Cases

Aila Ahonen
CHALLENGES IN SPORT ENTREPRENEURSHIP:

CASES IN TEAM SPORT BUSINESS
ACTA UNIVERSITATIS LAPPEENRANTAENSIS 1010

Aila Ahonen
CHALLENGES IN SPORT ENTREPRENEURSHIP:

CASES IN TEAM SPORT BUSINESS
Dissertation for the degree of Doctor of Philosophy to be presented with due

permission for public examination and criticism in the Auditorium A122 at
Lappeenranta-Lahti University of Technology LUT, Lahti, Finland on the 19th of
January, 2022, at noon.
Acta Universitatis
Lappeenrantaensis 1010
Supervisors Professor Vesa Harmaakorpi
LUT School of Engineering Science
Lappeenranta-Lahti University of Technology LUT
Finland
Professor Timo Pihkala

LUT School of Engineering Science
Finland
Reviewers Professor Jukka Vesalainen

School of Management
University of Vaasa
Finland
Assistant Professor Markku Jokisipilä

Center for Parliamentary Studies
University of Turku
Finland
Opponent Assistant Professor Markku Jokisipilä

Center for Parliamentary Studies
University of Turku
Finland
ISBN 978-952-335-777-8
ISBN 978-952-335-778-5 (PDF)
ISSN-L 1456-4491
ISSN 1456-4491

LUT University Press 2022
Abstract
Aila Ahonen
Challenges in sport entrepreneurship: cases in team sport business
Lappeenranta 2022
97 pages
Acta Universitatis Lappeenrantaensis 1010
Diss. Lappeenranta-Lahti University of Technology LUT
ISBN 978-952-335-777-8, ISBN 978-952-335-778-5 (PDF), ISSN-L 1456-4491, ISSN
ISSN 1456-4491
The aim of this dissertation was to study the challenges in entrepreneurship in team sport
enterprises. Sport entrepreneurship is a relatively new area of research in the sport
management field and has been studied to a very limited extent earlier. The main research
question in this study was: What are the challenges in entrepreneurship for small and
medium sized team sport enterprises? This dissertation contains four papers addressing
this question from different viewpoints.
The research method in this study was a qualitative case study approach. The analysis
approach used in this study was hermeneutical, and the study represents the constructivist
paradigm and interpretivist epistemology aiming at interpreting and understanding the
phenomenon in greater detail. The study contains two team sport enterprise cases from
Finland and one from Sweden. The research data came from multiple sources of evidence
including the case companies’ representatives’ interviews. The interview data was further
analyzed by using qualitative data analysis software.
The theoretical framework for this study consists of traditional entrepreneurship theories,
earlier discussion of sport entrepreneurship, social entrepreneurship, and SME’s
internationalization. The findings of this research are presented in the four articles and
summarized in the conclusions. The challenges in team sport companies in the studied
cases can be connected to the need for entrepreneurship due to professionalization,
business growth, social entrepreneurship, and internationalization.
The contributions of this study can be divided into theoretical contributions, sport
entrepreneurship discussion of the challenges team sport enterprises face, and managerial
contributions describing the influence on the team sport industry. The special features
connected to sport entrepreneurship that give team sport business companies extra
challenges in terms of entrepreneurship and business performance, are presented in a
model which gives a starting point for the future research. The more practical managerial
contributions can be utilized to support sport SME’s entrepreneurial development.
Keywords: Sport entrepreneurship, Team sport business, Sport business management,

Small and medium-sized sport enterprise
Acknowledgements
This work was carried out in the LUT School of Engineering Science at Lappeenranta-
Lahti University of Technology LUT, Finland, between 2017 and 2021.
I would like to thank my supervisors Professor Vesa Harmaakorpi and Professor Timo
Pihkala for their endless support and commitment to this process. I’d like to express my
thanks my reviewers Professor Jukka Vesalainen and Assistant Professor Markku
Jokisipilä as well for their commitment.
My co-authors Dr Thomas Persson and Dr Sari Savolainen deserve a special thank you
for their contribution.
I would also like to thank my employer JAMK University of Applied Sciences for the
two months leave to conduct the research and Foundation for Economic Education for
financially supporting this leave.
Aila Ahonen
December 2021
Jyväskylä, Finland
Contents
Abstract
Acknowledgements
Contents
List of publications 9
List of figures and tables 11
Nomenclature 13
1 Introduction 15
1.1 Background of the study.......................................................................... 15
1.2 Special features of sport business ............................................................ 21
1.3 Research questions and objectives .......................................................... 24
1.4 Research approach and design ................................................................ 26
1.5 Structure of the report.............................................................................. 27
1.6 Boundaries ............................................................................................... 28
2 Theoretical background 29
2.1 Entrepreneurship ..................................................................................... 29
2.1.1 Entrepreneurial opportunities ...................................................... 30
2.1.2 Entrepreneurial orientation ......................................................... 35
2.2 Growth entrepreneurship ......................................................................... 38
2.3 Sport entrepreneurship ............................................................................ 44
2.4 Corporate social responsibility and social entrepreneurship in sport ...... 48
2.5 Internationalization and sport SME’s ...................................................... 51
3 Methodology and research data 55

3.1 On ontology and epistemology................................................................ 55
3.2 Qualitative case study research ............................................................... 56
3.3 Method of analysis .................................................................................. 57
3.4 Data collection methods and measurement ............................................. 59
3.4.1 Interview approach ...................................................................... 60
3.5 Validation of the study ............................................................................ 61
4 Summaries of publications 63
4.1 Publication I; The importance of entrepreneurship in small and
medium-sized sport enterprises ............................................................... 63
4.2 Publication II; Entrepreneurial growth in elite team sport SME’s
in Finland ................................................................................................. 65
4.3 Publication III: Social entrepreneurship and corporate social
responsibility in team sport clubs ............................................................ 67
4.4 Publication IV: Strong entrepreneurial focus and internationalization –
the way to success for Finnish ice hockey: the case of JYP ice hockey
team ......................................................................................................... 69
5 Conclusions 73
5.1 Discussion ............................................................................................... 73
5.1.1 Sport entrepreneurship in team sport SME’s .............................. 73
5.1.2 Entrepreneurial growth in sport SME’s ...................................... 74
5.1.3 Social entrepreneurship in team sport companies ....................... 76
5.1.4 Internationalizations’ influence in sport SME’s ......................... 77
5.2 Theoretical contribution .......................................................................... 78
5.3 Managerial contribution .......................................................................... 81
5.4 Validation ................................................................................................ 82
5.4.1 Ensuring the trustworthiness of this study .................................. 82
5.4.2 Ensuring the authenticity of this study ........................................ 83
5.4.3 Limitations .................................................................................. 84
5.5 Suggestions for future research ............................................................... 84
References 87
Publications
9
List of publications
This dissertation is based on the following papers. The rights have been granted by
publishers to include the papers in this dissertation.
I. Ahonen, A. and Savolainen, S. (2018). The importance of entrepreneurship in

small and medium-sized sport enterprises, in Dodds, M., Heisey, K., Ahonen, A.
(2018) Routledge Handbook of International Sport Business, pp. 374-381. UK:
Routledge. Published.
II. Ahonen, A. (2019). Entrepreneurial growth in elite team sport SME’s in Finland,
Journal of Entrepreneurship and Public Policy, 8 (1), pp. 22-39. Published.
III. Ahonen, A. and Persson, H.T. R. (2020) Social Entrepreneurship and corporate
social responsibility in team sport clubs, in Ratten, V. (2019) Sport
Entrepreneurship and public policy; Building a new approach to policy-making
in sport, pp. 7-21. Springer Nature Switzerland AG2020. Published.
IV. Ahonen, A. (2019). Strong entrepreneurial focus and internationalization – the
way to success for Finnish ice hockey: the case of JYP ice hockey team, Sport in
Society, 23 (3), pp. 469-483. Published.
Author's contribution
Author Aila Ahonen is the principal author and investigator in papers II and IV. In paper
I, Aila Ahonen is the corresponding author and investigator, and Dr Sari Savolainen
contributed to the theoretical framework. In paper III, Aila Ahonen is the corresponding
author and Dr Thomas Persson contributed to the theoretical framework and brought in
the second case data from Sweden.
11
List of figures and tables
List of figures
Figure 1.1: Framework: the development of a sport as business (Beech and Chadwick
2013, 5) ........................................................................................................................... 17
Figure 1.2: Sport associations’ development from non-profit organizations to Limited
companies (Karhatsu, 2003, 37) ..................................................................................... 18
Figure 1.3: Existing businesses in the sport sector in Finland (TEM 2010, 9) .............. 20
Figure 1.4: The research process of this study ............................................................... 27
Figure 2.1: A model of the entrepreneurial process (Shane 2003,11) ............................ 33
Figure 2.2: Dynamic model of effectuation (Sarasvathy 2008, 101) ............................. 35
Figure 2.3: A theoretical model of EO-environment-structure-performance relationship
(Kreiser and Davis 2010)................................................................................................ 37
Figure 3.1: Hermeneutical process in this study............................................................. 58
Figure 5.1: Challenges in sport entrepreneurship in team sport SME’s ......................... 79
List of tables
Table 2.1: Summary of approaches for describing entrepreneurship (Cunningham and

Lischeron 1991) .............................................................................................................. 31
Table 2.2: Criterion for growth entrepreneurship (Hyrsky and Lipponen 2004) ........... 40
Table 2.3: Comparison of two approaches of explaining the small business growth (After
Storey and Greene 2010, 222-241, Dobbs and Hamilton 2007) .................................... 43
13
Nomenclature
Abbreviations
SME Small and Medium-Sized Enterprise
HJK Helsingin Jalkapalloklubi, Helsinki Football Club
JYP Jyväskylän Pallokerho, Jyväskylä Ice Hockey Club
CSR Corporate Social Responsibility
NHL North American Hockey League
KHL Kontinental Hockey League
CHL Champions Hockey League
NBA Nort American Basketball Association
UEFA Union of European Football Associations
15
1 Introduction
Sport entrepreneurship has become an important education profile and theme for research
only in the past decade. Sport as a physical activity to watch or to take part in has been
studied from different viewpoints, such as economics, philosophy, marketing, psychology
and ontology (Olivier 2006, Ratten 2010a). Sport business, however, has been studied
mainly from the marketing, management and leadership points of view, but not from the
entrepreneurship perspective. Entrepreneurship research has, on the contrary, a long
tradition, starting from the beginning of the 20th century and emerging as its own
discipline in the 1970’s (Mason and Harvey 2013) and lately, entrepreneurship research
has gained a distinguishable position in management journals (Audretsch, 2012). Recent
studies have also focused on entrepreneurship in the sport business, usually together with
management theories.
Sport is a globally growing industry, and its significance to people in terms of

participating and watching is great. Sport business is expected to grow worldwide by
around 6.4 percent in the next 3-5 years (PwC 2019). Business growth demands
competitiveness and determination, which are also characteristics of elite sports. In both
entrepreneurship and sports, the aim is to be a leader and better than the competitors. In
the sport business, this competition is held in two arenas, in sport and in business, and
that creates the phenomenon sport business. This combination makes this industry very
interesting, but, at the same time, challenging to study from the entrepreneurship
perspective. Generally, business often aims at maximizing profits. However, in sport
business the aim could be more in utility maximization than in profit maximization and
the motivation to run a sport firm often separates from general business. This makes sport
as a business very unique, and therefore, worth studying from the entrepreneurship
perspective. This study focuses on top league team sport enterprises.
1.1 Background of the study

Sport business is an internationally fast emerging industry. Depending on what is
included in this field of business, it is worth billions of dollars. According to Shank (2009,
7), this industry internationally had over 200-billion-dollar turnover per year then,
whereas according to Statista (2019), the market size for global sports market is 491
billion dollars. Ciletti (2012) maintains that the sport industry is worth $600 billion, and
Herstein and Berger (2013) calculate sporting goods, sports infrastructure construction,
licensed products and sporting events to be worth $480-$620 globally. Klayman (2012)
identified the spending related only to sport mega-events to be $141 billion already in
2012. The problem with measuring this industry is its heterogeneity. The question is what
is included in the sport industry, and what the sports-related industry is. Sport is often
included in some other industry area, and figures or revenues cannot be measured
precisely. In addition, the fact that there is a great number of volunteers working within
this industry makes it difficult to measure in terms of size or impact on employment. The
16 1 Introduction
biggest influence lately has been big sporting events that have boosted the revenues that
companies have gained from the sport business. Another big influencer, the media, has
had a great effect on sport businesses’ growth, and they have made the most important
sport competitions, such as the Olympic Games, NBA, NHL, and UEFA highly well-
known brands worldwide. Besides economic impact, sport also provides entertainment
for millions of people worldwide.
Sport and physical activities have always been important for the Finnish people and
society. Success in sport has historically had great influence on the national identity of
Finns; sport hobbies have a major role in young peoples’ lives in preventing the risk of
social exclusion and promoting health and wellbeing. The social aspect of sport and
corporate social responsibility are often connected to sport enterprises (Persson 2008).
Sport has been a very extensive phenomenon in Finland, Finns have won several Olympic
and World Championship medals, and sport is very visible in the Finnish media. In
Finland, the culture of non-profit seeking sports organizations run by volunteers has been
strong. Moreover, the number of paid employees has been very low, and the sporting
industry has been highly subsidized. (Heikkala 2009). Hence, the sport business sector
is still mainly run by municipalities and non-profit organizations in Finland, but this trend
has been changing lately since the public funding for sports is now decreasing. The
significance of entrepreneurs is growing because the public sector is cutting their
financing of sport, and more entrepreneurial opportunities exists in the sport sector.
Very often, the sport business in Finland becomes mixed with welfare as part of the whole
physical exercise industry. This causes confusions in terms of what should be included in
the sporting industry. Even the terminology is sometimes confusing: sport often includes
top level sports and recreation, sporting goods, welfare services and the related
infrastructure. These sectors often also include other than sports products or services.
Successful sport business as a business where world-class sports, together with some by-
products, would be commercialized is still very rare. Exploiting these business
opportunities and recognizing the possibilities to grow is a key issue in the Finnish sport
business industry. This study concentrates on a niche sector of this industry by examining
national top-level team sport enterprises.
Top-level team sport associations in Finland turned into businesses only in the late
1990’s. The development started with some reluctance since the message from the
community was that professional sports did not meet the criteria of non-profit
organizations anymore. Players’ contracts were listed as employment contracts, and
professional leagues in ice hockey, football and basketball were identified as profit-
seeking businesses. Non-profit sport associations became businesses, or at least parts of
their operations, mainly national league teams, had to become business enterprises.
(Rosbäck 2012). This development towards entrepreneurially lead sport organizations is
very recent in Finland compared to, sport industries in bigger countries, such as USA,
where the business formation started in 1950’s. Santomier (2002) describes the
development of the sport industry in the USA within the past 50 years as a result of
1.1 Background of the study 17
technological, cultural and entrepreneurial forces. The business culture in top-level sports
has longer roots in the US and in some bigger European countries than in Finland since
they have a bigger customer base and more developed business actions around elite
sports. However, after this development started in Finland, the dominant design of the
industry changed and as a result, the old non-profit model changed in top league
companies.
Beech and Chadwick (2013) define the development of sport as a business to contain
seven different stages, three revolutionary phases and four evolutionary phases as
follows:
Figure 1.1: Framework: the development of a sport as business (Beech and Chadwick 2013, 5)
In the foundation phase, only the actual sport appears. The second step, codification could
be, for example, the founding of a league (e.g., in this case, the Finnish ice hockey or
football league), and in the stratification phase, a governing body responsible for
codification is established. At this point, the club is still at the amateur level and does not
pay salaries to the players but may employ administrators, and the governing body of the
sport is defined. Stage four, professionalization, is important since that is the
establishment of a business enterprise. The organization grows and starts employing its
players, and the spectators are willing to pay for watching the games, and sponsors
become more interested in becoming involved. During the post-professionalization phase,
the business and amateur sport usually operate side by side, very often as a youth club
and a top league team. In stage six, commercialization, external organizations see the
opportunity to use the sport as a marketing tool, the related broadcasting expands, and
18 1 Introduction
risks, together with possible revenues, increase. Very few sport businesses have reached
the last post-commercialization stage. In this stage, the focus could be on a steady income
and the predictability of the working environment. (Beech and Chadwick 2013, 5-9).
Elite sport companies in Finland have their roots in the 1990’s when the first limited
companies were established. Until then, elite sport was run by non-profit volunteer-based
sport organizations, which still is the case with the majority of sport organizations in
Finland. Sports, and especially top-level team sports, became entertainment and
professionalized quickly when broadcasting developed. The players’ salaries grew
substantially, and the whole industry became commercialized. This rapid change caused
debt problems in sports clubs, but also gave them new business opportunities. Volunteer
work was still important, but more efficient decision-making and operational
management were needed to run these organizations more professionally. Business
orientation became familiar to sport organizations, and volunteer work was partly
replaced by hiring personnel for administration and coaching. Opportunity seeking and
skillful entrepreneurs were needed to develop the sports clubs further.
In Finland, the development towards sport entrepreneurship can be described, for

example, as follows:
Figure 1.2: Sport associations’ development from non-profit organizations to Limited companies
(Karhatsu, 2003, 37)
Karhatsu (2003, 37) describes sport associations’ development from non-profit

organizations towards enterprises through professionalization and commercialization and
adds opportunity recognition as well as the effect of media and entertainment into the
1.1 Background of the study 19
picture. The figure above portrays the sport industry’s development towards
entrepreneurial actions. However, the disappearance of ideology could be argued to be
more like a change in ideology rather than a loss of it. The traditional ideology of
volunteer work and community service has changed into a more business-oriented and
commercial ideology of running a sport organization. Otherwise, the characteristics, such
as debt problems, growing entertainment, the effect of media and entrepreneurial
opportunities aiming at gaining profits in the long run are recognizable in the Finnish
sporting clubs. However, one could also argue that the need to minimize risks is, perhaps,
characteristic to some non-profit organizations, but certainly not to a sport enterprise.
Risk taking is one of the characteristics required from an entrepreneur as explained later
in the literature review. Nevertheless, the change in the dominant logic of the industry
roughly follows the path described in the figure above.
The number of limited companies in the top-sport segment in Finland is nowadays still
quite small, including mainly national league teams in ice hockey, basketball, football
and volleyball. Moreover, a few individual athletes in, for example, alpine skiing, golf
and tennis have established their own companies due to their success, and, of course, rally
and formula 1 drivers run big businesses. In Finland, entrepreneurship in the sport
industry is growing further because the public sector has reduced the production of sports
services. Along with that, health issues have become more and more important to the
customers and led more consumers to sport organizations. The Ministry of Employment
and Economy has published two different reports concerning sport entrepreneurship’s
stage and development in Finland. According to the Development Strategy of Exercise
Business 2020, the sport business is a separate, complex industry including, on the one
hand, traditional sport operations from education, training and coaching to building
infrastructure, and on the other hand, sport marketing, tourism and program services,
equipment production, consultation and individual lifestyle coaching. (TEM 2010).
20 1 Introduction
Figure 1.3: Existing businesses in the sport sector in Finland (TEM 2010, 9)
Heikkala (2009) proposes a compendium of sport business in Finland. He addresses the

complexity of the business and indicates the difficulty of choice of what to include in this
industry. The heart of the figure above characterizes entrepreneurship in core sports and
the physical education business in Finland. Entrepreneurship in this sector is professional
coaching and training in the physical education business whereas professional sports
mean the top-sport leagues, education and sport facilities. Even in this core sector of sport
business there are the commercial sector, public sector and non-profit organizations
involved. The further we move from the heart of the figure, the more divided the field of
sport industry becomes. Sport business connects with communication, tourism,
entertainment, health and wellbeing, marketing, technology, and sport equipment
production, and it has a great entrepreneurial potential, together with the existing
entrepreneurship. (Heikkala 2009).
In this study, the focus is in the middle of the above figure, in the core professional sport
business. The two studied Finnish companies, JYP Jyväskylä Ltd and HJK Helsinki Ltd
1.2 Special features of sport business 21
both represent a professional elite team sport company in Finland. The Swedish football
club included in article IV falls into the same sector. Furthermore, they can be identified
as small and medium sizedd enterprises (SME’s), meaning that they belong to the small
and medium sized enterprises’ category because of their company size and the fact that
they operate in rather small markets in terms of population. Finland serves as an example
of a country with a small population (5,8 M), relatively high standard of living and high
quality of education. However, the interest towards sports in Finland is high. Finland has
a big variety of seasons and, therefore, a big variety of winter and summer sports
available. Finnish people are highly interested in participating in sports, as well as
spectating sports, and this creates demand in the market despite the small size of the
country.
Sport entrepreneurship studies in the Finnish context are still rare, and this research aims
to fill some of this gap. Sport plays an important role in society and involves multiple
stakeholders. Sport is often seen as a complex phenomenon since it is not purely business
but also practiced by public sector and non-profit organizations. Due to the lack of
empirical research in sport entrepreneurship, especially in Finland, this study gives some
insights into the discussion of sport entrepreneurship and tries to gain some understanding
of different challenges in terms of entrepreneurship in team sport business. The findings
are presented in the articles and their summaries and further discussed in conclusions.
1.2 Special features of sport business

Traditionally, sport has two different entities, commercial business companies and non-
profit organizations, such as sport clubs, federations and associations. Sport business and
sport companies sometimes differ from traditional businesses due to their non-profit
roots. However, some sport companies are quite similar to any other businesses, such as
sports technology, sport construction or sport education businesses. Companies belonging
to professional sports sector have some special features that cannot be found in other
businesses and therefore, they make sport business unique (Smith and Stewart 2010). The
specificity of sport business has been recognized by the European Commission (2007) by
the White Paper on Sport, European council declaration on sport 2008 and in the amended
Treaty of the European Union in 2009 (European Commission 2011). Sport is seen as a
rapidly commercializing industry and its specificity can be identified through sporting
activities and the organization of sport. The specificity of sports is described by the
European Commission as follows:
“The specificity of sporting activities and of sporting rules, such as separate

competitions for men and women, limitations on the number of participants
in competitions, or the need to ensure uncertainty concerning outcomes and
to preserve a competitive balance between clubs taking part in the same
competitions.” (European Commission 2007).
22 1 Introduction
“The specificity of the sport structure, including notably the autonomy and
diversity of sport organisations, a pyramid structure of competitions from
grassroots to elite level and organised solidarity mechanisms between the
different levels and operators, the organisation of sport on a national basis,
and the principle of a single federation per sport.” (European Commission
2007).
Even though these viewpoints can be applied in all sports, they especially apply in
professional team sports. The uncertainty of outcome is often mentioned to have an
impact in sport companies, and it has an influence on business on both levels, on and off
the field. The uncertainty of outcome plays a very important role in matches, and it attracts
the spectators. This uncertainty also affects the income of the team company, meaning
that the sporting success affects the number of spectators of each season, but may also
cause the team to drop from the league and so affecting income for a longer period of
time. In other words, the income is always seasonal, but costs are standard, which makes
this business financially very demanding. Team sports are highly regulated businesses
with multiple operational levels. The companies in team sports are governed by national
and international sport authorities together with national company legislation. The
governing bodies organizing the leagues often act like cartels, which is not the case in
most business entities. Examples of this specified actions controlled by sport governing
bodies and EU law are player transfers and free movement of players (European
Commission 2007). Companies in the team sports business therefore are faced with
navigating a much more complicated field of regulations, while dealing with more
uncertainty, than a company in another industry would.
Foster, Greyser and Walsh (2006) discuss the differences between professional sports and
business, identifying that both have challenges in marketing, branding, finances, product
innovation and customer value creation. In addition, they claim that sport business has
special functions, such as beating rivals, winning on the field, fans, passion for sport and
shared revenues. The main differences within these dimensions between traditional
business and sport are the importance of winning aspect versus financial profit in sport,
the passion element in customers (fans), sport performance’s effect on success, anti-
competitive strategies and players (employees) positions as assets (Smith and Stewart
2010). Smith and Stewart (2010) identify four dimensions of special features of sport as
follows:
“First, sport is a heterogeneous and ephemeral experience mired in the

irrational passions of fans, commanding high levels of product and brand
loyalty, optimism and vicarious identification. Second, sport favours on-
field winning over profit. Third, sport is subject to variable quality, which
in turn has implications for the management of competitive balance and
anti-competitive behaviour. Fourth, sport has to manage a fixed supply
schedule.” (Smith and Stewart 2010).
1.2 Special features of sport business 23
Sport fans are a unique form of sport customers, whose commitment to their team and
sport cannot easily be found in other industries. Sport consumers as spectators do not
differ much from any other consumers but sport fans can be very passionate about their
sport, have a lifelong commitment and encompass social aspects, such as belongingness
to a group and an emotional attachment (Smith and Stewart 2010). Emotions of fans and
spectators are an important characteristic in team sport business because they attract and
engage the customers to the team they support, affect their behaviour and create the
atmosphere of the game event.
The winning versus profit aspect is interesting; some professional sports are very much
profit-seeking businesses, such as Formula 1 teams, most of the football clubs in Europe,
or North American football and basketball teams. When it comes to smaller countries,
such as Finland, the aim for top-level businesses is to be profit-seeking entities, however,
they are still very often supported by municipalities, shareholders and volunteer work. In
order for a professional sport team to stay competitive, there needs to be on-field success
but also a competitive sport league to ensure interesting competitions (Smith and Stewart
2010). There is always a need for competition in sport business, since the events cannot
take place without direct competitors and collaboration between them (Beech and
Chadwick 2013, 9). The focus of activity being the event of competition held in one of
the competitors’ facilities, the competition is never neutral, but affected by fans and the
location of these facilities. This can be further extended to the idea of sport value
framework by Woratscheck et al (2014), which describes the sport event as a platform for
value co-creation for different stakeholders. Stakeholders in sport business often differ
from other businesses, especially in terms of distinct customers, but also in terms of
partner organizations. Sponsors are a very unique form of partners in sport business,
where the monetary support for the team can be remarkable and the benefits for the
sponsor very largely intangible.
Short termism in decision making in all levels is typical for sport business companies,
and there are seldom long-term strategies. The aspiration or necessity for sporting success
on the field, and the effect of individual players, forces clubs to focus on short term
planning (Moore & Levermore 2012). Player sales and individual performances are a big
risk in team sport companies when hiring their rosters (Radaelli et al. 2018). Another
industry specific issue in relation to decision-making is the lack of the possibility to make
all decisions independently since they are dependent on federations or other umbrella
organizations (Ratten 2012). At the top level in Finland, there is the national federation,
national first league association, European governing body and global governing
organization, which all have their specific rules and regulations that influence the team
company. The risks that come with the industry of professional team sports and the
decision-making issues are what makes forming long-term plans challenging. It would be
impossible to predict many of the on-field factors or new regulations of the several
governing bodies that play a role in a team sport company’s strategy. Short termism
allows for considering these factors, whereas a long-term strategy often doesn’t.
24 1 Introduction
Very typical special character for sport business is volunteers working together with
professionals, which could be a challenging combination for managers. Although, the
focus of event organizers is in hiring professionals instead of volunteers, they are still a
necessary resource for many first league companies in Finland. Sport enterprises often
exploit both, volunteers and paid employees to assure their human resources (Ratten
2012). Volunteers participate also in sport business companies’ operations and volunteer
management is one essential part of sport firms’ human resource management. Wicker
(2017) suggest that the process of volunteerism in a sport organization includes aspects,
such as selection and training, task allocation, logistics, communication and recognition
of volunteers. In a sport business organization, there are volunteers on all levels of
operations; events, board of executives, different services and operational tasks
throughout the club. Volunteers are an invaluable human resource for sport organizations
and their motivation needs special attention (Kim 2018). In addition to volunteer
management, one challenge is player management, since player contracts are not similar
to employment contracts. There are often difficulties in managing two distinct groups of
employees and the allocation between players and other staff is can be difficult (Moore
& Levermore 2012). The different contracts between groups of employees and the
involvement of volunteers creates a need for managers with a broad and industry specific
skillset.
Social entrepreneurship means an entrepreneurial activity addressing societal pains or

fulfilling a task that meets a certain community need (Gallagher et al. 2012). In sport
business, it means the entrepreneur’s willingness to bring their own business knowledge,
professionalism, networks and experience to use without monetary returns (Gallagher et
al. 2012) or it can be seen as a marketing tool for the sport club (Gilmore et al. 2011) and
a means to enhance the brand equity (Shropshire 2012). In sport, a social entrepreneur is
often not motivated by profits, but more by the opportunity to make a social contribution
to the community (Ratten 2010b). This leads to the discussion of profit maximization
versus utility maximization in the sport industry. In sport business, the focus is very often
first in the utility maximization on the field instead of gaining revenues, which makes this
business somehow different from the mainstream where the aim for a company is to gain
profits.
Negative special features of sport exist as well, such as corruption, money laundering and
problems with intellectual property rights (European Union 2007), however, these cannot
be identified as shaping much of the sport industry in Finland. In international context,
these, together with doping issues, are negative outcomes related to sport business.
1.3 Research questions and objectives

The first aim of this study was to identify special sport entrepreneurship challenges in
small and medium sizedd team sport enterprises. Sport has its unique nature and there are
special characteristics that cannot be found from other industries. The second aim of this
research was to deeper understand those challenges sport entrepreneurship faces in team
1.3 Research questions and objectives 25
sport SME’s. Maxwell (1996) describes research questions as the heart of one’s study and
points out that in qualitative research, there must be some amount of flexibility.
Qualitative research should have research questions to start with, but they could be
clarified further along the way. He also states that too precise questions too early might
cause misinterpretations and lack of analysis (Maxwell 1996, 49-52). In a case study, a
research question needs to have a substance (what is it about?) and form (how? why?)
(Yin 2014, 10-11).
The main research question for this study is:
What are the challenges in entrepreneurship for small and medium sized team sport
enterprises?
First action in this study was to identify sport entrepreneurship in the context of team
sports in Finland (article I). The second article describes business growth and the
characteristics affecting it in these top league enterprises. The subjects of observation
were those turning points in the enterprises’ development and especially those
entrepreneurial actions that had led to their organizational growth (article II). McKelvie
and Wiklund (2010) suggest that growth entrepreneurship research should concentrate
more on understanding “why and how” enterprises have grown by researching their
growth paths. They argue that recent literature has concentrated on growth rates instead
of growth modes, and they present three different growth streams and techniques to study
them. The importance of social entrepreneurship was stressed both in literature and the
conducted interviews, and this led to the third article: social entrepreneurship and
corporate social responsibility in team sport enterprises (article III). The fourth article in
this dissertation was raised by multiple discussions in the field of ice hockey industry
together with the case interviews. Since ice hockey is the most popular sport in Finland,
the lack of empirical research of what the bottom line of entrepreneurial success in this
industry is, generated the interest in further examining the ice hockey case (article IV).
The research questions derived from the theoretical framework and empirical data for the
attached articles were the following:
1. What is sport entrepreneurship in a small and medium-sized team sport

enterprise?
2. Why and how have the two studied first league sport enterprises grown?
3. What is the role of social entrepreneurship in team sport SME’s?
4. What is the influence of internationalization in team sport SME’s?
The answers to these research questions emerge from multiple sources of evidence. The
results including the answers to these questions are further observed in each article.
26 1 Introduction
1.4 Research approach and design

This study stems from a desire to understand sport entrepreneurship and different
entrepreneurial characteristics that have influence entrepreneurship in ice hockey and
football team sport business firms in Finland. The actual research topic was chosen purely
based on researchers’ interest towards entrepreneurship and sport business development.
The research focus of understanding elite sport enterprises’ entrepreneurial orientation
and challenges takes this study into a field that has had very little research attention in
Finland (or even elsewhere).
According to Hallebone and Priest (2009, 6-7), the next step, after perceiving the research
question and aims, is to choose the appropriate philosophy of science and the logic of
inquiry. This study falls into the interpretivist philosophy of science since it utilizes a
qualitative case study approach and aims to generate understanding of a particular
phenomenon in its real-life context. Interpretivist epistemologies often seek to describe
and understand socially constructed realities, interpret the researched phenomenon and
use qualitative methods (Hallebone and Priest 2009, 27). When the research involves
behavioral approaches to entrepreneurship, it does not involve large-scale data sets but is
more likely to be resorting to experimental methodology (Audretsch 2012).
The development towards top level team sport companies in Finland has been very recent
since elite sports became an area of business only in the 1990’s, and mainly ice hockey
and football teams started working as professional companies. Professional ice hockey
and football league sports are also the ones that attract most the media, sponsors,
participants, fans and spectators in Finland. These professional league sport companies
are characterized by their being in the highest national level, employing professional
players and having a professional business policy.
After screening the elite sport business industry in Finland and the limited companies in
it, it was found that there were professional businesses, i.e. limited companies, mainly in
ice hockey, football, few in basketball and volleyball, and in some individual sports, such
as alpine skiing, golf and tennis. In order to limit the choices and to be able to compare
the results from the studied cases, the data was delineated to concern national league clubs
in ice hockey and football. Two enterprises, HJK, Helsinki Football Club and JYP,
Jyväskylä Ice Hockey Club, were chosen to be interviewed after measuring publicly
available financial data of 11 national league football and 14 ice hockey companies. In
the Finnish national football league, there are 12 teams playing, but one of them was still
a non-profit organization. A third case from Swedish football industry was added in the
social entrepreneurship study to enrichen the empirical data. The theoretical background
consists of theories of entrepreneurship, sport business and sport entrepreneurship. The
theoretical framework of entrepreneurship is enriched by bringing in a theoretical aspect
of social entrepreneurship and internationalization in sport. The actual research process
related to this report could be divided into different stages as follows:
1.5 Structure of the report 27
Figure 1.4: The research process of this study
1.5 Structure of the report

The structure of this report is very straightforward and delineated according to the design
of this research as indicated in the above Figure 1.4. The report is divided into five
sections: introduction, theoretical background, methodology and research data, summary
of the publications and conclusions. In addition to these, all four published papers are
28 1 Introduction
attached at the end of the book. In the introduction, the focus is first on introducing the
background interest of this research and explaining its relevance to the Finnish sports
industry since the focus of this study is mainly national. Secondly, the research questions
and research design are presented in the introduction section to introduce and specify the
research focus. The theoretical background section declares the theoretical framework of
this study by presenting traditional theories of entrepreneurship, which are then then
combined with perspectives of sport entrepreneurship. This section combines the
theoretical background discussed in all four papers whose summaries are presented in
section four. In the last conclusions section, summarized answers to the research
questions are discussed, theoretical and managerial contributions identified, the study is
critically evaluated, and suggestions for future research are made.
1.6 Boundaries
The boundaries of this study are related to the temporal, geographical and industry
characteristics and perspectives as well as case number delimitations.
This study focuses on understanding the entrepreneurial challanges in two studied Finnish
cases, Helsinki Football Club and Jyväskylä Ice Hockey Club. The reasons for the number
of cases are as follows: first, there are only two team sports in Finland where all the first
league teams are limited companies and, secondly, two cases from different sports and
different market areas give a richer picture than cases from the same sport could do. In
the third article included in this study, a similar case from Sweden was added to enrichen
the discussed social entrepreneurship context, and to compare whether the situation
within the same sport but in a different environment would result different aspects.
Geographically, this study is limited to Finland (and Sweden in paper III), and might,
therefore, have some cultural features that exist only in the Nordic sport or business
culture. Limited companies might be regulated differently in different countries, which
may cause some aspects to function differently. Furthermore, the sport context adds some
delimitations or at least some special features to this study as well. This is especially true
with regard to the research background and earlier discussions since there is a very limited
number of studies available concerning sport entrepreneurship. This gives an extra
challenge to this study, but it makes it very fascinating as well.
The perspective in this study is on entrepreneurship from the entrepreneur’s and

enterprises’ point of view. All of these companies are small and medium-sized
enterprises, and their entrepreneurs can be assumed to have a strong impact on their
actions. The attached research papers discuss several aspects of entrepreneurship from an
organizational viewpoint, together with the individual entrepreneurs’ impact on firm
performance.
29
2 Theoretical background
2.1 Entrepreneurship
An earlier chairperson of the Finnish Entrepreneurs’ Association stated that growth
entrepreneurship is like world class sport:
“A growth entrepreneur is like a top athlete aiming at World Championship.

