How Organizational Structure and Power Dynamics Impact Decision Making—An Empirical Investigation of General Manager Turnover in the National Basketball Association
Abstract
This dissertation examines the factors affecting GM dismissals in the NBA. Although there is limited consideration of executives in sport, scholars argue that GMs play a critical role within professional sport organizations, as they are generally involved in both business and on-field operations of the team. While there is some understanding of the impact that GMs have on organizational performance in sports, there is a lack of consideration of the tenure of executives and the factors that lead to turnover in these positions. As such, there is a critical need for further examination of GMs in sport. Following power theory and the theoretical understanding developed in both CEO and coaching dismissal literature, this study not only incorporates characteristics of GM and team performance but also accounts for power dynamics, ownership structure, and other organizational factors. Results for this study were estimated using both the CPH and logit estimation. The findings of this study indicate that a GM’s structural and expertise power significantly affect their risk of dismissal. Additionally, enhanced performance during the regular season or playoffs significantly decreases GM’s probability of dismissal. The analysis also reveals that under a dispersed ownership structure, GMs face a higher risk of termination. These empirical insights not only enhance the theoretical understanding of how power dynamics and organizational structure influence tenure and decision-making within professional sport organizations but also provide important managerial implications for higher-level sports executives, such as presidents and owners.