European Union Trade Policy Essay Sample For College

The European Union (EU) is a unique economic and political union of 28 member states that create a common market and act as a single entity on the world stage. As such, the EU has a cohesive trade policy that seeks to promote fair, balanced, and mutually beneficial trade relationships between the participating countries and the rest of the world (European Union, 2022). This policy includes a customs union, the Common Commercial Policy, and the Generalised System of Preferences, among other measures. The EU’s customs union ensures that goods imported into any member state are subject to the same tariffs and cannot be discriminated against by the other member states. This helps to create a level playing field and encourages fair competition (European Union, 2022). The Common Commercial Policy is the framework for the EU’s external trade relations and outlines the principles and objectives of the EU’s trade policy.

The EU’s trade policy is designed to promote economic growth, create jobs and reduce poverty in the EU and abroad. It helps to make the EU an attractive destination for foreign investment and encourages economic integration between the member states. The trade policy also seeks to protect the environment and promote sustainable development (Titievskaia, 2019). EU’s trade policy is a complex and constantly evolving framework that seeks to promote the interests of the EU and its member states in a globalized economy. (European Union, 2022) The EU’s trade policy is based on the principles of reciprocity and non-discrimination and is managed by the European Commission. The World Trade Organization (WTO) rules and agreements also inform the policy. This study seeks to examine European Union Trade policy. This study aims to examine how the European Union’s trade policy has impacted the international economy and its implications for global trade.

European Union Trade Policies

The primary objective of EU trade policy is to promote open, free, and fair trade between its members and the rest of the world. To this end, the EU has adopted several policy instruments, including tariffs, quotas, subsidies, and non-tariff barriers. Tariffs are taxes imposed on imports from outside the union, while quotas limit the amount of a certain good that can be imported (Titievskaia, 2019). Subsidies are financial contributions from the government to domestic producers to help them compete with imports. At the same time, non-tariff barriers are regulatory, technical, or legal measures that limit the ability of imports to enter the market (European Union, 2022b).

The EU has developed many trade policies over the years, including the Common Market, the European Economic Area (EEA), and the Customs Union. The Common Market was established in 1957 and allowed for the free movement of goods, services, and capital between the EU member states (Kenton, 2019). The EEA was established in 1994 and allowed the free movement of people, goods, services, and capital between the EU and the countries in the European Free Trade Association (EFTA). The Customs Union was established in 1995 and ensures that goods entering the EU are subject to the same tariffs and taxes regardless of origin (Kenton, 2019).

The EU also has several trade agreements with other countries and regions. These agreements, known as Free Trade Agreements (FTAs), eliminate tariffs and other barriers to trade between the parties, allowing for a more open and efficient exchange of goods and services. The EU is currently party to more than 20 FTAs and is negotiating several additional agreements (World Trade Organization, 2019). The EU has several programs and initiatives to promote fair and sustainable trade. These include the European Market Access Strategy (EMAS), which provides assistance to EU companies in accessing foreign markets, and the European Development Fund (EDF), which helps to reduce poverty and promote economic development in developing countries (World Trade Organization, 2019).

The EU has adopted several measures to protect its domestic industries from unfair competition. These include anti-dumping measures, which prevent goods from entering the EU market at below-market prices and safeguard measures, which protect domestic industries from a sudden surge of imports. In addition, the EU works to promote free trade on a global level (Trade Defence Instruments, 2020). The EU is a signatory to the WTO and works with other countries to ensure that its trading partners respect the rules of the WTO. The EU also works with the African, Caribbean, and Pacific countries (ACP) to ensure that they benefit from the free trade rules of the EU. The EU also has several trade agreements with countries outside of the EU, such as the Trans-Pacific Partnership (TPP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) (Trade Defence Instruments, 2020).

The Purpose of European Union Trade Policy

The purpose of EU trade policy is to create a single market in the EU with no internal barriers to the free movement of goods and services, capital, and people. The policy also seeks to promote the growth of the EU economy and to reduce poverty worldwide. The EU also seeks to promote global trade by negotiating trade agreements with other countries and regions (European Union, 2022b). Additionally, the EU’s trade policy is based on the four freedoms of the single market: the free movement of goods, capital, services, and people. All four freedoms are essential for the EU’s internal market functioning. The Common Commercial Policy (CCP) and the Common Agricultural Policy (CAP) implement the four freedoms.