A growth entrepreneur trains according to a specialized program, prepares
carefully for the record, and pushes himself every day to being better than
those entrepreneurs who do not wish to expand.” (Wuorinen 2010).
Entrepreneurship theories are often presented from either the organizational point of view
or an individual entrepreneur’s perspective. In this study, both aspects, organizational and
individual level are considered in building the conceptual framework for this study. In
sport SME’s, such as the company cases in this study, strong entrepreneurs can create and
define the organizational culture and, therefore, the individual entrepreneurs strongly
affect the organizational level. These individuals have a strong position in their
enterprises; they define the guidelines for entrepreneurial actions and have the power to
make decisions on their own. An organization, on the other hand, is highly dependent on
the environment of the industry where it operates, which in this case is unique and often
quite turbulent. Therefore, both the individual entrepreneur and the enterprise as an
organization are included in the theoretical background literature review.
Entrepreneurship has been defined in many different ways over time. The first definitions
concerning entrepreneurship or entrepreneurial action can be tracked down to Richard
Cantillion’s writings (approximately 1680-1743) (Landström 2006, 28). The very first
modern definition for entrepreneurship and entrepreneur is the one that Schumpeter
introduced already in 1934. He states in his famous article from 1934 as follows:
“The carrying out of new combinations we call enterprise; the individuals

whose function it is to carry them out we call entrepreneurs.” (Schumpeter
1934).
Schumpeter (1934) further reflects whether a capitalist is a synonym for an entrepreneur

or not. On the one hand, he claims that a company’s shareholders (who are defined to be
capitalists) should be included in the entrepreneur’s definition. However, on the other
hand, he separates entrepreneurs from shareholders. Schumpeter’s era is also evident in
his text. In 1934, the world was quite different from today, and entrepreneurship was not
considered a profession. The way in which Schumpeter (1934) explains that the
entrepreneur is his own technical expert, professional specialist, buying and selling agent,
head of his office, his own personal manager and legal adviser, shows the differences
between our way of thinking and the 1930’s way of thinking. Today the entrepreneur
30 2 Theoretical background
usually has a large business network for all the necessary support functions instead of
doing everything himself.
It is also important to understand the difference between a manager and an entrepreneur,

although both functions are certainly needed in entrepreneurial actions. To this effect,
Baumol (1968) defines a manager to be the individual who oversees the ongoing
efficiency of continuing processes. In contrast, he defines an entrepreneur to be a
Schumpeterian innovator, meaning that his job is to identify new ideas and to put them
into action. He must lead and inspire, and he cannot allow things to fall into repetitive
patterns, and for him, today’s custom is not good enough for tomorrow. (Baumol 1968).
An entrepreneur can be a manager as well, but a manager is not necessarily an
entrepreneur. Obviously, the definition of an entrepreneur depends on whether we define
the phenomenon from, for example, the juridical, economic, social or functional points
of view. However, at the end, an entrepreneur is a person who takes great social and
economic responsibility in his actions and manages a wide network in order to put new
ideas in place.
Shane and Venkataraman (2000) define entrepreneurship to be recognition, evaluation

and execution of opportunities by certain individuals: entrepreneurs. This definition
implies that there exist business opportunities that can be evaluated by certain individuals,
and furthermore exploited by these individuals. Hence, this means that entrepreneurship
cannot be defined only based on these individuals’ characteristics. However, the
differences between individuals have an impact on who discovers the business
opportunities and who does not. According to Mason and Harvey (2013),
entrepreneurship and entrepreneurial opportunities are always dependent on context
specific circumstances, conditions and historical processes.
2.1.1 Entrepreneurial opportunities

Entrepreneurship can also be defined through a certain process where entrepreneurs have
certain characteristics and they behave in a certain way, and their businesses are at a
certain level of the enterprise lifecycle. Cunningham and Lisheron (1991) separate six
different schools of thought to define the entrepreneurial process. Four of these schools
take notice of different subjects in entrepreneurial actions. They conceptualize
entrepreneurship by exploring the answers to questions concerning what kind of persons
entrepreneurs are, what they achieve and what they do. In principle, schools of thought
based on entrepreneurial characteristics address the characteristics from two different
directions, one being interested in entrepreneurs’ values and the other stressing the
importance of great personalities. Apart from this, they also separate the idea of the
intrapreneurship school of thought that refers to employees’ entrepreneurial approach to
their work. (Cunningham and Lisheron 1991.)
2.1 Entrepreneurship 31
Table 2.1: Summary of approaches for describing entrepreneurship (Cunningham and Lischeron
1991)
These different entrepreneurial process descriptions, in other words, schools of thought

are highly dependent on the stage of the company’s life cycle. However, characteristics
from the different schools can be defined based on one enterprise and its entrepreneurs’
actions. In the sport business, intuition can have a remarkable role still in the maturity
stage; hiring the right, expensive players in a team is based on the facts of the player, but
often also on intuition since the outcome is never guaranteed. Intrapreneurship is needed
in the sport business since the working hours are very often different to office hours and
some kind of passion for sports is a very common feature for the employees as well as for
the entrepreneurs. Even though it can be argued that different characteristics from
different approaches can be found in one enterprise, the school of thought logic follows
a pattern that is very rational in firm growth and development.
A very important point in this discussion about entrepreneurs and overall entrepreneurial
actions is the effect of the political environment. Environmental changes have been
studied carefully in entrepreneurial research as in other economics research. These
changes have often been the major facts that affect the economic development of the
enterprises. For example, changes in social and political environments can cause major
modifications in economic development in terms of regulations, and legal issues. With
legal regulations, governments can affect entrepreneurial opportunities and adjust the
legal environment where the enterprises operate. Today, the discussion concerning
governmental actions is wide since entrepreneurship has become more and more
important to society. The tendency today in welfare states, such as Finland, is to abolish
these barriers that might prevent entrepreneurial actions, and to encourage entrepreneurs
to exploit the existing opportunities and establish new businesses.
Business opportunities are the core of the entrepreneurial process. Schumpeter (1934)
argues that new possibilities are constantly being offered by the surrounding world, and,
in particular, new findings are added to the existing store of knowledge all the time
(Schumpeter 1934, 79). Furthermore, Leibenstein (1968) also emphasizes the
entrepreneur’s role by arguing that the inter-firm motivational state is important in
entrepreneurial opportunity discovery. He examines the demand side of entrepreneurial
action and defines different inputs to be gap-filling and input-completing capabilities.
(Leibenstein 1968). In turn, Shane and Venkataraman (2000) define entrepreneurship to
include an entrepreneurial person as well as the existence, recognition and exploitation of
entrepreneurial opportunities. In addition, Laukkanen (2007) argues in his
entrepreneurship definition that entrepreneurship is, above all, a business action and in
order for it to be successful, it needs an entrepreneur and a favorable operational
environment. It is obvious that in successful entrepreneurial actions both the entrepreneur
and the surrounding environment play an important role.
Today the environment is more and more turbulent, and the changes that the entrepreneur
must face are greater. One of the interesting impacts on the environment is the role of
uncertainty. The role of uncertainty is in focus in Kirzner’s description of the Misesian
system and its entrepreneurial profile. Mises points out that entrepreneurial actions cannot
be separated from individual human actions, but that they are affected by the surrounding
uncertain environment as quoted by Kirzner (1982):
“The entrepreneurial element cannot be abstracted from the notion of

individual human action because the uncertainty of the future is already
implied in the very notion of action. That man acts and that the future is
uncertain are, by no means, two independent matters, they are only two
different modes of establishing one thing.” (Kirzner 1982).
The Misesian theory discusses the differences between human action and economizing
activities in the ever-changing world. The main point of this discussion is the fact that
entrepreneurs must operate in an uncertain world where the future is partly unknown.
(Kirzner 1982).
Opportunity recognition is an important issue in the entrepreneurial process before and

throughout the entrepreneur’s career. Shane (2003) gives an interesting insight into this
entrepreneurial development process. The starting point is opportunity recognition,
discovery and exploitation. Both opportunity recognition and exploitation are the key
issues in the entrepreneurial process (Bygrave 1994; Shane 2003, 18-19). This model of
entrepreneurial actions consists of four stages: the existence of entrepreneurial
opportunities, the discovery of these opportunities, exploitation of them and allocation of
resources, and the design of an organization and strategies. It could be pictured as follows:
Figure 2.1: A model of the entrepreneurial process (Shane 2003,11)
Shane (2000) argues that the unit of analysis should not necessarily be the enterprise
because it might give a one-sided view of the entrepreneurial actions. Therefore, the unit
of analysis should also be the entrepreneur. When talking about opportunity recognition,
he also highlights the importance of the entrepreneur’s previous knowledge. All people
cannot recognize the same opportunities because their previous experiences are different.
The information networks through which persons analyze the world affect the
possibilities to see opportunities where they exist. Nevertheless, people sometimes do
find these opportunities without acknowledging them or without actively searching for
them. All the decisions concerning the entrepreneurial process, such as strategies of how
to enter the markets, or which resources to use, are reliant on the entrepreneur’s previous
experiences. (Shane 2000). Davidsson (2015) takes this further by discussing the role of
entrepreneurs (actors) and external enablers, and how they affect the new venture ideas.
External enablers represent the environmental circumstances that have an influence on
opportunity recognition and usage when developing new businesses. The third construct
that they stress is opportunity confidence which refers to the actor’s individual evaluation
of possible opportunities. (Davidsson 2015).
One common opinion is visible in the different definitions of an entrepreneur: an

entrepreneur always creates something new, operates in a turbulent environment and is
“a step ahead” when an opportunity exists (Bygrave 1994, Scarborough 2011, 25-27).
Not all people have the required power to become entrepreneurs. Shane and Ekhardt
(2003) introduce the theory of an individual-opportunity nexus where they conclude the
previous discussions and highlight the individual cognition in the entrepreneurial process.
The reasons why some persons are more likely to discover entrepreneurial opportunities
than others include characteristics, such as risk-taking capability, self-direction, strive for
autonomy and resources as well as financial, experiential, social and human capital.
Opportunity recognition is, therefore, a result of a cognitive process, and the
implementation needs sufficient conditions for entrepreneurial behavior. (Shane and
Ekhardt 2003). Dimov (2011) highlights the importance of research from three different
perspectives: opportunity as happening, opportunity as expressed in actions and
opportunity as instituted in market structures. In other words, research should focus on
venture ideas, markets and entrepreneurs’ actions in relation to opportunities.
Sarasvathy (2001) discusses the difference between effectual and causal reasoning in
entrepreneurial decision-making. Causal reasoning is based on the logic of a predictable
future when effectual reasoning assumes future to be controllable. In other words, in the
causation models, one can control the future if it can be predicted, and in the effectuation
models, there is no need to predict the future as long as it can be controlled. (Sarasvathy
2001). This effectuation logic stresses the importance of the way in which entrepreneurs
think instead of the individual characteristics or firm performance. The uncertainty of the
future can be controlled by using effectuation logic in the entrepreneur’s decision-
making. Instead of long-term planning, which is dominant in causal logic, the
entrepreneur seeks solutions that work for the time being (Puhakka 2007, Laukkanen
2007), which can be connected to sports’ seasonal nature. The use of effectuation logic
in decision-making enables the entrepreneur to change the set goals whenever the
changing business environment requires something other than what has been planned.
Effectuation logic applies especially when the markets cannot be precisely defined in
advance.
Figure 2.2: Dynamic model of effectuation (Sarasvathy 2008, 101)
Effectuation logic begins with the entrepreneur’s know-how and previous experience and
proceeds in a cyclic mode. Effectuation logic requires commitment, experience, learning
and knowledge from the entrepreneur. By different means, the unpredictable future can
be controlled even though the content may change along the development process.
(Sarasvathy 2008, 101-106). Sarasvathy’s ideas together with Shane’s opportunity
recognition theories widen the understanding of why and how some people discover
opportunities and what the possible barriers are for some entrepreneurs to not recognize
them. Moreover, the same aspects can be discovered in Ronstadt’s (2007) corridor
principle theory. He argues that an enterprise is like a corridor where new opportunities
can be found in new corridors that open from the first one. These corridors might lead to
the same direction as the previous business or to a totally new direction depending on the
entrepreneur’s intentions and capabilities. The corridor principle explains why the
entrepreneur sees a certain opportunity and not something else. This opportunity exists
because of the previous enterprise. The entrepreneur’s knowledge of his/her customers,
trends and suppliers together with the entrepreneur’s capabilities, such as know-how,
interests and abilities play an important role in opportunity recognition. (Ronstadt 2007).
2.1.2 Entrepreneurial orientation

The environment where entrepreneurs operate is often turbulent, and they must have
certain personal characteristics and drivers to be able to cope within this ecosystem.
Literature suggests that entrepreneurial orientation together with certain environmental
factors might improve a firm’s performance. Entrepreneurial orientation refers to an
enterprise’s entrepreneurial activity in terms of strategy, decision-making style and

practice. Covin and Slevin (1991) introduce a firm-behavior model of entrepreneurship
and argue that entrepreneurial performance and orientation are functions of both the
organizational level and individual level. Companies with an entrepreneurial orientation
are willing to take high risks when aiming at success; they are proactive, innovative and
opportunity seeking. They argue that the organization itself is never entrepreneurial, and,
therefore, the behavioral models in the organizational and individual levels are necessary
for understanding both the company level behavior and individual entrepreneurs’ actions
affecting the entrepreneurial process. This entrepreneurial condition or attitude is affected
by three kinds of research variables. The first are the external variables including the
external environment, technological innovations, dynamism, hostility and the industry’s
life cycle stage. Secondly, there are strategic variables, such as mission strategy and
business practices and tactics, and, finally, there are internal issues, such as management
style, resources, competencies and organizational culture and structure. (Covin and Slevin
1991). Lumpkin and Dess (1996) describe the entrepreneurial orientation construct to
contain five different dimensions: risk taking, proactiveness, autonomy, innovativeness
and competitive aggressiveness. The entrepreneurial orientation is context-specific, and
these dimensions vary independently within their context. Kreiser and Davis (2010)
renew this discussion by identifying three sub-dimensions of entrepreneurial orientation,
namely innovation, proactiveness and risk-taking, to form a special relationship with
organizational performance affected by the environment and organizational structure.
Wiklund and Shepherd (2005) also stress the importance of the relationship between
business performance and a dynamic environment. According to them, both
entrepreneurial orientation and firms’ access to financial capital positively influence the
firms’ performance. They also define entrepreneurial orientation to consist of risk-taking,
innovativeness and proactiveness.
The three sub-dimensions of the entrepreneurial orientation, namely, proactiveness,

innovation and risk-taking, are moderated by the external environmental characteristics
and the internal organizational structure. Innovation relates to the organization’s
enthusiasm to support new ideas and products, creativity and novelty. Risk-taking
describes the extent to which entrepreneurs are willing to take financial risks and how
much other resources there are available. The high level of risk-taking as a contributing
power to entrepreneurial success has been identified in many studies related to
entrepreneurial performance (Covin and Slevin 1991, Kreiser and Davis 2010, Lumpkin
and Dess 1996). Proactiveness associates with entrepreneurial opportunities; the
entrepreneur discovers and takes advantage of the existing opportunities before the
competitors and is capable of acting in a rapidly changing environment (Lumpkin and
Dess 1996, Kreiser and Davis 2010). These three dimensions have a differential
relationship with firm performance and other organizational variables, which Kreiser and
Davis (2010) have identified in their study of entrepreneurial orientation. The external
environment has a sufficient effect on the relationship between the sub-dimensions of
entrepreneurial orientation and firm performance.
Figure 2.3: A theoretical model of EO-environment-structure-performance relationship (Kreiser

and Davis 2010)
The more uncertain and dynamic the environment is, the more opportunities there exist
(Kreiser and Davis 2010), and firms act proactively in trying to gain a competitive
advantage. Growth and profitability are both related to environmental dynamism and
proactive strategies. Environmental dynamism refers to a firm’s internal facts, such as
innovations and uncertainty, when the munificence of the environment refers to external
opportunities and resources. Firms operating in munificent rather than hostile, and
dynamic rather than stable, environments can benefit from innovative and proactive
strategies together with convenient risk-taking behavior. (Kreiser and Davis 2010).
Organic structures with a high level of flexibility, open policies in planning, effective
decision-making and communication have a positive impact on the relationship between
entrepreneurial orientation and firm performance, and this may lead to financial success
and growth (Kreiser and Davis 2010, Lumpkin and Dess 1996). Mechanistic structures
with a high level of bureaucracy, control and hierarchy do not encounter with
entrepreneurial orientation. Organic structures give a firm flexibility to act proactively
when opportunities exist and promote the needed innovative behavior when exploiting
these opportunities. (Kreiser and Davis 2010.) A dynamic and uncertain business
environment also requires a certain amount of flexibility in company decision making
and strategy in order to be able to compete and succeed or even grow in the rapidly
changing markets. To conclude about the importance of an entrepreneurial orientation in
relation to firm performance and the effect of internal structures and the external
environment, Kreiser and Davis (2010) argue that:
“A firm operating in a dynamic and munificent environment should

emphasize very high levels of innovativeness and proactiveness, moderate
to high levels of risk taking, and should implement an organic structure.”
(Kreiser and Davis 2010).
Moreover, Wiklund and Shepherd (2005) argue that the firm performance is not only
influenced by the sub-dimensions of these entrepreneurial orientations. However, there is
clear evidence that it is also influenced by access to financial capital. According to it,
entrepreneurial orientation can be adopted to overcome certain restraints, and companies
that have a limited access to financial capital and who operate in a stable environment
might benefit the most in adopting an entrepreneurial orientation strategy. (Wiklund and
Shepherd 2005.) It is obvious that there is a distinct link between the three sub-dimensions
of entrepreneurial orientation and firm performance affected by a certain organizational
structure and a certain operating environment.
2.2 Growth entrepreneurship

In the 1990´s and still at the beginning of the 21st century, the discussion on
entrepreneurship in Finland was based on the idea that we should increase the number of
enterprises. This conclusion was a consequence of the economic depression at the
beginning of the 1990´s when the number of enterprises considerably decreased. The
growing interest towards growth entrepreneurship has changed the direction of the
discussion as well as introduced the idea of the quality and growth possibilities of
companies. The number of growth enterprises is very small in Finland, but their
significance to the national economy is great since they create most of the new jobs. It is
necessary for firms to grow, first, in order to create new jobs and, secondly, to develop
new products and services, new business models, service processes and production
systems (Hyrsky 2007).
Growth entrepreneurship is a very complex and versatile phenomenon and rather a

combination of different characteristics. Organizational growth can be traditionally
divided into two basic categories: organic growth within a company or growth through
corporate acquisitions. McKelvie and Wiklund (2010) add another, third, category,
namely, hybrid growth models. Organic growth is a firm’s internal growth, usually
performed based on its current resources, and it is very typical for small and medium
sized enterprises (Davidsson et al. 2006, 30). Growth by acquisition simply means growth
by buying new businesses. The third way to grow, the hybrid models are neither organic
nor acquisitive but somewhere in between. They represent business models, such as
franchising, licensing and strategic alliances (McKelvie and Wiklund 2010). According
2.2 Growth entrepreneurship 39
to Hyrsky and Lipponen (2004), companies can grow by expanding their current market,
creating new business or through corporate acquisitions. In the present study, the focus
of the growth entrepreneurship literature review is on organic growth since the studied
enterprises are small and medium sized, and they have grown organically.
Penrose (1959) describes firm growth in her famous “Theory of the growth of the firm”:
“The continued growth of a modern business firm can, I think, be most

usefully viewed as the continual extension of the range and nature of the
activities of an organization in which the role of the owners may or may not
be relevant, and of which even ‘central management’ (or entrepreneur) is
only a part, though a very important part. It is at the organization as a whole
that we must look to discover the reasons for its growth.” (Penrose and
Pitelis 2009, 57).
Both, the individual entrepreneur and the whole organization are important when
achieving growth. However, the role of the entrepreneur in small and medium sizedd
companies tends to be more significant and directional than in large organizations.
Besides this, Davidsson et al. (2006, 33) argue that organizations can only grow if they
are successful.
In literature, there are various studies that explain entrepreneurial growth in distinct ways.
Even though there are multiple interests and a massive amount of research concentrating
on entrepreneurial growth, it seems that there is a lack of theory capable of explaining the
mainly organic small business growth. Different researchers stress different approaches
when studying growth entrepreneurship. Some concentrate on external forces, when
others underline the importance of internal factors and the individual entrepreneur’s role.
According to Mäki-Fränti (2006) and Hyrsky (2007), at least four internal factors affect
possible growth, namely the characteristics of the organization, the individual
entrepreneur as well as growth and leadership strategies. Laguir and Den Besten (2016)
identify that work experience and motivation are the cornerstones of entrepreneurial
growth for micro and small business enterprises. On the contrary, Osborne (1993) argues
that the basis for a company’s growth comes from the business concept’s operability. An
entrepreneur should identify the needs of his customers and the company’s market
possibilities so as to develop the best possible competition strategy (Osborne 1993). This
is further stressed by Weber et al. (2015) who argues that growth is always part of a
company’s strategy and that willingness to grow determines the success of this strategy.
Laukkanen (2007) defines growth entrepreneurship as entrepreneurial actions aiming to
gain quantitative growth and generate wealth. A growth enterprise, he defines, is a firm
managed by highly growth-oriented leaders. (Laukkanen 2007). Hyrsky and Lipponen
(2004) have described the criteria of growth entrepreneurship in Finland as follows:
Table 2.2: Criterion for growth entrepreneurship (Hyrsky and Lipponen 2004)
In the different stages of their lifecycle, companies grow differently, but certain basic
elements exist in a firm’s business principles if it achieves growth. Entrepreneurs are very
much entrepreneurially oriented, prepared to take risks, and they have the ability to
recognize opportunities and face competition. For a start, there should be markets and
demand, and the company’s employees’ abilities must meet the expectations of the
growing business. Innovativeness and motivation to grow are defined to be competitive
advantages for business growth. (Hyrsky and Lipponen 2004).
Poufelt (2007) points out seven important strategic elements for growing enterprises in
his growth entrepreneurship study. Growth enterprises focus on a special area of business,
they have well-functioning business systems, large value chains and networks, good self-
financing, they tend to grow organically and their profile is internationalized. These
companies’ organizational development is advanced, and they manage successful
employee recruitments. They also have a skillful executive board with members outside
the firm, determination and an attitude of speed and action towards their work. He argues
that by focusing on the core business activities and products and avoiding expansion
outside the core business, the entrepreneur can keep the company profitable, and that
enables growth. According to his study, all the unprofitable businesses have been closed
down quickly. Active networking is one of the main functions of a growth enterprise, as
well as a functioning infrastructure. By growing organically, a firm might grow more
slowly but steadily and, hence, gain a long-term competitive advantage. The organization
should be ready for the change that growth brings and educate the personnel accordingly.
Successful recruitments and task delegation are key factors in managing growth. Ability
to make fast decisions and determination characterize these enterprises. (Poufelt 2007).
Laukkanen (2007) identifies six growth possibilities for organically growing enterprises:
innovation-based enterprise, managed business diffusion, previous enterprise as a base,
acquisition, portfolio growth and growth from external pull. Innovations can be either
technical innovations or an innovative solution to a problem. Innovations are also
important when managing business diffusions. Enterprises can grow by taking several
small steps over time together with effective marketing and branding or by adopting fast
growth strategies. Previous businesses can act as a base for a new growth enterprise either
financially or operationally since entrepreneurs have gained know-how and experience
from their previous businesses, and they can utilize it by setting up new businesses or
branches. Portfolio entrepreneurs set up various businesses in order to practice different
business activities. All these actions very often require favorable external conditions,
demand and markets. (Laukkanen 2007, 31-40).
On a firm level, entrepreneurial orientation affects the firm’s performance success, and
there is evidence that it affects the firm’s growth as well (Wiklund et al. 2009, Covin and
Slevin 1991). Wiklund et al. (2009) developed an integrative model of small business
growth where the determinants were entrepreneurial orientation, the environment and the
firm’s strategic fit with it together with resources and the management’s attitude. They
suggest that the firm’s entrepreneurial orientation tends to be the guiding actor conveying
the impact of the environment on, resources for and attitudes towards growth
entrepreneurship (Wiklund et al. 2009). As mentioned earlier, entrepreneurial orientation
has a positive effect on a firm’s performance and success, and therefore, it can be assumed
that it has a positive impact on growth as well. Entrepreneurial orientation includes such
characteristics as innovativeness, risk taking and proactiveness, which are closely
connected to growth entrepreneurship. Lumpkin and Dess (1996) argue that
entrepreneurial orientation and performance are not only dependent on a firm’s internal
strategic actions, but that they are also context specific phenomena and, therefore,
dependent on the external environment. Wiklund et al. (2009) have found that the
strategic choices that the management makes in developing entrepreneurial orientation
have a positive effect on small business growth, and that the environment, management
attitudes and resources have a direct effect on small business growth and an indirect effect
on growth through entrepreneurial orientation.
A dynamic environment with constant change offers more opportunities for entrepreneurs
to pursue and exploit. This provides them with the possibility to grow. However, the
effectiveness of entrepreneurial orientation requires a fit between the company
characteristics and the operating environment. According to Wiklund et al. (2009),
resources that influence the entrepreneurial orientation can be divided into financial
capital, human capital and entrepreneurial networks or, in other words, social capital. The
financial capital enables a firm to function more easily, in other words, exploit
opportunities, take risks and invest. The human capital refers, especially to the
entrepreneurs’, but also to the staff’s know-how, experience and skills to lead and run the
company and pursue opportunities when necessary. Social capital means entrepreneurial
networks that provide access to information, capital and resources necessary for
functioning and growing successfully. These might include alliances with other
companies, internal relationships with the management team and relationships with the
company stakeholders.
The management’s attitude towards growth together with motivational factors are of
importance in small business growth since the personal goals of the entrepreneur might
either help the progress of growth or set limits to it. To conclude, Wiklund et al. (2009)
argue that the three most influencing constructs affecting small business growth are the
level of entrepreneurial orientation, the management’s growth attitudes and the dynamism
of the environment. Dobbs and Hamilton (2007) studied the previous discussion on
business growth and divided the determinants of small business growth into four
categories: management strategies, the entrepreneur’s characteristics, environmental and
industry specific facts and firm attributes. The same conclusions can be found in Lumpkin
and Dess (1996) as they stress the importance of environmental variables, such as industry
characteristics, environment dynamism, munificence and complexity, and organizational
factors, such as structural and strategic processes, resources, company size and
management team to be critical in utilizing the entrepreneurial orientation in order to
achieve high performance and growth.
Enterprises’ growth can also be described through different growth models. According to
McKelvie and Wiklund (2010), research has been focusing on explaining differences in
firms’ growth without paying attention to how these companies have grown. They argue
that more attention should be drawn to qualitative differences in firms’ growth processes.
The growth process can be explained by using different growth approaches, which intend
to explain why some businesses grow. Storey and Greene (2010, 222-241) identify six
different growth approaches: evolutionary approaches, social networks, resource-based
views, managerial approaches, economic approaches and random approaches. Dobbs and
Hamilton (2007) also name six approaches to studying small business growth:
stochastic,descriptive, evolutionary, resource-based, learning and deterministic
approaches. These two perspectives are compared in the table below.
Table 2.3: Comparison of two approaches of explaining the small business growth (After Storey
and Greene 2010, 222-241, Dobbs and Hamilton 2007)
Random or stochastic approaches assume that growth is an outcome of many different

variables affecting the business performance and even sometimes of pure luck (Storey
and Greene 2010, 235-237). There are many factors that affect business performance and
growth, especially in small businesses the growth path can be very heterogeneous, and
therefore, together with a turbulent task environment, this approach can be in some cases
justified. The resource-based view of business growth is based on Penrose’s (1959) theory
of growth (Dobbs and Hamilton 2007), and it stresses the importance of each firm’s
unique resources, capabilities to exploit entrepreneurial opportunities and competencies
to maintain a competitive advantage. This approach is close to Storey and Greene’s
(2010) managerial or learning approach and Dobbs and Hamilton’s (2007) learning
perspective. The managerial approach connects the entrepreneur’s psychological profile,
growth intention and managerial style together in this managerial approach.
Entrepreneurial characteristics and growth intention, as well as a certain managerial style,
can partly explain the causes that have led to organizational growth. However, they ignore
the impact of the external environment. Growth intentions together with innovativeness,
proactiveness and risk taking create a firm level entrepreneurial orientation, which has
been proved to have a powerful effect on business growth (Wiklund and Shepherd 2005).
The learning perspective strengthens the discussion of individual entrepreneurs’ or
managers’ role in business growth by emphasizing the importance of learning in
knowledge creation. The entrepreneur achieves the necessary resource of knowledge by
learning (Dobbs and Hamilton 2007) and from previous experiences (Politis 2005). The
entrepreneur’s know-how and career experiences, such as managerial or industry specific
experiences, together with an entrepreneurial orientation can have a crucial influence on
entrepreneurial learning (Politis 2005).
Social networks as an approach to achieving business growth contain both entrepreneurs’

formal and informal networks and environmental influences ranging from the
geographical location to other important companies and stakeholders. In an economic
approach, the influence from the external environment is limited to the industry’s cost
structure. (Storey and Greene 2010, 235). According to Dobbs and Hamilton’s (2007)
evolutionary approach, these social external networks and internal forces both have an
effect on business growth, and there are no standard models for demonstrating the growth
path since the circumstances of growth are individual and unique. This evolutionary
approach differs from Storey and Greene’s (2010) evolutionary approach that is based on
stage models that emphasize growth as clearly defined stages.
The last approach presented in the table earlier is Dobbs and Hamilton’s (2007)
deterministic approach where the emphasis is on what actually causes business growth.
The aim of this approach is to identify certain variables that explain growth. The focus is
on individual, firm and the industry’s environmental characteristics that can affect growth
rates over a period. (Dobbs and Hamilton 2007). The deterministic model pays attention
to all levels of small business actions and contexts where they operate, and it can,
therefore, explain the possible causes of growth in more detail than the previously
mentioned approaches. Regardless, also these deterministic models have their limitations
since they can only explain some variations in business growth but not fully explain it.
However, this approach is also supported by McKelvie and Wiklund (2010) as they stress
the importance of the growth mode instead of the growth rate, and they highlight the
significance of reasons to grow in the growth development process.
2.3 Sport entrepreneurship

Sport business has been defined in many different ways, depending mostly on the context
in which it has been discussed. Sport itself is often defined as a physical activity that
typically, but not always, is competitive and played by the certain rules (Taylor 2011, 15).
Sport as a business, especially in Finland, is still at its introduction stage in its lifecycle,
even though it has developed rapidly during the past decades. It can be expected to grow
further and offer multiple business opportunities to entrepreneurs. There have been
2.3 Sport entrepreneurship 45
several factors influencing this global growth and development: the complexity of the
sport industry, the growing interest of media, development of the globalized marketplace,
strengthening competition, the influence of technological development, for example, the
Internet and the convergence of the global customer behavior (Santomier 2002).
Sport has been studied from different viewpoints, such as economics, philosophy,
physiology, psychology and ontology (Olivier 2006, Ratten 2010a). Sport business has
been researched mainly from the marketing, management and leadership points of view.
Although recent studies also focus on entrepreneurship in sport business, usually together
with management theories, the number of studies is still very limited. Sport
entrepreneurship remains an unstudied phenomenon (Bjärsholm 2017). Porter and
Vamplew (2018) combine sport history and business history, and present new approaches
to sport entrepreneurship based on the innovations and the idea of new opportunity
exploitation. Demand for sport entrepreneurship research is explicit since sport
businesses need to become more entrepreneurial in order to compete in the local and
global markets.
Sport entrepreneurship includes a variety of businesses, and it is very heterogeneous by

nature. Sport business also acts differentially depending on the environment where it
operates because social, legal and governmental restrictions differ a great deal depending
on the country (Ratten 2011a). Sport requires innovations and operates in a turbulent
environment, just like entrepreneurship (Ratten 2011a). Taylor (2011, 169-171) discusses
sport business as a part of leisure business and connects it closely with tourism. He divides
sport and leisure business into three different categories: the private, in other words,
commercial sector, public sector and the third sector, meaning non-profit organizations.
From these three, the commercial sector generates most of the revenue in sport related
businesses. Ball (2005) also emphasizes the importance of entrepreneurship for the
hospitality, leisure, sports and tourism businesses. These industries are growing globally,
and they are important contributors to national economies. There are different challenges
in the growth of these industries due to the rapidly changing environment, human
resources, product and service development, and entrepreneurship is the driving force in
this change. (Ball 2005).
Fullerton (2010) divides sport products into three segments: access to spectator sport
events, the provision of venues for participation in sports as well as sporting goods and
apparel (Fullerton 2010, 4). Sport historian Hardy (1986) starts his analysis of sport
entrepreneurship, organizations and marketplace by defining the development of the sport
industry. This involves the sport products, entrepreneurs developing the products and the
networks and organizations that the entrepreneurs create. He argues that a product’s
nature usually defines the organization that produces it. He identifies sport products to
include the activity or game form, the service and the goods. (Hardy 1986). Santomier
(2002) introduces the US sport industry in three sectors: performance, production and
promotion. In the performance sector, consumers are spectators or take part in the actual
trainings. The production sector provides the equipment for the sport, and the promotion
segment includes, for example, marketing and sponsoring activities. He connects all these
sectors tightly to entrepreneurship and stresses the possibility to recognize entrepreneurial
opportunities and create new business ventures in each sector. (Santomier 2002). In sport
business, there are multiple entrepreneurial opportunities, and entrepreneurial activities
are needed to develop different sport-related organizations (Ciletti and Chadwick 2012,
Ratten 2011a, Santomier 2002).
Innovations, proactiveness and risk-taking are also closely connected to sport

entrepreneurship (Ciletti 2012, Hardy 1986; Ratten 2010a). Technological innovations
have shaped the overall sport industry and developed new sports, new products and
services, sports participation and marketing activities. Digitalization, including different
ways of promoting and broadcasting sport as well as digital marketing together with the
fragmentation of the traditional media, has especially had an enormous impact on sport.
Social media have given sport enterprises new ways to market their products, stream their
events and engage the sport consumers. Sport organizations often act as agents of change
in society or advance sustainability in their operations (Ciletti 2012). Sport organizations
have been proactive in progressing sustainability in their operations by exercising
environmental responsibility or enhancing social responsibility. However, proactiveness
also appears in the field of marketing, especially in not so highly valued ambush
marketing. Ratten and Babiak (2010) connect sport entrepreneurship with corporate
social responsibility and philanthropy and argue that these issues have become an
important part of sport organizations’ business operations.
Risk taking in sport organizations was not previously such an issue as it is today since
sport organizations were not considered profit seeking organizations. Government and
other institutions highly subsidized them, and they operated mainly by volunteer
resources (Hardy 1986). However, today’s sport entrepreneurship is a high-risk business
including both social and financial risks. Ciletti (2012) defines different risks in sport
business to be related to expansion, finances, recruiting employees and athletes, licensing,
markets and buyer behavior as well as legal and political issues. Due to the turbulent
environment and the globally and rapidly changing industry area, sport entrepreneurs
need to take risks in order to develop their businesses further. This risk taking is especially
evident in sports, such as football, which invest heavily in worldwide scouting to employ
the best talents (Radaelli et al. 2018), and the same applies to ice hockey. Radaelli et al.
(2018) argue that the human capital of players should be seen as a business opportunity
rather than just a resource of a company. Human capital, understood as the skills and
talents of the players, represents an opportunity to improve the sporting performance and
popularity of the team (Radaelli et al. 2018).
One of the first sport entrepreneurship theories is the sport-based entrepreneurship theory
(Ratten 2010a, 2011a), which brings traditional entrepreneurship discussion in sport
context. It argues that:
2.3 Sport entrepreneurship 47
“Sport is an entrepreneurial process as innovation and change are key

