Relationship commitment and value creation in sponsorship relationships

Abstract

ABSTRACTPurpose: The sponsorship industry has evolved considerably in recent years due to the strategic business opportunities that it provides. Despite increased interest in sponsorship, analysis of the relationship between relationship commitment and value creation and of relationship commitment as comprising multiple types or components in the context of sponsorship relationships is lacking. To address these gaps, this paper analyzes relationship commitment (in terms of affective commitment and value-based commitment) as a significant mediating variable, and value creation in the context of sponsorship relationships.Methodology/approach: A questionnaire was sent to Swedish Hockey League sponsors to collect data and to verify the study’s conceptual model and relationships. The response rate for the survey was 19.8%, that is, 122 completed questionnaires out of 616 sent. The respondents represented the most common industries in Sweden, but most of them belonged to the construction, repair, and electronics industries (18.0%), manufacturing and production industry (13.1%), and commerce industry (11.5%). Most sponsoring companies (30.3%) were categorized as medium-sized (50–249 employees). Most respondents (38.5%) had invested EUR 4300–15,000, whereas 11.5% had invested less than EUR 4300. Moreover, we found that most sponsors had been in their sponsorship relationships for more than 10 years (32.8%). Structural equation modeling (SEM) was used for the data analysis.Findings: This study demonstrates that relationship commitment is an important driver of value creation in sponsorship relationships. Furthermore, the various forms of affective commitment and value-based commitment should not be considered merely components or forms but distinct types. Certainly, there is interaction between the two types, but sequentially in such a way that affective commitment is a prerequisite for value-based commitment. This means that a sponsor must have an emotional relationship with the sponsee in order to understand, perceive, and calculate the sponsorship relationship’s future business value in terms of profits and other benefits. This study also finds that value-based commitment is the most significant type of commitment in sponsorship relationships.Research implications: The study demonstrates that shared values, trust, and affective commitment are fundamental conditions for value-based commitment. If the parties agree on how they should behave in the relationship, the rules and objectives that apply lead to the emergence of mutual trust, which in turn makes the parties want to continue the relationship for emotional reasons. But this is not enough for value creation; they must also see that there are future business benefits from the relationship. Therefore, the parties more or less explicitly make calculations. If the calculations indicate that the long-term benefits of the relationship outweigh the short-term sacrifices, they are prepared to invest in the relationship, and this may lead to value creation. In other words, there is both interplay and tension between shared values, trust, and affective commitment, on one hand, and value-based commitment, on the other. Another theoretical contribution is that previous research has considered the links between relationship commitment and value but has ignored the different types of commitment that play key roles in the value-creation process; this study has addressed that oversight. The study demonstrates that affective commitment and value-based commitment have different roles and meanings. Affective commitment indirectly affects value creation, while value-based commitment directly affects value creation. Affective commitment has the role of partial mediator, while value-based commitment has the role of full mediator. Furthermore, they differ in their basic characteristics: affective commitment is an emotional aspect, while value-based commitment is a calculative aspect.Originality/value/contribution: Previous studies have not analyzed the relationship between relationship commitment and value creation. However, this study demonstrates that relationship commitment is an important driver of value creation in sponsorship relationships. Furthermore, most previous research argues that relationship commitment consists of various components or forms that interact in parallel with each other. However, this study demonstrates that the various forms of affective commitment and value-based commitment should not be considered merely components or forms but distinct types. Certainly, there is interaction between the two types, but sequentially in such a way that affective commitment is a prerequisite for value-based commitment. Furthermore, previous studies have consistently noted that affective commitment is the most important component, form, or type of relationship commitment. However, this study finds that value-based commitment is the most significant type of commitment in sponsorship relationships.