations with a relatively stable workforce and regular activities throughout the year. However, the role of MCS in pulsating organisations has been largely ignored within accounting scholarship. Jeacle (2009), for instance, suggested that further accounting and popular culture research should pay more explicit attention to the nature of the organisational form under investigation. To address this, we designed a multiple case study (Eisenhardt, 1989) of pulsating

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www.eurovision.tv/page/timeline.

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Please cite this article in press as: Carlsson-Wall, M., et al., Management control in pulsating organisations—A multiple case study of popular culture events. Manage. Account. Res. (2016), http://dx.doi.org/10.1016/j.mar.2016.01.002

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organisations, comprising six different sport event organisations (SEOs). Sport is certainly a significant form of popular culture, and the interest in and market for major sport events is huge (Emery, 2010; Green, 2001; Jago and Shaw, 1998; Szymanski, 2003). In Sweden, when registration opened for the country’s largest crosscountry skiing event, Vasaloppet, all available registrations were filled within minutes. The pulsating nature of SEOs is evident. Take one of our case organisations, Vätternrundan, a large cycling event, as an example. Vätternrundan has ten permanent employees working all year with the cycling events, however during the two weekends when the events take place, approximately 4000 volunteers work to ensure the realisation of the events. The following exploratory research question is pursued in the paper: What is the role of management control systems2 in pulsating organisations such as sport event organisations? We draw on the work published in the literature on pulsating organisations, e.g. Hanlon and Jago (2000), and on Malmi and Brown’s (2008) conceptual MCS framework, which enables us to analyse a broad array of controls. By studying pulsating organisations, we seek to contribute to the literature on accounting and popular culture as well as to the more general MCS literature. This is achieved by moving beyond the current restricted appreciation of time and organisational work as practices that are organised into discrete phases which are considered to follow a regular sequence (c.f. Ezzamel and Robson, 1995; Huy, 2001; Nandhakumar and Jones, 2001). The literature on pulsating organisations emphasises the difficulty of managing these organisations, attributable to the sudden and steep changes in the rhythm of the daily activities, and stresses the importance of both structure and flexibility (e.g. Hanlon and Cuskelly, 2002; Hanlon and Jago, 2000). As a result of the high degree of irregularity in these organisations, we can expect clear limits to the usefulness of MCS; nevertheless, there is need for some form of MCS in such organisations because decisions need to be made and actions must be coordinated (c.f. Jörgensen and Messner, 2010). This paper seeks to investigate whether, and if so how, MCS are used in pulsating organisations. The paper is structured as follows. In Section 2, the literature on pulsating organisations and on MCS is reviewed. This is followed by a section on research methods. Thereafter, the MCS in six sport event organisations are analysed, and a discussion takes place of how the pulsating nature of the sport event organisations has had an impact on the MCS. Finally the conclusions and suggestions for future research are presented. 2. Theoretical development 2.1. The pulsating nature—a main characteristic of event organisations The role of events in popular culture is significant. The Woodstock Music and Art Fair in 1969 where around 500,000 people gathered for three days is still famous around the world. The film festival in Cannes, the American Oscars, the British Academy of Film and Television Arts (see, Jeacle, 2014), the summer and winter Olympic games, and the Roskilde music festival in Denmark are other well-known examples. Such events are described as being both highly complex and unpredictable and as varying in size and complexity (Shone and Parry, 2004). Event organisations are often characterised in terms of the variation between the number of people who are involved when an event takes place compared to those engaged before and after it. This characteristic has been referred

2 In line with Malmi and Brown (2008, p. 290), we define MCS as “systems, rules, practices, values and other activities management put in place in order to direct employee behavior”.

to as ‘pulsating’, an expression invented by Toffler (1990), who used the term to denote organisations that quickly expand and then contract. More specifically, the majority of staff involved in event organisations are employed by the organisation for a limited time, thereby creating an expansion and contraction in the personnel, causing the organisation to pulsate (Hanlon and Cuskelly, 2002; Smith and Stewart, 1999). As noted by Hanlon and Cuskelly (2002), pulsating organisations are quite different to other types of organisations which have a relatively stable workforce, established relationships between employees and where the induction of new employees is commonly performed on an individual basis. In contrast, pulsating organisations have a large influx of personnel over a limited period of time, and where sports are concerned, these people are often volunteers or temporary staff who receive little or no pay (Slack, 1997). The management literature on event organisations has mainly focused on the economic impact of the events (Badget and Gouguet, 2010; Dwyer et al., 2000; Preuss, 2005; Robinson and Minikin, 2011; Taks et al., 2011) and on personnel management (Farrell et al., 1998; Hanlon and Cuskelly, 2002; Hanlon and Stewart, 2006). Hanlon and Cuskelly (2002), for instance, studied how the pulsating nature of sport events had an impact on human resource management practices and found that a customised human resources process for such organisations was necessary. Hanlon and Jago (2000) showed how sport event organisations tended to operate with a small core of employees, expanding substantially before and during an event, and then shrinking in size again afterwards. They found that since these organisations involve rapid change, organisational growth, and increased diversity, there was a tension between the need for structure on the one hand, and the need for flexibility and quick adaptation to unforeseen circumstances on the other. For sport events, the equilibrium between events is indicative of the underlying structure that keeps the organisation stable, whereas during the perturbations, i.e. when the sport event organisation expands in size, this underlying structure swells to incorporate a massive addition to the workforce. The almost unique characteristic of event organisations, i.e. the pulsating nature which creates an ongoing need for structure and flexibility, is likely to have important implications for management control in these organisations. However the literature has not dealt with this issue adequately. In the following section, therefore, we discuss the role of MCS in pulsating organisations, such as SEOs. 2.2. The role of management control systems in pulsating organisations Management control is considered a key activity in organisations (Otley, 1994) and has been defined in various ways in the literature (see e.g. Merchant and Van der Stede, 2007; Otley and Berry, 1980; Simons, 1995). In this paper we draw on Malmi and Brown’s (2008) MCS framework in which five types of controls are included: planning (long-range planning and action planning), cybernetic controls (financial and/or non-financial measurement systems); reward and compensation; administrative controls (governance structure, organisational structure, policies and procedures); and cultural controls (clans, values, symbols). It has been argued that administrative controls create a structure in which planning, cybernetic, and reward and compensation control elements are exercised (Malmi and Brown, 2008). Cultural controls are seen as broad, yet subtle controls, that are assumed to be slow to change, thereby providing a contextual frame for the other controls (Malmi and Brown, 2008). One important reason for applying this framework is that it is difficult to specify beforehand which controls will be used and in what way they might be applied in sport event organisations, and therefore a typology with a broad scope fits well with the

Please cite this article in press as: Carlsson-Wall, M., et al., Management control in pulsating organisations—A multiple case study of popular culture events. Manage. Account. Res. (2016), http://dx.doi.org/10.1016/j.mar.2016.01.002