elements of sport.” “Sport-based entrepreneurship involves proactive,
innovation and risk-taking behavior in the sporting context.” (Ratten
2011a).
This theory identifies a number of different types of entrepreneurships affecting sport

such as social, technological, community-based, corporate, institutional and international
entrepreneurship (Ratten 2011a). It contains sport-related activities processed and
managed by entrepreneurial individuals, together with innovations to develop the
business venture. Both entrepreneurship and management play an important role in this
context. As sport business is regarded as a fast-changing industry, entrepreneurs are
expected to be innovative, willing to take risks and capable of interpreting the
opportunities. In sport-based entrepreneurship, the emphasis is on the value creation
process and the possible ventures resulting from this process. In this theory, value creation
is also linked to social responsibility. (Ratten 2010a). This theory is a good starting point
for sport entrepreneurship discussion combining the traditional entrepreneurship
discussion into the context of sport entrepreneurship.
Moore and Levermore (2012) discuss small and medium-sized businesses’ viewpoint of
sport entrepreneurship and study whether their parameters can be applied to English
football clubs. They argue that certain organizational characteristics, such as resource
constraints, informality and authoritarian management as well as short-termism are
characteristics of small and medium-sized enterprises (SME’s) in general and especially
in sports. Resource constraints in small and medium-sized sport organizations can be seen
in the scarcity of financial and human resources. These companies can seldom offer the
same career opportunities as bigger employers, especially for people in background
duties. The scarce availability of finance is often a barrier to growth and development in
small and medium-sized enterprises. Short-termism is also evidenced in financial and
human resource management, together with a lack of long-term strategic planning. This
short termism and lack of long-term objectives was also highlighted by Hemme et al.
(2017) in their study of fitness sport enterprises. Owner-managers are too often tied to the
day-to-day operational issues, and the mentality of short-termism characterizes the
decision making. Owner-managers easily adopt several roles in their business and rely on
their experience rather than delegate or engage other board members or managers in
decision making. SME’s operate by using informal policies and unstructured methods.
Even though these factors can be identified in sport SME’s, especially in football clubs,
sports still have important industry specific issues which affect a club’s business by
rapidly changing the interest towards it and the number of tickets sold, in other words,
its success. Poor playing can quickly turn the cash flow into a negative revenue. (Moore
and Levermore 2012). However, success in the field can have the opposite effect just as
easily. The lack of success does not necessarily mean that the company cannot grow. For
example, the operating environment, fan base, marketing skills and management actions
can all affect the company’s success as much as sporting success. Hammersmith (2019)
identifies that entrepreneurial orientation is closely connected to both successful financial

and sport performance in professional football clubs.
What motivates the entrepreneur in sport business? From the historical perspective, Hardy
(1986), leaning on previous studies, suggests that profit was the motivator for sport
entrepreneurs in the 20th century America. Even though success and possible profits are
motivators for entrepreneurs, a distinctive feature for a sport entrepreneur has been
innovations. (Hardy 1986). Furthermore, sport entrepreneurship can be seen as a tool for
non-profit organizations when their managers and owners act as entrepreneurs and with
a desire to respond to a market opportunity (Ratten 2010b). However, even if the financial
returns or profits are not the driving force, they are often the necessary resource for
developing the sport organization and to achieve its other goals. One common
characteristic for entrepreneurs and sport people is that they are willing to take risks in
order to develop their business further. Sport business owners bare the financial risk, for
example, by employing expensive athletes based on their reputation and future
development possibilities without knowing whether the outcome is successful (Ratten
2011b). Another motivational aspect is the decrease of public funding in sport. Sport has
become more professional and entrepreneurial due to this development, and the role of
sport in society has changed (Ratten 2019).
2.4 Corporate social responsibility and social entrepreneurship in

sport
Corporate social responsibility (CSR) has become an important part of many sport
organizations’ activities, and sport is, perhaps, a better platform to promote these matters
than many traditional industries due to its emotional impact on people. Corporate social
responsibility in sport can be seen either as actions in sport or through sport. CSR in sport
refers to the content of the message and organizations’ need to behave in a socially
responsible way. In sport organizations, this need can be even bigger due to the negative
aspects, such as doping, match fixing and gambling. CSR through sport refers to the
organizations’ capability of disseminating the CSR actions to their stakeholders.
(Breitbarth et al. 2015). The latter can be connected to the improvement of brand equity
or image amongst stakeholders through CSR. According to Bradish and Cronin (2009)
CSR is one of the most important current sport management practices and a tool to impact
the society. The core of the CSR is to combine business strategy with goodwill or other
social causes (Bradish and Cronin 2009). Godfrey (2009), who presents the corporate
social responsibility in general and its historical development (in the US), points out the
dilemma of different definitions and discusses the special nature of CSR and sport. CSR
can be seen as a part of different sport institutions’ operations and reversely sport can
have a role in other companies’ CSR (Godfrey 2009). For its many definitions and
purposes, CSR in sport can be quite difficult to categorize. It can manifest many, very
different actions carried out by either the sport organizations themselves or by one or
multiple stakeholders. What actions are required for an organization to be socially
2.4 Corporate social responsibility and social entrepreneurship in sport 49
responsible also vary with the times, so there may not even be need for a specific
definition as the concept of CSR isn’t a constant truth, but an idea that develops.
Sport provides a platform for CSR actions through organizations, athletes and coaches;
hence CSR actions can also provide ways for sport organizations to affect the community.
Many international sport federations have established their own CSR programs in order
to be socially responsible and gain in terms of having a positive image. The operating
environment influences sport organizations’ possibilities to implement different CSR
actions. Sport organizations’ CSR actions are dependent on external pressures and
internal resources (Babiak and Wolfe 2009), and they are influenced by sport policies
(Miragaia et al. 2017). Many business partners of sport organizations want to introduce
and strengthen their social sustainability and community projects (Ratten and Ratten
2011) and see the sports teams, athletes, and events as appropriate platforms to promote
their social and commercial goals by utilizing CSR (Smith and Westerbeek 2007, Bason
and Anagnostopoulos 2015). Professional sport clubs and leagues, companies, teams and
athletes have a big role in societies when building CSR related programs and activities
(Babiak and Wolfe 2009).
Walzel et al. (2018) provide a profound literature review of studies of CSR in professional
team sport organizations. They argue that CSR is a permanent tool for team sport
organizations, and the discussion now is how to implement and plan CSR actions and
how to measure its effectiveness. According to them, CSR is a multidimensional approach
in team sports, and it has different outcomes depending on the status of the organization,
non-profit or profit-seeking. In addition, CSR must include legal and economic
considerations, not only socially driven actions. (Walzel et al. 2018). Babiak and Wolfe
(2009) identify the external and internal drivers of team sport organizations in terms of
socially responsible activities and present a framework to adopt CSR in professional team
sports. They identify four key factors that are different in team sport companies in
comparison to other industries, namely passion, transparency, economics and stakeholder
management. Passion in sport events is often very intense, and fan engagement to the
sport product can be very strong. Sport often receives economic support from the
community and therefore, the expected responsibility towards the society is high. Sport
organizations actions, including player salaries and public behavior, are often public
knowledge in media, and it is common for sport organizations to commit CSR actions
that improve their image. All these three are part of the complex stakeholder management
in professional sport industry, and these relationships can benefit from active CSR
actions. (Babiak and Wolfe 2009).
Breitbarth and Harris (2008) argue that the corporate social responsibility combined to
the football business increases its competitiveness, value and enhances its performance.
They develop a value creation model in professional football through CSR.
Professionalization of the football industry has brought new forms of partnerships and
growing opportunities to benefit from adopting CSR in their strategies. Football can
create financial, human, cultural and reassurance value for its stakeholders. By offering
different ways to use CSR tools for the stakeholders, the sport club can improve its
competitiveness in the marketplace and operational environment. They argue that CSR
can create value to the stakeholders through four different approaches, namely
integrative, functional, ethical and power related, and by doing so improve the
competitiveness, financial gains and institutional relevance. (Breitbarth and Harris 2008).
CSR provides new ways of engaging the stakeholders to the clubs and can be seen as one
of the tools to improve the financial performance, image and connection with the
surrounding society. CSR actions are what makes a team seem like a more profitable and
desirable partner in comparison to a sports team that does not engage in CSR. For a
potential partner, a sports team that has an image as an organization that aims at doing
good for the society has the potential to give their partner that same image if they were to
collaborate. Thus, sports teams engaging in CSR actions not only have more support from
the general public, but also a bigger potential to negotiate ideal partnership deals and can
so perform better.
Giulianotti (2014) connects corporate social responsibility in sports to neo-liberal,

strategic developmentalist, developmental interventionist and social justice policies. Big
corporations can be linked to all these different policies whereas team sport clubs are
mainly utilizing the developmental interventionists policies in implementing different
sport development projects, and social justice policies in campaigning for good causes.
The concerns of all CSR activities in sport are, according to Giulianotti (2014), whether
these actions and their benefits within the different policies can be measured and
evaluated. Technical, dialogical and critical issues need to be paid attention to when
developing CSR projects within sport organizations, meaning that all activities need to be
related with the organizations’ strategic goals, communicated clearly and reflected
critically. In sports CSR is often involved in multiple levels (i.e., organizations, events,
athletes and coaches) and affects different stakeholder groups, which makes it even more
challenging to manage. According to Walters and Tacon (2010) stakeholder management
in connection to society is one of the key aspects of CSR.
CSR through sports is examined by Levermoore (2010) and Smith and Westerbeek
(2007), and they explain how corporates can utilize sport organizations to achieve their
CSR objectives. Dowling et al. (2013) follow this approach and present how CSR through
sport is leveraged in sport mega events, and especially in London 2012 Olympic Games.
They argue that when the partners are right, objectives common, expectations suitable,
and initiatives are innovative and creative, both parties can benefit substantially. In
addition, Levermoore (2010) argues that sport has built-in social responsibilities that can
be used to utilize in developing CSR actions through sport. This is especially efficient
due to sports’ possibilities to create partnerships between organizations that would not
normally co-operate and sports’ ability to reach communities that other industries do not
work with (Levermoore 2010). Sport has unique opportunities to leverage sponsorship,
improve the brand, enhance employee relations, build community networks, and
influence in social matters (Babiak 2010). Sport has always been described as something
that unites people and that can also be seen when talking about CSR in the sport industry.
2.5 Internationalization and sport SME’s 51
Sports include people and communities that other industries do not, which makes CSR in
sport unique and more efficient than in many industries.
When discussing the phenomenon of sport entrepreneurship and CSR, the concept of
social entrepreneurship could be drawn into attention. In sport enterprises, social
entrepreneurship is often seen as functions of CSR, including economic, social, and
environmental impacts on society. Social entrepreneurship in sport has been defined
differently depending on the context. One of the earliest definitions of the connection
between social entrepreneurship and sport entrepreneurship was given by Ratten (2010b)
who defined that social entrepreneurship is the use of social issues to create change. In
the case of sport enterprises, that are often SME’s, the entrepreneur has a crucial role in
social entrepreneurship. A social entrepreneur is not only motivated by the profits, but
also by the possibility of making a social contribution (Audretsch 2012, Ratten 2010b).
Douglas and Prentice (2019) identify prosocial, profit, and innovation as the motivation
pillars of social entrepreneurship that can be related to commercial entrepreneurs who
wish to innovate, make profits and serve a social purpose, all of which relates to corporate
social responsibility. Social entrepreneurship is linked to intentions and promises of
improving social conditions in society (Aliaga-Isla and Huybrechts 2018) as well as to
empathy (Bacq and Alt 2018) and innovative ways to meet certain socio-economic needs
without necessarily making a profit (Shaw and Carter 2007). The importance of social
entrepreneurship is recognized widely in corporate culture as a part of its CSR (Shaw and
Carter 2007).
Social entrepreneurship in sport is often connected to small sport organizations operating

in the non-profit sector (Gilmore et al. 2011), but a social factor can also be identified
behind profit-seeking sport enterprises as well. Gallagher et al. (2012) identify social
entrepreneurs in professional league sport clubs as being entrepreneurs who bring their
experience and networks to use to help the club’s development. These social
entrepreneurs are often entrepreneurs in other companies, and they do only volunteer
work for small sport clubs. Social entrepreneurs focus on societal benefits by generating
a social impact through, for example, charity work. Social entrepreneurship can be studied
both from individual and organizational perspectives and divided into different schools
of thought according to the conceptualization of the phenomenon. The social impact can
either be made for altruistic reasons or with the hope of increasing the brand equity of the
company and entrepreneur (Shropshire 2012).
2.5 Internationalization and sport SME’s

Internationalization is one form of business growth, and businesses in the sport sector
internationalize in order to seek new markets beyond the domestic markets, for various
reasons. International movement of people, technological innovations, economical
investments, evolution in media production and value creation has shaped the
internationalization of sport industry, and more sport organizations are seeking to grow
in international markets (Zhang et al. 2017, 2). Internationalization in sport SME’s is one
way of exploiting entrepreneurial opportunities by creating new strategies and
implementing new operations or seeking new markets. In many cases international
markets offer new opportunities when domestic markets might have saturated or there are
no possibilities for growth (Zhang et al. 2017, 2-3). Sport businesses are interested in
international markets in addition to their local operations (Ratten and Ratten 2011), and
national leagues in major sports are seeking new income from internationalization
(Woratschek et al. 2018). For some sport organizations, internationalization can even be
a means to stay in business. If the demand of the domestic market has dropped due to new
sports coming in from abroad and creating new trends, international markets may also be
where they find a new customer base altogether.
Internationalization in sport business has become an interesting research topic lately due
to the globalization and rapid professionalization and commercialization of the sport
industry. The global marketplace has become available for all sport organizations due to
the overall development of globalization and growth of sport business sector.
Technological development, efficient communication, and transportation together with
the rapid development of sport industry have boosted internationalization. Global sport
politics have also been more visible already since the 1990’s, and more attention has been
paid to the global sport economy (Giulianotti 2015). This has impacted the sport
leadership, and all the decision makers on different levels of sport governance must be
prepared to face the change in the global sport industry and its image (Zhang 2017, 3).
This global trend in sport business, together with the development of international
leagues, has also given local sport businesses better possibilities to enter the international
markets. The overall globalization of sport business and especially sport teams can be
seen as a necessity caused by competition of consumers interest, growing salaries of
players and technological development (Richelieu 2012) together with the effects of
social media, Internet and integration of global economies (Horbel et al. 2020). The
overall sport market is growing globally, and sport teams and clubs are seeing a strong
growth in the future (9,1 %) (PwC 2019).
Small and medium-sized enterprises’ internationalization process is often dependent on

both, the individual owner-entrepreneur, and the organization. The international
orientation of the firms is related to the managers and entrepreneurs’ motivation to grow
(Oystein et al. 2016). In sport, internationalization can be described as being a network
approach containing formal relationships, alliances, and memberships of professional
organizations (Hynes 2010), which in sport often means global governing bodies and
international leagues. The market selection is related to the sport’s size in the global scale
and internationalization status. This kind of a ready network can save the scarce resources
of the SME’s (Hynes 2010). The globalization of sport has improved the possibilities of
different enterprises to internationalize. Visible evidence of globalization over time is the
diversity of athletes in teams, diminishment of religious and language barriers for
participation (Thibault, 2009), free movement of athlete employees in Europe (Bosman
ruling), the effect of broadcasting and social media, and the increasing interest of fans
2.5 Internationalization and sport SME’s 53
from around the world. This development has created new opportunities for sport
enterprises at different levels to expand to international markets.
The company’s life cycle stage affects the internationalization process and the choice of
markets to enter (Andersson 2004) together with different internal and external success
factors (Bose 2016, Hynes 2010). In SME’s the owner-entrepreneurs’ impact on the
internationalization process is remarkable (Andersson 2000, Mc Dougall and Oviat
1996), and companies with entrepreneurs actively seeking international opportunities,
communicating this motivation to the employees and developing resources to
internationalize are more likely to grow internationally (Oystein et al. 2016). This is a
plausible case in sport management when talking about sport SME’s and their
internationalization strategies. The team’s success, financial situation and operating
environment are industry specific factors that affect the enterprises’ willingness to
internationalize, but the driving force is often the owner-entrepreneur. However, in terms
of player movement, the impact of the entrepreneur is not significant due to the open
player markets. The impact of global media has boosted the internationalization and
globalization, but there is a big difference between developed countries and developing
countries in how to utilize the internationalization of sport (Thibault 2009). North
American and European sport organizations have been increasingly interested in selling
their products and services beyond their regional markets (Zhang et al. 2017, 4), and
therefore, there are more internationalization opportunities also for smaller team sport
companies in these areas.
In sport, the growing revenues from broadcasting, technological changes, the

entertainment function of sport, increased global fandom and capital investments in
infrastructure have boosted the internationalization of sport (Zhang et al. 2017, 3).
Internationalization offers new business opportunities and new streams of revenues, and
capitalizing on a strong sport brand can be very profitable for a sport organization
(Richelieu 2012), however, the latter applies only for bigger leagues and sports, such as
NHL, NBA etc. In the European level the Premier League has shown that the export of
national sport leagues can be very beneficial (Woratschek et al. 2018) and German
Bundesliga teams have extended their markets for example to China (Horbel et al. 2020).
In Finland, national leagues are quite small, and this kind of development is still on its
infancy and the focus is more on teams itself and their international opportunities.
Sport has become more and more a form of entertainment broadcasted in different ways
through media, which better brings it available for consumers in the global marketplace
(Richelieu 2012). Sport events have also become an important part of the economic
development of cities and their branding (Taks et al. 2013, Knott et al. 2015), and the
economic impact of international game events can be remarkable for the hosting city as
well as for the sport club, especially in smaller countries and cities. The international sport
event provides new entertainment experiences for fans and spectators, volunteers, players
and all the other stakeholders, but also possibilities for economic gains for different
stakeholder groups. Sport events can have many positive tangible but also intangible
effects on a host city. Something like an improved image as a tourism destination, after a
sports event, can be a huge factor for a smaller city’s development.
There are also managerial implications in internationalizing the sport teams or

organizations. Teams’ success, international popularity of players and the club, together
with the right choice of entry, seem to be the key factors in international markets
(Woratschek et al. 2018). Entry to international markets also requires personnel skills,
commitment to manage the new operations, effective leadership and a strategic plan
(Zhang et al. 2017, 5). In the case of smaller countries team sports, market entry is highly
dependent on international leagues and the possibilities to enter those. This is then
dependent on the team’s success and possibilities to make the necessary investments. The
national league’s support for the international efforts of sport club is essential for these
operations to succeed (Woratschek et al. 2018). In Finland this can be seen also the other
way round; when Finnish clubs manage to get popular foreign clubs to visit, the game
event often gains more media coverage, spectators, and sponsorship money.
Bose (2016) identifies the main success factors for SME’s internationalization to be
“internationalization scenario, future internationalization prospects, internationalization
competencies, and strategies for internationalization”. The internationalization scenarios
are based on the industry’s and other similar companies’ internationalization possibilities.
Prospect evaluation and implementation of opportunities together with efficient decision
making define the amount of success in entering the international markets. Utilization of
these prospects into action by management and entrepreneurs, create the competencies
for capacity building, development policy, strategic networks and innovations. Strategy
for implementation and evaluation, consisting of modes of internationalization,
destinations to target, right operational decisions and timing for internationalization, is
the key to utilize the opportunities scenario, prospects, and competencies the company
has. (Bose 2016). Different industries need to apply different strategies (Andersson 2004).
In growing industries, such as sport business, the internationalization process and the
logic of market entry is different. In high growth industries, the internationalization is
dependent on firm’s internal resources, knowledge of entrepreneurs and management,
networks in targeted market areas and strategic decision-making procedures (Andersson
2004). Branding strategies play a crucial role in sport teams internationalization and the
team can capitalize on it (Richelieu 2012), however in case of Finnish team sport
enterprises branding is still done mainly locally, not internationally, and
internationalization is highly dependent on international leagues, federations and other
networks.
55
3 Methodology and research data
3.1 On ontology and epistemology

A philosophy of science determines the frame of reference and research foundation for a
study. Ontological and epistemological assumptions are included when making the
appropriate methodological choices for collecting and analyzing the data. Ontology is
defined as a philosophy of how the social reality is viewed (Smith 2010, 7, Stokes 2011,
90), in other words, a way the researcher looks at the world. Realist ontology employs the
perceptions and presumptions of the existing reality, whereas in constructionist ontology
the reality is socially constructed and dependent on social influences and under constant
revision (Smith 2010, 8, Hallebone and Priest 2009, 26-27). A starting point for this study
was a constructionist assumption that a sport company can be seen as an intentional
organization and entrepreneurship as a desired developmental process in such an
organization. Since the studied phenomenon was defined as “What are the challenges in
entrepreneurship for small and medium sized team sport enterprises?” the ontology
focuses on the “what” question. According to Hallebone and Priest (2009, 27), reality is
socially constructed from individual cognitive processes and influenced by previous
experiences. Constructivism construes that people create the reality through their
everyday interactions (Stokes 2011, 23-24). In enterprises, the people working there
create the reality by applying their own experiences and knowledge.
When ontology is related to the researcher’s view of the existing reality, epistemology is
associated with the theory of knowledge. Epistemology defines the way how the
knowledge related to the reality in a particular context is understood and exploited
(Hallebone and Priest 2009, 45-47). Epistemology defines the methods used in the
research and guides the choices that the researcher makes along the way. The guiding
philosophical framework for this study was interpretivist epistemology. Interpretivist
epistemology aims at understanding and illustrating socially constructed realities by using
language-based methods, such as interviews (Hallebone and Priest 2009, 27). In
interpretivism, the focus is on people and how they describe the research phenomenon
and how they construct their world (Thomas 2013, 108-110).
In this kind of case study research, intimate information could be received only from those
tightly involved in the organizations. The main owners and managers were the best source
of data for explaining the studied phenomenon. In order to fully understand the
interviewees’ narratives and their meanings, absorption must appear within the
researched cases and the researcher. In this study, the worlds of the researcher and
interviewees encountered, and subjectivity in interpreting the data was prominent. In
interpretivism, the key is to understand the studied phenomenon (Thomas 2013, 108-110).
Theme interviews were conducted in order to gain in-depth understanding of the
interviewees’ experiences. In addition, the interview data and concepts from the literature
were explored in order to generate new insights into the topic.
56 3 Methodology and research data
3.2 Qualitative case study research

When studying a phenomenon of reality and society, such as a sport organization, case
study research is a particularly appropriate approach (Skille 2013, 161). In this study, a
qualitative approach was used together with the case study methodology, presented, for
example, by Yin (2014). The purpose was to combine information from theme interviews,
company strategies, annual reports and financial data. However, the main source of the
collected data was the interviews.
A qualitative approach is suitable when studying real-life cases aiming at understanding

what is happening in certain companies. In this study, the qualitative method was used
together with a case study research strategy. A case study illuminates the importance of
methodological decisions; why they were taken and how they were implemented, and
what the outcomes of these decisions were. (Yin 2014, 12). Case study research has lately
become more popular in sport management research, especially when researching sport
policies or sport organizations (Skille 2013, 161). Yin (2014) defines a case study as
follows:
“A case study is an empirical inquiry that investigates a contemporary
phenomenon within its real-life context especially when the boundaries
between the phenomenon and context are not clearly evident. A case study
inquiry copes with the technically distinctive situation in which there will
be many more variables of interest than data points, and as one result relies
on multiple sources of evidence, with data needing to converge in a
triangulating fashion, and as another result benefits from the prior
development of theoretical propositions to guide data collection and
analysis.” (Yin 2014, 16-17.)
With regard to this study, the boundaries between the phenomenon and the context have
not been identified clearly in previous discussions and research. This gave further support
to the choice of a qualitative case study approach. The literature review of previous
studies and theories acted as a base for the research approach and research question
formulation. The existing theories of entrepreneurship provided a framework for
analytically (not statistically) generalizing the results of this study, and they were used as
a template to compare the results from these studied cases. The aim of analytical
generalization could be to advance the existing theory or conceptualize a new theory that
arises from the results (Yin 2014, 40-43).
Since there is no previous research in this particular context to be used as a guide when
deciding the number of cases, i.e. the units of analysis, the decision was based on the
assumption that two cases would be sufficient for drawing an analysis, and for providing
deeper understanding than one case. In article III, another case from Sweden was included
to gain further understanding of the social entrepreneurship in football industry and to
consider the studied phenomenon in the Nordic context. Since the aim was to more deeply
understand entrepreneurial challenges in the chosen elite team sport companies, the cases
were carefully selected and discussed both as individual cases and presented by cross-
3.3 Method of analysis 57
analyzing the results from different viewpoints. According to Yin (2014, 57), two or more
cases that support the same theory may justify a literal replication of the theory.
The theory for this study was built by reviewing literature and constructing a synthesis of
previous entrepreneurship discussions related to the general entrepreneurship, growth
entrepreneurship and sport entrepreneurship theories together with insights on social
entrepreneurship and internationalization. The existing entrepreneurship theories provide
a wide theoretical framework for this study, and the chosen literature represents an
overview of the appropriate theories. Theory building based on case study research
attracts the interest of many researchers, since it creates new insights into diverse topics
(Eisenhardt and Graebner 2007). As the researched phenomenon in this study was a new
context of entrepreneurship, and as a new approach to study sport business was adopted,
the goal of analysis was, on the one hand, to expand entrepreneurship theories in the sport
business context, and, on the other hand, to more distinctly understand the characteristics
affecting entrepreneurial challenges in elite first league team companies. In this study, all
cases were analyzed separately, and they served as replications and could be contrasted
in their real-life context and, consequently, they expanded the emerging theory. Theory
building occurs in a cyclic process where the research data, literature and new theory
emerging from the results alternate. The highlight of theory building from case studies is
on developing propositions and on theories that can be later tested in mainline research
(Eisenhardt and Graebner 2007).
3.3 Method of analysis

The analysis approach used in this study was hermeneutical, and the study represents the
constructivist paradigm and interpretivist epistemology aiming at interpreting and
understanding the phenomenon of selected sport organizations’ entrepreneurial
challenges. Even though the unit of analysis was an enterprise, the data came from
multiple sources of evidence and, especially, from individuals’ personal experiences. The
focus was on the appearance of entrepreneurship in the companies and entrepreneurs’ and
managers’ perceived meanings attached to it. Hermeneutics involves the process of
interpretation. Hence, the context of the studied phenomenon, and the person conducting
the interpretation have an influence on the outcome (Stokes 2011, 55). Hermeneutics is
about interpretation of meaning and a phenomenon and the relationship between them.
Moreover, the reflections and prejudices of the interpreter must be identified. (Skille
2013, 163.)
In this study, the interviews were theme interviews, and the interviewees were asked to
speak about their own experiences and opinions. In this way, they could express their
viewpoints freely, and the themes were the guiding principles for receiving the desired
data. The analysis started from pre-understanding the whole picture during the interviews.
By transcribing the interview data, a detailed explanation of the phenomenon was
produced. The more detailed the description of the studied phenomenon, the better is the
understanding of the analysis. A researcher’s task is, according to Skille (2013, 165), to
first move from understanding to explanation and then from explanation to understanding.
The data was divided into categories according to the previous literature, and that logic
was followed throughout the analysis process of each article. The interview data was
processed and analyzed in order to interpret the information and to gain a comprehensive
understanding of the phenomenon in its context. The researcher’s own background: work
as a sport management lecturer, a former athlete and a volunteer worker, both in
administration and in the field in several sports clubs, could be identified as an influential
element when analyzing the interpretations. However, the theme interview approach was
chosen to let the interviewees speak freely and thus keep the researcher’s influence
minimal.
Previous literature was used to formulate a frame of analysis for the interview data.
Although a literature-based synthesis was used as logic in the analysis, especially in
articles I and II, new issues rising from empirical evidence were taken into account when
conducting the case analysis of the interview data. These new matters raising from the
interviews were further examined in papers III and IV. The analysis was generated by
following the hermeneutical approach from pre-understanding to understanding the
wholeness, and then creating a deeper understanding of the research phenomenon and its
parts. Hermeneutics can be seen as a process of interpretation and concerns the
understanding of the meaning of a text. In modern organizational research it is seen as an
epistemology and philosophy of interpretation (Prasad 2002). The hermeneutic circle of
interpreting the data in this study can be further illustrated as follows:
Figure 3.1: Hermeneutical process in this study

3.4 Data collection methods and measurement 59
Hermeneutic task aims at understanding what a particular text means (Myers 2013, 170),
and the term text can be expanded to mean organizational practices (Prasad 2002), not
just text itself. Hermeneutic circle emphasizes the interpretation of this text in its context.
Historical, social and cultural surroundings might have an effect in the contexts where the
information is interpreted (Stokes 2011). The hermeneutic circle describes the idea of a
dialogue where the interpreter moves from the whole to the parts and then back again to
the whole (Myers 2013, 171). The hermeneutic circle in this study refers to making sense
on the whole phenomenon and the relationships between the company, entrepreneurs, and
the challenges in sport business context. Hermeneutics as an approach to a particular text
is about understanding the complex whole by interpreting the preconceptions, meanings
of the parts and their relationships (Myers 2013, 185-186). In this study the understanding
and knowledge grew along the way and different aspects (parts) stand out from the
empirical data. The discussion between theory and data (from interviews and other
sources) influenced the choice of topics to study further in the attached articles.
3.4 Data collection methods and measurement
The first step in data collection was a one-stage screening process to screen all the major
league football (11) and ice hockey (14) companies in Finland, and to compare the data
that was available in public sources. All the companies in the football league and ice
hockey league were examined by screening their financial figures and entrepreneurial
positions. This selection aimed at finding companies where the entrepreneur was in a
decision-making position and these companies met the criteria of small and medium
sizedd company.
Research data was collected from two elite sport enterprises from Finland, HJK Helsinki
Oy (Helsinki Football Club Ltd) and JYP Jyväskylä Oy (Jyväskylä Hockey Team Ltd).
Since there are limited companies only in team sports in Finland, more precisely only in
the major leagues in ice hockey and football (and a few in basketball), the selection of the
possible growth enterprises for the study was very narrow. Both of these companies can
be identified to be small and medium sized companies (SME). The overall football and
ice hockey industry in Finland is dominated by SME’s when using the European
definition of a small and medium sized enterprise: turnover < 50 M Euros and < 250
employees.
In the Finnish football industry, the selection was clear since HJK Helsinki Ltd was
clearly the most successful of all corporatized first league clubs. It could be seen as the
only profitable and well professionalized first league football team sport enterprise. In the
case of ice hockey, there were multiple choices that met the set criteria. However, in some
cases the ownership issues were not very clear, and in some cases, variation in business
success within the research period was quite remarkable. JYP Jyväskylä Ltd had grown
steadily during the researched period. The environment where JYP operates is very
different compared to that of HJK, which gives this study a possibility to identify whether
this has had an effect on entrepreneurial challenges, and which makes this study even
more interesting.
The research data was collected case by case by using the theme interview method. In
both selected cases, two persons were interviewed: the managing director, representing
the operative management and the entrepreneur/owner/chairman, representing leadership
and the organization’s board. The board is otherwise based on voluntarity and small share
ownership. As mentioned earlier, the number of companies was only two (and a third one
only in article III), which was justified because in a qualitative study there is no right
number of cases. A more important objective than the number of cases was limiting the
data and building a contextual understanding of the studied cases (Eskola and Suoranta,
2008, 60-65). With a straightforward theoretical background and lesser need of certainty,
two or three cases for a case study approach is sufficient (Yin 2014, 56-65).
3.4.1 Interview approach

The interviews were the primary sources of evidence in this study. By interviewing the
key persons in these sport enterprises, the knowledge of the characteristics affecting
entrepreneurial growth was possible to identify. Since this research was qualitative by
nature, the interviews were conducted case by case, and the understanding of the
theoretical framework developed during the interview process. Theme interviews were
selected as a tool for this study for numerous reasons. Firstly, the phenomenon of top elite
sport entrepreneurship has not been studied widely, and the possible outcomes were
highly unpredictable. Secondly, the form of theme interviews gives the researcher the
opportunity to add supplemental questions during the interview if needed. The third
reason for this choice was the interpretivist approach of the study. There was no
hypothesis aiming to test theory. Instead, the research aimed to explain concepts that
emerged from the interviews, literature and the companies’ reports as well as to interpret
the meanings behind them in order to understand the entrepreneurial growth in these
cases. Moreover, the aim was to create new insights into the entrepreneurship theory from
the sport business perspective by highlighting different approaches in the articles. When
using the case study methodology, the main source of data is usually interviews, and they
are often more guided conversations than structured interviews (Yin 2014, 111-113). In
case study research that aims to build new theory, qualitative interviews together with
other sources, such as history reviews or archives, are the most commonly used sources
of data (Eisenhardt and Graebner 2007).
A theme interview is an intermediate form between a structured and open interview, and
it is widely used in qualitative surveys since it is in accordance with many of the points
of departure in the qualitative approach (Hirsijärvi et al. 2006, 197). The aim of the
interview structure was to collect information according to the line of research as well as
to gain information that was unexpected. Previous literature served as a basis for forming
the theme interview outline. The theme interviews in this study were headlined under
certain themes according to the entrepreneurship literature, meaning that they were
3.5 Validation of the study 61
guided by certain topics drawn from previous studies and the theoretical framework. The
theme interview method was chosen because it allowed the researcher to focus on certain
aspects of the studied phenomenon. Moreover, it gave some flexibility for listening to the
interviewees in the interview situations and giving them a chance to speak freely. All the
interviews were approximately 90 minutes long.
Maxwell (1996, 78) indicates possible data analysis methods in qualitative research to be
memos, categorizing strategies and contextualizing strategies. In this study, the main data
processing was based on coding and categorizing. All the interviews were digitally
recorded, transcribed verbatim and then coded and categorized by using the NVivo data
analysis program. Coding categories in a qualitative study can be drawn from both the
theoretical framework and collected data (Maxwell 1996, 79). In theoretical categorizing
the data is analyzed by using concepts and classifications created on the basis of theory
(Kananen, 2011, 61). As the aim was to understand and describe the characteristics
affecting growth, the actual analysis started from listening to the interviews and reading
the transcriptions and continued by coding the data. By listening to and transcribing the
interviews, a pre-understanding of the studied cases was formed. An essential history of
both cases based on their history publications was written before starting the actual
analysis so as to gain a comprehensive understanding of the selected cases. The analysis
was conducted by, first, positioning the interview data into these categories and sub-
categories and, secondly, by analyzing the data from these cases and the literature review.
The interview data was supplemented with other sources of evidence. The public sources,
such as the Trade Register and the sources of economic journals, were used to collect the
financial information about the industry and the football and ice hockey first league
companies. The chosen cases were then examined in more detail before creating the main
data collection procedure and the interview outline. Other sources, such as the companies’
annual reports, strategies, income statements, balance sheets, web pages and history
publications, were used together with the interview data in order to form a complete
picture of these cases. According to Yin (2014), when conducting a case study, the
researcher should use multiple sources of evidence, create a database for the case study,
always maintain a chain of evidence and be critical of what data sources to use (Yin 2014,
118-127). The electronic sources that were used were the web pages of these two
companies and the national football and ice hockey leagues.
3.5 Validation of the study

