Organizational Structure, Public-Private Relationships, and Operational Performance of Large-Scale Stadiums: Evidence from Local Governments in China

Abstract

The financial sustainability of large-scale sport stadiums has become a challenging issue for sport organizations in China due to increasing market competition, lack of professional sport franchises to tenant the facilities, and gradual slow-down in Chinese GDP growth. Previous findings about operational performance of sport organizations identify organizational structure and public-private partnership (PPP) as important predictors. The aim of the current study was (a) to propose a predictive model for operational performance of large-scale stadiums in China and (b) to examine the relationships among organizational structure, PPP, and operational performance. We conducted a literature review to establish a theoretical framework for the proposed model, selected Yangzhou Sports Park and Xuzhou Olympic Sports Center to examine the relationships, and conducted expert interviews to examine the research questions. We found that Xuzhou’s operational performance was more effective due to several mechanisms related to both organizational structure and PPP: incentive, supervision, and assessment. Notably, using built-in benchmark monitoring procedures, Xuzhou managers identified a variety of constraints early on to address onsite problems while maintaining efficient communication among key PPP stakeholders.