Strategising to Moderate Risk at Mega Events: the case of Olympic Games
The management of risk at mega events is the focus of this dissertation. The framework for criticality of risk areas is identified through a literature review in the chosen domain of Olympics as an instance of mega events. The study looks at different areas of risk and examines assertions made in online archived articles in the public domain. The dissertation uses web based archival resources to acquire such articles using judgmental sampling. Content analysis is the method of analyses complemented by analysis of variance and correlation analysis.
Reflecting on discussion on risk, and on the orientation of shortcomings and prescriptions in articles used as data -is the empirical basis for the study. The implications emphasize a greater role for the host city communities – the risk and benefits are central to minimizing risks in planning and implementation. The importance of such moderation in alliancing and orientation is also found to be beneficial for the organizers of mega events. The study is limited in scope due to sample size and accessibility issues but delivers to the two research questions it is based on, draws out key implications for risk management, and also, reflects on the Games themselves as sequential settings that belong to a larger set of mega events. Such events due to their sequential nature of occurrence- have tremendous opportunity to learn for performance improvement.
This study has been helped tremendously by online portals as data sources especially Highbeam.com, and also, the House of Commons Committee of Public Accounts reports to do with Olympic Games. Guidance and orientation received from the University have been very helpful in organizing this study. Finally, I would like to express my gratitude to friends and family for their co-operation during my busy days while conducting this study. Chapter 1. Introduction
Since the decision for revival of the Olympic movement at the behest of Baron Pierre de Coubertin in Sorbonne, in Paris in 1894, the Olympic movement has come a long way. After nearly fifteen hundred years the first games in Athens were held in 1896. The chronology has come a full circle with the Athens Games on 2004. Over this time frame the Olympic movement is a signifier of prestige and also political clout. However, as with all forms of growth and maturity in a continuously changing world problems and issues have reshaped time and again to challenge the smooth execution of Olympic Games and their perception in minds of the global audience whether it be the public or the governments or also, the sportsperson and organisers. The International Olympic Committee (IOC) has made sure through instruments, producers, rules and routines that it controls the aspects of these mega events – the primary focus being to maintain them not only as the top sporting event but also ‘the’ mega-event that has no comparable competitor (Hill, 1992).
This mandate of size, scope and ambition brings with it an ever more complex environment. The risk of poor performance is associated with such complexity that is difficult to understand and distil into delivery concerns. The internal facets not withstanding, constant challenges like the unpredictability but at the same time likelihood and associated concern of events such as acts of terrorism compound the interface with externalities. The impact of the socio-economic frame of reference at Game sites, the expectations of the IOC and other stakeholders on the reputation and legacy front et al., provide a platter that has a risk quotient attached to every aspect. The management of this risk is critical to carry the movement forward as a successful global phenomenon that brings together people in a fulfilling manner driven by healthy sporting camaraderie.
This dissertation examines risk areas in Olympic Games with an objective to arrive at a risk framework and then derive the relative importance of different risk areas. Using evidence from published sources it also tries to contextualize shortcomings in management of such risk and potential solutions that can help moderate risk. In this frame of reference, the dissertation makes an implicit case for contextualizing and assessing learning from past experience, and the shape of the current schema of risk management for London Olympics, 2012.
1.2 Research Questions
The central research questions that drive this study are as follows:
1. What is the relative critically of areas of risk that are associated with the Olympic Games?
2. What are the shortcomings in existing ways of managing risks? & How can these shortcomings be addressed?
1.3 Dissertation Outline
This chapter sets the mandate for the study and is followed by a literature review that looks at risk from a mega event perspective and in context of Olympic games in particular. The third chapter outlines the approach and methodology for this dissertation. Among other aspects of data and sample selection – it provides a perspective of textual analysis and other allied techniques used for interpreting the same. The fourth chapter presents the research findings under different research questions. A relative criticality of risk areas based on the risk framework /typology in the literature review section is arrived at. The orientation of shortcomings and recommendations in the sample articles is also presented.