In a quantitative study, the validation procedure often contains the validation of reliability
and validity. Reliability measures whether the same results could be achieved if the
research was to be repeated later on. Validity measures whether the findings truly reflect
the phenomenon, and whether they could be generalized to a larger population. In a
qualitative study, such as this study, these concepts are not as clear as in a quantitative
survey and therefore not as easy to measure. In a qualitative study the question of
validation becomes simplified into the soundness of the research process (Eskola and
Suoranta 2008, 210). Instead of considering reliability and validity, the validation of the
research can be examined by utilizing the concepts of trustworthiness (Lincoln and Guba
1985, 290) and authenticity (Veal and Darcy 2014, 50). Trustworthiness includes
credibility, transferability, dependability and confirmability, whereas authenticity
designates fairness and ontological, educative, catalytic and tactical authenticity (Veal
and Darcy 2014, 50). The validation of this study is further discussed and analyzed in the
discussion section.
63
4 Summaries of publications
4.1 Publication I; The importance of entrepreneurship in small and

medium-sized sport enterprises
AIM AND BACKGROUND
The aim of this paper was to discuss the importance and different aspects of
entrepreneurship in the sport context, especially in small and medium-sized sport
enterprises. The paper introduces some basic definitions of entrepreneurship and connects
entrepreneurship with sport in SME’s. Sport business in Finland has gone through major
changes in the past few decades. Sport organizations have shifted from non-profit to profit
seeking businesses. Public sector funding is decreasing, volunteerism slightly
disappearing and commercialization growing in the global sport industry. This is further
illustrated with a short team sport SME case of Finnish ice hockey.
Entrepreneurship and sport business is a combination that will have a remarkable role in
the future. In Finland, the sport business sector is still mainly run by municipalities and
non-profit organizations, and this trend has been changing recently since the public
funding for sports is decreasing. Sport is not a very international phenomenon, especially
in the business field in Finland, even though Finns have won several Olympic and World
Championship medals and sport is very visible in the Finnish media (Heikkala 2009). Top
level sport in Finland became an area of business only in the 1990’s with the message
from community was that professional sports could not identify themselves as non-profit
organizations any longer, and professional leagues in ice hockey were identified as profit
seeking businesses. Non-profit sport associations became businesses or at least a part of
their operations, the national league teams, had to become firms. (Rosbäck 2012).
Entrepreneurship can be connected to Schumpeterian (1934) innovation-based school of

thought and Shane and Venkataraman’s (2000) opportunity recognition school of
thought. Sport entrepreneurship has been identified as sport organizations acting
innovatively in a business context (Ratten 2010a; Ciletti and Chadwick 2012). Sport
entrepreneurship is connected to risk taking, innovativeness and proactiveness (Ratten,
2012) and sport entrepreneurs’ motivation often raises from other than monetary aspects.
Due to the commercialization and professionalization of sport business, it offers multiple
business opportunities for capable entrepreneurs. Entrepreneurs have been seen
opportunity-seeking, creative, self-confident, risk tolerant (Timmons and Spinelli 2009)
and able to operate in a turbulent environment. These characteristics are easy to connect
to sports as well. Opportunity recognition plays an important role especially in small and
medium-sized sport enterprises due to the changing industry environment.
Professionalization has created the need to commercialize different functions within the
non-profit organizations and establish new companies. Entrepreneurs’ role is often
remarkable in SME’s and their personal skills and resources are important in developing
their companies. Entrepreneurial resourcefulness combines the individual’s personal
skills and behavior to recognize and exploit opportunities in a successful manner (Misra
and Kumar 2000). Sport entrepreneurs are often strongly connected to the sport they are
involved in. Sport also generates big emotions amongst its stakeholders, entrepreneurs
included, which is a special feature in the sport business.
MAIN FINDINGS
Professionalization and commercialization have created a need for sport entrepreneurs in

the sport business sector. Opportunity recognition and capability of exploiting them play
a crucial role in the Finnish elite sport sector. The dominant design of the team sports
industry changed at the turn of the century and top teams have established limited
companies to replace the non-profit organizations. This development has continued ever
since.
The markets are limited in a small country like Finland and the overall industry structure
lies on small and medium-sized enterprises. The case example, JYP ice hockey team,
became an entrepreneurially driven company at the turn of the century when the whole
industry changed. JYP’s owner-entrepreneur was highly motivated and had a strong
passion for ice hockey when exploiting the opportunity to become a sport entrepreneur
and ice hockey team owner. The fast-changing operational environment required
entrepreneurial orientation, risk taking, innovativeness, creativity and resourcefulness.
The monetary returns were non-existent and the possibility to make a social contribution
was one of the motivating factors for the entrepreneur.
Entrepreneurship has been the corner stone for JYP’s development. JYP is a typical SME
and the entrepreneurial orientation on all levels has been important for its success. The
special nature of sport business, the uncertainty of the outcome, high risks in player
employment, short termism in the operational planning and strong role of the owner-
entrepreneur are all characteristics of sport SME’s.
CONTRIBUTION
This paper acts as a starting point for the future research in sport entrepreneurship in the
Finnish context, and especially in team sports. It is obvious that entrepreneurship is more
needed in the sport sector due to its professionalization and commercialization. There are
multiple characteristics that are common in entrepreneurship in SME’s and sport. The
importance of entrepreneurship and the role of the entrepreneur is vital in these kinds of
sport SME’s where the market is limited and where operations need to be run in a fast-
changing environment. The sport sector offers multiple opportunities in Finland and
possibilities for starting new businesses are high for capable entrepreneurs. Sport
entrepreneurship is a growing phenomenon and it needs to be further studied from
different viewpoints.
4.2 Publication II; Entrepreneurial growth in elite team sport SME’s in Finland 65
4.2 Publication II; Entrepreneurial growth in elite team sport SME’s

in Finland
AIM AND BACKGROUND
This paper concentrates on entrepreneurial growth in elite team sport business companies
in Finland. Entrepreneurship and entrepreneurial growth has been topics of discussion
amongst sport policy makers in Finland, as well as an emerging discussion topic in the
field of economics. The aim of this paper was to describe entrepreneurial growth in team
sport SME’s and identify what has influenced their growth paths.
The theoretical background of this study consists of different theories of growth

entrepreneurship and sport entrepreneurship. The development of SME’s growth starts
from the recognition of entrepreneurial opportunities in the sport business and
entrepreneur’s personal skills. Entrepreneurship can be described as a process which goes
through different stages of growth and an entrepreneurial career. By analyzing the
outcomes of the most important epoch-making events in enterprises’ career the results
explain particular factors why and how these businesses have grown.
In SME’s, strong entrepreneurs often create and determine the organizational culture,
especially in sport companies, and therefore, the individual level strongly affects the
organizational level. An important aspect of successful growth entrepreneurship is the
recognition of entrepreneurial opportunities, and exploitation of them (Shane and
Venkataraman 2000). This together with entrepreneurs’ individual characteristics, such
as personality issues, experience background and know-how (Ray 1993) enable the
successful growth. In addition, Osborne (1993) argues that the business concept and its
functionality are the main agent for company growth.
Ratten’s (2011a) theory of sport-based entrepreneurship stresses the special nature of

sport entrepreneurship and the importance of individual entrepreneurs. Cilletti (2012)
connects sport entrepreneurship with the same characteristics as traditional
entrepreneurship by identifying sport innovations, risk taking and proactive nature to be
substantially entrepreneurial. Entrepreneurial orientation, including innovativeness,
proactiveness, risk tolerance, competitiveness and autonomy (Kreiser and Davis 2010,
Lumpkin and Dess 1996) together with entrepreneurial opportunities that exist in the sport
business create sport entrepreneurship. However, entrepreneurial individuals willing to
pursue these activities are widely needed in order to develop sports related organizations
(Chadwick and Cilletti 2012, Ratten 2011a, Santomier 2002).
MAIN FINDINGS
The findings of this paper were interpreted by using the developed sport entrepreneurship
growth model of three different growth entrepreneurship approaches: growth ability,
growth opportunity and growth orientation. Growth ability, including industry-specific
characteristics, organizational and individual resources and working environment seemed

to be the basis for entrepreneurial growth. Access to resources, such as financial, social,
experiential and human capital were important reasons in changing the business from
non-profit to a company model. Fast changing operating environment and the industry-
related issues, such as uncertainty, short termism and risk taking, also had a significant
impact on growth.
The development of the growth in these team sport SME’s had started from the
recognition of entrepreneurial opportunities. New business opportunities appeared within
the existing business and outside the core business. Internationalization, stakeholder value
creation and developed sponsorship models provided new possibilities within the existing
business, whereas, the utilization of the existing facilities and creative new business
ventures offered entrepreneurial growth opportunities outside the core business functions.
Growth orientation was the sum of individual efforts but also the organizational features.
External environment and policy makers’ influence created a favorable business
environment and growth atmosphere. This in connection with internal strategic actions,
future orientation and intensive development, together with entrepreneurs’ determination,
progressed the growth orientation. The studied entrepreneurs had characteristics of social
entrepreneurs due to their motivation and passion for their sport without expectations to
financial contribution. They were capable of taking big financial risks in terms of sporting
performance success and employment. Their entrepreneurial experience and know-how
proved to be important to the growth of these sport companies.
CONTRIBUTION
This paper gives new insights into sport the entrepreneurship discussion by combining
traditional growth entrepreneurship theories with sport entrepreneurship theories. This
paper contributes especially to the discussion of growth in small and medium-sized
enterprises in the team sport business sector. This discussion is rather small even in
international comparison even though growth entrepreneurship is a growing phenomenon
in policy makers’ interests. Sport business is a fast-growing industry area in the global
context and offers multiple business opportunities. This study states that there are certain
identifiable characteristics that have affected the entrepreneurial growth in these studied
cases. As the sport entrepreneurship sector has been researched very little, this paper gives
some insights to the discussion. However, this is limited to the team sport context and
Finland, and cannot, therefore, be widely generalized.
4.3 Publication III: Social entrepreneurship and corporate social responsibility 67
in team sport clubs
4.3 Publication III: Social entrepreneurship and corporate social

responsibility in team sport clubs
AIM AND BACKGROUND
This paper discusses one of the growing trend in sport entrepreneurship, namely social
entrepreneurship. The focus of this paper is on the entrepreneur and his/her role as a social
entrepreneur. This is connected to the so-called triple bottom line of corporate social
responsibility (CSR), in other words, economic, environmental and social issues in sport
context. The case examples of this study are both from football industry, one from
Sweden and one from Finland. Football has been one of the leading sports in adapting the
CSR in its actions. Case examples from two different Nordic countries within the same
sport give interesting insights into the subject. Nordic countries face similar challenges
in terms of sport entrepreneurship, and their market situation is quite similar.
Social entrepreneurship in sport is often connected to the society and small sport clubs in
non-profit sector bringing innovative solutions to social problems (Gilmore et al. 2011).
Social entrepreneurship can occur also in for profit businesses where the entrepreneur
behaves as a social entrepreneur and the company brings benefits to the society. Social
entrepreneurs in professional league sport clubs can be identified as being individuals
who help the development of the club and bring their previous experience and network to
use. They offer their knowledge of business and professional skills to the club, which
helps its development and growth. (Gallagher et al. 2012). These social entrepreneurs are
often entrepreneurs in other companies and do only volunteer work for small sport clubs.
However, there are often owner-entrepreneurs in sport clubs, non-profit or company-
based, who also have social goals to meet in their entrepreneurial actions. Sport
entrepreneurs motivation to become entrepreneurs and they ability to recognize
opportunities can be affected by social goals. Social entrepreneurship can be used as a
marketing tool for sport SME’s (Gilmore et al. 2011).
Sport organizations have the responsibility to act to improve individual wellbeing and
offer benefits to the society, and at the same time the amount of sport organizations
practicing CSR has increased (Ratten 2011b). Different stakeholders in sport companies
expect more CSR activities, and it can be an important development tool for the sport
club in terms of sponsorships and partners. Many partnering organizations see sport clubs
as a form of implementing their corporate social responsibility. CSR can be applied in
sport and through sport, the first meaning the different CSR actions implemented in sport
organization and the latter referring to sport organizations used as the channel for
communicating CSR activities (Breitbarth et al. 2015). Corporate managers and sport
managers can use sport as a vehicle to implement CSR (Smith and Westerbeek 2007).
MAIN FINDINGS
Both of the case example clubs are involved in multiple CSR actions and they meet the
definition of social entrepreneurship. They are engaged in youth programs, environmental
sustainability enhancement, career development programs and promoting social
integration. CSR programs run by these clubs are important for their brand equity and
promotion. Soft values in relation to youth and sports have gained more attention from
sponsors in the past few years, and therefore, those are important actors in attracting
sponsors and other stakeholders. Value creation for different stakeholders has been
implemented through social, environmental and financial impacts, the triple bottom line
of CSR actions. The operating environment and Nordic sports culture play a role in these
clubs’ CSR actions as well as regarding, for example, environmental issues which are
self-evident in these countries.
The role of the key actors, such as managers and entrepreneurs, is to be the driving force
in these team sport enterprises in conducting different social projects. The impact on the
stakeholders and brand equity is evident, but altruistic motives can be identified behind
these actions as well. Career development, support for youth athletes and children’s
projects are good examples of non-commercial CSR actions which benefit society and
give possibilities to the less fortunate people in society.
CONTRIBUTION
This paper contributes to the discussion of social entrepreneurship in small and medium-
sized team sport enterprises. Social entrepreneurship and CSR in sport have been
emerging discussion topics (Breitbarth et al. 2015, Ratten 2011b, Miragaia et al. 2017),
and different conceptual aspects have been studied, but little empirical evidence is
available, especially regarding small and medium-sized sport enterprises. Social
entrepreneurship and corporate social responsibility are growing trends in the sport
industry, and sport enterprises are expected to benefit society and create positive impacts
on community in terms of economy, environment and society.
4.4 Publication IV: Strong entrepreneurial focus and internationalization – the 69
way to success for Finnish ice hockey: the case of JYP ice hockey team
4.4 Publication IV: Strong entrepreneurial focus and

internationalization – the way to success for Finnish ice hockey:
the case of JYP ice hockey team
AIM AND BACKGROUND
The aim of this study is to illustrate how international influences from North American
Hockey League (NHL), Kontinental Hockey League (KHL) and Champions Hockey
League (CHL) have affected the development of Finnish ice hockey in its
professionalization process. This is studied through the phenomena of sport
entrepreneurship and internationalization in one successful Finnish Ice Hockey Club, JYP
Hockey Team, by demonstrating its development from a small town ice hockey club to
multiple time Finnish Champion and European Trophy (2014) and Champions Hockey
League (2018) winner.
The development of European ice hockey has been heavily impacted by North America
and NHL (Backman 2018). Söderman (2016) connects democracy, gender equality and
social integration closely to the development of ice hockey in Nordic countries.
Ice hockey has had an important effect on sports culture in Finland and it is so far the
most professionalized sport (Lämsä, 2012). The National Ice Hockey league was the first
league to commercialize in Finland, and it has become the most widely followed sport in
terms of spectator numbers and media coverage. Internationalization has played a
remarkable role in this business development. The internationalization process of Finnish
ice hockey companies has been influenced, first, by the NHL and the KHL (Backman,
2018), and later by the CHL. Ice hockey commercialized fast at the turn of the century,
and clubs’ operations divided, as the first league teams became entrepreneurial driven
organizations, and the non-profit nature changed into profit seeking businesses, whereas
juniors and women remained non-profit.
Entrepreneurship is a growing phenomenon in sports in Finland due to the recent

commercialization. Sport entrepreneurship can be divided into three main aspects;
innovation-based, business formation and opportunity recognition (Ratten 2018) which
was the framework used in this paper to identify the internationalization effects in JYP’s
entrepreneurial development. Innovation-based entrepreneurship refers to constant
change in the marketplace, which in sport is very fast. Innovations in this model are
identified as new ways of remaining competitive, which are in this case the
internationalization and new business opportunities. Business formation means changes
in the business structure when exploiting and achieving the new opportunities.
MAIN FINDINGS
One of the turning points for JYP was the transformation from a non-profit organization
to a profit seeking enterprise at the turn of the century. The dominant design of the whole
industry changed due to commercialization and governmental changes. This change in

the business model made decision making and risk taking easier and JYP was able to
develop its business functions together with team development. At the beginning of the
entrepreneurial path, JYP created an innovative business strategy, took high risks in terms
of the player budget and acted proactively to secure its facilities. One big part of JYP’s
success has been the monetary and operational influences of international ice hockey
leagues. Internationalization has affected both the financial returns and team
performance.
The NHL has especially influenced the business model of JYP but also its player roster.
Over ten players have transferred to the NHL, and the same number has been sold to the
KHL. The KHL has, overall, been an important actor in the Finnish ice hockey markets
for the past decade in terms of financial returns. The first player sales in 2008 confirmed
JYP’s position as a profitable organization and gave it the necessary investment
possibilities to develop its business further. JYP has sold players to the KHL even though
it has recognized the risk of selling its success together with the best players. However,
the KHL market has been declining in the past few years, and its importance today is also
declining. Later, the importance of the European markets and the CHL has grown. The
CHL has provided opportunities in terms of more game events and sales, brand awareness
and player development.
Another aspect in this development has been the owner-entrepreneur’s international

orientation and willingness to expand. The aspects introduced by Ratten (2018) in relation
to sport entrepreneurship, namely, innovation-based, business formation and opportunity
recognition can all be connected to internationalization. However, opportunity
recognition plays a crucial role in terms of clubs identifying opportunities within the
international markets, both regarding international games but also player sales.
In the future, international markets in the ice hockey business can be expected to grow
due to internationalization, technological development and expanding marketing
possibilities. This gives opportunities for those clubs that qualify to play in international
leagues. Future challenges for the Finnish clubs and the National Ice Hockey League are
to keep the quality of the games at a high level, attract star players and find new innovative
ways to improve the whole industry. Innovations in terms of strategy and improved
operations, such as customer services and digitalization, have been a cornerstone of JYP’s
success. JYP can maintain its position by investing in its players together with developing
its business functions both locally and internationally.
CONTRIBUTION
This paper contributes to the discussion of sport entrepreneurship and internationalization

in the ice hockey business. Internationalization was identified as one important segment
in entrepreneurial growth. As sport business is a globally growing industry, this case study
brings this development into the local club level. The number of countries playing ice
4.4 Publication IV: Strong entrepreneurial focus and internationalization – the 71
way to success for Finnish ice hockey: the case of JYP ice hockey team
hockey on a national and international level is increasing, and international markets can
be expected to grow. This study gives new viewpoints and understanding in the process
of the internationalization of a small and medium-sized sport enterprise. This aspect has
not been discussed to a great extent in the European ice hockey context even though the
European Ice Hockey League has strongly developed its series.
73
5 Conclusions
5.1 Discussion
5.1.1 Sport entrepreneurship in team sport SME’s

Despite the fact that the studied two Finnish enterprises represent different sports and
operate in different market areas, there are still many similarities in their entrepreneurial
paths. Both interviewed entrepreneurs can be seen as Schumpeterian (1934) innovators
but at the same time modern social entrepreneurs. They operate in wide networks, they
carry the social and economic responsibility for their company and their youth teams and
the society. In addition, both of the Finnish team sport entrepreneurs have established
their companies by recognizing an opportunity to be involved in the sport business.
Whether this was caused by the change in the industry’s dominant design or their passion
for their sport, can be further discussed.
The entrepreneurs themselves are as important as the companies for their success and
business performance. Timmons and Spinelli’s (2009) core and desirable entrepreneurial
attributes are easy to identify in these entrepreneurs. They both show deep commitment
and determination to their sport companies by stressing the importance of having passion
for their sport and the sports industry as a whole. They both have a high tolerance of risks
and they are able to bear the uncertainties of the industry. They have both taken big risks
in terms of hiring expensive players, organizing sporting events and recruiting the key
personnel. They have the motivation to excel, and their motivation is not driven by
money, but more by the enthusiasm for their sport. It is difficult to position sport
entrepreneurs into a certain model presented by Cunningham and Lischeron (1991) but
there can be seen characteristics from the “Great person school” and “Leadership school”.
The team sport entrepreneurs are persons who have strong intuition, and they are also
motivating leaders of people. In such a turbulent environment as the elite team sports
industry, self-confidence and decision-making capabilities together with those of
delegation are very important skills for leaders and managers.
The decision-making process in these kinds of elite team sport companies contains the
elements of effectuation logic introduced by Sarasvathy (2008) when the set goals can be
changed according to the changes in business situations and the environment. This logic
starts from the entrepreneur’s know-how, skills and experience and extends to
interactions with other people and requires a strong stakeholder commitment. This logic
can be applied to these team sport companies since the importance of the entrepreneurs’
role, networks (spectators, fans, volunteer etc.) and stakeholder commitment (sponsors)
is evident. The uncertainty of the sport business environment supports the use of
effectuation logic, and the need for quick decisions and constant change is stressed by the
entrepreneurs.
74 Conclusions
Both companies are in the maturity stage in their lifecycles, and they have settled their
positions amongst the top Finnish ball game companies. Due to the seasonality of the
industry, short-term decisions and solutions are often required together with long-term
strategies as stated by Moore and Levermore (2012). Seasonality causes challenges,
especially in terms of finances; the operating costs are mainly stable, but the income might
differ highly during the season or in different seasons. The entrepreneurs’ commitment,
learning and know-how are required characteristics for controlling the unpredictable
future. Their personal role in creating and effectuating the business operations and
committing the shareholders and other network members is essential. In all these cases,
the entrepreneurial orientation dimensions, namely, innovativeness, risk taking,
autonomy and proactiveness (Kreiser and Davis 2010) define the firm performance and
are influenced by the sport business industry’s environmental dynamism. Sport
entrepreneurship in these kinds of team sport SME’s is the combination of motivated and
capable entrepreneurs, a good business structure and a suitable operating environment.
5.1.2 Entrepreneurial growth in sport SME’s

Growth entrepreneurship in sport is divided into three different approaches in this study,
namely growth ability, growth opportunity and growth orientation. The growth ability is
affected by the environment, sport industry specific issues and company resources.
Uncertainty of outcome, emotional involvement, volunteer workers and the sport events’
unique nature are commonly mentioned as industry specific issues. The tolerance of
bearing risks is high, yet the control of the risks is also tight and manageable. The
entrepreneurs highlight the risk management together with the ability to bear the pitfalls.
Innovativeness and proactiveness occurs in many areas of this intriguing business, for
example, in sponsorship deals, new product development, stakeholder advertising and the
use of social media. Sponsorship is a unique element in sport business, and it rarely occurs
in other businesses. It is essential in sport companies’ operations, and it represents a
remarkable share of their annual turnover. Sporting companies have become their
sponsors’ media, and they offer different services and possibilities to gain competitive
benefits from the partnerships.
Growth ability in the team sport industry has been somehow context specific. On the one
hand, central associations whose actions have influence on all teams govern the operating
environment in Finland, and on the other hand, the change in the whole sport industry’s
dominant design has affected the business and growth. Most of the actors in the sport
industry in Finland are still non-profit organizations, but the trend has been shifting quite
rapidly towards professional business companies. The policy makers have supported this
development of change in the dominant design of sport industry, and this has created a
positive operating environment and encouraged the professionalization and business
creation development.
The international markets in terms of games and player sales have become essential in
the future development and ability to grow for the companies. Player sales generate
revenues and give financial resources to develop the business further. Although the
75
importance of international markets is emphasized, also the importance of domestic

business development is underlined, meaning the sponsorship media, better use of
facilities and service development. As defined by Woratscheck et al. (2014), a sporting
event is the platform where different stakeholders create value. These sport clubs and
their events could be described as environments for creating value. They are their
sponsors’ media for visibility and their fans home base where they can feel social
inclusion. Moreover, they offer entertainment to the stakeholders and a place to enjoy the
atmosphere and services.
Growth opportunity starts with the recognition of business opportunities, and it is

influenced by the business environment where the enterprise operates, together with
individual attributes (Shane 2000, Shane and Ekhardt 2003). The characteristics affecting
the growth opportunities include clear growth strategies, human capital, performance
success in the field and in business as well as effective leadership. As sport business is
regarded as a fast-changing industry, entrepreneurs are expected to be innovative, willing
to take risks and capable of identifying and exploiting business opportunities. The
emphasis of exploiting business opportunities in these cases has been, on one hand, in a
value creation process for the shareholders, and, on the other hand, in entrepreneurial
capabilities.
Even though sporting success is not a measurement criterion for a growth enterprise in
sport business, it has been essential for the opportunity to grow in these cases. The role
of uncertainty plays a crucial role in the sports industry, since the outcome of a game is
always uncertain, and it might have a great impact on the organization’s sporting
performance and business success. Without success in sport, it is very difficult to attract
spectators, sponsors or other stakeholders. Sponsoring partners are often more attracted
to successful elite sport companies than the non-successful ones. However, success in
itself is not sufficient for attracting stakeholders or partners since sporting companies
must have the business knowledge to offer marketing solutions that bring real benefits
and meet the right target groups of their sponsors. Successful sponsorship deals are a
vital condition for the studied companies’ growth since their revenue share of the business
is remarkable.
These studied companies have well-functioning business systems (Osborne 1993) led by
entrepreneurially oriented managing directors and committed owner entrepreneurs. The
key personnel in the administration have all been with the company for several years,
which indicates that the recruitments have been successful, which is according to Poufelt
(2007) one of the key functions in business growth. He also emphasizes the effect of a
skillful executive board with members from outside the firm, which is also the case in
both of the studied firms. Innovation and motivation to grow are competitive advantages
(Hyrsky and Lipponen 2004) for these companies. Opportunity recognition and
exploitation require both an entrepreneur who is willing to go ahead and an
entrepreneurially oriented management as well as sufficient organizational characteristics
to support the actions.
76 Conclusions
Entrepreneurial orientation is often supported by a dynamic environment and a clear

organic structure (Kreiser and Davis 2010). Proactiveness, innovativeness and risk taking
are identified to be necessary characteristics of sport entrepreneurs (Ratten 2010a). The
entrepreneurs and managing directors are all very entrepreneurially oriented, and they
highlighted the importance of creativity and innovativeness in their businesses, together
with the importance of proactive working in terms of competitive advantage in
sponsorship development, shareholder commitment and new business development. As
Kreiser and Davis (2010) also state, entrepreneurial orientation is a summary of company
and individual behavior. A growth strategy at an early stage of their company lifecycle
and a specified vision where to be in future in terms of sporting success and company
development are important elements of the growth orientation in team sport SME’s. The
management’s attitude towards growth was very positive, which according to Wiklund et
al. (2009) is, together with entrepreneurial orientation and environmental dynamism, the
most important construct of small business growth.
Organic structure with a high level of resilience in decision making, open operational
policy and an efficient communication, are according to Kreiser and Davis (2010)
essential for profitable growth performance. The firms in this study have grown
organically by developing their operations. Moreover, their ownership issues are very
clear, the main owners are the entrepreneurs and chairmen of the boards, and thereby,
they have the authority to make decisions. This clarifies the daily operations and allows
flexibility in decision making, which is required in a turbulent sport industry environment.
The entrepreneurs’ individual characteristics, such as previous know-how and
experiences, management attitude, together with company resources have all contributed
to successful growth.
Business growth and sporting success seem to be somewhat compounded in these cases,
but it is only one function affecting possible business growth, and its effect on growth is
difficult to measure very accurately. The characteristics affecting business growth in sport
SME’s are multifaceted and complex, but the entrepreneur has a significant role in the
entrepreneurial growth. However, without the right abilities, business opportunities or
entrepreneurial orientation growth is not likely to happen. In other words, all the three
dimensions, growth ability, growth opportunity, and growth orientation, must exist if a
sport enterprise wants to grow its business. The characteristics within these approaches
might differ between firms, depending on the context and operating environment.
However, entrepreneurial growth in team sport enterprises seems to be a sum of different
characteristics rather than caused by just certain elements. It can be described as a process
where multiple characteristics affect each other and the outcome at its best is successful
business growth.
5.1.3 Social entrepreneurship in team sport companies

Social entrepreneurship in sport has become an important aspect in the past years. Social
entrepreneurship can be viewed from two different perspectives, from that of the company
performance or the entrepreneur’s actions. Social entrepreneurship is one part of the
77
corporate social responsibility culture (Shaw and Carter 2007) and an important part of
many partnerships in sport companies. According to Ratten (2010b), skillful business
executives and entrepreneurs work for sport enterprises in order to make a social
contribution to the sport and community instead of having monetary motives. Therefore,
it can be said that the entrepreneurs are not motivated by the profits, but by the possibility
to make a contribution to the community. This can be their willingness to support the
junior teams, create different charity events, contribute to the surrounding society and to
offer their business knowledge and professionalism for the club’s development and
growth. The passion for sport and the passion for growth could both be seen in these cases
as socially driven motivations to be involved in sport business. Sport entrepreneurs are
motivated by the intangible results, such as the feelings of winning, the possibility to
make a social contribution or the special atmosphere in the stadium. Profits are minimum
and the entrepreneurs’ own returns are not significant.
The operating environment, meaning mainly the home cities, is important in terms of
spectators, fans and game events. The attitude and commitment that the surrounding
society holds towards the sport and the club were seen to be essential. The local media,
municipality and decision makers have a significant effect in building the brand of the
sports club. Social community projects and the entrepreneur’s commitment to the society
together with a positive entrepreneurial attitude towards the club can act as effective
promotional tools for sport SME’s development.
Many aspects of social entrepreneurship and corporate social responsibility can be seen
as improvements in the company image or brand equity. Different charity projects,
environmental responsibility campaigns and sustainability programs are important for the
image of team sport companies but also for their business development. They attract new
spectators and new sponsors, and they act as one driver for the company’s success. Many
businesses are interested in collaborating with sport firms in social sustainability and
community projects (Ratten and Ratten 2011). CSR and social entrepreneurship are new
trends in business and can create new, interesting entrepreneurial opportunities for sport
SME’s.
5.1.4 Internationalizations’ influence in sport SME’s

The globalization and internationalization of sports companies have opened new business
opportunities in multiple directions. Global media development has increased the
possibilities for sport companies tremendously and decreased the barriers to participate
in or watch sports (Thibault 2009), which has opened new markets for sport firms. For
team sport companies in ice hockey or football, these opportunities have two main forms:
international player sales and international games. The willingness to internationalize is
related to the entrepreneurs’ motivation to expand their businesses (Oystein et al. 2016),
and it is sometimes a necessity for a team sport organization. From the economic point of
view, the international player market is very important since the studied companies have
profited from player sales and international games. The European market is the most
important one for football clubs, and the possibilities of the players to access the European
78 Conclusions
clubs is essential for both, the players and the clubs. This market is highly competitive,
and good relationships with the major European clubs are needed for the possibility to
supply players to bigger teams. In ice hockey, the main outside market for player sales
has been the Kontinental Hockey League in Russia. The North American Hockey League
is also an important opportunity for the players, but the clubs do not receive a significant
payout for players transferring to the NHL, whereas the KHL pays to the club for all the
transactions in the form of a contract payment, and these revenues have been very
important financial gains for ice hockey SME’s. Selling the top player is always risky,
since these transactions might cause a loss in success at the same time when gaining
financial profits. However, these transactions are somewhat unavoidable since player
contracts allow the players to have the possibility to transfer abroad. Moreover, these
international playing opportunities also attract players to be employed in teams where
they might have the possibility to go abroad.
Internationalization as one aspect of business performance has gained financial profits for
the studied companies and generated more interest in their teams and match days. Even
though the best players require heavy investments from the company and sometimes from
the entrepreneurs themselves, it was stressed that it has always been worth the investment
and risk. The possibilities to multiply the money invested in a good player was seen
substantial. One way of making real profits in such a small market as Finland was to
operate in the international markets. The boost for this internationalization has been the
entrepreneurs’ international orientation and capability to exploit these opportunities. The
effect of an owner-entrepreneur’s motivation to internationalize and their capabilities to
communicate and find resources for this development are keys to success and growth
(Oystein et al. 2016, Andersson 2000). Internationalization has proven to be an important
source of finances together its positive effects on team sport firms’ performance on the
field and in business.
5.2 Theoretical contribution

As the aim of this study was to understand the challenges shaping the entrepreneurship in
team sport companies, the frame of reference was sport entrepreneurship and
professionalized team sport enterprises. This study was hermeneutical and therefore, the
understanding of the phenomenon grew along the way while the empirical study was
implemented. The framework for the articles and this dissertation was built in interaction
with empirical findings and previous relevant literature. These cases and approaches
presented in the four different articles explain the importance of entrepreneurship in sport
SME’s, entrepreneurial growth in these companies, and the effects of internationalization
and social entrepreneurship. The summary of the challenges found, that these team sport
enterprises face in their entrepreneurial business can be described as follows:
79
Figure 5.1: Challenges in sport entrepreneurship in team sport SME’s
The entrepreneurial challenges found in this study can be divided into the need for
entrepreneurship, social responsibility, business growth and internationalization. In these
kinds of small and medium-sized enterprises, the focus needs to be in both, the
entrepreneurs’ actions, and characteristics, as well as in a functioning business system.
The need for entrepreneurship starts from the rapid professionalization of the team sport
industry in Finland. The development from non-profit organization into profit-seeking
businesses require capable entrepreneurs and entrepreneurial orientation. The shared
passion for sport seems to be a common characteristic but there’s a need for functional
business performance in order to make the business successful. The studied cases show
that the entrepreneur’s role in overcoming the different challenges of business
performance is crucial. Short-termism is a model that works in team sport enterprises due
to the seasonality of the business, but it also requires a long-term business strategy to
comprehend the business behavior to achieve success on a larger scale. The effect of
business success and its significance for the company can be measured and evaluated but
in a sport enterprise, the on-field success also plays an important role in terms of new
business opportunities, such as internationalization.
Internationalization is an important aspect for team sport enterprises as a way to gain new
markets and utilize business opportunities that can widen their revenue streams. The
challenges in terms of internationalization relate to its uncertainty. Sporting success often
determines the opportunities to internationalize, and the special challenge is that these
opportunities are often also managed by an international governing body. These
opportunities are important in two ways, for business expansion but also for sport
80 Conclusions
development. International games and player sales are the most common forms of these
international opportunities.
New markets often bring in business growth, which has its own challenges in terms on
profitability and financial decisions. The team sport business, especially in Finland, has
been a business for passionate individuals, and the motivation for entrepreneurs in the
studied cases seems to link to the entrepreneurs’ willingness to be part of the particular
sport. The biggest individual revenue sources for team sport enterprises are sponsorships,
ticket sales and broadcasting rights. These sources differ from the traditional business
structure and make the business vulnerable for changes in both, business and on the
sporting field. The relationship of business and on-field success is very difficult to
measure or prove but it can be said that the sporting success has an effect on the business
success. The possible business growth is dependent on different revenue sources, business
performance abilities, business opportunities together with company’s growth orientation
and the entrepreneur’s willingness to grow. It can be discussed whether the aim of sport
business is profit maximization or utility maximization. In the studied cases both aspects
can be identified. The businesses have long-term strategies to grow but also short-term
goals in sporting success, which do not necessarily deliver at the same time.
Corporate social responsibility and sustainability need to be connected in modern sport

entrepreneurship. CSR is often part of the business in multiple ways; other companies are
utilizing team sport companies to achieve their own CSR objectives, but team sport
SME’s also have their own CSR and sustainability programmes. The passion for sport as
a motivator for the entrepreneur can also be a motivator to act as a social entrepreneur to
give back to the community and the sport in question. The social aspect of team sport
entrepreneurship is shaped with different challenges in human resource management due
to the different stakeholder groups connected to the company. Sport event volunteers
require different managerial knowledge than staff members, fans, spectators, or partners.
Emotions are often involved in these stakeholder groups’ actions, which can lead to
additional challenges for management.
The studied cases showed that there are certain challenges in terms of need for
entrepreneurship, company’s internationalization, business growth and social aspect, that
can be closely connected to team sport entrepreneurship. The special features connected
to sport entrepreneurship give team sport business companies extra challenges in terms
of entrepreneurship and business performance. New markets are connected to
internationalization and business growth along with the industry specific challenges of
uncertainty of outcome and sporting performance. Social entrepreneurship connects to
sport marketing where it is used as a tool to market through sport or sport itself to pursuit
the corporate social responsibility actions and image goals. Passion for sport and
emotions are present on multiple levels of team sport SME’s performance from athletes
to spectators and entrepreneurs, which makes the human impact to business remarkable.
81
5.3 Managerial contribution