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exploratory purpose of our study. As Malmi and Brown (2008, p. 291) argued: “This analytical conception of MCS... provides a sufficiently broad, yet parsimonious, approach for studying the phenomenon empirically. . . The strength of the typology lies in the broad scope of controls”. The five types of controls broadly map the tools, systems and practices managers have available to formally and informally direct employee behaviour. In addition, previous research on sport event organisations has indicated the importance of choices regarding organisational structure for the management of these organisations (e.g. Hanlon and Jago, 2000). A number of management control frameworks (e.g. Merchant and Van der Stede, 2007; Simons, 1995) treat organisational structure as a contingent variable, whereas the framework of Malmi and Brown (2008) includes organisational structure within it as it is something that managers can use and alter in the process of implementing control (see also Flamholtz, 1983). When studying MCS in pulsating organisations, we need to move beyond the restricted appreciation of time and organisational work practices as being organised into discrete phases that are considered to follow a regular sequence (c.f. Ezzamel and Robson, 1995; Huy, 2001; Nandhakumar and Jones, 2001). The sudden changes in pace, the limited time over which the primary activities occur, the often unforeseen questions requiring immediate answers during an event, and the reliance on a large number of temporary staff, would lead one to expect that both structure and flexibility are needed. Such balance between structure and flexibility ties into a broader debate in the MCS literature about the role of MCS in situations requiring an innovative mind-set and where people are motivated, at least partly, by intrinsic motivation rather than extrinsic compensation (Adler and Chen, 2011). One body of work has highlighted the importance of freedom in such situations and therefore claims that there will be little of MCS and constraints (Abernethy and Brownell, 1997; Abernethy and Lillis, 1995; Amabile, 1998; Amabile et al., 1996; Damanpour, 1991; Quinn, 1980; Tushman and O’Reilly, 1997; Verona, 1999). In contrast, however, an emerging stream of research has demonstrated the enabling role of MCS in such situations (e.g. Brown and Eisenhardt, 1997; Carlsson-Wall and Kraus, 2015; Christner and Strömsten, 2015; Davila, 2000; Jörgensen and Messner, 2010; Kamoche and Cunha, 2001; Moll, 2015; Van der Meer-Kooistra and Scapens, 2008; Van der Meer-Kooistra and Scapens, 2015). For example, Jörgensen and Messner (2009, 2010) demonstrated how spreadsheet models incorporating a contribution margin ratio and a payback ratio were important ways to coordinate the product development process within a company. In the MCS literature, leading researchers even talk about a paradigm shift. As Adler and Chen (2011, p. 63) put it: “. . . indeed, recent theoretical and empirical research in management accounting and control represents a paradigm shift away from the traditional focus on established objectives and stable environments. . .. The new paradigm highlights the role of MCS in innovation and uncertain environments, envisioning formal MCS as ‘flexible and dynamic frames adapting and evolving to the unpredictability of innovation, but stable to frame cognitive models, communication patterns, and actions’ (Davila et al., 2009, p. 327).” We propose that MCS in pulsating organisations need to ensure that they maintain structure and flexibility, which Kamoche and Cunha (2001) in their study of product development denoted ‘minimal structures’.3 They argued that minimal structures, such as MCS,

should provide appropriate levels of responsibilities and procedures (i.e. structure) combined with wide zones of manoeuvre (i.e. flexibility). In pulsating organisations, both structure and zones of manoeuvre are likely to be needed to cope with the change in pace before, during and after the event. For example, during the day of a large marathon with thousands of runners, unexpected events are likely to occur that require individuals or teams to improvise. In these instances, it can be expected that a pulsating organisation needs to have the flexibility to ensure that the appropriate individual or team engages in such improvisation. If there is too much structure, it might take too long before problem-solving starts (which would be devastating for a one-day event), but with too little structure, the wrong individual(s) might engage in the problem-solving (which would also be devastating for a one-day event). We also expect that a study of pulsating organisations can develop the literature on ‘minimal structures’ (i.e. Brown and Eisenhardt, 1997; Kamoche and Cunha, 2001; Van der MeerKooistra and Scapens, 2008; Van der Meer-Kooistra and Scapens, 2015; Varoutsa and Scapens, 2015). This literature has primarily dealt with new product development, innovation and supply chain management, as a result of which, studying pulsating organisations has the potential to provide novel findings related to the use of ‘minimal structures’.

3 In the accounting literature, Van der Meer-Kooistra and Scapens (2008), Van der Meer-Kooistra and Scapens, 2015) and Varoutsa and Scapens (2015). have drawn on the concept of minimal structures to analyse accounting in lateral intra-organisational relations and inter-organisational relations, and in product development.

21 Lagadère Scandinavia has arranged the Swedish Open since 2000, and acquired the license for the Swedish Open tournament from the Swedish Tennis Federation in 2009. 4 Vasaloppet, 2014a. 5 Vätternrundan, 2014.

3. Research methods We conducted an explorative multiple case study of six sport event organisations to answer the research question set out in the paper (Eisenhardt, 1989; Yin, 2014). The selection of cases was based on polar types (see, Eisenhardt, 1989), and therefore each of the six cases covers a different sport, size, location and ownership structure, as summarised in Table 1. Even though the sport events are well-known in Sweden, we made an explicit effort to choose events that are either one of the biggest in the world in their sports category (i.e. Vasaloppet and Vätternrundan) or that are part of a global tour of sport events (i.e. the DN-gala, Gothenburg Horse Show, Stockholm Marathon and the Swedish Open). As a consequence, our six cases represent sport event organisations that should be similar to other global sport event organisations around the world. 3.1. Vasaloppet The history of Vasaloppet dates back to 1520 when the Swedish king, Gustav Vasa, skied the 90 km from Sälen to Mora. This crosscountry skiing event, over the same distance, was founded in 1922 and is today the world’s oldest, biggest and longest ski race. During the ‘winter week’ eight different ski races take place over various distances.4 3.2. Vätternrundan The idea of cycling around the second largest lake in Sweden, Vättern, was born in 1966, corresponding to a distance of 300 km. Races are also arranged over shorter distances, the Halvvättern (150 km) and Tjejvättern (100 km). The events have around 35,000 participants in total. The cycling events are not called competitions, but ‘health races’.5

Please cite this article in press as: Carlsson-Wall, M., et al., Management control in pulsating organisations—A multiple case study of popular culture events. Manage. Account. Res. (2016), http://dx.doi.org/10.1016/j.mar.2016.01.002

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Vättern-rundan

Main event

Vasaloppet

Vättern-rundan

Stockholm Marathon Group Stockholm Marathon

Sports Year of first event Permanent Employees Volunteers Participants/audience Owners

Cross-country skiing 1922 30 3500 88,000 2 sports clubs

Cycling 1966 20 4000 35,000 7 sports associations

Running 1979 16 3000 260 000 2 sports clubs

Type of ownership

Stadion-klubbarna

Got Event AB

Lagadère Scandinavia

The DN-gala

Gothenburg Horse Show Equestrian 1977 2 300 76,000 1 municipality

The Swedish Open

Track and field 1967 2 700 13,000 12 athletics associations Non-profit association Non-profit association Non-profit association Non-profit association Municipality

Tennis 200021 20 400 40 000 1 private company Publicly traded

3.3. Stockholm Marathon

3.7. Data collection and data analysis

The running event, the Stockholm Marathon (42 km), was founded in 1979. Now the organisation arranges 12 different running events, with around 260 000 participants altogether, and two international athletics competitions every year.6 The largest events, in terms of runners, are the Stockholm Marathon, Stockholm Half Marathon and the Tjejmil (the latter being a 10 km race for women).7

This study builds on semi-structured interviews over the period from February to April 2014. In total, 21 people have been interviewed, meaning that three to four individuals have participated in interviews per case organisation (see Appendix A). The length of interviews ranged from 35 to 150 min, and on average took 70 min. The interviewees’ roles were CEO, CFO, board representative, marketing manager, financial manager and project manager. The semi-structured interview technique involved posing a predetermined set of broad questions based on the Malmi and Brown (2008) MCS framework, but also allowing openness towards follow-up questions that arose during the interviews. All interviews were tape-recorded and transcribed, with the interview transcripts totalling around 200 pages. In addition, internal documents and the SEO’s webpage material were used as complementary sources of information. When conducting data analysis, the empirical material was organised into the main themes in the Malmi and Brown framework using a spreadsheet. Within each theme, the data was further grouped into Malmi and Brown’s sub-categories, when needed (Eisenhardt and Graebner, 2007). The data analysis also involved a search for cross-case patterns which necessitated the identification of categories prior to searching for within-group similarities and intergroup differences (c.f., Eisenhardt, 1989). In line with an explorative research purpose (Edmondson and McManus, 2007; Keating, 1995), abduction played an important part of our data analysis and theoretical development (see, Lukka, 2014; Lukka and Modell, 2010). For example, when we conducted the cross-case data analysis, we realised that there was a difference between participation- and spectator-driven sport events in terms of the use of MCS. Furthermore, being interested in the balance between structure and flexibility, we realised that there was surprisingly detailed action planning. Trying to make sense of this empirical finding, we then delved deeper into the organisational theory literature on temporary, event-based organising and encountered the concept of ‘operational representation’ (Bigley and Roberts, 2001). Based on large wild-land fires, Bigley and Roberts (2001) showed that bureaucratic structures can be needed in a dynamic environment because there is a constant need for individuals to understand the activity system they are part of and their role within it. Using the concept of ‘operational representation’ helped us to develop a theoretical explanation of why there was a need for detailed action planning in pulsating organisations.