The findings are then taken forward to a research discussion chapter where the implications of the findings are taken forward for Olympic Games as a case of mega events. The dissertation concludes by providing a snapshot of study achievements, limitations of the study, and leads for future research.
Chapter 2. Literature Review
‘Mega-events’ are way for cities, nations and economies to further their development agendas. Olympic Games no doubt belong to this fold of events and probably the most significant of them all.
The reputational and economic effects on cities of hosting the Games have been well-documented (e.g., Andranovich, Burbank & Heying, 2001; Miyazaki & Morgan, 2001). However, there is much more work to be done in scoping the risk that is associated with these games. Aside from the fiscal debacle of the Montreal Olympics, right from the onset of the modern Olympics, critical situations have afflicted the games. Political factors have had a role to play with the Nazi bandwagon riding the 1936 Olympics, disruptions through the Wars, and also, anti-apartheid and cold war boycotts. Munich and Atlanta Olympics on the other hand encountered terrorism reshaping the security connotations forever (Burton, 2003).
Hosting the Olympic Games requires a range actors and institutions to come together and the risk of management that such diversity brings with it is also considerable. While the rewards for the community remain high e.g., like being labeled an Olympic world class city the risks of failure are equally great both in the execution of the games, and the stigma that such failure may bring to the community, management and the government. Rationalizing, motivating and organizing remain key to risk control in addition to the unpredictable externalities that may impact such events (Ansell, 1997).
In the next section I discuss the Risk from a perspective of distilling a typology that can closely approximate the numerous variables that associate with a mega event. There after I discuss Olympic risk in the specific context of Olympic Games and the games to be held in London in 2012.
2.2. Risk and Mega Events
The idea of risk is very subjective and highly contingent on the situation and area in question. The understanding of risk as the probability of loss is very macro. This probability is sometimes complex to diagnose as the involved variables are subjective and the probability itself is to make it ambiguous-uncertain. Furthermore, risk is also a matter of significance and relative consequence that various negative influences bring upon an initiative or institution (Tannert et al, 2007).
A discussion to arrive at a typology of risk that is comprehensive and suitable to be considered for mega event scenarios needs to start with Enterprise Risk Management (ERM). With its moorings in financial engineering of risk, ERM covers risk associated with all organisational and institutional silos whether insurance, financial or in general- operational issues. The detailed risk maps that inhabit the increased awareness about risk are now even more important especially in light of the externalities and unpredictable that have been re-emphasized in the aftermath of 9/11. These range from a risk typology that involves interest rates to even more subjective reputational risk aspects. Furthermore, risk is more associative and less silo-ed as the consequences ricochet for the whole organisation or institutional system that may comprise multiple organisational entities as in mega events – thus culminating into macro level strategic risk frame also (Ahlquist, 2003; Barnoff, 2004).
Risk management can be seen at several levels in the case of institutional mechanisms (Quarantelli, 19988; Horlick-Jones et al.; 2001; Kunreuther et al. 1995; Tarlow, 2002): :
Stemming from externalities with some predictability consensus associated with them. For instance, political-legal, economic, and also social
Stemming from externalities with very less or no consensus on the predictability like natural calamities and terrorism (different from perceived likelihood. For instance, an act of terrorism may be likely but cannot really be predicted as against the earlier type!)
Institutionalization and legacy risk Corporate/institutional risk that stems from integrating multiple parties into the management- decision frame. The challenge is to effectively work on negotiation and on the complex pattern of alignment of different stakeholder objectives. For instance, given multiple organisational systems that comprises institutional mechanisms for mega events. Reputational risk are a part of this risk in the main but also can stem from other types
Operational risk -that could stem from supply chain management issues, sub-contracting issues, and work efficiency problems, among others.