The empirical contribution of this study is the deeper understanding of the challenges of
team sport SME’s from certain perspectives presented in the four papers attached to this
dissertation. These examples may offer some ideas to consider especially for team sport
enterprises and entrepreneurs in similar circumstances. Moreover, the findings can be
used in developing other team sport companies’ business strategies. By monitoring these
cases, team sport enterprises could compare their actions to these companies and, perhaps,
learn something that might help them to develop their businesses. In addition to
contributions to elite team sport companies, this study offers interesting information to
sport associations, such as the Finnish Football Association or Finnish Ice Hockey
Association. These associations can benefit from these results in their task to advise and
develop the football or ice hockey clubs in Finland. Furthermore, this study can benefit
the governmental institutions working in the sport field and sport policy decision makers
by offering understanding of business growth in the sport context.
The change in the dominant design of the sport industry and the establishment of limited
companies have been some of the most effecting turning points in these case companies’
development. Sport managers in similar sport companies in Finland should not prevent
this kind of change and professionalization since it seems to have a positive effect on the
overall company development, and especially on decision making, strategic development
and organizational progress. The change from a non-profit organization to a limited
company clarifies the responsibilities and the decision-making process, gives better
access to financial capital and improves the investment possibilities. An organic structure
and a good business concept together with the right recruitments should be in the focus
in team sport enterprises’ development. By managing the risks of recruitments and by
reacting proactively to the changes in the industry, a sport company can create
competitive advantage in its markets.
Sport business managers should aim at long-term planning in terms of their strategies,
despite the fact that some sport performance-related decisions must be taken in short term
due to the seasonality of the industry. Growth and the aimed aspects of it, such as
internationalization or expansion to other areas of business, should be planned ahead and
fit into the overall strategy of the firm. The entrepreneurs’ own experience and business
skills are important factors, especially at the beginning of the company life cycle. In later
stages of the company life cycle, a future oriented perspective in strategic planning
together with a skillful executive board and wide networks can help create successful
business. Skilled businesspersons as board members can bring new know-how and a
powerful contribution to the decision-making. Volunteer management at all levels of
business functions in team sport companies, from the executive board to the coffee shop,
have a strategic impact on the business, and with the right human resource management
system, sport companies can gain remarkable benefits.
Financial risks and investment decisions should be taken carefully and considered in co-
operation with different actors, such as the municipalities and private investors. Risk
82 Conclusions
taking is an essential part of the sport business, and managing risks in a rather turbulent
environment is an essential part of entrepreneurs’ career. In team sport companies, these
risks need to be weighed both from the sport and business side in order to manage the
balance between monetary gains and sporting losses. In a turbulent sport industry
environment, the awareness of the surrounding markets, possibility to act proactively and
the capability of bearing risks are key functions to sport entrepreneurs. Risks should be
controlled but not avoided.
Team sport companies in Finland are financially very dependent on their sponsors and
business partners, and innovative ways of attracting new stakeholders or acting as their
media to reach their target groups have grown. Sport often attracts people in ways that
any other industry cannot, and people are interested in the social aspects of business, such
as environmental issues, sustainability or different charitable events, and this is one form
of creating new partnerships with sponsors or other stakeholders. These different
functions of corporate social responsibility are often interesting ways to offer partnerships
to companies interested in marketing through sport. Corporate social responsibility and
companies’ actions in relation to CSR has become a new trend and a way to attract both
businesses and spectators to commit to a team sport company. Spectators’ growing
awareness in environmental and sustainability issues have created new sponsorship
possibilities and markets for sport enterprises.
Sport organizations can benefit from the entrepreneurs’ creativity, innovativeness and
passion to the sport in the form of entrepreneurial experience or business knowledge.
Proactive actions to the changes in the sport industry design or policies are vital
conditions for success. Sport managers and companies should be widely connected to the
surrounding business environment, sport policy makers and national and international
federations. By acting in these networks and responding to the change, both the company
and the entrepreneur can have an influence on the development of the whole industry and
its regulations. Sport managers should take advantage of the rapid professionalization of
the sport industry and actively seek to commercialize the non-profit businesses where the
business functions demand that. In the existing profit seeking businesses, the ability to
recognize and utilize new business opportunities either within the core business or outside
it is essential in order to remain competitive and grow.
5.4 Validation
5.4.1 Ensuring the trustworthiness of this study

As is commonly the case, there were some challenges in this research process. Firstly, the
studied industry area is quite new in Finland, and there are still very few enterprises in
the whole team sport industry. However, it is an admitted fact that the private sector is
growing in the field of sports, whereas the public and non-profit sector are declining.
Especially among elite sport companies, the number of growth enterprises is very limited,
and this did not allow but a limited selection. Another challenge was that there was not
83
much previous research conducted in entrepreneurship in sport business. However, this

was also an opportunity to gain some understanding to this phenomenon and start further
research and discussions.
The trustworthiness of this study was ensured by following the presented case study
process carefully. In an attempt to avoid the possible overall lack of credibility, this
research was conducted by describing every step of the research in detail.
Misunderstandings were avoided by recording and verbatim transcribing the interviews.
Furthermore, the credibility of the interpretation was confirmed by selecting an
appropriate theoretical framework against which to compare and analyze the data, and by
using multiple sources in conducting the analysis. Transferability in this study was mainly
ensured by carefully documenting the steps of the research process. Whether these results
are transferable to other similar cases remains to be seen in future research, but these
results explain the studied phenomenon in a certain context and are, therefore,
transferable to some extent. Dependability and confirmability both stand for the
consistency of the results, and they can be checked by other researchers, in this study by
the supervisors and examiners. In qualitative case study research, the interpretation of the
same data is never similar since the researcher starts from his or her basis with different
background experiences and knowledge.
5.4.2 Ensuring the authenticity of this study

In a qualitative study, the question of the sufficiency of the data is difficult. In this study,
the chosen amount of the collected data and sources was previously justified and
explained. Since the researched phenomenon was new and there was no previous
research, and since the elite team sport industry is very young in Finland and the total
number of enterprises in the ball game leagues fairly small, it was justified to conduct a
case study and keep the number of cases small. Even though the number of the cases from
Finland was two (and one case in one article from Sweden) some saturation of data could
be identified.
The analysis was conducted by using a computer software program called NVivo in order
to ensure the extent of the analysis. All the steps were documented, and an interview
database was created in the NVivo qualitative data processing program. By using the
analysis technology in coding the interview data, the possible disregard of important
points was minimized. Ontological and methodological choices were explained and
justified in order to ensure the authenticity of this study. The reader should be able to
follow the analysis and interpretations of this study. When presenting the results of the
analysis, some quotations are used in the articles in order to indicate the correctness of
interpretation and strengthen the authenticity of the study.
The studied framework is somewhat new in the context of sport business and
management, and it provides new insights into the entrepreneurial discussion as well. The
issue of growth entrepreneurship in sports, or even the issue of overall entrepreneurship
in sports, is nationally very important in Finland. The sports sector is commercializing
84 Conclusions
quickly, and more non-profit organizations are turning to businesses. Therefore, this study
is an important starting point for this research area, and it may benefit the sport industry
in Finland. A possible bias in interpreting the data may occur because the researcher is
never totally objective in qualitative research but influenced by previous knowledge and
experiences.
The sources of evidence in this study were multiple. According to Yin (2014), a complete
case study needs to show that the effort to collect all the necessary evidence was real, the
most relevant evidence was presented, and the boundaries were identified (Yin 2014, 200-
205). The use of multiple sources was important in meeting the aim of the study to
understand more deeply these sport enterprises’ challenges. Company histories and
information from web pages, annual reports, some financial data and strategies gave the
background information for the big picture, and interviews together with a literature
review produced the parts of discussion and conclusions. The research process was logical
and hopefully easy to follow.
5.4.3 Limitations
One limitation in qualitative research is always that the researcher’s interpretations and
possible biases or previous experiences may affect interpretation. In this research, the aim
was not to generalize the findings, but to gain knowledge and understanding of the
researched phenomenon, and, therefore, the interpretation was dependent on the
researcher. The possible biases were limited to a minimum by carefully transcribing the
interviews, describing the research process in detail and keeping the report logical.
This case study research is limited to medium and small sized team sport companies and
cannot be generalized further to sport companies at large. However, a theoretical or
analytical generalization could be possible as the results are parallel with several earlier
well-tested theories of sport entrepreneurship and special features of sport business. The
study is also geographically limited to Finland (and a Swedish football company included
in one article). The case study approach limits this study to only a few cases, and the
phenomenon needs to be further tested in mainline research.
5.5 Suggestions for future research

This study gives a starting point for sport entrepreneurship discussion in the Finnish team
sport industry and sport SME’s in general. In the future, more systemic research should
be conducted in order to empirically test the presented model of sport entrepreneurship in
sport business in mainline research. One way of testing this theory would be to compare
these findings to the whole team sport industry in Finland or within the same sports in
different operating environments. Since the conclusion is that there are certain industry
specific challenges that shape the team sport entrepreneurship, it can be further discussed
whether there are differences in different operating environments. Another approach for
85
future studies would be to identify possible other aspects of different challenges in sport
entrepreneurship in team sport enterprises or other sport business SME’s.
87
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Publication I
Ahonen, A., and Savolainen, S.

The importance of entrepreneurship in small and medium-sized sport enterprises
Reprinted with permission from

Routledge
Routledge Handbook of International Sport Business
pp. 374-381, 2018
© 2018, Routledge, Taylor & Francis Group
34
THE IMPORTANCE OF
ENTREPRENEURSHIP IN
SMALL AND MEDIUM-SIZED
SPORT ENTERPRISES
Aila Ahonen and Sari Savolainen
Introduction
Entrepreneurship is an interesting area of research in the field of sport management since
sport has been studied from various business viewpoints, such as marketing, management and
leadership, whereas sport entrepreneurship has gained much less attention. Sport is a complex
phenomenon; the commercial aspirations growing together with non-profit goals makes it
difficult to identify whether sport enterprises are profit-seeking businesses or more social
enterprises. Although the sport industry is growing rapidly in both the non-profit and profit-
seeking sectors, sport organizations in Europe are still mainly non-profit and often run, at
least partly, by volunteers. However, during the past couple of decades, more sport organiza-
tions have been transferred to privately owned enterprises and sport has become highly
commercialized business. In Finland, where the case example is from, the change has hap-
pened, especially at the highest level of sport, since the public sector pulled out from funding
professional or semi-professional sport. Sport entrepreneurship is rather a new phenomenon
in Finland, existing since the 1990s, while in the US, sport has been commercialized for
much longer. Although sport entrepreneurship has been most noticeable at the highest level,
it exists on all levels from elite sport to grassroots sport (Gilmore, Gallagher & O’Dwyer,
2011; Ratten, 2011).
Sport entrepreneurship has been defined as sport-related organizations acting innovatively
in a business context (Ratten, 2010; Cilletti & Chadwick, 2012). The role of entrepreneurship,
and especially the role of an entrepreneur, has become important in small and medium-sized
sport enterprises (SME) due to commercialization. Business, in general, targets profit
maximization whereas, in sport business, the target could be utility maximization (Spender,
1989). This does not mean that profit is not important in sport entrepreneurship but
entrepreneurs and business managers of sport-related enterprises can enhance their economic
performance by harnessing the power of sport to deliver community and social objectives
(Smith & Westerbeek, 2007). Entrepreneurs in SMEs are often motivated by something
other than financial returns and have a strong passion for their sport.
The aim of this chapter is to identify the importance of entrepreneurship in small and
medium-sized sport enterprises. The chapter introduces some basic definitions of
“entrepreneur” and “entrepreneurship” and presents some of the common features of sport
374
Entrepreneurship in sport
and entrepreneurship that are discussed in the literature. A short case example of the
importance of entrepreneurial orientation in an ice hockey SME from Finland further
illustrates the phenomenon introduced in this chapter.
Entrepreneurship and entrepreneur

Entrepreneurship researchers have provided several different definitions of entrepreneurship
as a phenomenon. The first definitions of entrepreneurship can be found in Richard Cantillion’s
writings (1680−1743) (Landström, 2006). The first modern definition of entrepreneurship is
Schumpeter’s (1934). He defined entrepreneurship and entrepreneurs as follows: “the carrying
out of new combinations can be called enterprise and the individuals whose function it is to
carry out them can be called entrepreneurs” (Schumpeter, 1934). Schumpeter sees that the
entrepreneur is his own technical expert, professional specialist, buying and selling agent, head
of his office, his own personal manager and legal adviser. Schumpeter’s definition shows the
differences between our way of thinking and the way of thinking in the 1930s but it is still
applicable today. Nowadays the entrepreneur usually has a large business network with support
functions rather than doing everything himself. Entrepreneurship is a combination of inno-
vativeness (Schumpeter, 1934), effectiveness (Kirzner, 1982) and opportunity recognition
(Shane, 2003). Entrepreneurship is a mixture of risk-taking, investing and potential growth-
seeking (Holt, Rutherford & Clohessy, 2007). The same characteristics can be identified as
crucial for a sport organization’s leadership.
Shane (2003) defined entrepreneurship as an activity that involves the discovery, evalua-
tion and exploitation of opportunities to introduce new goods and services, ways of organiz-
ing, markets, processes and raw materials through organizing efforts that previously had not
existed (see also, Venkataraman, 1997; Shane & Venkataraman, 2000). This entrepreneurship
definition includes explanations of why, when and how entrepreneurial opportunities exist;
the sources of those opportunities and the forms that they take; the processes of opportunity
discovery and evaluation; the acquisition of resources for the exploitation of these opportu-
nities; the act of opportunity exploitation; why, when and how some individuals and not
others discover, evaluate, gather resources for and exploit opportunities; the strategies used
to pursue opportunities; and the organizing efforts to exploit them (Shane, 2003; Shane &
Venkataraman, 2000). Some people see more opportunities than others and are therefore
more likely to become entrepreneurs. Resourcefulness is often connected to entrepreneurship
and entrepreneurial resourcefulness has been defined as the ability to identify opportunities
in the environment and regulate behaviour to successfully manage an organization in order
to pursue the opportunity (Misra & Kumar, 2000). In general, resourcefulness means the
ability to self-regulate and direct one’s behaviour successfully in order to cope with stressful
and challenging situations (Meichenbaum, 1977). Correspondingly, Welter and Xheneti
(2013) see resourcefulness as a dynamic concept encompassing multiple practices that change
over time. These are results from a close interplay of multiple contexts with entrepreneurial
behaviour. The sport business environment is a constantly changing one that requires
resourceful management and leadership skills from entrepreneurs.
Cole (1959) has defined an entrepreneur as an individual who is primarily responsible for
gathering the necessary resources to initiate a business. Pickle and Abrahamson (1990) define
an entrepreneur as a person who organizes and manages a business by undertaking and assum-
ing the risks for the sake of profit. On the other hand, entrepreneurs are individuals who
implement entrepreneurship by discovery, evaluation and exploitation of opportunities (Shane
& Venkataraman, 2000). They see that an entrepreneur evaluates perceived opportunities and
375
strives to make the decisions that will enable the firm to realize sustainable growth. This
opportunity exploitation often involves high risks. In sport business, for example, risks include
hiring expensive players without any guarantee of their performance. Entrepreneurs’ abilities
to bear these risks influence a firm’s performance and its potential to develop and grow.
Entrepreneurs are often seen as individuals, usually founder-owners, who perceive entrepre-
neurial opportunities, exploit those opportunities, establish ventures by certain means and
purposes and manage their ventures in a certain way (Gibb, 2002).
The individual characteristics of an entrepreneur have frequently been a topic of investiga-
tion in various studies (Leibenstein, 1968; Brockhaus,1982; Kuratko & Hodgetts, 1995;
Giannetti & Simonov, 2004; Timmons & Spinelli, 2009). Different writers define different
personal characteristics as important for an entrepreneur. An example of an earlier conceptu-
alization is presented by Leibenstein (1968), who defines the entrepreneur as an individual or
group of individuals with four major characteristics: (1) the entrepreneur connects different
markets, (2) he can make up for market deficiencies, (3) he is an input-completer, and (4) he
creates or expands time-binding, input-transforming entities (i.e. firms) (Leibenstein, 1968).
Leibenstein thus concentrates more on the task of an entrepreneur than the individual or
psychological characteristics.
Schumpeter defines entrepreneurs as a special type, their behaviour as a special problem,
and their motivating power as drawn from several significant phenomena (Schumpeter, 1934).
Entrepreneurial characteristics include, for example, the desire for responsibility, entrepre-
neurial family background, confidence, entrepreneurial freedom, ambition, competitiveness,
future orientation and value for money (Mariotti & Glackin, 2012, pp. 6−10; Scarborough,
2011, pp. 20−24). Timmons and Spinelli (2009) divide entrepreneurial characteristics into three
different categories: core characteristics, achievable characteristics and non-entrepreneurial
characteristics. The most important core characteristics are commitment and determination,
which can help to overcome some possible obstacles. They see successful entrepreneurs as
good leaders and supportive managers, who do not try to achieve excessive independence
from the surrounding environment. They are opportunity-seeking, ready to act in a fast-
changing, turbulent environment. They are creative, self-confident and able to cope with a
reasonable amount of risk and uncertainty (Timmons & Spinelli, 2009, pp. 249−262).
Entrepreneurs enjoy the freedom of owning their own business but do not prefer the often
long working hours, and non-monetary aspects are great motivators in venturing into business
(Alstete, 2008).
Ownership, and especially psychological ownership, is an interesting context in which to
explain entrepreneurship in sport, even though it is not commonly connected to theories of
entrepreneurship. In practice, every entrepreneur is a business owner, which brings along
entrepreneurial responsibilities, duties, rights and even risks of losing the target of ownership.
Legal ownership is defined by the owner being able to exercise his natural powers over the
subject-matter without interference, and more or less excludes other people from such inter-
ference (Holmes [1881] 1946, p. 246). The owner answers only to himself. Psychological
ownership is defined as a cognitive-affective construct that is based on individuals’ feelings of
possessiveness and of being psychologically tied or attached to objects that are material and
immaterial in nature (Pierce, Kostova & Dirks, 2001). Understanding ownership and psycho-
logical ownership in sport entrepreneurship is important since sport business activities are
often strongly connected to sport itself and the feelings it causes. Furthermore, sport entre-
preneurs are often emotionally connected to the sport, and these kinds of emotions in business
activities cannot be found in many other fields of business.
376
Entrepreneurship in entrepreneurially-driven sport organizations

Professional sport has undergone major structural and operational changes over the past
decade and it is both similar to and different from a traditional business. However, all business
ventures, including sport, aim to widen their market share, build a strong brand and make
profit (Smith and Stewart, 2010). Sport contains many features similar to entrepreneurship;
in both, the aim is to win and to be a forerunner compared to competitors. The traditional
aim of on-field success is still important in sport but there is a growing awareness that revenue
and profits, together with sporting success, are the key to overall successful performance
(Smith & Stewart, 2010). In sport SMEs, sporting success does not guarantee success in
business, and therefore it is essential that the business knowledge of the entrepreneur is of a
high standard. One fast-growing form of sport entrepreneurship is event organization. The
growing number of sport events have also become an important economic and social driver
for regional development around the world. According to Hall (2006), sport events, and
especially sport mega-events, are very important forms of urban sport entrepreneurship.
Sport entrepreneurship in SMEs is very heterogenic in nature; it contains different busi-
nesses from several sectors. Sport entrepreneurship and entrepreneurial actions in SMEs can
be divided into four main categories: (1) sport events and participation activities, (2) sport
supplies and services, (3) sport facilities and arenas, and (4) sport investors and owners (see
Figure 34.1). Entrepreneurial activities and business actions can happen while simultaneously
overlapping in different categories.
Very often SMEs act in all the areas of sport entrepreneurship described in Figure 34.1.
Entrepreneurs’ social networks between sport organizations and external business providers
give them opportunities to access knowledge, information and other resources (Ratten &
Ferreira, 2016). Wide stakeholder networks are essential for sport entrepreneurs to create
value for their customers.
Successful sport entrepreneurship requires innovation, creativity, proactivity and the ability
to take risks (Ratten, 2011; Cilletti, 2012). In the sport industry, there is a growing amount
of entrepreneurial opportunity, and individuals who can recognize and exploit these opportu-
nities are needed (Cilletti & Chadwick, 2012). Entrepreneurship in sport can be based on
earlier activity in the same field of sport. An athlete might have seen an opportunity for entre-
preneurial activities connected to sport during his/her active sport career, and utilized this
opportunity later. Sometimes entrepreneurship can be built on the earlier non-profit organiza-
tion’s actions around sport. Very often non-profit voluntary work has dried up or public
funding has decreased, and the organization has changed into a profit-seeking business.
Ratten (2011) introduces a theory of sport-based entrepreneurship, arguing that “sport is
an entrepreneurial process as innovation and change are key elements of sport”. Sport-based
entrepreneurship exists when sport-related entrepreneurial opportunities are exploited by
creating value. Sport entrepreneurship comprises individual entrepreneurs who combine
Sport events and activities Sport supplies and services
Sport SMEs
Sport facilities and arenas Investors and owners
Figure 34.1 Main forms of small and medium-sized sport entrepreneurship
377
opportunities that arise from their networks, and optimize resources where they are effective
(Ratten, 2011). Moore and Levermore (2012) argue that resource constraints, informality,
an authoritarian management style and short-termism in decision making are characteristics
in SMEs in sport business. These are characteristics that are connected to entrepreneurial
orientation as well. Lumpkin and Dess (1996) and Covin and Slevin (1991) identify autonomy,
innovativeness, risk-taking and competitive aggressiveness to be dimensions of entrepreneurial
orientation, while Kreiser and Davis (2010) add innovation and proactiveness to these
characteristics to exploit entrepreneurial behaviour. An entrepreneurial orientation together
with a favourable environment and the right organizational structure is needed to achieve
profitable firm performance or growth (Kreiser & Davis, 2010).
Innovativeness, proactiveness and risk-taking are identified as key concepts of sport
entrepreneurship by Cilletti (2012). Technological innovations and new media solutions
have provided opportunities for sport enterprises to expand their businesses. The sport
sector’s uniqueness in terms of uncertainty of outcome and fast changes requires proactive
actions from sport entrepreneurs. Risk taking in terms of financial risks such as athlete
contracts, licences and market-related risk, together with social risks of serving change
agents or breaking down traditional barriers, are characteristics of sport entrepreneurship
(Cilletti, 2012).
The case of entrepreneurial development in JYP Ice Hockey Club
Ice hockey is the most popular sport in Finland in terms of spectators and broadcasting. Finland
has also been very successful in ice hockey in international competitions, such as the Olympics or
World Championships, by winning several medals over the years. Jyväskylä Ice Hockey Club (JYP)
is a small-town ice hockey team that has played in the Finnish national league since 1985. JYP is
also one of the most successful businesses within the national ice hockey league companies in
Finland with several national championships and a European Trophy league win in 2013. JYP
operated as a non-profit organization until it was corporatized at the turn of the century (Ruuska,
2013). Today, JYP operates as an SME and a majority of its shares are owned by the entrepreneur,
who also acts as a chairman of the board. The first push for the corporatization was that player
contracts were seen as employment contracts by the taxation authorities, and profit-seeking ice
hockey clubs could no longer identify themselves as non-profit organizations. The benefits of the
corporatization were that decision-making processes became streamlined and entrepreneur-centred
risk taking increased, access to financial capital became easier and competitiveness grew substan-
tially. The owner-entrepreneur invested heavily in the club at the beginning and took big risks in
terms of player recruitment and team building (Ahonen, 2017).
JYP has gained on-ice success and managed to develop that into a business success even
though the facilities and environment have provided some challenges. JYP operates in the small-
est ice hockey arena in the national league and its home market in a mid-sized city with multiple
sport offerings is rather small (Ahonen, 2017). In 2004, JYP published a strategy called “Mission
2007” and defined a clear growth strategy in terms of sporting success and revenues. It succeeded
in terms of marketing and finances but not in terms of sporting success. The success in sport
followed a couple of years later in 2009 when it won the Finnish National Championship title
for the first time (JYP, 2017). Behind this success was its owner-entrepreneur’s entrepreneurial
orientation, innovativeness and willingness to take risks (Ahonen, 2017).
378
JYP’s entrepreneurial orientation includes both organizational and individual level actions
and actors. The entrepreneur and staff both show a big commitment and determination to their
company and the sport. The entrepreneur’s motivation to run the business is more connected
to enthusiasm towards the sport itself and to motivation to excel than monetary revenues. The
entrepreneur’s previous knowledge and innovativeness in decision-making, together with
the ability to exploit the opportunities when they exist, are drivers for success. Exploitation
of internationalization opportunities with the Kontinental Hockey League (KHL) in Russia
were important in achieving financial success. Player sales to KHL played a big role in JYP’s
development (Ahonen, 2017).
Value creation for stakeholders is one key to success in sport event organizing (Woratschek,
Horbel & Popp, 2014) and JYP has exploited this by creating high-quality services for sponsors,
spectators and fans. Due to cooperation with the city of Jyväskylä in investing into new facilities,
JYP had the opportunity to build new service facilities and gain more income from extended
restaurant and VIP-lounge services (Ahonen, 2017). Since the game events are more like platforms
where value is created for different stakeholders (Woratschek, et al., 2014), the importance of
off-field customer services are very great for such a small sport enterprise. The entrepreneurially
driven value creation process is essential for sport SMEs in order for them to be less dependent
on uncertain sporting success.
JYP’s business success has not been the motivator for its entrepreneur but more a facilitator
for future development. The owner-entrepreneur’s motivation to be a sport entrepreneur has a
lot to do with social entrepreneurship. The company has supported the non-profit youth teams
and the possibility to make a social contribution to the junior teams and the community act as
a motivator to the entrepreneur (Ahonen, 2017). This co-operation can be seen also as an asset
influencing future sporting success in terms of future players.
Conclusion
In small countries, with limited markets for sport events and sport services, the importance
of SMEs in the sport sector is growing. The public sector is pulling out from funding sport
and sport clubs are becoming service providers and commercialized businesses instead of
voluntarily run non-profit organizations. Opportunities exist in multiple sectors in sport
business, and entrepreneurs who are capable of recognizing and exploiting these opportunities
are widely needed. The challenge for SMEs in sport is the lack of financial returns and profits.
Motivational factors play a big role in establishing sport SMEs. The concept of psychologi-
cal ownership can explain some of the reasons behind sport business ventures. Emotional ties
to a certain sport can act as a motivator to become an entrepreneur and a business owner in
the field of sport, despite the small monetary returns. The special nature of sport business,
with its variety of feelings and passions, offers returns that cannot be found in many other
businesses. The challenge of a fast-changing operating environment requires special individual
characteristics in sport entrepreneurs including innovativeness, creativity, the capability to act
proactively, the ability to bear big financial risks, an entrepreneurial orientation and
resourcefulness.
Sport entrepreneurship research is in its infancy and the aim of this chapter is to give an
insight into entrepreneurial aspects in sport SMEs. SME’s roles in Finland and in the
Scandinavian sport sector are important due to the size of the countries and markets. Volunteer
work and public funding are decreasing, sport clubs are commercializing and the number of
379
local and international sport events is growing. Entrepreneurial opportunities exist and
possibilities for new business ventures are high. Despite a decrease in public funding for sport
in Finland, support for start-ups is available and creates a positive environment for establishing
new firms in the sport sector.
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381
Publication II
Ahonen, A.
Entrepreneurial growth in elite team sport SME’s in Finland

Journal of Entrepreneurship and Public Policy
Vol. 8 (1) pp. 22-39, 2019
Original publication: DOI: https://doi.org/10.1108/JEPP-03-2019-102
© 2019, Emerald
This article is © Emerald Publishing Limited and permission has been granted for this version to
appear here [https://lutpub.lut.fi]. Emerald does not grant permission for this article to be further
copied/distributed or hosted elsewhere without the express permission from Emerald Publishing
Limited.
Entrepreneurial growth in elite team sport SME’s in Finland
Aila Ahonen
Lappeenranta University of Technology, School of Engineering Science
Abstract
Purpose –Entrepreneurship in the sport sector has become an important

discussion topic amongst public policymakers in Finland, and the interface
between entrepreneurial sport companies and the public sector is crucial in
the development of sport entrepreneurship. The purpose of this study was to
discuss the entrepreneurial growth of two elite team sport companies in
Finland by describing the entrepreneurial characteristics and organisational
development affecting their growth. This paper aims at giving new insights
into the discussion of growth entrepreneurship in small and medium sized
enterprises (SME’s) in the team sport context.
Design/methodology approach - A qualitative case study approach was

chosen to best describe the phenomenon of entrepreneurial growth in top
sport team SME’s.
Findings - The results indicate that the entrepreneurial growth in these two
cases comes from entrepreneurial opportunities, growth orientation and
growth ability. Industry-specific issues, organizational characteristics, a
favourable operating environment, entrepreneurially oriented owner-
entrepreneurs and the policymakers’ capability of supporting the growth have
affected the success of these team sport enterprises.
Research limitations– This study is limited to the Finnish sport context and
these studied cases.
Practical implications – This paper explains the entrepreneurial growth of

two successful Finnish team sport enterprises and offers interesting insights
for sport management and similar entrepreneurial sport enterprises in the
industry.
Originality/value – This paper contributes to the discussion of sport

entrepreneurship, and, especially, offers further understanding of growth
entrepreneurship in small and medium sized sport enterprises.
Keywords - Sport entrepreneurship, Growth entrepreneurship, Sport

entrepreneur, Sport business management, Team sport, Small and medium
sized enterprise
Introduction
The importance of globally growing sport businesses for national economies

has become significant in many countries. This global development has been
influenced by the complexity of the industry, media, globalized marketplace,
growing competition, technological development, and the convergence of the
global customer behaviour (Santomier, 2002). Sport tourism related mega-
events or international events can produce remarkable positive economic
impacts on their hosting cities or countries (Preuss, 2007) together with
community development (Kaplanidou et al., 2013). Sport is unique by its
nature because it is a rather passionate industry area, its products and
services are highly dependent on the context, it is often seasonal and
supported by public money. Governments and organisations can influence
sport through entrepreneurship, since it offers new solutions for business
operations and influences the society (Ratten, 2018, 21; Ratten, 2017a).
Sport and physical activities have always had a great importance for the
Finnish people and society, and success in sport has had a substantial impact
on the national identity. The sports culture has always been strong in Finland,
both in terms of participating and spectating sports. Lately, sport
entrepreneurship and entrepreneurs have been in the spotlight in the policy
makers’ discussions in Finland. Sport is part of politics, and political decisions
affect the development of sport on the local and national level. Many projects
on the regional level rely on sports, and cities use sport as a tool for city
branding (Knott et al., 2015; Herstein and Berger, 2013). Developing sport
entrepreneurship amongst elite sport is one of the challenges that public
policy makers face, and the importance of entrepreneurially run sport
organizations is growing because the public sector is pulling out from
financing the sport sector in Finland (Diges, 2010). This development towards
entrepreneurial sport organizations is very recent in Finland compared to, for
example, the more widely discussed and studied US sport industry. In
Finland, top-level sport organizations started to become businesses only in
the late 1990’s.
Sport is part of innovation policies (Ratten, 2017b) and it can, therefore, be

connected closely to the development of growth entrepreneurship. The levels
of education and innovativeness, which are of high standard in Finland, are
often combined with growth enterprises. However, the growth numbers in
small and medium sized enterprises (SME’s) in Finland are very low in
international comparison (SME business barometer, 2018). In Finland, the
company structure lies heavily on SME’s since only 0.16 % of the Finnish
companies employ more than 250 persons and 0.86 % more than 50 people
(Statistics Centre, 2015). Only every tenth enterprise in Finland actively
seeks to grow and has a growth strategy (SME business barometer, 2018).
Business opportunities exist especially in the service sector to which most of
the sport business also belongs. Sport entrepreneurship can be seen to
include multiple businesses ranging from sport itself and coaching to
education, facility management, sports marketing, tourism, events,
utilization of modern technology and sports equipment (Diges, 2010).
Traditionally, the difference between business and sport is that sport is more
concerned about the winning performance on the field than profitable
business performance. This is due to the dominance of non-profit
organisations in sport. Nowadays, when sport has professionalized, the battle
is often in two arenas: on the field and in business. The importance of
revenues and profits, as well as access to resources, a good financial situation
and cooperation between the private and public sector have also proved to
be key success factors in sport performance. Both professional sports and
conventional business are aiming at building profits, strengthening their
brand, and winning more market share (Smith & Stewart, 2010). Even though
professional sports are mainly run as profit-seeking business ventures, many
sport entrepreneurs have a social impact focus on their performance as well.
Entrepreneurs can create other than monetary value by focusing on positive
social impacts, such as building their own or company brand or altruism
(Shropshire, 2012).
Sport entrepreneurship is a growing field of research, but entrepreneurship

has not been widely studied in the sport context. Increased research interest
in sport entrepreneurship is due to the continuous change in the market, its
competitive nature and fast global development (Ratten, 2018, 1-2). Sport
business has often been studied from the economic, philosophical,
physiological, psychological and ontological points of view (Olivier, 2006;
Ratten, 2010a), and management and marketing studies are the most
common aspects in the sport business field. The growing number of
entrepreneurship studies and, especially, growth entrepreneurship studies, in
sport together with the global industrial growth indicates that this area of
research will develop in the future. Entrepreneurship is one of the driving
forces in the global growth of the sport and leisure industry (Ball, 2005), and
therefore, an interesting area to study.
This study focuses on two elite sport team enterprises, a football company
and an ice hockey company from Finland, and their entrepreneurial growth
development. The aim of this paper is to understand why these small team
sport enterprises have achieved a sustainable entrepreneurial business
growth, and what the entrepreneurial functions in their growth are that
explain this success. The main research questions in this study were: Why
and how have these two studied first league sport enterprises grown? What
have been those entrepreneurial characteristics in terms of growth ability,
orientation and opportunity that have affected their business growth? This
paper aims at giving new insights into the discussion of growth
entrepreneurship in sport SME’s in the elite team sport context. The three
approaches used to describe the entrepreneurial growth were drawn from
literature dealing with entrepreneurship and growth entrepreneurship in small
and medium sized companies. Growth entrepreneurship has received
relatively little research attention in the sport context, and therefore, this
study gives interesting viewpoints for further studies. Nevertheless, SME’s
dominate entrepreneurship in the sport context (Moore and Levermore,
2012), and therefore, understanding the growth entrepreneurship
characteristics within these SME’s is important, and it can provide interesting
insights on entrepreneurship in the sport context. The rising role of sport in
society together with the growing impact of sport on the international
economy has grown interest towards sport entrepreneurship. An
entrepreneurial sport policy is important in developing sport management,
public policy and innovative entrepreneurship (Ratten, 2017a) and
“Entrepreneurship is a process inherent to business development, which is a
key part of sport policy” (Ratten, 2017b). In Finland, and in most European
countries, elite sport clubs have traditionally been run by volunteers, and they
have focused on non-profit utility maximization rather that profit
maximisation. However, professionalization has led to these clubs to establish
firms in order to better compete in the changing markets. Business growth is
essential for these small and medium sizedd companies’ competition (Dobbs
and Hamilton, 2007).
Growth entrepreneurship and sport SME’s
Entrepreneurship is a complex phenomenon that cuts across many fields of

business (Low and McMillan, 1988). The theoretical background of this study
consists of a synthesis of entrepreneurship and entrepreneurial growth,
together with the theory of sport entrepreneurship. In this study, the focus
in building the conceptual framework is on the organizational level. However,
in these kinds of small and medium sizedd sport enterprises, strong
entrepreneurs can create and determine the organizational culture, and,
therefore, the individual level strongly affects the organizational level (Wright
and Stigliani, 2013).
Entrepreneurship has been defined in different ways through history, and

there seems to be no single right definition. Venkataraman (1997) discusses
the problem of defining entrepreneurship and states that it is often defined
only from the entrepreneurs’ perspective and that entrepreneurship involves
both profitable business opportunities and individual entrepreneurs.
However, the effectiveness of entrepreneurs can be measured in terms of
their companies’ performance (Covin and Slevin, 1991). Shane and
Venkataraman (2000) also define entrepreneurship to be the discovery,
evaluation and exploitation of opportunities together with individuals utilizing
them. Entrepreneurship is a process in which individuals seek for
opportunities without regard to the resources they have (Stevenson and
Jarillo, 1990). Conversely, Gartner and Baker (2010) point out that
entrepreneurs may discover and exploit opportunities either with or without
regard to the resources at hand. In other words, opportunities can be either
discovered or created, but they are always the core function of
entrepreneurial activities, and important in entrepreneurial growth.
Understanding the importance of opportunity recognition, innovative
business development and the importance of individual entrepreneurs is the
key to policymakers’ support to growth entrepreneurship.
Growth entrepreneurship can be divided into two categories: organic growth

and growth by acquisitions. Organic growth usually happens within an
organization, and it is based on its current resources (McKelvie and Wiklund,
2010), not on buying new businesses. In this study, both cases have grown
organically, and therefore, the focus in the theoretical framework is also on
organic growth. In literature, there are multiple ways to define
entrepreneurial and small business growth. Some studies concentrate on the
external factors, whereas some claim that the internal aspects are the most
important when studying SME’s growth. Osborne (1993) argues that the basis
for a firm’s growth comes from the business concept and its functionality.
Laukkanen (2007) combines the enterprise and entrepreneur in his definition
of entrepreneurial growth: he identifies a growth enterprise to be a firm led
by highly growth-oriented entrepreneurs. Hyrsky and Lipponen (2004)
identify the four most important issues connected to entrepreneurial growth,
namely, growth orientation, growth ability, a recognizable competitive
advantage and market opportunities. Growth is very often directly connected
to business success and profitability (Davidsson et al., 2009; Clarysse et al.,
2011), whereas in SME’s the willingness to grow is the key for a successful
growth strategy (Weber et al., 2015).
In order to grow, an enterprise must be successful (Davidsson et al., 2006).