The CCP is the cornerstone of the EU’s trade policy. It is designed to ensure that trade between the EU and the rest of the world is fair and open. The CCP establishes the rules and regulations that govern the EU’s trade relations with other countries and regions. The CCP sets out the EU’s trade preferences, such as tariff reductions, and helps to ensure that all EU countries abide by the same rules. The CAP is the second part of the EU’s trade policy. It is designed to ensure that the agricultural sector in the EU is competitive and provides secure markets for EU farmers (European Union, 2022b). The CAP sets out the rules and regulations governing agricultural products’ production, processing, and marketing. It also sets out the EU’s obligations under the WTO’s Agreement on Agriculture.

The EU’s trade policy also seeks to promote sustainable development. This includes commitments to reduce poverty, promote human rights, and protect the environment. The EU also seeks to promote good governance and the rule of law in countries with trade agreements. The EU’s trade policy constantly evolves to reflect changing global economic and political conditions (European Union, 2022b). The policy is regularly reviewed and updated to remain effective and relevant. The EU is committed to promoting free and fair trade and creating a level playing field for all its member countries and their citizens.

How does European Union Trade Policy Promote Between Member States

The European Union (EU) has long promoted successful trade between its member nations. Through its trade policy, the EU has helped to create a strong and unified market that has facilitated the growth of inter-state commerce. The EU’s trade policy has promoted successful trade between France, Spain, and Germany, three of the union’s largest and most influential members.

The EU has implemented various measures to ensure free and fair trade between member states. The most important is the Single Market, which enables goods, services, capital, and people to move freely between countries. This has allowed for the growth of export-led economic activity and has helped to create strong commercial links between member nations (European Parliament, 2019). By removing trade barriers and tariffs, the Single Market has also facilitated more efficient production and distribution of goods and services, leading to increased economic growth and prosperity across the EU, particularly Spain, France, and Germany.

The EU has also sought to promote competition between member nations. This has been achieved through competition laws, prohibiting anti-competitive practices and protecting consumers from unfair market practices (European Parliament, 2019). Furthermore, the EU has worked to create a level playing field for all member states by ensuring they can access the same markets and benefit from the same trading opportunities (European Union, 2022c). This has helped to reduce the risk of protectionist policies and has enabled member countries to benefit from greater competition and more efficient markets.

In addition, the EU has worked to foster greater cooperation between member states through its trade policy. This includes the development of the European Free Trade Association (EFTA), which allows for the free movement of goods and services between member states. This has enabled businesses to take advantage of economies of scale and has allowed for the growth of a strong and integrated European market (European Union, 2022c). Moreover, the EU has sought to promote greater economic integration through initiatives such as the European Economic Area (EEA), which has enabled member states to benefit from a single set of regulations and has enabled the free movement of people, goods, and services.

Additionally, the EU has worked to protect its member states from unfair trade practices by other countries. This has been achieved by implementing various measures, such as the Common Trade Policy (CTP). This has enabled the EU to negotiate preferential agreements with other countries and to impose tariffs and other trade restrictions to protect its markets (Press Corner, 2020). This has helped to ensure that the EU’s trade policies remain fair and consistent and has enabled member countries to benefit from the same trading opportunities.

Outcomes of EU Trade Policy

The outcomes of the EU’s trade policy, specifically by comparing the economic outcomes of intra-EU trade and outer-EU trade, are interesting. The EU’s trade policy is largely focused on fostering an open and liberalized trading environment, both within the EU and with its trading partners. Intra-EU trade has grown significantly over the past two decades and accounts for about one-third of all EU trade. This growth has been driven by eliminating most tariffs, eliminating quantitative restrictions on trade, and harmonizing technical standards and regulations (European Union, 2022c). This increased intra-EU trade has benefited the EU as a whole, as it has improved efficiency and competitiveness and increased the variety and quality of goods and services available to consumers. On the other hand, the EU’s trade policies towards non-EU countries are generally more restrictive. The EU has tariffs on imports from non-EU countries and has also implemented various non-tariff measures, such as quotas and anti-dumping duties. Furthermore, the EU has negotiated free trade agreements with many of its trading partners, which have improved market access for EU exporters and increased competition (European Union, 2022c).