3.4. The DN-gala The DN-gala is a track and field competition of the highest international rank. This event has been arranged at Stockholm Stadium every year since 1967. In 2010, the DN-gala obtained Diamond League status as one of just 14 such competitions for track and field all over the world. Two additional events are arranged during the same week as the DN-gala, the little DN-gala and the DN-gala Youth. The former is a family event where children get to try athletics and the latter is a national athletics competition for teenagers aged 12–19.8

3.5. Gothenburg Horse Show Gothenburg Horse Show is an annual international equestrian competition that has been held at the Scandinavium Arena in Gothenburg since 1977. This event involves both horse jumping and dressage, and the event has turned into the World Cup Finals 13 times over the years.9

3.6. The Swedish Open The tennis tournament, the Swedish Open, comprises male and female tournaments during a fortnight in July and is arranged in Båstad. The first year of the tournament was 1948, and, since the year 2000, it has been arranged by Lagadère Scandinavia, a subsidiary of Lagadère S.C.A., which is an international conglomerate within media, publishing, retail and sports.10 The Swedish Open has been awarded “The Tournament of the Year” by the Association of Tennis Professionals (ATP) within its category for 11 years in a row.

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Stockholm Marathon Group, 2014. Vårruset is the largest event in total number of participants as it takes place at 17 different locations all over Sweden. The Stockholm Marathon Group owns the concept, but the events are mainly arranged by local running or athletics associations. 8 Stadionklubbarna, 2013. 9 Gothenburg Horse Show, 2014. 10 Lagadère, 2014.

4. Case analysis

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This section considers the various MCS control elements used by SEOs as outlined in theMalmi and Brown (2008) framework. We will start with the administrative controls since they create a foundation for cybernetic controls, planning, and rewards and compensation, which will be described in that order. Finally, we

Please cite this article in press as: Carlsson-Wall, M., et al., Management control in pulsating organisations—A multiple case study of popular culture events. Manage. Account. Res. (2016), http://dx.doi.org/10.1016/j.mar.2016.01.002

Vasaloppet

Cybernetic controls Governance structure

Policies and procedures

Budgeting

Financial measures

Non-financial measures

- Non-profit association - Limited company - Matrix organisation

- Two separate boards of directors - Management team - Project managers

- Owners’ directives (high level policies) Policies regarding:

- The budget is an important control system - Based on: outcome of the previous year, evaluations and the business plan - Forecasts prepared three times a year

- No. of registra-tions (70% of revenue)

- Participant surveys

- Budget is an important control system - Based on: outcome of previous the year, evaluations and the business plan - Forecasts prepared continuously when budget variances are detected

- The registration status (85% of revenue)

- Participant and volunteer surveys

- Budgets are not applied - Instead: the previous year’s outcome serves as a good benchmark

- The registration status (75% of revenues)

- Participant surveys

- The environment - Surveys and evaluations

- Non-profit associationLimited company - One of four business units in a sports alliance

- Two identical boards of directors - Steering group for the cycling events - Competition committee (volunteers)

- Non-profit association - Limited company - A flat organisational structure with three functions

- Two identical boards of directors - Management team - Project managers - Competition committee

The DN-gala

- Non-profit association - Limited company - Two permanent employees

- Two identical boards of directors - Management team - Competition committee

- Extensive policies and regulations provided by Diamond League regarding the competition and the services provided (e.g. hotels)

- Budget is based on the outcome and evaluations of the previous year, and goals for the next year - The financial situation (compared to the budget) is discussed at every board meeting

- Status of sponsor agreements

- Audience survey, evaluation by Diamond League

Gothenburg Horse Show

- Limited company (municipality owned) - One project manager employed, one competition manager

- Organisational committee (as a board of directors) - Competition working group

- Public procurement tender is required

- Budget is based on the previous year’s budget, the outcome, and if improvements are required - Less budget focus over the year because the knowledge and experience are substantial

- Ticket sales (60–65% of revenue)

- Surveys and evaluation meetings

The Swedish Open

- Limited company - Matrix organisation (tournament managers and project managers

- Tournament managers (per event) - Competition committee - Committee involved in financial decisions (e.g. budget approval)

- ATP and WTA provide extensive regulations - Owners require financial reporting and provide budget-related policies

- An extensive budget focus. The budget is modified several times until it is approved by a committee - Forecasts (revised budgets) are prepared twice a year

- The status of sponsor agreements

- Surveys and evaluations by ATP/WTA and the players

Vättern-rundan

Stockholm Marathon

- Owners’ directives (high level policies) Policies regarding: - ISO-20121 (sustainability) - Surveys and evaluations - Traffic security - No specific owners’ directives Policies regarding: - Starting up new events - Traffic security

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Table 2 Empirics of the SEOs’ administrative and cybernetic controls.

5

Rewards & compensation

Cultural controls

Employed staff

Volunteers

Values

Symbols

Clan(s)

- New role: Project manager works with development of events - Strategy meeting with the board of directors

- No monetary incentives - Motivated by the event as such

- Non-profit associations providing volunteers are paid 6 Euros/h/volunteer

- Owners’ directives - Values (communicated)

- Name, history, the region, Blueberry soup

- Volunteers → funds to their non-profit associations

Vättern-rundan

- Well-structured process - Considered extremely important - Crucial to ensure that both the structure and flexibility were guaranteed during the event

- Steering group was introduced during 2013 responsible for development of the cycling events

- No monetary incentives - Motivated by the event as such

- Non-profit associations providing volunteers are paid 6 Euros/h/volunteer

- Owners’ directives - Values (in business plan)

- The region and city, cycling

- Volunteers → funds to their non-profit associations

Stockholm Marathon Group

- Well-structured process - Considered extremely important - Crucial to ensure that both the structure and flexibility were guaranteed during the event

- The management team is responsible for the strategic issues

- A bonus (same for everyone) is paid and dependent on the bottom line result - Motivated by the event as such and to be able to fund other activities

- Non-profit associations providing volunteers are paid 26 Euros/day/volunteer - Owners are not remunerated when providing volunteers

- Mission statement - To fund non-profit association activities (informal)

- Event name

- Volunteers → funds to their non-profit associations

The DN-gala

- Well-structured process - Considered extremely important - Crucial to ensure that both the structure and flexibility were guaranteed during the event

- Not specifically addressed - 5-year agreements with Diamond League

- No monetary incentives - Motivated by the event as such

- Owners provide all volunteers and neither the volunteers nor their associations are remunerated

- Owners’ directives - To fund non-profit association activities (informal)

- The arena and event name

- The volunteers - A commit-ment for owner non-profit associations

Gothenburg Horse Show

- Well-structured process - Considered extremely important - Crucial to ensure that both the structure and flexibility were guaranteed during the event

- Organisational committee is responsible for the strategic issues

- No monetary incentives - Motivated by the FEI evaluation

- The volunteers are not remunerated - They are motivated by the social aspect of the event

- Main goal: best indoor competition - Objective: to promote Gothenburg

- The city

- Volunteers (often returning) → a social event, sports interested

The Swedish Open

- Well-structured process - Considered extremely important - Crucial to ensure that both the structure and flexibility were guaranteed during the event

- Not specifically addressed - Main strategy is to grow by acquiring existing events

- A few employees have monetary incentives - Motivated to reach budget targets and to be voted the best tournament among the players

- The volunteers are not remunerated - Volunteers are motivated by the social aspect of the event

- Main goal: tournament of the year - Strict budget targets

- Title sponsors, the city

[•] • Volunteers (often returning) → a social event, sports interested

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Long-range planning

- Well-structured process - Considered extremely important - Crucial to ensure that both the structure and flexibility were guaranteed during the event

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Action planning Vasaloppet

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Table 3 Empirics of the SEOs’ planning, rewards and compensation, and cultural controls.