Success itself depends on multiple external and internal factors, some of
which are controllable and some uncontrollable. Growth ability is based on
skills, competencies and knowledge, as well as on the ability to obtain
resources and coordinate scarce resources (Shane and Venkataraman, 2000).
According to Shepherd and Wiklund (2009), entrepreneurial growth depends
on small business managers’ aspirations to expand, their previous
experiences and education, together with environmental dynamism. Small
business growth is very often measured as an outcome, where growth is a
dependent variable influenced by independent variables (McKelvie and
Wiklund, 2010). These independent variables are those that enable growth,
although there is no consensus on which of these have a consistent effect on
growth (Shepherd and Wiklund, 2009). Gilbert et al. (2006) point out that
growth is a function of entrepreneurial decision-making about how and where
to grow. Growth is part of an enterprise’s strategy (Weber et al., 2015), and
the entrepreneur must choose to grow. Particularly for new firms, such as
those studied in this case, human, financial and outside resources are
important aspects in successful growth (Gilbert et al., 2006). Growth is a
process and outcome that always occurs in a certain period of time (McKelvie
and Wiklund, 2010). Policymakers’ challenge is to recognise these growth-
oriented enterprises and create an environment that supports the growth.
According to Faggian et al. (2017), a positive environment for economic
growth can be created through creativity, entrepreneurship and human
capital. An entrepreneurial sport policy, innovations and technological change
can boost sport entrepreneurship on local, national and international levels
(Ratten, 2017a).
The recognition, discovery and exploitation of opportunities are some of the

necessities of entrepreneurial actions and growth (Shane, 2003, 18-19). Not
everybody recognizes entrepreneurial opportunities, and the same
opportunities may be discovered differently due to the entrepreneurs’
different previous experiences, knowledge and know-how. The information
networks of individuals through which they see and analyse their environment
affect their possibilities to recognize entrepreneurial opportunities. (Shane
and Venkataraman, 2000). Entrepreneurs with previous business ownership
experiences identify more opportunities and are more innovative and creative
in exploiting those opportunities (Ucbasaran et al., 2009). Shane and Ekhardt
(2010) introduce the theory of an individual-opportunity nexus concluding
the previous discussions on reasons why some individuals are more likely to
discover entrepreneurial opportunities than others. They highlight the
importance of individual cognition in the entrepreneurial opportunity
discovery and exploitation. They identify individual characteristics, such as
willingness to take risks, self-direction and aspiring to autonomy, as well as
access to such resources as financial, social, experiential and human capital
to be of importance in this process. In order to be successful, the intent of
action also needs sufficient conditions for entrepreneurial behaviour. (Shane
and Ekhardt, 2010.)
Growth orientation is a sum of an entrepreneurial orientation and a positive

operational environment. Entrepreneurial orientation is a very useful
construct for understanding small business growth and, specifically, the
impact of resource utilization, environment and attitude towards growth
(Wiklund et al., 2009). Covin and Slevin (1991) argue that entrepreneurial
orientation and performance must be present on both the company and
individual levels. On the company level, entrepreneurial orientation, the
environment and the firm’s strategic fit with it affect small business growth
and profitability. Firms with an entrepreneurial orientation are willing to take
high risks, they are innovative, proactive and opportunity oriented (Wiklund
et al., 2009; Covin and Slevin, 1991). These are also characteristics of sport
entrepreneurship (Ratten, 2011; Cilletti, 2012).
Entrepreneurial orientation is always context-specific, and therefore,

industry-specific issues together with organizational characteristics play a
crucial role when defining the entrepreneurial growth orientation of the
studied companies. Entrepreneurial orientation contains three different
dimensions, namely, innovation, proactiveness and risk taking, and it is
affected by the environment and organizational structure (Kreiser and Davis,
2010). All the three sub-dimensions have different relationships with the
firm’s performance and success. To a certain degree, increased risk taking
has a positive effect on a firm’s performance, together with high levels of
innovativeness and proactiveness. These sub-dimensions are moderated by
the external environment and internal organizational structures. Organic
structures with these three functions of entrepreneurial orientation lead to
increased levels of firm performance. (Kreiser and Davis, 2010.) A turbulent
environment can increase the opportunities and proactive firm behaviour.
Companies need to make risky decisions in order to be able to compete in a
rapidly changing, dynamic environment, whereas in more stable
environments, risks can be avoided, and resources are more available. The
operational environment is often dynamic, and uncertainty exists on a high
level. This is especially true about sport where the industry environment is in
constant change, and the level of professionalization has an effect on growth
orientation in the sport context. In addition, Wiklund and Shepherd (2005)
still connect access to financial capital to these sub-dimensions affecting
entrepreneurial orientation.
Sport entrepreneurship
Sport business as a globally fast-growing industry can be expected to offer

multiple business opportunities all over the world. Both sport and
entrepreneurship have many similar characteristics. They demand
innovativeness, proactiveness and risk-taking, and they operate in a very
turbulent environment. (Ratten, 2011; Ratten, 2018, 12.) In the
development of sport entrepreneurship, new business ventures play an
important role because they increase the competition and create business
opportunities (Ratten, 2018, 13). Top-level sport and business growth have
similar features because both demand competitiveness and determination.
Growth entrepreneurship and top sports both aim to be better than the
competitors in a turbulent business environment. In sport business, the
competition is in two arenas, in business and in sport (Beech and Chadwick,
2013). Business, in general, often aims at profit maximization, whereas in
the sport business the aim could be more in utility maximization, which can
be connected to social entrepreneurship. On the one hand, entrepreneurship
is a driving force for economies to grow, and on the other hand,
entrepreneurship can be a resource for growing sport organizations.
Ratten (2011) introduces a theory of sport-based entrepreneurship where

entrepreneurship is discussed in the sport context. Sport-based
entrepreneurship is identified as sport-related activities that are produced
and managed by entrepreneurial individuals. Ciletti (2012) also connects
innovations, risk taking and proactiveness to the characteristics of sport and
entrepreneurship. Innovations have already been connected to sport business
by Hardy (1986) as he describes them as one indicator of sport
entrepreneurship. Innovations in sport enterprises include technological,
promotional, product (Ciletti, 2012; Ratten, 2011) and service innovations.
Innovations can be found on different levels in a sport enterprise: the
organizational, team or individual level (Ratten, 2011), and they can be the
driving force for the development of a policy that supports new venture
creation and development in sport (Ratten, 2017b). Due to the global growth
in the sport industry, a wide variety of entrepreneurial opportunities exist in
the sport business, and entrepreneurial activities are needed in the
development of different sport-related organizations (Ciletti, 2012; Ratten,
2011; Santomier, 2002). Sport has become more competitive and sport
managers need to develop new ideas and utilize entrepreneurial opportunities
(Ratten, 2017b). Ratten (2018, 12) also connects creativity together with
innovations, proactiveness and risk taking to sport entrepreneurship
development. Sport leaders are often creative, and they manage change very
well. Sport entrepreneurs’ personal characteristics and commitment influence
their success, and together with the operating environment, they have a big
influence on sport entrepreneurship.
In order to combine the different aspects of entrepreneurship,

entrepreneurial growth and sport entrepreneurship presented in the
framework, it was necessary to determine the different entrepreneurial
elements affecting growth in the sport business (see Figure 1). The first
segment, the ability to grow, includes the company’s resources, operating
environment and sport industry-specific characteristics. This segment
separates sport entrepreneurship from other businesses since sport is
affected by certain elements, such as excitement and emotions, uncertainty
of outcome and need for competition, which cannot be found in other
industries. The growth opportunity segment includes firm characteristics
affecting the growth, business opportunities and resources. Organizational
characteristics also influence the third segment, growth orientation, which
also contains the entrepreneurial orientation and the entrepreneurs’ personal
characteristics. This is summarized in Figure 1 below.
Figure 1. Growth entrepreneurship in sport business
The starting point for this segmentation was the need to understand what is
involved in growth entrepreneurship in sport. The aim of this synthesis was
to clarify the issue in question and to create a basis for data analysis. As the
aim was to understand the phenomenon, the deductive approach to data
analysis was taken, and the aim was to substantiate the synthesis with the
data.
Method and implementation of this study
This study was conducted as a qualitative case study aiming at interpreting

and understanding the phenomenon of two sport organizations’
entrepreneurial growth. The qualitative case study approach was chosen
since the aim was to understand why and how these studied enterprises had
grown and to gain a broader understanding of the phenomenon of growth
entrepreneurship in the sport context. This study followed mainly Yin’s (2014)
case study methodology. Case study research is popular amongst sport
organization or sport policy studies (Skille, 2013) since it can be used to more
deeply understand something that has not been studied to a great extent
before. The focus in this study was more on the growth mode than on the
growth rate. However, the case selections from the ice hockey and football
companies in Finland were made based on financial data. The selection of
these cases was based on identifying those indicators that qualify a firm to
be a growth enterprise in the national elite sport business. By using Storey
and Greene’s (2010, 210-211) criteria of growth measurement, two positive
cases that had grown steadily within a five-year period were selected for
analysis. The assumption in this study was that a dual case study analysis
would be more powerful than a single case study analysis, and furthermore,
two different sports might give more fruitful findings than just one.
The main research questions here were; why and how have these two studied
first league sport enterprises grown, and what have been those
entrepreneurial characteristics in terms of growth ability, orientation and
opportunities that have affected their growth and success. The answers were
drawn from multiple sources of evidence including company strategies,
sources of financial data, literature, company histories, and interviews with
the owner-entrepreneurs. In both companies, the entrepreneurs (main
shareholders) and managing directors (minor shareholders) were in-depth
interviewed by using the theme interview approach. Each interview lasted
from 90 to 140 minutes. The main themes of these interviews (in addition to
background information) were the critical turning points that had supported
the growth and the factors that had affected the growth.
The reason for choosing two cases from two different sports instead of just
one case was that, according to Yin (2014, 57), if there are two or more cases
that support the same theory, a literal replication of the theory may be
justified. Central to this theory building approach is the multiple case study
replication design (Eisenhardt and Graebner, 2007). In this study, the cases
served as replications and could be contrasted in their real-life contexts. Both
cases were analysed first separately and then cross-case in order to compare
the findings. The analysis in this study was a cyclical process where the
research data, literature and new theory emerging from the results
alternated. The emphasis of theory building from case studies is on
developing propositions and theories that can be later tested in mainline
research (Eisenhardt and Graebner, 2007). The qualitative approach in this
study was justified since no existing theory would produce ready perspectives
for the studied phenomenon, and, hence, the results could act as a starting
point for mainline research.
The case selection was based on the growth rates of the studied firms. The
first step was to screen the selected growth figures of 11 football and 14 ice
hockey first league team companies operating in Finland. Storey and Greene
(2010, 210-211) identify eight measures for company growth: sales, profits,
financial ratios, employment, market share, the entrepreneur’s income as
well as subjective (e.g. owner satisfaction) and multiple measures. This
criterion was used as a starting point for measuring the growth of the possible
cases. Wiklund and Shepherd (2005) identify the most common criteria for
measuring small business growth to be sales, profits and employment figures.
The measures used in this first round were turnover, profits and personnel
expenses, and all this information was publicly available in Finland. Turnover
described the sales figures of these companies and showed that the selected
two companies had grown heavily during the examined five-year period. Their
turnover was above average when compared to the other first league team
companies in their field of sports. In addition to turnover figures, the returns
and profits, together with employment expenses were studied to indicate the
growth rate of each company. Financial ratios were not considered important
since they might have been sensitive to divergences in different companies.
Moreover, market share was found to be very difficult to measure since all
the first league companies in football and ice hockey operate in different cities
with varying market areas.
Even though the growth rate of these two selected firms varied during the
researched five-year period, the overall growth clearly met the criteria set for
a growth enterprise. Variation in growth rates might propose different events
in the company’s lifecycle, such as a major contract or new product
development (McKelvie and Wiklund, 2010), which was the case with these
companies as well. The peaks in their growth rates were caused by, for
example, extremely expensive international player sales or service product
development. The period of five years was selected to ensure that the growth
was steady and not caused only by one or two major transactions. Different
time periods are used in growth entrepreneurship studies, although the most
common ones are 1-, 3- or 5-year periods (Delmar et al., 2003).
The data analysis started from the interviews with a pre-understanding of the
phenomenon. The interviews were recorded and transcribed verbatim. The
analysis of the transcripts was conducted by using the NVivo program by
employing an appropriate coding and categorizing system. The categorization
and coding were developed based on a synthesis of growth entrepreneurship
in sport as outlined in the literature (see Figure 1). Even though the analysis
was based on a synthesis drawn from the literature, new aspects raised by
the interviewees were also discussed. The analysis followed the
hermeneutical approach of interpretation from pre-understanding to a deeper
understanding of the phenomenon. A cross-case analysis was conducted to
identify how the studied cases replicated or contrasted with each other (Yin,
2014, 167).
The studied cases in brief
The football club of the study, HJK Helsinki, is the most successful football
club in Finland with regard to business operations as well as sporting success.
HJK has won altogether 28 Finnish Championships, 12 Finnish Cup victories,
and it has played in the Champions League and in the Euroleague (HJK,
2018). HJK operated as a non-profit organisation until the year 2000 when
the current Ltd was established. HJK has developed its business functions
with determination and with passion for sport and football. The entrepreneur
who owns most of the shares has been with the club since he was a child
when his father was the Chairman of the then non-profit club’s board. He has
invested heavily in HJK, and the club has gained a leading position amongst
the Finnish football clubs. The managing director, who was interviewed, has
been with the club for a decade, and he has observed the development
towards professionalization very closely. Multiple books have been published
about HJK together with thousands of newspaper articles.
The ice hockey club of the study, JYP Jyväskylä, has been one of the most
successful ice hockey teams in Finland during the past ten years. JYP won the
Finnish Championship in 2009 and 2012, the European trophy in 2014 and
the Champions Hockey League in 2018 (JYP, 2018). The non-profit club
turned into a limited company in 1999. The entrepreneur owns the majority
of the shares, and the interviewed managing director owns again a minority
of the shares. Regarding the ice hockey team companies, a choice had to be
made between three companies for this study, and JYP was selected because
its growth had been steadier than that of the other two, and because its
ownership was clearly entrepreneurial. Despite the turbulent first years as a
profit-seeking company, JYP has gained a balanced financial position and
managed to retain its sporting success amongst the best ice hockey teams in
Finland.
The critical turning points in the history of these companies provided very
interesting occasions affecting growth throughout the existence of these
companies. In order to understand the cases more deeply and to identify the
characteristics affecting their growth, some of the occasions in their growth
paths are worth mentioning. Some of the incidents that were considered
important happened already before the studied period. Both teams became
corporatized at the turn of the century (Ruuska, 2013; Aalto et al., 2007)
because of sport business professionalization in Finland. Non-profit sport
associations started to become businesses because the message from the
government was that professionally operating sport teams could not identify
themselves as non-profit organizations anymore (Rosbäck, 2012). Player
contracts were defined as employment contracts, and the nature of the first
league teams’ operations were determined as profit-seeking businesses. Both
enterprises suffered from serious losses before their present entrepreneurs
took over, and the first years of the firms were still years of instability
(Ruuska, 2013; Aalto et al., 2007). According to the entrepreneurs, the
benefits of establishing firms instead of non-profit organizations were easier
decision-making, non-divided responsibility, access to financial capital and
lighter administration.
A few years after establishing the limited companies, both teams acquired
new facilities (Ruuska, 2013; Aalto et al., 2007). This renewal of the facilities
was an epoch-making turnaround for both companies after the new venture
creation. A new football stadium and a renovated ice hockey arena were
crucial investments for both companies at the beginning of the century. The
main benefit of these new facilities were the possibilities to gain more income
from customer services. New lounge areas, restaurant services, spectator
areas and media visibility possibilities were developed for the stakeholders.
The investments in these facilities for such small companies were heavy, and
the entrepreneurs had to take great risks.
Another very critical change was the development of the international player
markets. In football, the market had existed longer, but in ice hockey, the
international market (apart from the NHL) opened as a result of the
establishment of the Kontinental Hockey League in Russia. During the studied
period, both companies had one significant international player sale, which
resulted in big profits. The importance of these sales is significant, although
these kinds of sales are not annual, and they are also highly coincidental.
However, the opening of new international player markets, together with the
opportunity to play European games, gave the businesses new opportunities
for gaining profits and expanding their businesses.
The important turning points were very similar in both cases despite the fact
that they operated in different market areas, different sports and had very
different histories. JYP Ice Hockey team is located in a mid-size city in Central
Finland with 140.000 inhabitants, whereas HJK Football Club operates in
Finland’s capital Helsinki with 650.000 inhabitants (the Metropolitan area 1.4
M). Both companies are now in the maturity stage of their lifecycles, they
have settled their positions amongst top teams in Finland, and their brand
awareness in good. Moore and Levermore (2012) argue that in the English
Premier League, the companies’ directors and owners tend to be highly
involved in the day-to-day operations and apply control over the organization.
In these studied cases, the owners’ main business is elsewhere, and they do
not take part in the daily routines but they are very much involved in the
decision-making.
Results
Growth ability
Growth ability consists of the company resources, working environment and

the industry-specific characteristics. Access to resources, such as financial,
social, experiential and human capital, proved to be important factors
affecting entrepreneurial growth. In growth entrepreneurship literature,
especially the roles of human and financial capital are stressed (Gilbert et al.,
2006) as a key to success. The financial resources for these kinds of team
sport companies in Finland can be divided into four main sources: game event
revenues, sponsorship money, international games and player sales. For
example, broadcasting plays almost no role at all. In addition, the highly
seasonal nature of this business presents an extra financial challenge. The
operational costs are stable, but the incomes differ due to the seasonality,
and even during the season according to the success of the team.
An industry-specific issue regarding the human capital is the uncertainty of

outcome in recruiting the players for the team. Expensive players might end
up being wrong investments, or they might be injured during the season.
Despite the risks and uncertainties of player purchases, all the interviewees
stressed the importance of team building. A successful team requires top
players together with knowledgeable coaches. Even though the best players
are expensive and require heavy investments from the company and
entrepreneurs, both entrepreneurs were still confident that it was always
worth the investment and risk. The possibilities to multiply the invested
money were seen enormous. Both entrepreneurs felt that the only way to
make real profits in such a small market as Finland was to operate in the
international markets, in football the European markets and in ice hockey
mainly in the Russian markets.
” We buy the player and he progresses in our coaching. Someday, we might

be able to sell him for double, triple or tenfold the price.” (B)
Human capital issues affecting the performance and growth, on and off the
field, include the right people in all positions, the players, the supporting
personnel and administration. The key personnel in the administration have
worked for these companies for a long time, which indicates a commitment
to their tasks. Successful recruitments and a skilful board of executives are
the core functions of business growth (Poufelt, 2007), and entrepreneurial
management has a positive effect on growth (Bradley et al., 2011).
Successful recruitments were seen very important in all company sections.
Both enterprises have skilful team managers, and they use professional
consultants when recruiting the team members. Sport leaders and coaches
are important actors in creating visions and ideas as well as in influencing the
level of creativity needed in entrepreneurship (Ratten, 2018, 9).
” Successful teams, those that thrive in this business, are very well-knit. You
can see that they are very tightly together. There must be the right persons,
right people in terms of playing but also the right chemistry, not too similar
persons, but not too different either. It is some kind of witchcraft.” (C)
The financial resources in these sport enterprises contain their income

sources, investment possibilities and financial risks. The division of income in
Finland is very exceptional since TV-broadcasting rights play practically no
role in the team sport companies’ budgets, whereas in Central Europe they
are a very important part of the first-league team sport companies’ income.
”In Finland, the income structure is different; we don’t really get anything
from TV-broadcasting. The paradigm is that the role of our partner
organizations has grown, and their share of the whole income is not in the
right proportion.”(B)
Since the broadcasting rights do not generate a great deal of income, the role
of sponsors, customers (spectators, fans and VIP guests) and stakeholders is
essential. Since the income structure relies very heavily on sponsors and all
the stakeholders, it is of utmost importance that there is value creation in
these companies’ networks. Social entrepreneurship issues, such as
corporate social responsibility, are important approaches to attract sport
sponsorship (Miragaia et al., 2017). Relying on sponsors, especially when the
economic situation of society is unstable, is precarious.
” We should be able to increase our ticket sales, the income from the paying
customers and the season ticket holders. Building on sponsors is not safe,
since there are always good and bad times in society, and we are tied to the
society.” (B)
It is also essential that these companies develop other income sources than
game events. Furthermore, the financial importance of the European games
and successful international player sales were stressed by all interviewees.
The European games are important because the prize money is remarkable
and they tend to attract spectators more than ordinary games, especially
when the opposing team is famous.
One aspect in the financial capital is the benefits of the corporatization of

these companies. A limited company has traditionally better access to
financial capital than a non-profit organization. Therefore, corporatization was
also a necessary tool for these organizations in order to be able to obtain
loans for their investments and keep their credibility in the eyes of their
sponsors. However, both entrepreneurs stressed the importance of cash flow
in the operational actions, and loans were options only when bigger
investments, such as arena investments, were needed. Neither of these
companies had needed a great deal of external capital in the past few years,
but the situation had not always been as stable as it was now.
”With 30 years of experience, there has been my money, sometimes my

friends’ money and sometimes the bank’s money involved. At times, we’ve
had horrifying amounts of debt.” (A)
Social capital can be understood to involve different stakeholders and

operational networks. Team sport companies’ stakeholders form different
groups, such as sponsors, customers, banks, suppliers, junior teams and
other sporting organizations. Sports clubs and their game events can be
described as platforms where the stakeholders create value (Woratschek et
al., 2014), which means that the fans have their home base, the sponsors
gain the required visibility, and the spectators can enjoy the atmosphere and
services. This value creation is essential in terms of maintaining business
success, and it helps the company to be less dependent on sporting success.
Success in sport was not one of the growth measurement criteria since there
is no solid way to measure it. Nevertheless, the sporting success has been
one of the growth contributors in these cases. The small population in Finland
together with multiple sport and leisure offerings makes the competition very
intense, and to gain a competitive advantage, the team must be sufficiently
successful to attract spectators and sponsors. Both companies have
developed their partnerships by developing technical equipment in the
stadiums and by offering multiple marketing possibilities and innovative
media solutions for their sponsors. The role of these kinds of technological
sports innovations together with social media is important in firm
development (Potts and Ratten, 2016).
The operating environment, meaning the hosting cities, is, of course,

important in terms of regulations and governing issues. The surrounding
environment affects the sport entrepreneurs’ possibilities to access markets
or obtain funding (Ratten, 2018, 11). The attitude that society holds towards
the sport and the club was seen to be very important. The local media have
a significant impact on building the brand of the sports club amongst the local
people. The surrounding community and its fans’ engagement with the club
were seen as crucial factors for success.
The role of uncertainty is defined as one of the entrepreneurial characteristics,

and it plays a crucial role in the sports industry since the outcome of a game
is always uncertain and it might have a great impact on the success of the
organization. Performance success has an enormous impact on the operations
of both companies. If the team drops out of the series at an early stage, the
number of games will be smaller and, consequently, less money will be made
with the ticket sales and services. In addition to this, the spectators tend to
be more interested in successful teams, and, therefore, value creation in
order to enhance commitment to the team is essential. All the interviewees
stressed the importance of committed fans and emphasized the significance
of developing the game event so that it would better serve different
stakeholders.
Short-termism is one of the industry-specific characters because sport

companies very often focus on the sporting success in short term at the
expense of long-term planning (Moore and Levermore, 2012). At some point,
this is compulsory since future success is often uncertain even despite having
the best possible players. Seasonality in the business makes it more difficult
to plan ahead, since the players might transfer in the middle of the season,
and the following season’s player recruitments have a strong impact on
planning. However, both studied companies stressed the importance of
strategic long-term planning and clear goals, especially in their
administration, sales and marketing. Even though it is difficult to plan the
team related issues in a long term, both companies have administrative,
financial and operational strategies on a long-term basis. A long-term goal
for both HJK and JYP is in the international markets where they see
opportunities to grow and gain profits.
”We must be successful. In future, there is hopefully a European league, since

that might give us the possibility to keep up this big-budget team, which is
expensive in these circumstances.” (C)
As mentioned earlier, ice hockey and football differ from the other sports in
Finland because in these sports, the first league clubs are limited companies
instead of non-profit associations. Even though they operate as businesses,
they still have many characteristics of non-profit associations, such as
volunteers, passionate employees and spectators, emotions involved in the
decision-making and business operations. It is challenging for the managers
and owners to manage these people. The owners of HJK and JYP have other
businesses to run, and their motivation is based on their passion for this
particular sport.
One remarkable industry specific character in the Finnish football is that there
is no player market in Finland. Teams do not purchase players but wait until
the season ends and bargain the deals during the off-season period. The only
transactions have happened when HJK has bought players from other national
league teams. The prices are high in proportion to the Finnish football
industry. However, they are not comparable to the European player prices.
Growth opportunity
The respondents stated that the development of their growth enterprises had
started from the recognition of entrepreneurial opportunities in their sport.
The role of opportunities is important in entrepreneurship; they exist in a
variety of ways and in different occasions (Shane and Venkataraman, 2000;
Shane and Eckhardt, 2003). The core business of game events is not
sufficient in such a small market as Finland, and in order to be able to survive,
the companies must identify opportunities outside the core business.
Internationalization, stakeholder value creation, developed sponsorship,
utilization of the existing facilities and creative new business ventures have
offered entrepreneurial opportunities for these businesses.
Opportunity recognition in the existing sporting businesses, such as HJK or

JYP, is a vital condition for them. Both entrepreneurs underlined the
importance of finding new business opportunities by exploiting the existing
business operations, but also by discovering new business areas. In terms of
sports, the internal opportunity for them could be to train more of their own
junior players for the first league team’s fourth or fifth line-up. Both of these
clubs also have many possibilities to develop their functions outside the core
ice hockey or football business, such as utilizing the arena for other events.
”We should find business opportunities outside ice hockey. That leads to the
arena and our restaurant services there. We should develop events around
the year there since we have a monopoly for catering, selling alcohol and
advertising in the arena. We have invested heavily in it. We have 365 nights
a year, and only 40 show time game events. That is not much.” (D)
The trend in sponsorships nowadays has shifted from supporting the first
league team to supporting the overall club or mainly junior operations. Soft
values in sports, especially those related to children, have become popular
within the big corporations, and they require actions from the sporting
organizations. Sport can be an effective vehicle for corporate social
responsibility (Smith and Westerbeek, 2007), and sport events that benefit
the community have become important in terms of attracting sponsors
(Miragaia et al., 2017). This creates opportunities for sport companies to
create new business inventions together with new sponsorship offerings.
”This city has a lot to offer for businesses, and therefore, we must be able to
differentiate, we must be interesting in the eyes of our customers. We have
one good side in our business at the moment, and that is children’s and youth
sport, it is trendy nowadays, and companies want to be involved in it.” (B)
International games and player sales have generated the necessary revenues
and extra income for developing the business further for both of the studied
companies. The Kontinental Hockey League (KHL) in Russia has developed a
new market for the Finnish ice hockey clubs since the club also benefits
financially when selling players to them. However, when a player moves to
the North American National Hockey League (NHL), the Finnish club does not
benefit financially. In the football industry, the international markets have
existed longer, and for the biggest Finnish football clubs these sales are
essential not only financially but also operationally. The European market is
the most important, and HJK has emphasized the possibilities for players to
access the European clubs through them. This market is highly competitive,
and it demands good relationships between HJK and the bigger European
clubs to be able to supply players to the European market. On the other hand,
these development possibilities guarantee that HJK interests the best players
in Finland. European markets attract the top players to join the clubs from
where they have the possibility to move to Europe. The Euroleague games
also attract more spectators and sponsors on the local level.
”The European league could develop into a professional league, and some of
the Finnish ice hockey teams could play both the European and national
games.” (D)
Another characteristic affecting business growth is the position of the
company in its lifecycle. According to the growth models, growing businesses
usually go through different kinds of crises before reaching the maturity state
(Greiner, 1972; Barringer and Ireland, 2012, 468-470; Carter and Jones-
Evans 2012, 411-414). Both studied enterprises have their backgrounds as
non-profit organizations, and it can be assumed according to their company
histories that they have gone through different crises during that time. HJK
and JYP have both professionalized their functions first by establishing limited
companies and since then improved their actions by recruiting educated
professionals in their administration departments. Furthermore, they have
grown their administration slowly by hiring, first, a capable managing
director, and secondly, well-trained marketing and sales personnel. Growth
has required creativity and leadership at the first stage, delegation and
coordination skills at the second stage, and finally, strong collaboration within
the whole company and its stakeholders. Both enterprises are in the maturity
stage in their life cycles, and the future challenge is to keep the core business
there and develop new business opportunities.
Growth orientation
Very often entrepreneurial growth is strongly connected to the

entrepreneurial orientation of the owners and managers. Firm level
entrepreneurial behaviour can be connected to economic success and growth
(Covin et al., 2006; Covin and Slevin, 1991). Firms with an entrepreneurial
orientation are willing to take high risks when pursuing success. They are also
innovative, proactive and opportunity seeking (Ratten, 2011; Ratten, 2017b;
Ciletti, 2012). Organizations are never entrepreneurial without individuals
who are capable of managing the organization and pursuing the necessary
actions. Entrepreneurial orientation is always context-specific, and therefore,
industry-specific issues together with organizational characteristics play a
crucial role when defining the entrepreneurial growth orientation of the
studied companies. Since elite sports, and especially team sports, is very
much an emotional business, it is crucial that there are strong and capable
individuals leading the business activities.
An entrepreneurial orientation and firm performance together with internal

strategic actions and the external environment all create a favourable growth
atmosphere (Kreiser and Davis, 2010). Proactiveness, risk taking and
innovativeness are characteristics of successful sport enterprises (Ratten,
2010a) and entrepreneurially oriented companies (Covin and Slevin, 1991;
Lumpkin and Dess, 1996). It can be said that the entrepreneurial success of
these companies has been largely based on their entrepreneurially oriented
owners and managing directors. They all highlight the importance of proactive
actions in developing a competitive advantage, innovativeness in sponsorship
and stakeholder commitment and risk taking in business development.
Growth has been in both cases a purposeful choice, not a coincidence, and a
consequence of a growth strategy. The management’s attitude and
commitment together with an entrepreneurial orientation and a dynamic
operating environment are important constructs of small business growth
(Wiklund et al., 2009).
Innovativeness as one characteristic of entrepreneurial orientation includes

innovative products and services together with innovative business solutions.
Opportunity recognition plays a crucial role in innovativeness in terms of
creating new business ventures by expanding the current business. Creativity
as a part of innovativeness is a fundamental issue in sport business when the
uncertainty of the outcome does not always support the product. Both
companies emphasize the importance of innovations and creativity in their
business actions.
”Some things already exist as they are, like the game itself. That is very
static. However, when it comes to the business, we need creativity.” (B)
Proactiveness in sport enterprises can be linked to opportunity exploitation

before competitors, acting in advance in a changing operating environment
or quick decision-making. There are multiple tasks in this kind of industry
where proactiveness in a necessary function. These tasks include, for
example, teambuilding and especially attracting the right players on time or
recruiting promising junior players. One also needs to consider changes in
success or in the overall industry and marketing or promotional issues, for
example, in social media.
”Even though I have been involved in this business for a long time, I have to
evaluate my procedures constantly. Times change, and we must also change;
we cannot just say that we go through that door because we are used to
doing that. We have to keep an open mind and be ready to do things
differently, we have to stay awake in order to avoid getting into a rut.” (B)
Both owners mentioned that they were not motivated by the profits, but by
the possibility to make a social contribution. Even though these companies
are profit-seeking organizations, they have characteristics of social
entrepreneurship. A social entrepreneur is motivated by the possibility to
make a social contribution instead of gaining financial returns (Audretsch,
2012). Social responsibility also gives sport organizations opportunities to
improve their image and business outcomes (Ratten, 2010b). Social
entrepreneurship in the elite sports is often connected to non-profit
organizations where entrepreneurs voluntarily bring their knowledge to use.
In addition, Gallagher et al. (2012) identify that social entrepreneurship may
also occur in professional league enterprises. In these cases, the main source
of income for both entrepreneurs is not the team sport enterprise but their
other businesses, and therefore, the possibility to make a social contribution
is an important motivation factor for them.
Conclusion
The aim of this study was to understand entrepreneurial growth in team sport
SME’s. Combining the sport context to growth entrepreneurship theories was
interesting since there was very little previous research available. The
characteristics affecting entrepreneurial growth are multifaceted. The results
show that the ability to grow, opportunity recognition and exploitation
together with an entrepreneurial orientation were all important in these
companies’ growth paths. The identification of these three approaches to
growth showed the complexity of growth in sport SME’s and its implications
for an entrepreneurial sport policy.
The ability to grow is affected by the operating environment, resources and

industry specific issues. Both of the studied companies operated initially as
non-profit organisations, and they were corporatized at the turn of the
century as a consequence of professionalization. Now, they are in the
maturity stage of their life cycles, and they have achieved a stable position
in the industry, although the uncertainty of outcome in sport keeps the
environment turbulent. Business growth and sporting success seem to be
somehow compounded in these cases, which indicates that success is one
growth indicator even though its effect on growth is hard to measure very
accurately. Although these sport SME’s operate as businesses, they still have
many characteristics of non-profit associations, such as volunteers,
passionate employees and spectators, emotions involved in the decision-
making and business operations. Their operating environment is highly
influenced by the public sport policy, and the growing sport companies should
be supported in every stage of their development. Understanding the context
of sport, its cultural differences and industry specific features is a challenge
for policymakers.
Growth orientation is affected by the organisational characteristics,

entrepreneurial performance, innovativeness, risk taking and proactiveness.
Sport companies cannot rely on the success of the team, and therefore,
exploitation of new opportunities inside and outside the core business seems
to be crucial. Although the concept of social entrepreneurship is often linked
to non-profit sport organizations, it can be connected to such profit seeking
businesses as these studied companies as well. The entrepreneurs are
motivated to run their businesses although the profits are not remarkable and
the risks are high. They have made the decision to grow even though it would
mean bigger financial risks and more commitment to the company. This
growth needs to be supported by policy decisions concerning both financial
and non-financial resources. Sport companies should be encouraged to grow
and thereby create jobs and economic growth.
Growth opportunities in these cases include experienced and capable
entrepreneurs, clear growth strategies, effective leadership, success in sport
and firm performance and stakeholder value creation. The motivation of the
entrepreneurs to excel, capable management and staff, together with an
organic structure, dynamic environment and a certain amount of risk taking,
proactiveness and innovativeness in business operations have made these
organizations very much entrepreneurially oriented. Cooperation in sport
business between the public and private sector requires flexibility, quick
decision-making and policymakers’ willingness to involve sport entrepreneurs
in policy development.
The studied growth entrepreneurship phenomenon is rather new in the

context of sport, and it provides new insights for the field of sport
entrepreneurship. However, the results need to be further tested in the
mainline research. The limitation of this study is that it is country specific,
and therefore, the findings are strongly related to the Finnish team sport
industry and sports culture. However, due to the growing professionalization
in team sports in Finland, the results can provide a practical contribution for
the other team sport companies and entrepreneurs, also in other countries
with similar situation.
The results can be further tested in the mainline research amongst

entrepreneurially managed sport enterprises, for example, by researching all
the team sport companies in Finland or by comparing these results to other
countries team sport SME’s. It would be interesting to investigate the
negative, not growing enterprises as well to identify the possible reasons for
the lack of business development and growth. Further research could also
study whether there are differences in the entrepreneurial characteristics
affecting the business growth in sport SME’s in different countries or different
sport industry areas. By studying the policy decision makers in a certain area
together with sport entrepreneurs would generate more understanding of
their influence on the firms’ opportunities to grow, and whether the
environment’s influence is bigger than the internal forces in the decision-
making process concerning the willingness to grow. Connected to this, it
would also be interesting to explore if different governmental sport policies
influence the innovation level, risk-taking behaviour or willingness to exploit
the potential business opportunities.
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Interviews: A and B from HJK Football Club and C and D from JYP Ice Hockey Club.
Publication III
Ahonen, A., and Persson, H.T. R.