In the case of mega events another form of risk that has to do with the size and scope of the event, and is based on the premise that greater these are the more likely are the above likely to manifest themselves. This can be termed – ‘Event Complexity’ Risk (Ceniceros, 2001). Risk of managing information about risk is also an associated factor here. In the information age a lot of data is available on all risk related variables but this also makes the potential for complexity through multiple interpretations very likely. In the pursuit of information – intuition has lesser and lesser of a role to play. This becomes critical when the issue is of externalities with a low prediction quotient.
2.3. Risk at Olympic Games
The idea of Olympism is ingrained in an institutional mechanism that integrates a legacy and numerous organisations when the legacy has to be taken forward in the form of other games. Beyond the exchanges and relationships that are contracted out to be economically meaningful the social, legacy and reputational aspects impart a “common meaning system” (Scott, 1995: 56).
By extension the implications of risk become even more nuanced for Olympic Games. In part, because the baggage of ideology and thus the expectations being immense –more than probably any other mega event on the planet. The following snippets that emphasize this ‘expectation assertion’ and thus reflect not only on the nuanced nature of risk but also the risk of failure:
The Olympic Games are subject to a most complex web of risk variables given the scope and expectations discussed so far. The categories of risk discussed in the previous section apply, and the aspect of ‘event complexity risk’ (Ceniceros, 2001) discussed before amplifies them in the context of Olympics. The legacy of Olympics marked by manifestation of externalities, strategic and operational issues all come together to shape an ever increasing concern for ‘things that can go wrong’
The Olympic Games are staged in collaboration with a given city. The consequences of how risk is managed are thus most important for the city and its people. The ramifications of course are nationwide. The connection is depicted in the naming of the Olympic Games — Berlin 1936; Los Angeles 1984; Sydney 2000 et al.– it is the city that is associated with operationalisation of the Games, and also has its own mascot, emblem et al. The communities – both in administration and in public domain of host cities provide for the direction to the initiative in the specificities of control that are given to a city. It is this localized application of the global and time established mandate of Olympics that initiates the formation strategies, operations , delivery mechanisms and the relationships that comprise them within the host city and beyond it also. Finally, in turn, this impacts the host city and all stakeholders beyond and within its frame of reference – through the performance of the Games and the legacy the Games leave behind (Burbank, 2001).
In the run to London 2012 risk management has become a much codified and dwelled upon feature. However political lobbying and public sentiments some times take attention away from it. For instance, during the bidding evaluation process the London transport system was seen as having serious problems by the International Olympic Committee (IOC) – this was given a back seat in subsequent evaluation exercise. While provisions for risk are formally made as for the 2012 games, the provisions are but only token in light of the heightened risks of terrorism.
Athens 2004 in particular -was also marked by delayed, rather ‘dangerously just in time’ completion of facilities. The experience has resulted in the Olympic Delivery Authority (ODA) imposing a master schedule that supervised ongoing progress (Burbank, 2001; Jennings, 2006).
Sponsors and license fees are a key component of revenues and in light of the failure to adequately protect these in Atlanta 1996, Sydney 2000 saw innovative strategies in place and the learning has continued to shape the delivery mechanism of the London 2012. Lessons from the past improve the delivery mechanism and the risk management apparatus, changing times require innovation to be continuous- proactive and not only in response to problems and failures of the past (Hamel, 1996).
Increasingly most of the investment that is to help host the games is sold to the taxpayer as additional benefits or infrastructure improvements that would occur irrespective of winning the bid to host the games. Besides moderating most internal political and fiscal discontentment, this also contributes to ‘planning of a lasting tangible legacy’. This is one of the seven key risk areas identified by the House of Commons Committee of Public accounts (July, 2007). This list that highlights both the generic and specific concerns is adapted from the report with excerpts of comments from the House of Commons highlighting the nature of concern. It is important to note that many operational facets especially security span several of these listed areas like for instance ‘Coordination of the multiplicity of organizations and groups involved in the Games’ and ‘Delivering the Games against an immovable deadline’ among othersHouse of Commons (2007)
The delivery of the London Olympic Games 2012 has been configured around two new bodies the Olympic Delivery Authority (ODA), and the London Organizing Committee of the Olympic Games and Paralympics Games (LOCOG)- the former providing facilities, and the latter, staging the games.