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elaborate on the cultural controls, providing a contextual frame for the other controls. Tables 2 and 3 summarise our empirical findings. 4.1. Administrative controls 4.1.1. Organisational structure The internal structures vary with the size of the organisations. Vasaloppet is the largest, and employs a matrix structure, whereas the DN-gala is the smallest, with only two employees, although consultants are hired on a part-time basis when required. Four of the six SEOs (Vasaloppet, Vätternrundan, Stockholm Marathon and the DN-gala) are owned by non-profit associations with the benefit of being tax exempt and a separate limited company has therefore been created for each event to meet the requirements of sponsors and partners used to make transactions with limited companies, and not associations. This distinction of legal entities separates the four SEOs’ operations so that the commercial operations, relating to sponsorship and marketing, are conducted in the limited company, whereas operations relating to the participants and the actual event are arranged by the non-profit association. The CEO of Vasaloppet commented: “We have to separate the limited company from the non-profit association, especially when it comes to sponsorship agreements and sponsorship products. It is the association that provides the famous blueberry drink, so there are internal transactions between the company and the association [to cover the cost of this].” Related to this, the CEO of Vätternrundan explained: “The companies that we have agreements with are used to making transactions with other companies, and not non-profit associations, when it comes to VAT, etc.” For Vasaloppet, Vätternrundan and the Stockholm Marathon, the primary source of revenue (70–85 %) comes from the participation fees and hence is recorded in the nonprofit association, whereas the sponsorship revenues (15–30%) are registered in the limited company. The benefit of having most of the revenues in the association is that such legal entities are taxexempt if they are deemed to be of public interest.11 The SEOs with just single legal entities are the Gothenburg Horse Show and the Swedish Open, these being limited companies. Got Event AB, which owns and arranges the Gothenburg Horse Show, is owned by the municipality of Gothenburg, and Lagadère Scandinavia, which arranges the Swedish Open, is a limited company and a subsidiary of the French, publicly traded Lagadère S.C.A. Even though four of six SEOs are actually comprised of two separate legal entities, all interviews argue that they, in practice, can be viewed as single organisations. An example being that the same person is the CEO for both legal entities. The SEOs differ in terms of the number of permanent employees, which are from two to around 30, and the organisational structures vary from Vasaloppet’s matrix organisation to Stockholm Marathon’s less structured one. At the time of the events, however, 300–4000 volunteers become involved. As the CEO of Vasaloppet explained: “One week, it is calm and you talk to the same colleagues every day, but then, during the event, everything is turned upsidedown, which means undertaking other tasks than normal, and taking on new responsibilities. This requires adaptability.” The roles of the permanent employees have a tendency to burgeon during the events. The decision-making process, too, changes during the event, being shorter and with more responsibilities

11

Swedish Tax Agency, 2013.

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being delegated. The change in roles is exemplified by the work of the CEO of Vasaloppet, who acts as a volunteer and serves sports drinks during some of the events they hold. Similarly, all employees of the Stockholm Marathon Group help out when an event takes place, even if their usual role is finance or marketing. 4.1.2. Governance structure The board structures are a reflection of the legal entities, meaning that SEOs with dual legal entities have two separate boards of directors comprised of different individuals (Vasaloppet) or the same individuals (Vätternrundan, Stockholm Marathon and the DN-gala). All the SEOs have similar governance structures: a management team, project teams that are divided by function or event, and a committee of volunteers who are assigned practical event-related responsibilities, especially during the events. In Vätternrundan and the Gothenburg Horse Show, there is a steering group responsible for high-level decision-making for the events and with the goal of developing the events strategically. The management teams in most of the SEOs include the CEO and the managers of each business area. The Gothenburg Horse Show is a bit different since it is only one part of the Got Event AB’s operations; nevertheless, the event has a ‘competition working team’ which acts like a management team involved in the operations. This is managed by the competition manager, who can be considered to correspond to a CEO, who acts the link between the management team and the board of directors. All of the SEOs have a group of volunteers who are involved over a longer time period than the ‘regular’ volunteers recruited to work during the events; these longer-term volunteers have more substantial practical responsibilities than their short-term colleagues. This group is often called the competition committee, and the committee varies in size and composition, ranging from 40 to 100 people who work directly under the CEO (in case of the DN-gala and Gothenburg Horse Show) or under a project manager. In contrast to the short-term volunteers, the committees meet several times throughout the year for workshops, and during the events they become responsible for certain areas and/or for groups of volunteers, indicating that when the events take place, the decision-making and responsibility can be delegated. When it comes to project teams, Vasaloppet and Vätternrundan have no project managers who are responsible for a particular event, but rather for different functions that are required during the events, such as the start or goal. This is different from both the Stockholm Marathon Group and the Swedish Open. The former has 14 different running events and the project managers are responsible for 2–3 events each. For the Swedish Open there is a tournament manager responsible for each event, whereas the project managers work with all or several of the events. 4.1.3. Policies and procedures For the non-profit association and municipality owned SEOs, the owners determine high level policies and procedures, which are often communicated through the owners’ directives. These directives emphasised the promotion of public health and the region together with a ‘sound financial situation’. One implication of the non-profit related owners’ directives is that registration fees are not raised even though the events are fully registered quickly. This was explained by the CEO of Vasaloppet: “We don’t raise the fee by 100 Swedish kronor [10 Euros] just because we can, a commercial actor would probably have done that.” For Lagadère Scandinavia, the owners’ policies are closely related to the financial targets, especially the budget. In Vätternrundan, the owners require that the cycling events generate a 30% surplus to be reinvested in the sport alliance’s operations. The owners’ overall policies have an effect when starting new events, as exemplified by the Stockholm Marathon Group having a policy that new events can take losses

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the first year, break-even in the second and become profitable the third year. Vätternrundan, too, acknowledges that not all of their sport events, especially new ones, are operated with a profit. As opposed to the non-profit and municipality owned SEOs, however, the French owner of Lagadère Scandinavia, does not provide any operational policies, only financial directives. Lagadère Scandinavia requires extensive reporting since the owner is a publicly traded company. Thus, in this instance, the company has strict policies when it comes to the budget, and as expressed by a project manager: “The owners do not care about how we operate the events, they only want positive earnings.” Policies and procedures are also provided by municipalities and/or authorities in particular in relation to environmental and security issues, and the international sport federations which tend to have extensive regulations regarding the sport competition or tournament. For instance, a prerequisite for Vasaloppet, Vätternrundan and the Stockholm Marathon is to receive permissions from the municipalities or authorities (e.g. Swedish Transport Administration) to make it possible to arrange the event. Furthermore, as the first Swedish sport event, Vätternrundan has addressed a framework of sustainability policies to become ISO-20121 certified. This means developing standards for the cycling events within environmental, economic and social aspects. For example, the circulation of traffic on certain stretches of road must be prohibited. When it comes to the DN-gala, Gothenburg Horse Show and the Swedish Open, the relevant international sports federations first of all sanction the competition or tournament, and second, provide an extensive set of rules and policies that have to be followed. An international sport federation12 is a non-governmental governing body with the aim of coordinating and administering the relevant sport at an international level. The rules and policies provided by a federation comprise anything from the competition program to the amount of prize money, but they might also impose rules regarding commercial rights such as TV broadcasting. As stressed by the competition manager at Gothenburg Horse Show: “They [the federation] provide rules regarding everything.” 4.2. Cybernetic controls In the SEOs, the evaluations are performed post-event, and the budget is considered to be interrelated with the non-financial measures of quality. The process and focus of the budget differ somewhat between the SEOs, but the budget is used to distribute resources to the functional areas of the organisation, as described by the project manager of Vasaloppet: “The budget provides useful financial limits for each role in the organisation.” As such, the budget is a means of providing limits on what activities can be done, and the process is descried as being comprehensive. The extensive evaluations, through participator surveys, and the business plan are important inputs to the budget development. The current budget is based on the previous year’s budget and forecasts. Both Vasaloppet and Vätternrundan consider the budget to be an important and useful control system that is closely connected to the evaluation and planning activities. Even though budgets are applied within the Gothenburg Horse Show, the process of preparing them is viewed as routine by the project manager: “We have prepared the budget so many times [. . .] of course we update the budget, but the template has been developed over 38 years now.” The budget is also considered to be of great importance in the Swedish Open and