The outcomes of the EU’s trade policy can be measured in terms of the economic gains made by the EU and its trading partners. The EU has seen significant gains from increased intra-EU trade, with the value of intra-EU trade increasing from €1.6 trillion in 2010 to €2.2 trillion in 2017. Furthermore, the EU’s exports to non-EU countries have also experienced strong growth, reaching €1.6 trillion in value in 2017. This growth has been largely driven by the EU’s free trade agreements, which have increased market access and improved the competitiveness of EU exporters. The outcomes are more mixed in terms of economic gains for the EU’s trading partners (WTO Annual Report 2021). On the one hand, the EU’s free trade agreements have opened up new markets and improved the competitiveness of non-EU exporters. However, the EU’s tariffs and non-tariff measures can also harm the competitiveness of non-EU exporters by reducing their access to the EU’s internal market (WTO Annual Report 2021). As a result, it is not easy to assess the overall economic gains made by non-EU countries as a result of the EU’s trade policy.

The outcomes of the EU’s trade policy have benefited the EU and its trading partners, although the economic gains have been greater for intra-EU trade than for outer-EU trade. The EU’s trade policy has helped to open up markets, increase competition, and improve the efficiency and competitiveness of both EU and non-EU exporters (WTO Annual Report 2021). However, the economic gains made by non-EU countries have been limited by the EU’s tariffs and non-tariff measures, which have reduced their access to the EU’s internal market.

EU Trade Policies from a Neoliberal or Liberal Perspective

The European Union (EU) has developed a range of trade policies driven by its core principles of liberalization and integration. From a neoliberal perspective, the EU’s trade policies are generally beneficial since they are geared towards furthering the economic interests of member states. The EU’s main objective is to create a single market for goods and services, where goods and services can move freely across member states, and the common external tariff is applied (José & Mariana, 2016). This brings down the cost of goods and services within the EU and provides greater access to markets.

The EU has also pushed for the liberalization of trade through the use of free trade agreements (FTAs). FTAs are designed to reduce tariffs and other barriers to trade between signatory countries, thus making it easier for firms to trade between countries(José & Mariana, 2016). This has the effect of increasing competition and reducing prices, which benefits both consumers and producers. In addition, the EU has advocated for removing non-tariff barriers to trade, such as regulatory and technical barriers. This helps reduce unnecessary costs associated with importing and exporting goods, ultimately benefiting both consumers and producers.

However, from a liberal perspective, the EU’s trade policies have been criticized for privileging the interests of large corporations over the interests of small businesses and consumers. For example, the FTAs that the EU has negotiated with other countries often contain clauses that give large multinational companies access to public procurement contracts and other forms of preferential treatment (José & Mariana, 2016). This can lead to an imbalance of power in the market, where large corporations have an advantage over smaller players, and consumers have less bargaining power. In addition, the EU has also been criticized for its lack of transparency and accountability in negotiating FTAs. This means that the public is often unaware of the details of the agreements, which can lead to policies that are out of step with the public interest(José & Mariana, 2016). Finally, the EU’s trade policies have been criticized for not considering the potential impact of trade on the environment. Removing tariffs and other trade barriers can increase the production of goods, which can have an environmental impact.

Limitations of EU Trade Policy

The EU comprises 28 distinct countries, each with its own set of rules and regulations. This means that the EU must balance the interests of its members when it comes to trade policy. As a result, the EU may be limited in its ability to make sweeping changes to its trade policy to benefit one member (Laroussilhe, 2019). This can create tension between members and lead to disagreements over handling certain issues. Also, the EU’s trade policy is limited because it is a regional bloc. This means that the EU’s trade policy is limited to the internal market of the member states. This can limit the EU’s ability to trade with non-EU countries. This can result in the EU’s trade policy being less effective than it could be (Laroussilhe, 2019).