Social Entrepreneurship and corporate social responsibility in team sport clubs

Springer
Sport Entrepreneurship and public policy;
Building a new approach to policy-making in sport
pp. 7-21, 2020
© 2020, Springer Nature Switzerland AG.
Social Entrepreneurship and Corporate
Social Responsibility in Team Sport Clubs
Two Cases from Sweden and Finland
Aila Ahonen and H. Thomas R. Persson
Abstract Small and large sport clubs, in big cities or in the countryside, need to
respond to external pressures created by social, financial and environmental factors.
These pressures may come from the commercial environment, communities, national
governing bodies, or political stakeholders. This chapter introduces the reader to the
current pressures faced by Nordic sport clubs and the entrepreneurs’ role in the clubs’
development through the lens of entrepreneurship, and especially social entrepre-
neurship. This chapter addresses the role of the entrepreneur in relation to the triple
bottom line of corporate social responsibility (CSR)—economy, environment, and
society—in the context of Finnish and Swedish team sport clubs by using two football
clubs as examples.
1 Introduction
Sport has become one of the fastest growing industries worldwide. It is a significant
part of many people’s lives, as it touches their everyday life as participants, media
consumers, spectators, or through other types of engagements. This certainly applies
to the Nordic countries1 where the sports culture has always been very strong and
played an important role in the creation of their national identities. This is, perhaps,
not strange considering that the Nordic countries have historically been very suc-
cessful in elite sports on a global level, despite their small populations (Peterson,
1
Nordic countries include Sweden, Finland, Norway, and Denmark. These countries face similar
challenges in terms of sports development, although the development tracks have been quite
different.
A. Ahonen
JAMK University of Applied Sciences, Sport Business School Finland, Jyväskylä, Finland
e-mail: Aila.Ahonen@jamk.fi
H. T. R. Persson (*)
Faculty of Business, Department of Work Science, Kristianstad University, Kristianstad,
Sweden
e-mail: [email protected]
© Springer Nature Switzerland AG 2020 7

V. Ratten (ed.), Sport Entrepreneurship and Public Policy, Contributions to
Management Science, https://doi.org/10.1007/978-3-030-29458-8_2
8 A. Ahonen and H. T. R. Persson
2008). Notwithstanding certain differences between Finland and Sweden, the two
countries discussed in this chapter have traditionally been successful in the winter
Olympic sports, such as ice hockey, cross country, and downhill skiing and in the
summer Olympic sports, such as wrestling, track and field as well as in the equestrian
and aquatic sports. However, Sweden and Finland have over time with some excep-
tions lost some of their competitiveness in the professional Olympic sports (Andersen
& Ronglan, 2012). The number one sport in both countries in terms of participants
and spectators is football. In the mainstream debates, this is commonly explained by
the media focus on the sport. Football is a global sport, and for big clubs and national
federations, the international success of teams or individual players is often the most
visible measurement of popularity. Naturally, this gains the most attention, whereas
small- and medium-sized sports organizations mostly live an unnoticed life, at least as
far as the media is concerned. However, the sport sector tends to be dominated by
small organizations, and as such, the sector is best studied from an SME perspective
(Moore & Levermore, 2012). The importance of these sport SMEs is especially
remarkable in such small economies as Sweden or Finland. Hence, understanding
the external pressures that these clubs face with regard to economic, social, or
environmental aspects is important.
Both Finland and Sweden have gone through a major organizational change in
their sport systems in the past decades (Andersen & Ronglan, 2012). Although sports
have been traditionally based on non-profit sports clubs, amateurism and volunteer-
ism, the importance of sport enterprises or for sport organizations to behave like
enterprises and the need for entrepreneurially oriented leaders have risen due to the
rapid professionalization and commercialization of the sports industry. In the Nordic
countries, this development did not start until the end of the last century, since before
then, professional athletes were not recognized as real sports men and women. To be
paid as an athlete was, in fact, forbidden up until the 1960s (Peterson, 2008).
In both Sweden and Finland, football has been influential in the development of
the sport model and sports culture in terms of integration, welfare, and even democ-
racy (Andersson & Carlsson, 2009). Changes, such as when the Finnish public sector
is withdrawing from funding sport organizations (Rosbäck, 2012), pressures the
organizations at all levels of sports to find new sources of income. This has forced
sport clubs to renew their operations and professionalize their organizations and
actions. Moreover, it requires sport organizations to develop new business opportu-
nities and attract more or more generous stakeholders in terms of sponsorship. One
way of holding on to and attracting new sponsors is for organizations to develop a
corporate social responsibility (CSR) agenda (Inoue, Kent, & Lee, 2011). CSR has
become an important topic among sport policymakers, and the pressure from com-
mercial, community, and political stakeholders, as well as from SGBs to deliver in
terms of social responsibility is increasing (Persson, 2008, 2014). When both small
and big sport clubs respond to this external pressure by implementing CSR, it can be
explained as an expression of the entrepreneurial nature of sport, a result from
constantly having to adapt to suit its own and society’s changing needs (Ratten,
2010b). This chapter focuses on the role of the social entrepreneur in relation to the
triple bottom line and sustainability, commonly associated with CSR and corporate
Social Entrepreneurship and Corporate Social Responsibility in Team Sport Clubs 9
governance (Hernández-Perlines & Ibarra Cisneros, 2018). Hence, in similar fashion

to the distinction between an enterprise’s CSR and that of a social enterprise in terms
of primary goals and handling of profit (Persson, Biggeri, Testi, Bellucci, & During,
2018), a distinction is made between the sport entrepreneur and the social entrepre-
neur in this chapter.
2 Sport Entrepreneurship
Entrepreneurship, or entrepreneurial traits have become an important topic in the

context of the changing financial circumstances for sport, whether it is the state
funding that is changing, stagnating or disappearing, or whether it is managing in a
competitive environment where clubs compete both for sport results and sponsors.
The turbulent and rapidly changing environment creates its own challenges for
sport enterprises (Ratten, 2018). Sport as a business entity has certain unique
characteristics: the competition is often held in two arenas, in business and on
the field or pitch simultaneously, as teams in the same league and at the same time
need to cooperate with and compete against each other as the uncertainty of
outcome may affect the business unexpectedly. In all markets, but perhaps even
more so in small markets, such as Sweden or Finland, sport clubs and companies
need to seek new possibilities to grow their businesses and build their brands
effectively. Hence, sport clubs need entrepreneurs at the same time as sport—
specifically football and ice hockey—has become an interesting playground for
entrepreneurs interested in sport. In Finland, the changes in state funding have
created business opportunities for capable entrepreneurs willing to invest in sports,
take risks and operate in a changing environment, while the 51% rule in Sweden is
still an obstacle for big investments (Backman, 2018, p. 178, 183). This makes
Finland and Sweden, with their own national circumstances, two interesting cases
to study.
Moore and Levermore (2012) argue that the sport sector is primarily made up of
SMEs and that it should, consequently, be studied and analyzed accordingly. They
conclude that certain organizational characteristics of SMEs, such as resource con-
straints, short termism, informality, and authoritarian management, are also charac-
teristics of sport SMEs. In addition, innovations, risk taking, and proactiveness are
closely connected to both entrepreneurship and sport (Ciletti, 2012; Hardy, 1986;
Kreiser & Davis, 2010; Lumpkin & Dess, 1996). The fact that many sports, such as
football, are played on a seasonal basis, and the Swedish and Finnish football leagues
between April and November, creates seasonal challenges both in terms of income
sources and of how to be competitive in the European Cups. In other words, football
clubs need to be innovative to counteract these weaknesses. According to Ratten
(2010a), common characteristic to sports entrepreneurs is precisely that they are
innovative, willing to take high risks, and work proactively to meet these challenges.
Opportunity, recognition, and exploitation are core functions of entrepreneurship
(Shane & Eckhardt, 2003), and sport business offers multiple opportunities (Ratten,
2011a, 2011b) on different levels of society. The exploitation of these opportunities is

dependent on the individual entrepreneur and his/her personal entrepreneurial char-
acteristics and motivation. Although profit has historically been the motivator for
sport entrepreneurs (Hardy, 1986), more recent studies show that sport entrepreneurs
are often more motivated by non-monetary aspects (Ratten, 2011b). Hence, the
motivation of being an entrepreneur may change over time, and non-monetary
aspects, such as being one’s own boss, freedom of decision making, opportunities
of success, satisfaction, and personal rewards can become greater motivators than
money making (Alstete, 2008). Just as for sport enterprises, sport entrepreneurship
can also be seen as a tool for non-profit organizations to develop their business ideas
with a desire to respond to or create market opportunities (Ratten, 2010b) and to gain
market shares. Thus, even when the financial returns or profits are not the driving
force, they are a necessary resource for developing sport organizations and achieving
other goals.
The distinction between sport entrepreneurship and social entrepreneurship may or
may not, depending on the definition of social entrepreneurship, be a gigantic leap, just
like the gap between CSR and social entrepreneurship. Miragaia, Ferreira, and Ratten
(2017) connect the two latter to the point of view of the enterprise and the sponsoring of
sport events at the community level. In their research, they place the social entrepreneur
in the midst of a for-profit company, instead of the social enterprise sector (see Testi,
Bellucci, Biggeri, & Persson, 2018). With its natural connection to social enterprises,
social entrepreneurship is commonly defined as a not-for-profit activity that generates
and maximizes social value while remaining economically profitable (Persson et al.,
2018). Social entrepreneurship can be about fulfilling a task that meets a certain need of
a community (Gallagher, Gilmore, & Stolz, 2012), which could be argued to be part of a
firm’s CSR actions. Social entrepreneurship in sport is often linked to small sport clubs
operating in the non-profit sport sector (Gilmore, Gallagher, & O’Dwyer, 2011).
However, in the context of this chapter, social entrepreneurship is not determined by
the size of the organization but viewed in the light of motivation. A social entrepreneur is
not motivated by the profits, but the opportunity to contribute to social change
(Audretsch, 2012; Miragaia et al., 2017; Ratten, 2010b). Gallagher et al. (2012) identify
social entrepreneurs in professional league sport clubs as entrepreneurs willing to assist
in the development of the club by bringing their experience and networks to use. They
offer their business knowledge and professionalism to improve the club’s development
and operations (Gallagher et al., 2012). Moreover, they use their networks, contacts, and
time in community projects that benefit the sport club and society (Gilmore et al., 2011).
These social entrepreneurs are often entrepreneurs who own other businesses, and sport
clubs are their side business, or they work on a volunteer basis for a sport club. Their
social impact can either be based on altruistic motivations or on a hope of increasing the
brand equity of the entrepreneurs and their companies (Shropshire, 2012). More impor-
tantly, it is argued in this chapter that the definition of the social entrepreneur and social
entrepreneurship in sport is context-specific, depending on a national context, the nature
of the organization, and position of the person.
3 CSR as a Development Tool for the Sport Club
The current pressures that (Nordic) sport clubs are facing and the different ways in
which they handle and respond to the changing situation can be understood through
the lens of CSR (Persson, 2008, 2011). CSR is not a requirement for sport organiza-
tions, but it is increasingly an expectation. A growing number of sport federations and
clubs are acting as if it was in their organization’s best interests to become involved
with CSR at some level. In line with Ratten (2010a, 2010b), it can be argued that sport
in general has an entrepreneurial nature as it is constantly, sometimes voluntarily, and
sometimes involuntarily, adapting to suit its own and society’s changing needs.
Besides Ratten’s contribution on social entrepreneurship and innovation (Ratten,
2011a, 2011b) and sport entrepreneurship (Ratten, 2010a, 2012, 2018), surprisingly
little attention has been paid to the entrepreneur in sport and even less to the
entrepreneur behind CSR activities in a sport club context. Hence, the attention is
on contributing to the knowledge of the role of the entrepreneurs behind the devel-
opment of CSR as a response to the pressures that sport clubs are facing. Although
these entrepreneurs might be viewed as sport entrepreneurs, social entrepreneurs, or
entrepreneurs in general, none of these views is predetermined. In the context of this
chapter, a distinction is made between CSR and social entrepreneurship in terms of
primary goals and handling of profits. While both may have similar social goals, in
the latter case the social goals are primarily for gaining profit and using the surpluses
mainly to achieve the social goals (Persson et al., 2018, p. 201).
From the sport horizon, CSR has been a research topic for less than two decades
(Babiak & Wolfe, 2006; Ioakimidis, Stergioulas, & Tripolitsioti, 2006; Irwin,
Lachowetz, Cornwell, & Clark, 2003; Persson, 2008; Smith & Westerbeek, 2007),
but CSR is far from being a new phenomenon. Formal studies on social responsibility
are the product of the twentieth century, and Bowen’s (1953) publication Social
Responsibility of the Businessman is commonly seen as the landmark book of the
topic. According to Bowen, CSR “refers to the obligations of businessmen to pursue
those policies, to make those decisions, or to follow those lines of action which are
desirable in terms of the objectives and values of our society” (Bowen, 1953, p. 6).
Sport scholars have brought a range of different foci to the study of sport and CSR,
partly colored by their parent disciplines, and the list of topics covered in sport CSR
literature is constantly growing. The focus has been ranging from CSR indicators
(Chen, Chen, Tai, & Hsiung, 2015), conceptual models (Breithbarth & Harris, 2008),
sector-specific frameworks (Fifka & Jaeger, 2018), CSR activities (Filizöz & Fişne,
2011), communication (Persson 2014), and implementation (François, Bayle, &
Gond, 2018) to stakeholder/consumer/fan perceptions and expectations (Alonso &
O’Shea, 2012). The focus list also includes decision-making processes
(Anagnostopoulos, Byers, & Shilbury, 2014), brand equity (Baena, 2018), sponsor
strategies (Djaballah, Hautbois, & Desbordes, 2017), entrepreneurship, and CSR
(Miragaia et al., 2017), media framing (Carey, Mason, & Misener, 2011), environ-
mental management initiatives (Babiak & Trendafilova, 2011), corporate and athlete
citizenship (Agyemang, 2014), as well as literature reviews (Breitbarth, Walzel,
Anagnostopoulos, & van Eekeren, 2015). With the growing amount of literature
stemming from different disciplines, it should not come as a surprise that there is little
or no agreement among scholars regarding the definition of CSR or whether it is at all
possible to measure and carry out an international comparative analysis of different
CSR activities. Despite this, since 2011 it has been possible to compare the interna-
tional ranking of one’s own national football league to others around Europe and
lately globally by studying the Responsiball Ranking (Responsiball, 2018). Despite
the comparative nature of the two case studies from different countries, this chapter
does not present a comparative analysis but, instead, a descriptive and reflective case
study approach.
The concept of CSR has since the first publications at the beginning of the twenty-first
century, started to appear in sport and gained increasing interest among politicians, sport
federations, and clubs. A double-voiced political discourse with a twofold purpose
(Bakhtin, 1999, p. 185) sets sport organizations challenging goals in terms of national
funding (Persson, 2008). Especially in Sweden, where sport funding is based on the
presumed benefits to the society in terms of public health and social integration, it is
simultaneously argued that sport clubs should take on a social responsibility beyond their
core activities, which makes them coproducers in the welfare sector. In the European
context, football has been at the forefront of sports by communicating its CSR policies,
agendas, and practices. National Football Federations have been signing up for UEFA’s
Good Governance principles for associations (UEFA, 2018) and developing their Cor-
porate Governance (FA, 2017) and their CSR agendas (DBU, n.d.; NFF, n.d.; Suomen
Palloliitto, 2019; SvFF, n.d.). Football is a big business, and like other businesses, top
football clubs in the different European leagues, such as Malmö FF from Sweden
(MFF, n.d.-a), Helsinki Football club (HKJ, 2019) from Finland, Manchester United
(Manchester United, n.d.) from England, and the German Borussia Dortmund (BVB,
2018) have long since had their CSR policies, agendas, and practices in their strategies.
When researching CSR in the European context, the definitions by the European
Commission should be drawn into attention. However, this chapter does not align
itself completely with the EC definition (n.d.)—“the responsibility of enterprises for
their impact on society”—or previous ones stressing the integration of social and
environmental concerns in the business operations in contact with stakeholders, since
these lack the financial aspect. Neglecting the financial responsibility of the organi-
zation results in an incomplete CSR concept in relation to the triple bottom line (TBL)
including economic, social, and environmental dimensions (Hernández-Perlines &
Ibarra Cisneros, 2018). In the context of this chapter, CSR is viewed as a concept
where the organization takes responsibility for its impact on society and environment
by integrating their own and their stakeholders’ social, environmental, and financial
concerns in their operations on a voluntary basis, not as a legal obligation.
4 Cases of Swedish and Finnish Football
Malmö FF (MFF) from Malmö, Skåne, Sweden, with a population of 339,313

(Ekonomifakta.se, n.d.) was formed in 1910, and it has played 82 seasons in the
Swedish Premier League (Allsvenskan). It has won the Premier League 23 times,
became the Swedish champion 20 times, won the Swedish Cup 14 times, and reached
as far as the European Cup final in 1979. During the past 10 years, MFF has won the
national title five times (MFF, n.d.-a). Although it has many similarities with sport
enterprises due to the 51% rule, MFF is a membership-based organization. Currently,
Malmö FF is a financially stable club with its own stadium, something that is not
common in the Swedish context. In 2018, Malmö FF had a turnover of SEK 342.9
million and a profit of SEK 39.6 million (MFF, 2019). Although a financially poor
club in comparison to the top tier of the European “Big Five,” MFF’s financial
situation—due to Champion Leagues and Europa League appearances in the group
stages and beyond—puts the club in a very favorable position in the Swedish context.
Malmö FF’s CSR Manager does not come from the club’s own ranks. Instead, the
manager has a long experience of cooperation between the public, private, and idea-
based sector because of being involved in adult education (folkhögskola) that has a
strong focus on social equality. The CSR manager is currently working with
employment questions on a local level through Malmö FF as well as on the national
level through the Swedish Elite Football as a member of SEF’s CSR steering group.
The manager’s motto is “Football is more than just football,” and she is convinced
about the increased importance of and opportunities created by sport and that
together with the idea-based sector they contribute to a better society (Personal
communication, April 2019).
MFF chooses, just like several other Swedish clubs, to what we call in this chapter
refer to as social responsibility or CSR as MFF in the community. MFF frames their
Football Academy, Career Academy, School Football against Racism, Football
network, Summer football, Autumn football, MFF supports, and Bengt Madsen’s
youth fund as part of their community engagement. To MFF, community engagement
is a key word in their description of their activities with a focus on children and youth.
Community engagement is about “positive and for the individual developing activ-
ities . . . spreading positive values . . . counteract violence and racism and increase
integration” and reducing drug abuse. It is about faith in the future and inclusion. This
they try to achieve through a variety of activities for different age groups. In order to
support its community engagement, the club has linked six companies as their main
partners (MFF, n.d.-a).
Three of the eight community engagement activities can be seen as CSR, if
defined as something that goes beyond a sport club’s core activities. That is a general
perception from the public point of view although the aim should be to integrate
CSR with the club’s core activities. In most sport clubs and SGBs, the core activity is
twofold: training and competing (in leagues officially recognized by the SGBs), and
the former leads to the latter almost independent of age, and this is not an example of
CSR. Accordingly, the three main CSR activities are the Career Academy, School
Football against Racism, and MFF Supports. MFF has run their Career Academy
since 2014, and it is based on collaboration with the City of Malmö through an IOP
(idea-based public partnership), the Swedish Public Employment Service in Malmö,
and several labor market policy projects. The Career Academy facilitates job
matching, such as sharing job ads through their own channels and networks,
providing and arranging opportunities for job interviews and other recruitment
events as well as providing their own online job search engine. On the Career
Academy website, the club highlights their latest achievements in terms of success-
ful internal and external job matching, and reports results, such as 200 successful job
matchings with MFF’s network of companies and nine career days arranged with
100 job seekers per meeting, out of which 50% have gone on to work, study or to
internships (MFF, n.d.-a).
The School Football against Racism project is run by Pedagogical Inspiration,
Malmö Municipality with support from Malmö FF and it is based on the four basic
principles of the UN Convention on the Rights of the Child. The project includes
working with the children in their classrooms, visiting the Malmö Stadium, and
finishing with a football tournament at a local football arena. In 2018, 800 students
from 13 Malmö schools participated in the project. MFF supports LifeWatch in
increasing knowledge and understanding of autism, something they have done
since the beginning of 2019 (MFF, n.d.-a).
Even though MFF has chosen to place its Code of Conduct and policy (MFF, n.d.-
b) as part of their value base, instead of as part of MFF in society, their Environmental
Policy should be seen as part of MFF’s CSR work based on the TBL model. While
some parts of this environmental policy stress the importance of following the
environmental legislation, other parts are norm driven, such as being aware of our
environmental impact, working with energy saving measures, such as minimizing the
use of disposable items, limiting the consumption of supplies, using environmentally
friendly alternatives with transportation and communication, meetings, goods, and
services, as well as educating on environmental issues (MFF, n.d.-b, p. 19).
HJK Helsinki, from Finland’s capital, Helsinki is the most successful football club in
Finland. Helsinki is the biggest city in Finland with a population of 634,272. Moreover,
the Helsinki Metropolitan Area has around 1.5 million inhabitants (Helsinki, 2018). The
HJK football club was established in 1906, soon after football arrived in Finland, and it
has since 1911 won the men’s Finnish Championship (Veikkausliiga) title all together
29 times and the Finnish Cup 13 times. During the past 10 years, HJK has won the
national title eight times and been the second and third once. HJK has been successful at
all levels: men, women, and juniors (HJK, 2019). Most of the successful Finnish players
have played for HJK before going abroad, and HJK has been the best steppingstone for
players to gaining recognition by European teams. HJK is the biggest club in junior
football in Finland with 3100 registered players (Helsingin Sanomat, 2019) on multiple
different level teams around the Helsinki region.
HJK operated as a non-profit organization until 2000 when the current owner-
entrepreneur took over and established the limited company HJK Ltd. (Aalto,
Lehtola, Sulkava, & Tiitta, 2007). HJK is divided into two different organizations:
the team company and a non-profit association with recreational teams and junior
teams. In the same year, a new stadium was built, which gave the club possibilities to
develop its business further. Before that, HJK played in the Helsinki Olympic
Stadium, which had a far too big capacity, and the field was not suitable for football
matches in terms of atmosphere and functionality. HJK’s turnover in 2018 was 4.6
million euros and that of its stadium company was 1.9 million euros with profits of
0.2 and 0.3 million euros, respectively (Asiakastieto, 2019). HJK’s revenues have
varied yearly according to player sales and international games. For example, in
2014 HJK played the UEFA Champions league and succeed to qualify to the group
stage, which showed as a remarkable growth in its turnover and profits (Asiakastieto,
2019).
HJK has a long tradition of being one of the first football clubs in Finland and also
values these traditions in its actions. Its current owner has been with the club since he
was a child, and his father was the chairman of the non-profit club. Therefore, the
motivation to start the HJK Ltd. was based on the entrepreneur’s passion for football
and ties to the club more than possible monetary returns. His other family enterprise,
one of the biggest media houses in Finland, is his main business entity (Personal
communication, 2014). By purchasing the majority of HJK shares, he brought his
business networks, experience, and knowhow to the football company. The volun-
teer board of executives also consists of successful directors from different business
areas. Together with the entrepreneur, the board has had a crucial role for the
survival of the club, and it has increased professionalism in decision-making (Per-
sonal communication, 2014).
HJK has a public CSR strategy on its webpage, which identifies the three triple
bottom line aspects—the social, environmental, and economic responsibilities in
detail. The social responsibility includes children’s rights realization, social exclu-
sion prevention as well as lifelong learning, and well-being for different minority
groups. The environmental responsibility is based on sustainable use of energy,
recycling, and sustainable development in all actions. The economic responsibility
relates to facilities and possibilities for people to play football at different levels with
reasonable cost (HJK, 2019). This is based on the stable and healthy economy of the
league company and the non-profit association.
HJK promotes CSR on different levels: it stresses diversity, sustainability, respon-
sibility, and tolerance in its values. Moreover, the club has a sustainability program,
offers football schools, football camps and city block football, and it is a big after-
school care provider. The public sustainability program is an important part of HJK’s
corporate responsibility strategy, and it is based on three different programs: The
“You are not alone”—campaign, Club Ball 2018–2021 and Aulis Rytkönen Trust
Fund (HJK, 2019).
The “You are not alone”—campaign is an EU funded project and run by the
Family Federation of Finland and multiple sports associations (Väestöliitto, 2019).
According to HJK (2019), they are one of the pilot organizations in the campaign that
focuses on preventing bullying and inappropriate behavior in sports. The aim of the
campaign is to secure safe sports practice in all clubs and teams and to develop ways
to prevent bad behavior. Every player has the right to enjoy sports and to be treated
equally with respect. The Club Ball—project aims at promoting non-exercising
vocational school students’ movement by offering easy access to sports opportuni-
ties. The project is run together with the Stadin Ammattiopisto vocational school and
the Business College of Helsinki. The aim of the project is to encourage non-moving
students to take exercise and thus promote their commitment to their studies. The
project is an example of taking responsibility of youth outside the teams and helping
them improve their life management skills. The Aulis Rytkönen Trust Fund helps
players from low-income families by granting scholarships to talented young players.

The watchword of the trust is that no one should be left outside for monetary reasons
since that would be a loss for the whole football community (HJK, 2019). The trust
was named after one of the football legends in Finland. Aulis Rytkönen was the first
player to go abroad in 1952 and play professionally in France (Aalto et al., 2007).
HJK has developed its business functions outside the core business in order to
make use of the stadium also outside the game events. It provides work well-being
services for companies in the Helsinki region by advertising the possibility to learn
from the club and its team spirits (HJK, 2019). In addition, HJK is the second biggest
after-school care provider for schoolchildren in the capital city region after the church
by moving 500 children daily (Helsingin Sanomat, 2019). This benefits HJK in terms
of field usage and revenue as well as the community in terms of encouraging the
children’s movement and providing after-school care activities. The City Block
league is another example of a sport offer benefiting the community, and its effect
on social integration is remarkable (Personal communication, 2014). HJK runs
different city block teams around the city of Helsinki in order to offer children an
opportunity to have a hobby in their own neighborhood at low cost.
HJK’s entrepreneur has been the driving force in its development toward a
successful, responsible and sustainable sport enterprise. He has acted as a social
entrepreneur by investing time and money in the club’s operations, bringing his
business knowledge into the company, and by being innovative and ready to take
risks. HJK has developed its CSR Strategy together with the Finnish Football
Association (Suomen Palloliitto, 2019) and other stakeholders, and it has benefited
both the club and the surrounding community. HJK Ltd. and the HJK Association
work closely together, and business revenues have been used to support the junior
teams over the years. The social cohesion among the whole club is one of the member
priorities in HJK (2019).
5 Conclusion
The attitude that the surrounding society holds toward a sport club is often crucial in
terms of community support and stakeholder involvement. Therefore, the importance
of a CSR strategy and its implementation has grown in the past few years. The role of
uncertainty in sport companies in terms of outcome and success is evident in the
rapidly changing sport environment, and business functions in all sectors are impor-
tant. Here, CSR strategies can be used to build a team’s image, reputation, and brand
equity. There is no doubt that value creation for the stakeholders through social,
environmental, and financial impacts has been the guiding principle for the two clubs
discussed in this chapter.
It takes an entrepreneurial mindset when investing in social responsibility in line
with Malmö FF’s Career Academy, which has been copied and currently operated by
nine other Swedish clubs and advocated by Swedish Elite Football (SEF), and the
same applies to the Finnish HJK, which has been the role model for the rest of the
smaller clubs in the Finnish league.
The entrepreneurial role and orientation of the management staff in these clubs
have been the driving forces in their CSR actions. Although it never depends only on
one individual, the case of Malmö FF and their CSR Manager, both due to her
background and the CSR activities being developed and implemented by MFF as
well as SEF, fits the description of a social entrepreneur. Moreover, being hired to
work with CSR based on competence rather than a successful sport career is a good
example of the professionalization currently taking over the Nordic sport sector. In
Finland, because of a greater focus on business actions due to the structure of the
organization and self-funding, there is no appointed CSR manager in HJK.
The characteristics of social entrepreneurship can be found in the activities of
both clubs. Independent of the business-oriented nature and organizational form,
both clubs show willingness to contribute to society, even though it might not always
qualify strictly as CSR actions or be measurable in the short term. Different
commitments, such as youth activities and socially beneficial CSR actions build
their brand image and raise awareness among the stakeholders and public in the long
term. The HJK “You are not alone”—campaign and the MFF Football against
Racism are good examples of positive publicity and exquisite brand building.
Even though the sizes of these two clubs differ, similar aspects in terms of triple
bottom line can be found. Both clubs have developed programs and projects with a
core of social responsibility, especially in terms of social and socioeconomic respon-
sibility and, to some extent, environmental sustainability. HJK has developed
multiple ways of offering opportunities to more and more children and youth to
play despite their economic backgrounds by creating programs to bring football
closer to different demographic groups and by supporting low-income families’
children financially. These different recreational football programs support social
integration and community development as well as the sports development within
the club. The more players the club has at the junior stage, the greater is the selection
of players at the elite stage. MFF’s CSR-flagship, the Career Academy has proven
that sport clubs in collaboration with local authorities can be just as, if not more,
successful than local unemployment offices on their own. As a result, the activity has
now spread to several other elite clubs in Sweden.
Soft values in sponsorship have been the trend in sport for the past few years, and
the role of CSR and social entrepreneurship has grown in partnerships between
sponsoring companies and sport clubs. Therefore, the CSR programs run by the two
studied football clubs are important in terms of promotion and stakeholder commit-
ment. Successful CSR programs give the clubs a possibility to gain recognition and
differentiate themselves from the competitors. In addition, as in the case of MFF’s
CSR Manager, they can influence other football clubs to commit themselves to CSR
activities.
Environmental sustainability does not play a prominent role in either club’s
public CSR actions. However, environmental issues are often self-evident in the
Nordic cultures, and therefore, they are often not discussed as separate projects. For
example, MFF’s CSR Manager states, “we do things before we tell others about
them.” Recycling, sustainable energy use, and environment protection are everyday
actions of all sport clubs in Sweden and in Finland.
This chapter is limited to two countries and cases from them, and in the future, it
would be interesting to study if these findings of the role of the entrepreneur in
relation to the triple bottom line of CSR would apply to small- and medium-sized
sports clubs from different countries outside the Nordic countries. The assumption
here is that the operating environment and sports culture as well as the level of social
entrepreneurship in these clubs play a crucial role in the adaptation of CSR.
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Publication IV
Ahonen, A.
Strong entrepreneurial focus and internationalization – the way to success for Finnish ice
hockey: the case of JYP ice hockey team

Sport in Society
Vol. 23 (3), pp. 469-483, 2019
© 2019 Routledge, Taylor & Francis Group
Sport in Society
https://doi.org/10.1080/17430437.2020.1696531
Strong entrepreneurial focus and internationalization –

the way to success for Finnish ice hockey: the case of JYP
ice hockey team
Aila Ahonen
School of engineering Science, LUt University, Lahti, Finland
ABSTRACT KEYWORDS
Ice hockey is the most professionalized sport in Finland, and it has had Ice hockey; sport
an important effect on the overall sports development in Finland. The entrepreneurship; sport
national ice hockey league was the first league to professionalize in internationalization;
Finland, and it is the most widely followed sport in terms of spectator European hockey; team
sport
numbers and media coverage. Internationalization and entrepreneur-
ship have played a remarkable role in the development of Finnish ice
hockey. Internationalization has been influenced, first, by the North
American National Hockey League (NHL), and later by the Russian
Kontinental Hockey League (KHL) and Europe’s Champions Hockey
League (CHL). The establishment of entrepreneurially driven limited
companies amongst ice hockey leagues at the turn of the century was
a pivotal point for professionalization and commercialization in Finnish
ice hockey. The aim of this study is to examine the impact of interna-
tionalization on one successful entrepreneurially driven Finnish ice
hockey club, JYP ice hockey team, by demonstrating its path from a
small-town club to a multi-time Finnish Champion and Finland’s first
European Trophy (2014) and Champions Hockey League (2018)
winner.
Introduction
Ice hockey is the number one sport in terms of media coverage and spectator numbers
in Finland, and the Finnish ice hockey league (SM-Liiga, branded as Liiga since 2013)
was the first professional sports league in Finland. According to Sponsor Insight’s annual
sport barometer (2018), 49% of Finnish people over 18 years old are interested in ice
hockey, and when divided according to gender, 60% of males and 38% of females are
interested in ice hockey (Sponsor Insight 2018). Sports at all levels have always been
strong in Finland, both in terms of participating and spectating. Success in sports,
together with a strong sport culture, has had a substantial impact on the national identity
of Finns. Finland has a rich competitive history in a variety of sports at a global level,
but since the national ice hockey team’s Olympic success in the late 1980s and 1990s,
ice hockey is the country’s leading sport (Lämsä 2012). Finland’s national teams at all
CONTACT Aila Ahonen [email protected]