12 In this study, Diamond League (brand name of international athletics competitions owned by the International Associations of Athletics Federation), FEI (the International Equestrian Federation) and ATP/WTA (Association of Tennis Professionals and Women’s Tennis Association) will hereafter be referred to as International Sports Federations.

according to the CFO: “We look at the budget every day [. . .] everything is connected to the budget [. . .] every single deviation from the budget is followed-up.” After the budget has been prepared, and been approved by the board of directors, it is continuously monitored. Vasaloppet, Vätternrundan and the Swedish Open do this by preparing forecasts, which are presented several times per year. The DN-gala does not work with forecasts, even though the budget is discussed, and is on the top of the agenda, at every board meeting. The Stockholm Marathon Group differs from the other SEOs as it does not use budgets, unless it is arranging a new event. Instead, the outcome of the previous year’s event is analysed and serves as a basis for the coming year. As the CFO put it: “If we are going to raise the registration limit by 500 participants the next year, we know what revenues that will contribute, and then we have to figure out if there are any changes or improvements required to allow for 500 more participants.” The most frequently monitored financial measure by Vasaloppet, Vätternrundan and the Stockholm Marathon Group is the number of participants. This measure is directly linked to the revenue from registration fees, which correspond to 70–85% of these SEOs’ revenue. As the marketing manager of Stockholm Marathon explained: “We check the participation numbers every day, and compare it to the same day of the previous year. It provides an indication of whether we need to take action, increase the marketing efforts.” For the DN-gala, Gothenburg Horse Show and the Swedish Open, the sponsorship revenue corresponds to 35–70% of the total revenue. This revenue stream is dependent on the duration of the sponsorship agreements, which is why the SEOs strive to sign threeyear agreements with their sponsors. Yet another financial measure that is monitored by these SEOs is the ticket sales. This measure is particularly important for the Gothenburg Horse Show, where ticket sales correspond to 60–65% of the revenue. When it comes to non-financial measures, all six SEOs use surveys to evaluate the quality of the events. The SEOs that arrange events with a large number of participants use surveys to evaluate the participators’ level of satisfaction and the quality of the event. Surveys may also be distributed to the audience, volunteers, sponsors and partners, and serve as a useful instrument to detect areas of improvement and hence, become a basis for action planning. Non-financial measures are also connected to the SEOs’ goals, exemplified by the chairman of the board of Vätternrundan: “Our goal, which is stated in their business plan, is that the total experience shall get a score of 4.3 on a 5-point scale on the participant surveys.” For those events where international sports federations are involved (the DN-gala, Gothenburg Horse Show and the Swedish Open), extensive evaluations are conducted by the federations. For example, the Diamond League evaluates the DN-gala based on 17 parameters. The goals for the SEOs are often related to the ranking that the federations provide. Furthermore, the elite sport stars evaluate the events, as stressed by the project manager of the Swedish Open: “The tournament has been voted ‘the best tournament of the year’ by the players, eleven years in a row.”

4.3. Planning 4.3.1. Action planning—very important across all six cases All interviewees emphasised the importance of the pulsating nature of their organisations and said that the period of planning and preparation is significantly longer than the time of the events. The annual rhythm of the SEOs can be divided into four phases; planning, preparation, execution and evaluation. Depending on the

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“The tennis is the back-bone and we plan everything else around the tennis program.”13 “Diamond League gives us a specific schedule of the field events, which we cannot change.”14

Fig. 1. Annual rhythm of the labour hired for SEOs with one main event per year (not according to scale).

When it comes to sponsors, planning meetings are conducted to realise the activities that the sponsors tend to require for the exposure of their brand. The challenges of communicating with and between volunteers were mentioned by the SEOs arranging events with thousands of volunteers who are often members of other non-profit associations. The communication does not only involve conveying information regarding the event, but also imparting the values the volunteers should express to the participants. Furthermore, during the events, a large number of volunteers have to be managed and coordinated to realise the event. Here all interviewees stressed the importance of detailed action planning for reliable performance during the event. As the CEO of Vätternrundan put it: “Every year we get lots of positive feedback from the participants about our volunteers’ work, and they are the ones meeting the cyclists. Our main task is therefore to make the volunteers aware of the message we want to deliver to the participants. . . make the volunteers act in the right way, have the correct equipment etc.”

Fig. 2. Annual rhythm of the labour hired for SEOs with several main events per year (not according to scale).

number and timing of the events, the phases more or less overlap. Fig. 1 illustrates how the four phases follow each other stepwise, which is the case for Vätternrundan, the DN-gala, the Gothenburg Horse Show and Vasaloppet. Fig. 2 shows the annual rhythm for SEOs where the preparation and execution phases overlap, as there are several events over a certain period of time, which is the case for Stockholm Marathon Group and Lagadère Scandinavia. The figures show that the action planning, which involves both the evaluation and planning phases, corresponds to the majority of the annual cycle. The action planning was emphasised by all interviewees as being extremely important because goals and actions are decided upon and planned at meetings, workshops and conferences during the year. Post event evaluation was common to all of the SEOs evaluated, although the evaluations occurred by different means. Meetings or workshops are conducted after the event to prioritise the introduction of improvements for the next year’s events. For example, the DN-gala arranges an annual meeting during the fall (after the event), as described by the CEO: “At the annual meeting with the owner non-profit associations [twelve athletics clubs], we report the outcome of the current year’s event and then set up goals for the next year.” Vätternrundan has a similar set-up, holding planning conferences twice a year. At the first one, high-level goals are set, and the second involves more practical planning. Since the planning process starts with evaluations of where areas of improvement are detected, there is a need to prioritise, as explained by the CFO: “During the planning phase we have to decide what areas we are going to improve, what it will cost and what resources it requires.” The action planning tends to involve most employees, and many of the initiatives and areas of improvement come from suggestions by the employees or volunteers. The goals established are typically discussed at an annual meeting with the owners, and hence they become involved in the planning process. Furthermore, international sports federations become involved in the action planning since they provide pre-determined standards, and also the program, for the competition or tournament, as illustrated by the Swedish Open and the DN-Gala:

Action planning was believed to help the volunteers to build and maintain viable understandings of the wider event system to which they belong. As the same CEO explained: “Everything is about detailed planning. I mean it is a climax during the event. But at that time everything should be clarified and it is a giant puzzle we need to put together [before the event].” Similarly, the project manager of Swedish Open stressed: “The most important thing is that we make sure that all those working during the event has the right information, concerning where they should be, when they should be there, what happens during the week, and what different tasks are done.” The interviewees emphasised that all volunteers working during the event are equally important; every individual is an important piece of the puzzle. As the marketing manager of Vasaloppet put it: “To be able to deliver these events, everyone needs to be on board as everyone is dependent on each another. So it is extremely important to have planning and coordination meetings [before the event].” Similarly, the CEO of the DN-gala said: “On the day of the event: if you have a traffic controller who does not close down a street that should be closed, you are in big trouble. And every role is basically important.” The communication with the volunteers before the event is therefore planned in detail, where all six organisations focus on increasing the knowledge of what the brand of the event represents, and clarifying that everyone working during the event is an important part of the whole. The CEO of Vätternrundan expressed it as follows: “We stress over and over again how important it is that the whole chain works. We highlight the important work every individual is doing.” In addition, the interviewees emphasised the importance of organisational flexibility to cope with problems and uncertainty during the event. As the volunteers are the ones encountering many of these unforeseen problems, they need to be able to also improvise when necessary. As the CEO of the DN-gala put it: “It is such an absolute deadline when you work with events. It is ‘this day’. We have an international TV broadcast to 15 million people and at 8 pm it starts. We cannot say, let us start a bit later. . . so all

13 14

Project manager, Lagadère Scandinavia. CEO, the DN-gala.