These bodies are supervised by the Olympic Board, and the Department for Culture, Media and Sport that comprises the Government Olympic. The number of bodies that link up to provide services feed into a complex supply chain which is not easily comprehendible but the delivery mechanism can be seen as follows:
The complexity of the delivery mechanism and the even more nuanced supply chain has a knock on effect on the other listed factors- for example the timely delivery aspect is contingent upon the effectiveness of co-ordination.
The timescale from securing the bid to eventual hosting is quite big- the resultant inflation and unpredictable external factors affect budgetary issues. On the other hand, the contractual procedures required to say for instance, harness fresh private sector funds make it cumbersome to source then with such re-estimates. One example of changing circumstances is heightened security risks that may also require re-estimates.
The lottery money that is going into 2012 is being diverted from other just causes and such resource re-direction needs to come good in the future from surpluses created by the impetus of the games. Having a structured approach to supply chain management and recognizing the extensive processes that will be required to facilitate construction and reworks for instance- are key to effective management. Monitoring of progress via a steering group will help keep a check on the various cogs of the complex machine that also stems from the ‘master schedule’ requirement mentioned before (Jennings,2006). The lasting legacy issue is about reuse and sustainable orientation of facilities and infrastructural developments to generate a source of income over life. This is key to realizing long terms benefits from the impetus of the games.
The discussion on the above that leads from the typology provided also suggests as range of micro factors that need to be put in context. As later in this dissertation – these micro factors that lie within the ambit of the typology are crucial to examine shortcomings and recommendations from web based archived publications. These micro risk areas can be listed as follows as mainly from the above discussion:
- Scheduling (the preparation flow from award of the games to being ready comfortably and in time)
- Infrastructure Quality (the quality of facilities and how customized they are to delivering the games)
- Sponsorship (a resource bracket that is not only about monetary issues but also to a degree about sanction)
- Licensing issues (the arrangements to appropriate services and rents)
- Security (issues to do with management of crowds in the old days now primarily about terrorism)
- Legacy (the impressionistic statements the Games make on the city-nation and the Games themselves)
- Resource opportunity cost (in light of other good causes)
- Coordination (in delivery)
Extant literature that has dwelled on shortcomings and recommendations across some of these areas hints at resourcing, sanction from top and public support as driving variables towards addressing shortcomings related to the aforesaid areas. Toohey and Taylor (2007) for instance, have highlighted the role of public sentiments in shaping response to threats of terrorism. The impact of how fear, anger, optimism, and pessimism as attributes of such sentiment – translate into the public ‘buying in’ to the organisers claims about the efficacy of security, were key as per their empirical analysis.
In the risk management area the need for ‘special events to have special risk management’ mandates (Ceniceros, 2001) is propounded explicitly or implicitly in most literature. Such literature highlights the ‘event complexity’ issue that is a part of the typology propounded in this review based on literature. What such research also suggests is the need to be very explicit in fleshing out risk variables no matter how unconventional they may appear (McGee, 2006; Roche, 2006). The unconventionality is what has required me to distill a novel framework in typology and in micro areas in this literature review – to be examined and validated in the later chapters
In the subsequent chapters I examine the Risk associated with Olympic Games. This is done in two complementary ways. I examine the perceptions about risk in recent past through a methodologically embedded analysis and then draw implications largely in context of the prospective frame London Olympics 2012. While the former provides for a perspective on relative criticality of risk areas, and how shortcomings and recommendations associated with it are tabled – the latter provides a platform to contextualize the findings. In the parts of the dissertation to follow -data sources for this analysis and a detailed methodology are provided prior to analysis and findings of the study.