© 2019 informa UK Limited, trading as taylor & Francis Group
2 A. AHONEN
levels, men, women and juniors, have won multiple medals in international competi-
tions. The latest victories for Finnish ice hockey were men’s gold medal and women’s
silver in the International Ice Hockey Federations World Championships in 2019.
The Finnish ice hockey League (Liiga) was established in 1975 in order to replace
the national amateur league (SM-Sarja), and it has operated ever since (Liiga 2019).
The North American National Hockey League (NHL) in terms of formatting the league
and its operations, including play-offs, a closed league model, game events and tro-
phies, has heavily influenced the Liiga. Other important international influences have
been the Russian Kontinental Hockey League (KHL), especially in opening new player
markets, and finally, the European Champions Hockey League (CHL) that has had an
effect on local clubs in terms of international game events and developing the
European market.
Top-level sport in Finland became an area of business only in the late 1990’s, at the
same time as ice hockey was professionalized heavily. This means that sport business
in elite sports is a relatively new phenomenon in Finland, and that most sport organi-
zations are still non-profit organizations mainly run by volunteers. However, the impor-
tance of entrepreneurially run sport organizations has been growing because the public
sector is pulling out from financing and producing services in the sport sector (Diges
2010). The development started with the government’s decision that professional sports
could not identify themselves as parts of non-profit organizations anymore. They were
seen as profit-seeking businesses where the focus was in gaining revenues like with any
other business. Ice hockey players’ contracts were listed as contracts of employment,
and professional leagues in ice hockey and football, and later also basketball were
identified as businesses (Rosbäck 2012), or at least their first league teams were seen
to be too big and commercial to meet the standards of a non-profit association. Sport
clubs divided their operations into for-profit businesses and not-for-profit organiza-
tions, and their national league teams became business enterprises, whereas the youth
and women sports stayed within the non-profit clubs. Part of this development can be
argued to be a consequence of the Bosman ruling and the free movement of labor within
the EU. Even though this ruling primarily concerned football, it affected other sports
and sporting clubs as well by providing an example of the free movement of labor within
the EU (Douvis and Billonis 2005; Radoman 2017; Bindler and Findlay 2008). In
Finland, this development towards entrepreneurial sport business organizations is very
recent compared to, for example, the more widely discussed and studied US sport
industry.
The objective of this paper is to discuss the development of ice hockey in Finland
through the case study of Jyväskylä Ice Hockey Club (JYP). This case study aims to
describe the influence of international ice hockey development on a Finnish ice hockey
club’s commercialization and business development. This development is examined
through the lens of entrepreneurship. The aim is to understand how a local ice hockey
club in Finland has been influenced by international hockey leagues (NHL, KHL as well
as CHL) during its path from a non-profit organization to a profit seeking, professional
and entrepreneurially driven business enterprise. This paper gives new insights into the
discussion of sport entrepreneurship and the impact of internationalization on the ice
hockey business in one of the leading ice hockey countries in Europe.
Sport in Society 3
Method
The research method of this study was a qualitative case study approach. A qualitative
approach is suitable when studying real-life cases, and when the aim is to understand what
is happening in a certain company, and case studies are an effective way of gaining data
from a certain social phenomenon in its natural context. A case study is an empirical inquiry
that investigates a real-world case in its real-world context, where the connection between
the phenomenon and context is not clear (Yin 2014). In this study, the phenomenon studied
was the development of an ice hockey club from a volunteer based non-profit organization
to a professional business organization in the context of internationalization and entrepre-
neurship with special attention on the influence of the NHL, KHL, and CHL.
The case selection was made by comparing the ownership structure and financial records
of twelve Liiga clubs in Finland from 2008 to 2012 (one club’s financial data was not available
at the time of the research). The period was selected because of the establishment of the
KHL and Euro Hockey League in 2008. The aim was to select a club that had been successful
both on-ice and off-ice, together with a stable financial performance. Since sporting success
does not guarantee business success, it was rather the business success that needed to be
measured. In order to identify the business success, success criteria for sport enterprises
were developed by using the Storey and Greene (2010, 210–211) company growth approach:
sales/revenue, profits, financial ratios, employment, market share, income of entrepreneur,
subjective measures and multiple measures. The most commonly used methods indicating
business growth are sales and profits together with employment figures. (Wiklund, Patzelt,
and Shepherd 2009; Delmar, Davidsson, and Gartner 2003). The final selection was based
on the financial data, entrepreneurial ownership structure, sport success and the interna-
tionalization level. The selected club, JYP, has gained substantial success in the field of sport
both nationally and internationally, and it is also a founding member of the European
Champions Hockey League. The data for this study came from multiple sources of evidence,
such as the company history and website and financial data sources, with the main sources
being the interviews of the owner-entrepreneur and the managing director (who also owned
a minor share of the company). The interview data was analyzed using NVivo software.
Sport entrepreneurship and internationalization

Sport entrepreneurship has lately been an emerging discussion topic globally in the field
of business and economics, and this trend supports the development of sports. However,
in the sport business context, entrepreneurship has not been widely studied, even though
it has been recognized as a growing field in the industry. Sport entrepreneurship has two
different roles in society: it can be a profit seeking business or a non-profit organization
benefiting the community (Miragaia, Ferreira, and Ratten 2017; Ratten 2018). In a profes-
sional sport league, such as an ice hockey league, the business entities within the league not
only compete against each other but also cooperate with each other (Zimbalist 2003). The
battle is on two fields, on the ice or court and in the marketplace. Therefore, sport entre-
preneurship forms an interesting area of research.
Entrepreneurship and entrepreneurs have been in the spotlight in sport policy makers’
discussions in Finland for the past decade. The level of education and innovation, which
4 A. AHONEN
are of a high standard in Finland, are often combined with growth-seeking enterprises.
However, the overall growth numbers amongst Finnish companies are very low in interna-
tional comparison (SME business barometer 2014), and sports companies are very often
not seeking growth but, rather, simply trying to survive. In Finland, the company structure
lies heavily on small and medium size business enterprises (Statistics Centre), and there
are many new opportunities for capable entrepreneurs in the service sector to which the
sport business belongs.
Sports development in Finland for entrepreneurial companies has been slow, starting from
the turn of the century, and most of these enterprises are still in their infancy. However, the
decrease of public funding for sports has sped up the development. Ice hockey has led the
way in commercialization and turning the first league teams into businesses. Since the market
is very limited in such a small country as Finland, it has been of importance for professional
league clubs to seek new business opportunities in the international and local markets.
Globalization has had an enormous impact on the sports sector, and it has encouraged
small and medium sized enterprises to increasingly internationalize their operations
(Richelieu 2012). An important aspect of this development is how a small firm’s owner-man-
agers practice internationalization (Lamb, Sandberg, and Welsch 2018), what the factors
enabling internationalization are (Reuber 2018) and what the influence of the industry
environment or the industry specific factors is. Big media corporations have developed the
global sports market through broadcasting to global viewers and, thus, speeding up the
market’s internationalization. All this has affected sports development and entrepreneurship
both globally and locally.
The sport industry has some special characteristics that affect the development of enter-
prises and entrepreneurs in the sport sector. Spender (1989) introduced an industry recipe
theory, which explains that every industry is different, and that managers or entrepreneurs
have to deal with uncertainties that are common to this certain industry area. In the sports
sector, these industry specific issues include a fast-changing operating environment, rapid
global growth, complexity and heterogeneity of products and services, volunteerism, the
effect of the field on success and uncertainty of outcome. In addition, different motivational
factors, such as the passion for sport and the emotions involved, are industry specific factors
influencing sport entrepreneurship. In the sport business, the aim could be more in utility
maximisation than in profit maximisation since the motivation to run a sport company
might differ from that in general business. In utility maximization, the focus is on more
achieving some other goals and maximum value, such as sporting success, than just gaining
profits (Prinz 2019). Often the maximization goals in terms of winning are more important
than profits, although profits might enable some other goals.
According to Ratten (2018), sport entrepreneurship can be described through three
different aspects: innovation-based, business formation and opportunity recognition.
Innovation-based entrepreneurship refers to the constant change in the marketplace and
innovation to new ways of remaining competitive (Ratten 2018). Sport and entrepreneurship
both require innovation, and they operate in turbulent environments (Ratten 2011). Sports’
nature as innovation-oriented, risk taking and proactive is identified as substantially entre-
preneurial (Ciletti 2012; Ratten 2010). Ciletti’s Ciletti (2012) classifications of sport inno-
vations into technological, product and promotion innovations are close to Santomier’s
Santomier (2002) description of the US sport industry falling into the performance, pro-
duction and promotion subcategories. Innovations connected to sport products and services
Sport in Society 5
often mean mostly technological innovations for developing a company’s offerings. However,
innovations in sport have developed new sports, new products and equipment, new ways
to train sports and better uses of marketing activities. Digital marketing especially, has had
an enormous impact on the sport business and its internationalization. Innovations in the
new media and the fragmentation of the traditional media have caused an extensive evo-
lution in sports promotion and marketing in the international context. Social media have
given sport enterprises new opportunities to market their products and engage the sport
consumers (Ciletti 2012). This development has improved the cooperation within different
international sport leagues and local clubs, and created opportunities for businesses and
players in the international markets.
The business formation perspective of sport entrepreneurship focuses on business cre-
ation based on new ideas or societal change. Sport entrepreneurs need to be creative in
order to develop their business functions and implement new ideas (Ratten 2018).
Globalization has been the guiding principle in the business formation of Finnish ice hockey
(Backman 2018a, 414). The professionalization and commercialization of sport has caused
the establishment of new profit-seeking businesses in the sport sector. The first league ice
hockey teams in Finland have established businesses similar to the NHL model, whereas
their Swedish counterparts have kept the ice hockey business still as a non-profit sector
with their 51% non-profit majority owner rule (Backman 2018a, 414). This rule set by the
Swedish Sport Confederation outlines that even though a team works as a limited company,
the non-profit club needs to own at least 51% of the shares in order to keep the voting
majority (Backman 2018b). In Finland, the voting rights and decision-making in these
entrepreneurially driven companies are based on a commercial ownership structure, which
means that the more shares one person has, the more votes he/she has. This makes deci-
sion-making easier and business development faster. Castano, Mendez, and Galindo (2015)
connect entrepreneurs’ innovation, internationalization and business growth expectations
in business development in the service sector. An important way to seek growth opportu-
nities in the Finnish sport markets is to expand to international markets.
Social entrepreneurship can be closely connected to business formation in sport. A social
entrepreneur is motivated by the possibility to make a social contribution instead of only
seeking profit (Audretsch 2012; Ratten 2010). Previous businesses can be the base for new
business ventures operationally and financially, and entrepreneurs can utilize their previous
experience and knowledge in establishing new companies (Laukkanen 2007). They might
be individuals who offer their business experience to the club without expecting any finan-
cial return (Gallagher, Gilmore, and Stolz 2012), although social contribution and profit
seeking can both be the goals in entrepreneurial sport organizations. This is very often the
case when non-profit organizations, or parts of them, turn into businesses.
The third perspective on sport entrepreneurship is opportunity recognition and exploita-
tion. In sport, the commercialization of business opportunities is important (Ratten 2018),
and successful entrepreneurs are often opportunity oriented and capable of handling uncer-
tainty and high risks (Timmons and Spinelli 2009, 249–262). Opportunity recognition is
one of the key concepts in the field of entrepreneurship (Shane 2000; Eckhardt and Shane
2003; Short et al. 2010), and entrepreneurs’ personal characteristics and individual cognition
define the capability of seeing these opportunities (Ekhardt and Shane 2003; Ronstadt 2007).
Sport organizations that can discover and exploit new opportunities can gain substantial
advantages in the global environment (Ratten 2012), and entrepreneurial opportunities can
6 A. AHONEN
act as a starting point in international entrepreneurship (Oviatt and Baron 2007).

Opportunity discovery can be a process to solve a business problem (Hsieh, Nickerson, and
Zenger 2007) where the entrepreneurs’ previous knowledge plays a crucial role and where
the information networks, through which the entrepreneurs perceive the environment,
affect their possibilities to recognize opportunities (Shane 2000). The performance of a
small sport enterprise operating in a relatively small market is dependent on its ability to
recognize opportunities locally and internationally. Together with the enterprise’s capability
to recognize and utilize business opportunities, the entrepreneurial orientation of the owner
and the firm affect the firm’s business success. Entrepreneurial orientation is connected to
innovations, proactiveness and risk taking (Lumpkin and Dess 1996; Kreiser and Davis
2010). The overall development of the sport and ice hockey industry together with entre-
preneurship development have affected the advancement of JYP and other clubs in
Finland.
Ice hockey development in Finland

In Finland, the development of ice hockey started early in the 1920’s, and the first
Finnish Championships were organized in 1928, and the Finnish Champions League
started in 1934. Ice hockey developed slowly together with the rest of the society. The
Ministry of Education started funding the Finnish Ice Hockey Federation in the 1950’s
(Isotalo 2016), and Finland has participated in the Olympics and World Championship
tournaments since 1957 (Lämsä 2012). Ice hockey was based on amateurism until the
1970’s, and the organization and management then was still based on volunteer work
and utility-maximization instead of profit-maximization (Backman 2018a, p. 411). The
Finnish National Hockey League was established in 1975 (Finhockey 2019), and ice
hockey started to professionalize. Ice hockey became one of the most popular sports in
Finland, and it has maintained its growth. The year 1988 was the golden year for
Finnish ice hockey as Finland won silver in the Calgary Olympics, and two Finnish ice
hockey players won the Stanley Cup with the Edmonton Oilers squad (Finhockey 2019).
At the same time, the establishment of regional radio stations made ice hockey live for
bigger audiences (Lämsä 2012), and JYP was a pioneer in utilizing this platform and
broadcasted its games via local radio. In the 1990s, the clubs signed their first television
contracts, and the popularity of ice hockey grew even further.
In 1995, Finland won its first World Championships gold medal in
Stockholm (Finhockey 2019), and this victory was very important for all of the
sports fans in the country as the Finnish Lions beat their biggest rival and dear
neighbor, Sweden. The championship victory boosted the popularity of ice hockey
explosively with both the league and the clubs gaining financial windfalls (Mennander
and Mennander 2004, 31–32). The lockout of NHL players during the 1994–1995
season generated increasing player move-ment to Finland (Lämsä 2012), and the
Finnish League had its highest talent level, which attracted more fans and spectators.
Finnish international success in ice hockey has remained stable from the beginning
of 1990’s until today. Finland has won several medals in the European Championships,
World Championships and Olympics. Finland won its second World Championship
gold medal in Slovakia in 2011, followed by a third gold medal in 2019, also in
Slovakia. Adding to the men’s team success, the women’s national team and youth
national teams in both genders have been very successful by winning multiple
international trophies. This has boosted the ice hockey industry in Finland and helped
the local clubs in their professionalization and commercialization actions.
Sport in Society 7
The national ice hockey league, Liiga, changed its legal structure to that of a cooperative
in 2000 for two years and then became a limited company in 2002. In the year 2000, the
Liiga also became a closed series with thirteen teams, all limited companies and expanded
to fifteen members by 2019. Due to the commercialization of ice hockey business, the
Finnish government taxation office also defined Liiga teams as for-profit organizations
(Rosbäck 2012) at the end of the1990’s, and the first league clubs were advised to corporatize
their organizations. This was due to the high revenues generated by the clubs’ events, the
high salaries of players (ibid.) and the amount of sponsorship money compared to other
sports. Player salaries represented 40% of the budget of the first league teams in 1998–1999,
which was an unbearable amount for non-profit organizations (Mennander and Mennander
2004, 82–91). The aim of the corporatization of the clubs was that they could organize
themselves better as employers and attract private investors to take risks and invest in
ice hockey.
As a result of this corporatization, ice hockey clubs divided: the first team companies
became businesses, but junior and women’s teams remained as non-profit organizations.
Since sport has been traditionally a non-profit activity and run by volunteers in sports clubs,
this change towards for-profit enterprises put men’s ice hockey into a different position
without any public funding. However, this business development gave local clubs incentives
to act more professionally and entrepreneurially. Many businessmen around the country
became owners and entrepreneurs of ice hockey companies, without clear profit opportu-
nities in the horizon. The motivation for these entrepreneurs was more related to their
passion for sport than monetary reasons. This development gave new opportunities for
both Liiga and the clubs to develop the ice hockey industry in Finland. At the same time,
the discussion about cooperation with the Swedish Elitserien (the top ice hockey league in
Sweden) and the development of European ice hockey was intensive (ibid. pp. 88–89). The
Finnish league decided to concentrate more on developing its national league and adapted
the NHL business model (Lämsä 2012).
All first league companies in the closed series have struggled with their finances from
the beginning and this development has been distinctive until today. Depending on the year,
some teams have been able to generate profit, but generally, their operations have been
mainly unprofitable (Yle 2016; Kauppalehti 2017). Internationalization in terms of player
sales and European games have been one solution to some teams in terms of generating
more turnover and making extra profits from their core business. A ground-breaking event
for the Finnish ice hockey industry occurred in 2013 when the whole Jokerit team joined
the KHL and sold its arena to Russian investors (Yle 2013). Jokerit has, so far, been the only
Finnish team to join the KHL despite the league’s willingness to expand into neighboring
countries. For the other first league teams, internationalization has meant possible player
sales to the KHL and players signing contracts with the NHL together with CHL participation
and European games.
Case: JYP ice hockey club

JYP is an entrepreneurially oriented ice hockey club in the small city (130 000 residents) of
Jyväskylä, Finland. The club used to be an indebted non-profit sport club, but since 1999,
when the current owner took over and changed it into a limited company, it has grown both
financially and operationally. Today it is a successful ice hockey company in Finland with
8 A. AHONEN
multiple national championships. Moreover, it won the European Trophy League in 2013
and the Champions Hockey League in 2018. Behind this success is its entrepreneurial growth
orientation and the internationalization of the ice hockey business.
JYP was established in 1923, and it had multiple sports in its offerings for several years.
In 1947, ice hockey was taken into the selection of JYP’s sports, and the first official JYP ice
hockey team was established. The first outdoor ice hockey rink was built in Jyväskylä in
1950 with pure volunteer effort and without any financial support from the municipality.
In 1960, the JYP team qualified for the second division, and during the same decade, the
new innovative finance source ‘Bingo’-game (game of chance played with numbered cards
and balls in special Bingo-halls) started to function (Mennander and Mennander 2004,
26–27). The 1970’s were a decade of change for JYP because it qualified for the first division,
got its first artificial ice rink, went bankrupt and split into two different clubs with the
remaining sports, ice hockey and football. In the 1980’s, JYP hired its first professional
coach, and the first ice hockey arena was built in Jyväskylä in 1982. During this time, JYP
set clear goals for sporting success and economic stability by doubling its player budget and
developing its game event. They also started to broadcast their matches on a local radio. In
1989, JYP finally won its first National Championships silver medal (Ruuska 2013, 14–93).
After this, at the beginning of the 90’s, an economic depression hit Finland very hard,
and sport sponsorship money decreased. A new practice arena was built, and the possibilities
to play ice hockey improved, but the financial situation for JYP worsened, and the player
budget was far too small for a national league team. The message from the government was
clear: the players were employees and game events were considered professionally organized
business events, not non-profit occasions anymore (Rosbäck 2012). The corporatization of
the first league sport enterprises in Finland was, on one hand, forced by the government at
the beginning of the century since player contracts became employment contracts. On the
other hand, these organizations’ operations had grown, and the game events had developed
more and more towards entertainment. Ice hockey organizations, such as JYP, developed
rapidly towards business-oriented companies, their operations became profit seeking and
commercialized, and, therefore, they did not meet the criteria of a non-profit organization
anymore. ‘In Finland the taxation authorities took a stance on that league teams could not
operate as non-profit organizations anymore since the businesses were so big and such in
terms of their nature that a limited company was the right form of business’ (Tyni, K.,
personal interview, 2015). Finally, in 1999, JYP was corporatized and JYP Jyväskylä Ltd was
established. The new company bought the first league team and its place in the Liiga together
with A-juniors (Ruuska 2013, 93–136).
At the same time, the league clubs corporatized from the non-profit organizations, and
Liiga became a closed series. JYP played the league with limited success for several years, and
the owners concentrated on coping with a relatively small budget. In 2004, JYP published a
strategy called ‘Mission 2007’ which aimed to raise the club among the best teams in the
league. In 2005, the main owner invested more money in JYP and bought the majority of its
shares. This made the decision-making easier, lightened the administration and made it pos-
sible to increase risk taking and proactiveness. In addition, a professional marketing manager,
who became the managing director later on, was hired together with a new head coach. In
2006, JYP had its first profitable year as a result of an innovative new marketing strategy, risk
taking and successful recruitment. Mission 2007 succeeded in terms of marketing and finances
by stabilizing the business performance but still failed in terms of sporting success.
Sport in Society 9
JYP needed new facilities in order to keep up with the national league requirements,
and finally in 2002, an arena was built in partnership with the municipality. ‘We made the
city decide whether ice hockey would still be played in this city or not. The message to
them was clear, if there isn’t a new arena, there won’t be this company either. It’ll be the
last year, and this company will be put on hold or sold to somewhere where they want to
build the arena’ (Seppänen, J., personal interview, 2015). Even though the new arena was
the smallest one in Finland in terms of seats, it made it possible for JYP to develop its
off-field services. ‘The new arena made it possible to improve our income since we got
appropriate restaurant facilities, and even though we still have a small audience capacity,
we can take our actions to the next level if we are good enough. It was, of course, a crucial
decision, and our working environment improved essentially’ (Tyni, K., personal inter-
view, 2015).
To follow the ‘Mission 2007’ strategy, JYP invested heavily in its player budget in
the 2007–2008 season in order to gain sporting success as well. This paid off in two
ways: it made it possible for JYP to purchase more expensive domestic players, and
JYP’s star players attracted the attention of the KHL in Russia where their rights could
be sold. JYP operated mainly in Finland until 2007, concentrating on climbing its way
to the top of the Finnish League. The first player sale to the KHL in 2008 changed the
business dramatically. This gave the club a possibility to gain some extra financial
rewards, but these remarkable occasions did not emerge on a regular basis, and there-
fore, businesses could not be built on these sales. Another aspect of these sales was the
perpetual question of selling one’s success along with the best players. ‘Every time we
have questioned whether we sell our success, and that we cannot afford to do it, so, we
are all the time searching for some kind of a balance of horror’ (Seppänen, J., personal
interview, 2015).
The KHL was established in 2008, and it replaced the Russian Super League (Hockey
History 2019). Its emphasis was on the Russian markets, but interest towards players in
Finland was big. JYP hosted KHL agents and made its first international player sale by
selling its goalkeeper to Dynamo Moscow. The price of the sale was €500,000, which
represented about 11% of the club’s annual turnover. This was an epoch-making event in
terms of internationalization and finances. This one sale turned the company from a barely
stable to a profitable business. JYP’s turnover shows a major increase in 2009-2010, which
was due to another player sale to the Russian KHL league, to the Kazakhstan club called
Ak Bars Kazan. This was the biggest trade of one player on that time, and it was worth
1,1 M€for JYP. Although selling top players might jeopardize sporting success, it cannot
be avoided since player contracts allow them to transfer. Moreover, in the case of the KHL,
the monetary reward for the club is remarkable compared to transfers to the NHL. ‘The
NHL takes whoever they want, and we get a certain amount, but with the KHL you can
sell and negotiate the price’ (Seppänen, J., personal interview, 2015). Ever since, the KHL
has played a big role in terms of player sales and monetary returns every year in JYP’s
operations. All together, these sales have been an important source of income because
over the years, JYP has sold altogether 10 players to KHL clubs. KHL sales have represented
2-5% of JYP’s turnover in the past years (apart from the very expensive player sales at the
beginning described above). However, the KHL market is not growing anymore: ‘KHL
markets have been quiet in the past few years, and their role has diminished’ (Tyni, K.,
personal interview, 2019).
10 A. AHONEN
The NHL has had an important role in the development of ice hockey in Finland. The
idea of play-offs was copied from there (Backman 2018a, 412), and the administration of
the Finnish league is based on the North American model (Lämsä 2012). The first Finnish
player transfer to the NHL took place in 1969, and since then, more than 400 players have
gone to the NHL from Finland (SJHS 2019). This trend has influenced JYP as well over the
years when players have transferred to the NHL and caused replacements or changes in the
planned squads. Even though the returns for the club have not been as big as with the KHL,
they are still important both operationally and financially. Altogether, over ten players had
transferred to the NHL from JYP by 2018. The overall effect of these transfers to the NHL
and KHL have been remarkable, representing on average 7–8% of JYP’s annual turnover.
The main influence of the NHL for the players was the establishment of a player association,
which was created to represent the players in their contract negotiations. The Finnish
association was the first one in Europe to represent the interests of players (Lämsä 2012).
Moreover, these international opportunities attract the players to play on teams where they
see the opportunity to go abroad.
The establishment of the CHL in the season 2008–2009 (IIHF 2019) gave JYP an oppor-
tunity to enter the European competition. JYP is one of the founding partners of the CHL,
and it has invested in the development of the European league. The interviewees highlighted
the importance of international games as a source of income but also the possibility to
improve the club’s brand awareness amongst spectators and players. Entrance into the CHL,
and especially the victory in 2018, has brought financial and operational success to JYP.
The European competition adds more games to the regular season, attracts spectators, and
sporting success in these games benefits the club in terms of income: more ticket sales and
game payments, as well as more sponsorship money. JYP has kept its position amongst the
top clubs in the Finnish national league, which has given it the continuing position to play
CHL games. Other benefits of CHL games are the internationalization of the whole company
and significant opportunities for player improvement. ‘International games are important
in terms of game development, and they bring great value to the club by all means and
measures. These games teach the whole staff how to operate in international markets’ (Tyni,
K., personal interview, 2019). International games are a great opportunity for the players
to attract international attention. ‘International games are a great showcase for the players.
Even the tempo of these games is good for the players’ advancement’ (Tyni, K., personal
interview, 2019).
In addition to the opportunities in the international markets, it has been very important
for JYP to develop the use of facilities and create other business lines in the team sport
context since the core national game event business is very seasonal and highly dependent
on sporting success. ‘It has helped that we have been successful in sports. It goes hand in
hand with business success, losing is not interesting, no matter how good the playing itself
might be’ (Seppänen, J., personal interview, 2015). The income structure has changed from
ticket sales and sponsorship to a more complex variety of sources. JYP has realised the need
to develop the game event towards an entertainment event, and therefore, they have devel-
oped their services to a new level. By improving the services and involving and committing
the stakeholders, the value that attracts customers to come to the games can be created. JYP
has maintained its position amongst top ice hockey clubs in Finland, and in terms of
finances, it has been very successful even though its arena capacity is the smallest one in
the national league.
Sport in Society 11
Conclusion
The ice hockey development in Finland towards professional, profit-seeking business has
been heavily influenced by internationalization, and especially by the culture of the NHL
and KHL together with the development of the CHL. The ice hockey league has been a
pioneer of sport professionalization and commercialization in Finland and the first league
to establish entrepreneurially driven enterprises.
Innovations are the source of competitive advantage in sport firms (Winand and Hoeber
2017), and sport innovations can take different forms including risks, image constraints,
value incentives and sport consumer services (Ratten and Ferreira 2017). Innovations in
terms of strategy and improved operations, such as customer services and digitalization,
have been a cornerstone of JYP’s success. At the beginning of the entrepreneurial path, JYP
created an innovative business strategy, took high risks in terms of player budgets and
proactively secured its facilities to be able to compete effectively on ice and off ice.
Entrepreneurship plays an important role in the development of sport products and
services (Ratten 2018). In JYP’s case it was crucial that it corporatized in order to finance
its facility and service development. By improving the sport value framework, a sport com-
pany can influence the success of its operations (Woratschek, Horbel, and Popp 2014). By
improving the services, and involving and committing the stakeholders, the value that
attracts customers to come to the games was improved. Another important innovation
shaping the sport industry and JYP has been the development of digital media. Social media
has given sport organizations the possibility to market them to larger audiences (Ciletti
2012). This development has been essential in attracting new sponsors and in promoting
JYP’s international game events. Global media corporations have developed the interna-
tional markets through broadcasting and opened the opportunities to sports organizations
to utilize these possibilities.
The dominant design of the sports industry changed in Finland at the turn of the century.
This was affected by the government and overall environmental changes, such as the Bosman
ruling. JYP changed its first league’s business format from a non-profit to profit seeking
enterprise. As a non-profit organization, commercialization and internationalization would
have been more difficult in terms of finances and decision-making. The formation of the
new profit seeking business model helped the company to make decisions faster, be more
proactive in its operations and develop its international markets. The model of the Finnish
ice hockey league was copied from the NHL (Backman 2018a), and the business is limited
into 15 team companies (2019). This closed league model ensures that the participating
teams have the resources necessary to compete, but it does not give opportunities for other
clubs in Finland to rise to the first level. The NHL business model also guides the local
clubs in their operations. The owner-entrepreneur’s motivation to run the business is based
on his passion for ice hockey and the possibility to make a social contribution. These attri-
butes can be connected to social entrepreneurship (Audretsch 2012, Ratten 2010; Gallagher,
Gilmore, and Stolz 2012) like JYP’s entrepreneur’s expectations are not financial returns
but more the possibility to contribute to the sport and community.
Entrepreneurship in sport is a globally growing phenomenon due to commercialization
(Ratten 2018), and more opportunities exist when the environment is dynamic and char-
acterized by uncertainty (Kreiser and Davis 2010). High level of risk taking and proactive-
ness have been argued to advance the business performance (Covin and Slevin 1991; Kreiser
12 A. AHONEN
and Davis 2010; Lumpkin and Dess 1996). JYP recognized new opportunities in the local
and global markets and utilized them by investing bravely in its operations. Even though
the market in Finland is relatively small but ice hockey’s position very strong in terms of
sponsorship money and spectators’ interest, this gives entrepreneurial ice hockey clubs,
such as JYP, a good opportunity to develop their business. Another important aspect of
successful opportunity recognition and exploitation with JYP has been the entrepreneur’s
personal characteristics, which include, for example, responsibility, entrepreneurial back-
ground, confidence, commitment, ambition, competitiveness, opportunity obsession, future
orientation and tolerance of risks (Glackin and Marioti 2012, 6–10; Scarborough 2011,
20–24, Timmons and Spinelli 2009). JYP’s owner-entrepreneur took high risks in terms of
investing in and selling the players together with facility development. In addition, he
designed a future oriented strategy, has an entrepreneurial background and is strongly
committed to the club.
‘Entrepreneurial activities are necessary for sport organizations to progress and go
international.’ (Ratten 2018). Internationalization has been important both in terms of
finances and sport performance for JYP. Opportunity recognition in terms of international
business opportunities amongst the NHL, KHL and CHL has been very important for
JYP’s financial development. These business opportunities often act as a start for a com-
pany’s internationalization (Oviatt and Baron 2007). The KHL has been, overall, an
important factor in the Finnish ice hockey markets for the past decade, and its importance
in JYP’s development is distinct in terms of financial returns. The first player sales con-
firmed JYP’s position as a profitable organization and gave it the necessary investment
possibilities to develop its business further. The first player transfers to the KHL happened
at the same time as JYP’s innovative new strategy, and together they boosted its economic
development. However, the KHL market has been declining in the recent years, and its
importance today is not very remarkable anymore. This development has forced JYP to
develop its other opportunities in the domestic and European markets, especially with
the CHL. The CHL has slowly developed to be the European counterpart for the NHL
and the KHL. CHL games have gained awareness and income for JYP, and success in the
European competition has been an important source of extra sponsorship income in
addition to the national series. This has helped JYP to maintain its position amongst top
ice hockey clubs in Finland.
In the future, the international markets for ice hockey can be expected to grow due
to technological development, marketing possibilities and social media (Ciletti 2012).
Teams can attract fans from different parts of the world, and the number of countries
playing ice hockey is growing. This gives opportunities especially for those clubs that
qualify to play in international leagues. Future challenges for the Finnish ice hockey
clubs, and the whole national ice hockey league, are to keep the quality of the games at
a high level and to attract star players to keep the international markets running.
Another challenge is to find new innovative ways to improve the whole industry.
Although financial success is still very limited in most of the clubs, the challenge is to
find ways to attract more sponsors and develop the core business to be more attractive
for different stakeholders. By developing the game events, side businesses, marketing
communication, and new opportunities in international context, clubs can improve
their operations.
Sport in Society 13
This case study of JYP highlights the effect of international ice hockey leagues on the
local club level. This paper contributes to the discussion of sport entrepreneurship and
internationalization in the ice hockey business in Finland. It cannot be widely generalized,
but its findings can be used as a start for testing them in mainline research.
Disclosure statement
No potential conflict of interest was reported by the author(s).
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ISBN 978-952-335-777-8
ISBN 978-952-335-778-5 (PDF)
ISSN-L 1456-4491
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Lappeenranta 2022

Cases

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Uploaded by

Aila Ahonen

CHALLENGES IN SPORT ENTREPRENEURSHIP:

ACTA UNIVERSITATIS LAPPEENRANTAENSIS 1010

CHALLENGES IN SPORT ENTREPRENEURSHIP:

Dissertation for the degree of Doctor of Philosophy to be presented with due

Professor Timo Pihkala

Reviewers Professor Jukka Vesalainen

Assistant Professor Markku Jokisipilä

Opponent Assistant Professor Markku Jokisipilä

Lappeenranta-Lahti University of Technology LUT

Keywords: Sport entrepreneurship, Team sport business, Sport business management,

List of figures and tables 11

3 Methodology and research data 55

I. Ahonen, A. and Savolainen, S. (2018). The importance of entrepreneurship in

List of figures and tables

Table 2.1: Summary of approaches for describing entrepreneurship (Cunningham and

Sport is a globally growing industry, and its significance to people in terms of

1.1 Background of the study

In Finland, the development towards sport entrepreneurship can be described, for

Karhatsu (2003, 37) describes sport associations’ development from non-profit

Heikkala (2009) proposes a compendium of sport business in Finland. He addresses the

1.2 Special features of sport business

“The specificity of sporting activities and of sporting rules, such as separate

“First, sport is a heterogeneous and ephemeral experience mired in the

Social entrepreneurship means an entrepreneurial activity addressing societal pains or

1.3 Research questions and objectives

The main research question for this study is:

1. What is sport entrepreneurship in a small and medium-sized team sport

1.4 Research approach and design

Figure 1.4: The research process of this study

1.5 Structure of the report

The perspective in this study is on entrepreneurship from the entrepreneur’s and

“A growth entrepreneur is like a top athlete aiming at World Championship.

“The carrying out of new combinations we call enterprise; the individuals

Schumpeter (1934) further reflects whether a capitalist is a synonym for an entrepreneur

It is also important to understand the difference between a manager and an entrepreneur,

Shane and Venkataraman (2000) define entrepreneurship to be recognition, evaluation

2.1.1 Entrepreneurial opportunities

These different entrepreneurial process descriptions, in other words, schools of thought

“The entrepreneurial element cannot be abstracted from the notion of

Opportunity recognition is an important issue in the entrepreneurial process before and

Figure 2.1: A model of the entrepreneurial process (Shane 2003,11)

One common opinion is visible in the different definitions of an entrepreneur: an

Figure 2.2: Dynamic model of effectuation (Sarasvathy 2008, 101)

2.1.2 Entrepreneurial orientation

enterprise’s entrepreneurial activity in terms of strategy, decision-making style and

The three sub-dimensions of the entrepreneurial orientation, namely, proactiveness,

Figure 2.3: A theoretical model of EO-environment-structure-performance relationship (Kreiser

“A firm operating in a dynamic and munificent environment should

2.2 Growth entrepreneurship

Growth entrepreneurship is a very complex and versatile phenomenon and rather a

“The continued growth of a modern business firm can, I think, be most

Random or stochastic approaches assume that growth is an outcome of many different

Social networks as an approach to achieving business growth contain both entrepreneurs’

2.3 Sport entrepreneurship

Sport entrepreneurship includes a variety of businesses, and it is very heterogeneous by

Innovations, proactiveness and risk-taking are also closely connected to sport

“Sport is an entrepreneurial process as innovation and change are key

This theory identifies a number of different types of entrepreneurships affecting sport

identifies that entrepreneurial orientation is closely connected to both successful financial

2.4 Corporate social responsibility and social entrepreneurship in

Giulianotti (2014) connects corporate social responsibility in sports to neo-liberal,

Social entrepreneurship in sport is often connected to small sport organizations operating

2.5 Internationalization and sport SME’s

Small and medium-sized enterprises’ internationalization process is often dependent on

In sport, the growing revenues from broadcasting, technological changes, the

There are also managerial implications in internationalizing the sport teams or

3 Methodology and research data

3.1 On ontology and epistemology

3.2 Qualitative case study research

A qualitative approach is suitable when studying real-life cases aiming at understanding

3.3 Method of analysis

Figure 3.1: Hermeneutical process in this study

3.4 Data collection methods and measurement

3.4.1 Interview approach

3.5 Validation of the study