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pieces of the puzzle must work. Problems just need to be solved.” Similarly, the CEO of Vätternrundan explained: “During the event, you just need to solve the problem. If we have volunteers able to solve the problems all the time, whatever problems there are, we will be perceived as a flexible, helpful and nice event.” And the interviewees emphasized that detailed action planning was essential also for enabling the volunteers to be able to improvise when needed. Action planning was said to provide the volunteers with an understanding of the activity system of the event and each individual’s place in this system. These understandings helped the volunteers to effectively integrate their behavior with that of others to solve unforeseen problems. As the project manager of Vasaloppet explained: “This year we had soil frost thawing so we had to move parking lots, and then we needed to quickly change signposts. . . I mean try to redirect thousands of cars to other parking lots, this takes time and we need to make new signposts and information material, you never know this beforehand. But then all volunteers simply did it, and made fast decisions. And because we have such detailed planning, everyone knows exactly what they should do [during normal circumstances]. Then it is also easier to think anew, and to dare to improvise a little [when an unforeseen problem occurs]. If we had less planning, people would have been too uncertain to take these quick decisions and adapt to the new circumstances. But everyone has such a good view of all flows and knows the aims and core values of the event. Then people quickly understand the consequences of what they do, even if unscheduled occurrences arise. They know how many cars need to be moved, etc.” As the quotation illustrates, the managers of the sport event organisations provide the volunteers with a degree of latitude to improvise. Improvisation is thereby considered legitimate to the extent that it fits with the organisation’s goals and values. Otherwise it is overtly discouraged, as seen through the detailed action planning.

4.3.2. Long-range planning Many of the interviewees mentioned how important it is to continuously develop the events and improve them. Vasaloppet and Vätternrundan have introduced a new ‘role’ or group to take responsibility for this. In the Vasaloppet organisation, a project manager, who works across the four business areas, is responsible for event development. Vasaloppet also, holds a board meeting that only focused on strategy; this takes place every year in January. During 2013, Vätternrundan introduced a steering group because the competition committee had to focus on the practical issues of the next year’s event and did not have time to focus on strategic issues. The steering group is responsible for setting long-term strategies and developing the cycling events. When it comes to Gothenburg Horse show, the organisational committee serves as a strategic forum as: “It is important for such an old event like this to be flexible and alert so that we do not repeat everything, year after year.”15 For the DN-gala, the long-term planning is of less interest since five-year agreements were agreed with Diamond League; outside this framework, strategic issues are not specifically addressed. Similarly, Lagadère Scandinavia does not have a forum for strategic issues, but when it comes to their growth strategies, the organisation typically acquires sport events, or the license to arrange a sport event, and on such occasions the owners are involved and provide financial and legal expertise.

4.4. Rewards and compensation Bonuses or monetary incentive programs, related to a group’s or individual’s performance, are rare within the SEOs. However, employees at some positions within Lagadère are attributed to a bonus, but whether it is tied to the budget or to other financial measures is not known by the interviewees. Permanent employees of the Stockholm Marathon Group are paid an overall bonus, depending on the bottom line earnings, that is equal in size for everyone. The bonus, however, is not tied to any specific goals, but is only paid if the SEO generates a surplus. Vasaloppet, Vätternrundan, the DNgala and the Gothenburg Horse Show do not pay any bonus-related remuneration to their employees. Here employees are described as being highly motivated by the event itself and by generating funds for their sports associations for is reinvestment in sport activities. Furthermore, the quality of the events is emphasised as a source of motivation. This is measureable through the surveys and evaluations conducted after an event. The existence of these surveys and requests for information imply that the organisation, as a whole is striving to receive high scores or ranking on participation surveys for or the international sport federations’ evaluations. Whether volunteers are remunerated differs between the SEOs. The organisations that arrange events involving a large arena and thousands of volunteers remunerate the non-profit associations that provide volunteers 6 Euros per hour (Vasaloppet and Vätternrundan) or approximately 26 Euros per day (Stockholm Marathon Group). This is a funding source for the non-profit associations in the region and the volunteers feel that they are actively contributing to their respective specific associations’ sports activities. However, the owner non-profit associations of the Stockholm Marathon Group are not remunerated when providing volunteers, instead, the surplus that the events generate is distributed to the associations. The sport events that involve fewer volunteers, 350–800 people, are not being paid in monetary terms, but do receive food and clothes. When it comes to Gothenburg Horse Show and the Swedish Open the volunteers come from all over Sweden and they apply or register individually, not through an association. Many of their volunteers return year after year because they enjoy the social aspect of working at the events, as explained by the Competition manager, Gothenburg Horse Show: “The volunteers love to be here because they create a social network and come close to the professional riders and their horses.”

4.5. Cultural controls The purpose of Vasaloppet and Vätternrundan is to generate a surplus with which to fund the owner associations’ operations and sports activities. The interviewees frequently mention this particular aim as something they are proud of. Furthermore, the owners’ directives stipulate that the events shall promote the sport, public health and the businesses of the region. Additionally, they are reflected in the SEOs’ core values, which are communicated in internal documents, such as the business plan, and at meetings with volunteers, municipalities and partners, and are said to be promoting: “History/tradition, non-profit logic, public health and folk festival”—Vasaloppet’s core values16 “Health, challenge, community and cycling”—Vätternrundan’s core values17

16 15

Competition manager, Gothenburg Horse Show.

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Vasaloppet, 2014a. Vätternrundan, 2014.

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The Stockholm Marathon Group has similar values, but these are communicated through a mission statement: “To arrange high quality competitions for runners and joggers on all levels, and to contribute to improving public health.”18 The values that are not formally communicated tend to relate to the achievement of high quality events, denoted as ‘Vasalopp quality’ by Vasaloppet, an expression that is used within the organisation. Gothenburg Horse Show is based on values that are aligned with the purpose of the event, i.e. to promote Gothenburg and the hospitality business, and a main goal of the event is to be ranked as the best indoor equestrian event, a goal that has been achieved in several years. In the owners’ directives of the DN-gala, the mission stated is to “arrange an athletics competition on the highest international level at Stockholm Stadium.”19 Additionally, the DN-gala aims to offer the owner associations’ athletes an international competition where they can compete against world-class athletes. Values being related to the promotion of sports and health are exemplified by Vasaloppet, since the registration fees were not increased even though their main event was sold out in less than two minutes through internet registration. When it comes to cultural controls, Lagadère Scandinavia is quite different from the other organisations because of its emphasis on profit maximisation. As explained by the project manager, when talking about the owners’ attitudes, “They don’t care how we manage and operate the events, they just want positive numbers.” This, combined with the extensive involvement of the international sport federations, ATP/WTA, in the actual tournaments, make Lagadère’s focus the commercial side of the event, and not the sport. As a result, the employees tend to strive to achieve a high quality experience as well as an entertaining event. The most evident clan control in the SEOs is the management of volunteers. The volunteers are large groups of people who become heavily involved and only work with the event for a short period of time. The volunteer participation is motivated by the participants’ self-interest, their evaluation of the social meeting and their interest in sports or, simply, to help their local non-profit sports association, which provides volunteers in return for remuneration enabling their club to fund sports activities. Within all six SEOs, the interviewees expressed how important the volunteers are, saying that the event is dependent on the volunteers, but that this also presents a challenge since: “We need all these volunteers but they could, at any time, turn around and walk away.”20 The event serves as a ceremony and ritual for the volunteers as their engagement takes place then and there. The SEOs highlighted how the challenge of managing thousands of volunteers is tied up with the communication. Lagadère Scandinavia tries to encourage the need for teamwork, and emphasises that both volunteers and sponsors can work effectively together. Vätternrundan, in contrast put the stress on the importance of communicating their values to the volunteers so that the participants can experience them. 5. Discussion 5.1. The pulsating nature of events and its impact on management control The SEOs in this study are clearly pulsating organisations since they have 2–30 permanent employees for most of the year, but at the time of the event, 300–4000 additional volunteers become involved. To enable the SEOs to cope with this pulsating nature, our findings suggest that well-structured and detailed action plan-

18 19 20

Stockholm Marathon Group (2014). The DN-gala (2014). CEO, Vätternrundan.