Chapter 3. Approach & Methodology
This dissertation is based on secondary data sources. Web based archival documents, and also literature that provides narratives of different Olympic Games have been used. In some cases, references to changes in the delivery mechanism in the aftermath of a critical incident in the preceding games, form basis to reflect on the genesis of approaches to risk management. In others, which are a majority, author perception and orientation are taken as an indicator of the risk and shortcomings of risk management at the mega events of Olympic Games. A detailed methodology as described and illustrated in this chapter tries to work on these in a robust manner.
The listed areas of risk in general for mega events and contextualised to London 2012 games in the literature review- are taken as the bedrock to flesh out different factors that associate with each area. There are overlapping and micro factors like private funds generation, contractual arrangement for physical assets and security- but these have been worked at in an aggregated manner under the risk typology proposed. Some specific discussion on these follows under the findings section but the focus remains to generate a holistic risk perspective as per the research questions of this dissertation.
An analysis based on web based published material using content analysis or textual analysis (as archival text is the frame of reference) informs this dissertation. This is on a sample of articles in leading newspapers and periodicals on Olympics Games. The content analysis technique will make use of phrases, concepts, and their meaning to elucidate which are prime areas relating to risk concern and how the related factors are perceived. There is an opportunity to see cultural variations not only over time but over samples that belong to different parts of the world but the lack in spread in articles has defeated this additional objective – not affecting the addressal of the research questions. Textual analysis bases itself on the extent of occurrence and also on the implied meaning as in opinions voiced and intended (Lecompte et al., 1992). The data codes generated have been processed using statistical tools as described later in the chapter. As stated, after presenting the research findings in the chapter to follow, the relative criticality of risk factors is discussed – primarily in light of London 2012 and mega events in general later in this dissertation.
The sample of popular newspaper and periodical articles under content-textual analysis was expected to be about 50 over the last five years, given that we need to examine contemporary- relative importance of risk areas and factors. I have been able to locate 51 articles that are of relevance after going through nearly 200 articles to generate this shortlist. The sampling can thus be classified as judgmental. As mentioned, a regional classification was also intended but lack of articles that were comparable from the Asian and African perspective did not allow for this. The popularity weighing has also been done away with given this modification in selection criteria brought upon by access and availability issues – new criteria drawing to some degree on discourse architecture by a lead thinker in the field of semiotics- Foucault as described later is used for assigning weights. Archival information from the House of Commons Committee of Public accounts (HC) is available and updated version(s) have been used to support the comparison between content analysis findings and the risk assessment schema that exists. Though the Beijing games in 2008 were kept out of the frame of reference as material on these was rather limited, and also because the prospective frame was intended to be the London Olympics- some articles inevitably referred to the forthcoming Beijing Games as well.
3.3. Textual Analysis
Textual analysis is a form of content analysis where archival text is the platform for distilling meanings and implications. This includes online material. The analyses includes a perspective on the ‘intended’ vs. the ‘visible’ meanings and also the environment and players who enact the ‘transaction’ of the message.(Babbie, 1997). Textual analysis thus works in a frame of reference that seems to stem from ‘Semiotics’ of the study of meanings ( Bignell, 1997), is key to understanding such analytical approach. This is profiled here to draw on concepts that can be reflected in coding of the textual data.
Roland Barthes (1915-1980) is the first key thinker here of course building upon the basics of semiotics propounded by Saussure (Barthes, 1954, 1967, 1975). He speaks of certain levels at which meanings are pegged – the explicit sign actually indicates a deeper meaning or implication.
Among many others’ Michael Foucault is another important thinker – his views on the ‘context’ and the manner in which ‘discourse’ gets shaped both across time and within a given situation at a point in time have been much cited (Groden & Kreiswirth 1994).
3.4. Methods in Analyses
From the preceding discussion it can be summarised that the following are useful in setting out works for textual analysis:
- (Barthes amongst others) – looking at deeper meanings
- (Foucault) – looking at lineage and moorings support from past expressions
The characteristics of the web based published articles are as below for profiling the analysis to give a snapshot of how the analysis has been conducted
- They are a form of written text that arise both in response to previous postings and also independently in context of a phenomenon or event. To this extends the signs can be primary or secondary. For instance, critiquing claims about the efficacy of arrangements at the proposed game or just objectively stating the resource input into risk management and the claims about how these are going to affect the games
- They can be quasi –primary signs at a particular point in time as they may refer not directly to the event but follow a line of thought from previous events that had temporarily terminated in the past. So signs can manifest themselves in dormant forms till they are called into play again. For instance, semblance to arrangements in Olympic games that were held far in the past
So going back to our classification of risk in the preceding chapter:
- Stemming from externalities with some predictability associated with them. For instance, political-legal, economic, and also social
- Stemming from externalities with very less or no consensus on the predictability like natural calamities and terrorism (as argued before : a likelihood there but prediction is not possible)
- Institutionalization and legacy risk Corporate/institutional risk that stems from integrating multiple parties into the management- decision frame. The challenge is to effectively work on negotiation and on the complex pattern of alignment of different stakeholder objectives. For instance, given multiple organisational systems that comprises institutional mechanisms for mega events. Reputational risk are a part of this risk in the main but also can stem from other types
- Operational risk that could stem from supply chain management issues, sub-contracting issues, and work efficiency problems
- In the case of mega events another form of risk that has to do with the size and scope of the event, and is based on the premise that greater these are the more likely are the above likely to manifest themselves. This can be termed – ‘Event Complexity’ Risk
Demonstrating analyses for coding:
I will take snippets (some parts of articles) from the postings used and reflect on them.
From the discussion presented, in the main, I will keep in mind the base concepts of Semiotics as by Saussure, extended by Barthes and the explanation provided by Foucault that discontinuity and lineage are characteristic of every discursive statement or published text. Here I explain how the article has been looked at to draw coding for analyses. The source URL article produced here which is by Sally Jenkins in the Washington Post. Only some parts of the article are reproduced below as in quotes italics for this demonstration purpose.
“….The thing to do with the Athens Games is to believe in them until we’re absolutely forced not to. Anyone who has a chance to go to the Olympics is asking themselves a plain question: Is the trip worth it? The answer is plainly, yes, if only because of a principle best expressed in “The Greek Way,” by Edith Hamilton. She wrote something that all American athletes should take note of: “Civilization, a much abused word, stands for a high matter quite apart from telephones and electric lights…………………
…….This could be the motto of the Athens Games, given the delays in finishing stadiums, roads, and other infrastructure, and the explosion of three small bombs in the last two weeks. Nevertheless, it’s not a bad lesson, and it’s one that the more cosseted American athletes could use. In fact, maybe we could all do with some Greek culture”…….
…..Neither apparently do modern Greeks. Eighty percent of Greeks recently polled said they believe some kind of attack is “inevitable.” Fifty-two percent of Americans believe an attack is likely. U.S. Sen. Jon Kyle (R-Ariz.), the chairman of the Senate committee on terrorism, said the safest place to watch the Olympics is at home on television…..
……To date, no American athlete has withdrawn from the Games specifically because of security. But an NBA player is your best bet. “The players are definitely concerned,” Jermaine O’Neal, the Indiana Pacers forward and a member of the U.S. team, told the Associated Press. Not even the Queen Mary seems to console Ray Allen, who cited the USS Cole, the American destroyer that was attacked by al-Qaeda in October 2002 and lost 17 sailors. “The only thing I can think of,” Allen said, “is the battleship that got blown up……
……Hamilton wrote, “For a hundred years Athens was a city where the great spiritual forces that war in men’s minds flowed along together in peace; law and freedom, truth and religion, beauty and goodness, the objective and the subjective — there was a truce to their eternal warfare and the result was the balance and clarity, the harmony and completeness, the word Greek has come to stand for . . . and in all Greek art there is an absence of struggle, a reconciling power, something of calm and serenity, the world has yet to see again.” Or as an ancient poem says, “Greece and her foundations are . . . built below the tide of war”…..”
Source: When It Comes to Athens You’ve Got to Be
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