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ning was crucial. The action planning tended to follow a schedule and specific meetings, workshops or conferences devoted to planning were conducted at certain times during the year; the SEOs’ action planning benefitted from the annual rhythm where certain processes were repeated year after year. A number of action planning meetings were held with sponsors, suppliers and volunteers both prior to and during the preparation phase to ensure that the planned activities were realised in line with the SEOs’ goals. Immediately before and during the event, the SEOs experienced a communication challenge, associated with the unique information and communication requirements associated with managing a huge peak in activity (c.f. Toffler, 1990). To address this challenge, detailed action planning was required to prepare information for distribution, and to determine when and how this would be done. Furthermore, our findings indicate that detailed action planning and a clear role structure were important for ‘constrained improvisation’ (c.f. Bigley and Roberts, 2001, p. 1288–1289) during the event. That is, the volunteers were given a certain degree of latitude to improvise when unforeseen problems occurred; improvisation was considered legitimate and was supported only to the extent that it fitted with the organisational goals and values. Otherwise it was overtly discouraged. Related to this, Bechky and Okhuysen (2011) found that improvisation can have very negative outcomes if it is applied in the wrong situations by the wrong individual. Our study indicates that detailed action planning was needed to ensure that the volunteers understood when, how and who is responsible for the planned activities to take place, and when ‘constrained improvisation’ would be allowed. Thus, our study shows that detailed management controls in the form of action planning are important to handle the balance between structure and flexibility. Through action planning, the pulsating organisations in our study were able to capitalize on efficiency and control benefits, while overcoming the considerable tendencies toward inertia (c.f. Bigley and Roberts, 2001). We draw on Bigley and Roberts’ (2001) concept of ‘operational representation’ to theorise on the importance of detailed action planning. ‘Operational representation’ is defined as “the basic cognitive infrastructure permitting individuals and groups to effectively integrate their behaviors with those of others on a moment-to-moment basis as an incident unfolds and evolves” (p. 1290). Studying wildland fires, Bigley and Roberts (2001) demonstrated that a shared ‘operational representation’ was essential for joint problem-solving. This operational representation was created through a highly bureaucratic organisation called ‘The Incident Command System’, which stipulated the organisation, resources and responsibilities for handling a large fire. We argue that detailed action planning is needed to create such operational representation in pulsating organisations. The volunteers are often new to the organisation and therefore need detailed guidelines about the activity system to which they belong, about how different units and functions are supposed to interact, and about when and how ‘constrained improvisation’ can be carried out. Thus, the detailed action planning’s creation of ‘operational representation’ helped the volunteers to effectively oscillate between various preplanned organisational solutions associated with the more predictable aspects of the event and the improvised approaches required to address the unforeseen problems that occur during the event (c.f. Bigley and Roberts, 2001). Our findings differ from the literature on ‘minimal structures’ in which an important argument is that companies should only have a ‘minimal’ set of control practices to provide a balance between structure and flexibility (i.e. Brown and Eisenhardt, 1997; Kamoche and Cunha, 2001; Tatikonda and Rosenthal, 2000; Van der MeerKooistra and Scapens, 2008; Van der Meer-Kooistra and Scapens, 2015; Varoutsa and Scapens, 2015). Utilizing a ‘minimal’ set of

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control practices might work in settings such as new product development and supply chain management where team members have a lot of experience, have worked together previously and where a project occurs temporarily over a period of several years. However, in pulsating organisations with many inexperienced volunteers and where the event occurs over a short period of time, our case shows that detailed action planning plays an important role in helping the volunteers effectively integrate their behavior with that of others on a moment-to-moment basis as the event unfolds and evolves. Thus, our paper provides important boundary conditions to the literature on ‘minimal structures’ in that it shows that ‘minimal’ management controls might not be sufficient to handle the balance between structure and flexibility in pulsating organisations. 5.2. Participation- and spectator-driven SEOs—differences in management control Although the importance of detailed action planning for managing the pulsating nature was a common management control characteristic of the six SEOs, we also found important MCS differences between the organisations. When looking at our data, we revealed that a fruitful way of explaining these differences is through the distinction between participation- and spectatordriven SEOs. In the sport event literature, this distinction is rarely applied as the literature has tended to analyse spectator sports only (Hanlon and Cuskelly, 2002; Hanlon and Jago, 2000; Jago and Shaw, 1998; Preuss, 2005); in our investigation, however, we have representative organisations running both participation- and spectator-driven events. Table 4 summarises the main differences between the types of SEOs and the implications for management control. The two types of sport events are fundamentally different and are based on either sport-for-all or elite sport. The participationdriven events strive to promote health, which is reflected in the owners’ directives and mission statements. The sport-for-all values become evident when these SEOs start up new events. This is not done for financial reasons, but rather because there is a demand from individuals who want to participate in the events, for example, at a shorter distance. SEOs that arrange elite sport events tend to have values and norms related to the athletes. For example, the SEOs are incentivised to get a high score for the evaluations of the athletes themselves. The distinction between participation- and spectator-driven events is, therefore, useful when analysing the cultural controls within SEOs. Participation-driven SEOs are more sports-oriented, since the consumers of their services are the participants in the event, whereas the spectator-driven SEOs are more event-oriented, as their customers are the spectators who attend the event to watch the sport stars for entertainment. A possible reason for the event-orientation rather than sports-orientation is the involvement of the international sports federations, which control the actual competitions or tournaments through an extensive array of policies. This had an impact on what financial and non-financial measures are used within the different SEOs. For sport-oriented participation-driven SEOs, registration fees are the primary revenue source, and hence, the number of registrations (in actual or financial terms) is monitored in the run-up to the events, in contrast to spectator-driven SEOs were sponsorship agreements constitute a large revenue source and are therefore the financial measure followed-up on. Non-financial measures applied by participationdriven events are the participator surveys that serve as a basis for

22 Participation-driven SEOs: Vasaloppet, Vätternrundan, Stockholm Marathon Group. 23 Spectator-driven SEOs: The DN-gala, Gothenburg Horse Show, The Swedish Open

action planning for the next year’s events. The corresponding nonfinancial measure for spectator-driven SEOs is the evaluation that the international sport federations conduct, together with audience surveys. Another difference is associated with the legal entity in which the revenues and costs are recorded. A participation-driven SEO comprises a non-profit association where the registration fees and costs related to the actual event are recorded, because the nonprofit associations are tax exempt. However, all revenues and costs related to sponsors and marketing are recorded in the limited company, primarily because the sponsors and partners are used to making transactions with other limited companies. As the sponsor agreements represent a large revenue stream, the spectator-driven SEOs record all revenues and costs in a limited company. The reason for not recording the revenues and costs in the non-profit association is also because the VAT on income and expenses can be matched. Hence, the distinction clarifies the differences in the legal organisational structure. Furthermore, there is a difference in the rewards and compensation control element for the volunteers who work for participationand spectator-driven events. At a participation-driven event, nonprofit associations from the region appoint their members to work for the events and the participation-driven SEOs remunerate the non-profit association for the work force that they provide, approximately 6 Euros per hour per volunteer. This leads to a difference in the clan control, as the volunteers feel that they contribute to the funding of their non-profit association’s activities. At spectatordriven events, the volunteers are not remunerated but receive food and clothes. The clan control is therefore based on the socialisation among the volunteers that the event provides. Hence, the volunteers tend to be returning on their own initiative and are not asked to do so, for example, through an obligation associated with membership of a non-profit association. The most apparent difference between participation- and spectator-driven SEOs is how the stakeholders primarily affect the policies and procedures that the SEOs have to comply with. Participation-driven events have to manage relationships with municipalities and authorities and these stakeholders provide permission for the event, but there are also several policies, often related to the environment or security, that have to be followed to keep the permission. Spectator-driven SEOs, on the other hand, have to comply with extensive rules and policies that are provided by international sports federations, which are the spectator-driven SEOs’ most important stakeholders since they both sanction and are involved in the actual competition or tournament.

6. Conclusions At the outset of this paper, we posed the following exploratory research question: What is the role of management control systems in pulsating organisations such as sport event organisations (SEOs)? The pulsating nature of SEOs implies that they quickly expand at the time of the event and then contract (Hanlon and Jago, 2000). Detailed action planning was found to be crucial in all six of our SEOs; it served as the backbone in the chain of control in each case, connecting the evaluation based on non-financial measures with the budgeting, and with policies and procedures that were applied during the process. In this way, it was possible to ensure that both the structure and flexibility were guaranteed when the event took place. In pulsating organisations with many inexperienced volunteers and where the event occurs during a short period of time, detailed action planning created a shared understanding of the breakdown of activities; it also made it possible to clarify the role each individual plays within the system and to determine when and how ‘constrained improvisation’ was needed.

Please cite this article in press as: Carlsson-Wall, M., et al., Management control in pulsating organisations—A multiple case study of popular culture events. Manage. Account. Res. (2016), http://dx.doi.org/10.1016/j.mar.2016.01.002

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Table 4 Participation- and spectator-driven SEOs and the type of control that differs between the two types of SEOs. Participation-driven SEOs22

Spectator-driven SEOs23

Type of control that differs

Level of sports Organisational focus

Sport-for-all More sports-oriented

Elite sports More event-oriented

Primary revenue stream Volunteer remuneration

Registration fees recorded in the non-profit association Yes, to their non-profit associations

Sponsor revenues recorded in the limited company No

Cultural controls Financial and non-financial measures Organisational structure

Important stakeholders

Authorities and municipalities

International sport federations

We conclude that detailed action planning helped create ‘operational representation’, defined as “the basic cognitive infrastructure permitting individuals and groups to effectively integrate their behaviors with those of others on a moment-to-moment basis as an incident unfolds and evolves” (Bigley and Roberts, 2001, p.1290). The volunteers are often new to the organisation and therefore needed detailed guidelines about the activity system as such and about how different units and functions are supposed to interact. Our findings thereby provide important boundary conditions to the literature on ‘minimal structures’ (Brown and Eisenhardt, 1997; Kamoche and Cunha, 2001; Tatikonda and Rosenthal, 2000; Van der Meer-Kooistra and Scapens, 2008; Van der Meer-Kooistra and Scapens, 2015; Varoutsa and Scapens, 2015) by making it clear that ‘minimal’ management controls are inadequate for handling the balance between structure and flexibility in pulsating organisations. We also contribute by explaining important management control differences across the six SEOs through the distinction between participation- and spectator-driven events. The previous literature has primarily analysed spectator-driven SEOs (Hanlon and Cuskelly, 2002; Hanlon and Jago, 2000; Jago and Shaw, 1998; Preuss, 2005). The SEOs in our study tended to focus on either participation- or spectator-driven events and were different in terms of cultural controls, financial and non-financial measures, organisational structure, rewards and compensation, and policies and procedures. The distinction between participation- and spectator-driven events is also important in relation to the literature on accounting and popular culture. Jeacle (2014), for instance, analysed the role of the external auditor of the British Academy of Film and Television Arts (BAFTA). As she describes (Jeacle, 2014, p. 778): “Every February in London, a ceremonial ritual occurs which captures the eye of the world’s media. This annual event is the film awards ceremony of the British Academy of Film and Television Arts (BAFTA). ” BAFTA can be considered a spectator-driven event, along with events such as the Eurovision Song Contest, the Olympic Games and large music festivals, whereas the New York Marathon, for instance, would be considered a large participation-driven event. The examination of event organisations is a useful way to expand the territorial scope of popular culture accounting scholarship (c.f. Jeacle, 2012). The two contingency factors of participationand spectator-driven events, which explained important difference in the management control systems in our six organisations, could fruitfully be complemented with other contingency factors in further research on popular culture events. For instance, film awards events such as the American Oscars, and substantial music events such as the Eurovision Song Contest employ a significant number of professional and experienced staff during the event who also get a ‘normal’ salary. This differs from the six organisations in our study, which relied on volunteers with little or no pay. What implications does this difference have for the role of management control systems in such event organisations? Is detailed action planning needed to create ‘operational representation’ for such events, too,

Reward and compensation; Values Policies and procedures

or are ‘minimal structures’ adequate to achieve a balance between structure and flexibility? Furthermore, in terms of future research, it is important to acknowledge that our multiple case study is a first attempt to create a broader research agenda within accounting scholarship to bring analyses of management control in major events into the picture. This resonates with Jeacle (2009), who concluded that there is an important component to the accounting and popular culture theme which concerns the nature of the organisational form under investigation. More research is needed to develop our tentative findings further. First, in terms of further studies of other types of major popular culture events than sport events: Film awards events, large music festivals, to name a couple of examples. Second, in terms of in-depth single case studies, to further explore and refine the use of management control systems before, during and after the major event. For instance, to combine interviews and direct observations and be able to follow the event organization over an entire year has the potential to provide important findings related to the role of management control systems in pulsating organisations, in particular, relating to how these organisations deal with unexpected problems that are likely to arise during the event. Third, we have focused on recurring events. An interesting avenue for future research would be to investigate temporary organisations that arrange a non-recurring event, such as the Eurovision Song Contest (where the winning country organizes next year’s event) and the Olympic Games, to expand on our knowledge of management control in pulsating organisations. For management control systems research more generally, our findings also bring to the fore the analytical distinction between ‘minimal structures’ and ‘operational representation’, on which more research is needed.

Appendix A. : List of interviews Vasaloppet Anders Selling, CEO, 2014-02-04 and 2014-03-21. Karin Svärd, CFO, 2014-03-21. Mats Rylander, Project manager, 2014-03-21. Jon Svensson, Marketing manager, 2014-03-26. Vätternrundan Eva-Lena Frick, CEO, 2014-02-07 and 2014-02-24. Britt-Louise Kempe Karlsson, CFO, 2014-02-24 and 2014-04-07. Lars Samuelsson, Chairman of the board, 2014-02-24. Stefan Brissle, Project manager, 2014-02-24. Stockholm Marathon Axel Lönnqvist, Marketing Manager, 2014-02-07. Bengt Jansson, Head of project managers, 2014-03-24. Ola Ringström, CFO, 2014-03-24. The DN-gala Anders Tallgren, CEO, 2014-02-12 and 2014-04-14. Martin Ekblom, Board representative, 2014-02-12. P-O Östberg, Financial manager, 2014-03-18. Gothenburg Horse Show

Please cite this article in press as: Carlsson-Wall, M., et al., Management control in pulsating organisations—A multiple case study of popular culture events. Manage. Account. Res. (2016), http://dx.doi.org/10.1016/j.mar.2016.01.002

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Tomas Torgersen, Competition manager, 2014-03-31. Marie Lundmark, Project manager, 2014-03-31. Bo Djupström, Head of Scandinavia at Got Event AB, 2014-04-23. The Swedish Open Lisa Skeppstedt, Project manager—volunteers, 2014-02-25. Sara Bergh, Project manager—sponsors, 2014-04-02. Emmely Blania, CFO, 2014-04-04. Erik Gozzi, Auditor, Deloitte Sports Business Group, 2014-02-04.

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