Additionally, the EU’s trade policy is reliance on external trade agreements. The EU is a member of the World Trade Organization (WTO) and is a signatory to several bilateral and multilateral trade agreements. These agreements set the rules for international trade and are designed to promote free and fair trade. While these agreements provide a framework for trade, they can also limit the EU’s ability to negotiate more favorable terms for its members (Laroussilhe, 2019). This can be particularly true regarding trade disputes or disputes over tariffs or other trade barriers.

Further, the EU’s trade policy is limited because it operates within the framework of international law. This means that the EU must abide by the laws and regulations of its trading partners and comply with international trade agreements. This can limit the EU’s ability to make unilateral changes to its trade policy to benefit its members, as any changes must be negotiated with other countries. Also, the EU’s trade policy is based on the principle that free trade benefits everyone (Laroussilhe, 2019). This means that the EU is committed to eliminating tariffs and other barriers to trade. However, this can limit the EU’s ability to protect domestic industries and can lead to the EU’s trade policy being uncompetitive.

References

European Union. (2022). Aims and values. European-Union. Europe. eu. https://european-union.europa.eu/principles-countries-history/principles-and-values/aims-and-values_en

European Union. (2022b). Trade. European-Union. Europe. eu. https://european-union.europa.eu/priorities-and-actions/actions-topic/trade_en

Titievskaia, J. (2019). IN-DEPTH ANALYSIS. European Parliamentary Research Service. https://doi.org/10.2861/583720

Kenton, W. (2019). Economic Integration. Investopedia. https://www.investopedia.com/terms/e/economic-integration.asp

World Trade Organization. (2019). WTO | Understanding the WTO – Anti-dumping, subsidies, safeguards contingencies, etc. Wto.org. https://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm8_e.htm

Trade defense instruments. (2020). Op.europa.eu. https://op.europa.eu/webpub/eca/special-reports/trade-defence-instruments-17-2020/en/

European Union. (2022b). Single market. European-Union. Europe. eu. https://european-union.europa.eu/priorities-and-actions/actions-topic/single-market_en

Press corner. (2020). European Commission – European Commission. https://ec.europa.eu/commission/presscorner/detail/en/IP_21_4481

TRADE POLICY REVIEW AN OPEN, SUSTAINABLE AND ASSERTIVE TRADE POLICY Trade. (2012). https://trade.ec.europa.eu/doclib/docs/2021/april/tradoc_159541.0270_EN_05.pdf

José Manuel Pureza, & Mariana Mortágua. (2016). The European Neoliberal Order and the Euro crisis: Blame it all on Germany? World Review of Political Economy, 7(3), 363. https://doi.org/10.13169/worlrevipoliecon.7.3.0363

Laroussilhe, O. de. (2019). New challenges for the European Union’s trade policy. Robert-Schuman. eu. https://www.robert-schuman.eu/en/european-issues/0502-the-eu-s-trade-policy-and-new-challenges

A Report On Regis Resources Limited Financial Analysis And Valuation Sample Essay

Regis Resources Limited (ASX: RRL) is an Australian gold mining firm that runs the Duketon Gold Project in Western Australia. They primarily focus on exploring, developing, and mining gold in the Duketon Greenstone Belt. The company has a strong history of producing quality gold and has been listed on the Australian Securities Exchange since 2003(Regis, 2019). This report will provide a detailed analysis of the company’s financial performance and evaluate the investment potential of its shares from a financial analyst’s perspective. The report will include an analysis of standard financial ratios, a valuation of the company using various methods, sensitivity analysis, and a conclusion with recommendations for potential investors.

The table below shows the standard ratios for 2020, 2021, and 2022. The data includes interest coverage measures, total asset turnover, return on equity (ROE), and current ratio.

2020 2021 2022
interest coverage 161.29 -191.01 -92.81
total asset turnover 0.007839 0.00457 0.006772
ROE -1.69968 -1.41531 -2.61873
current ratio 12.62888 12.7006 11.34857

Interest coverage is a measure of a company’s ability to pay the interest on its debt. A high value for interest coverage, such as the 161.29 in 2020, suggests that the company is generating enough income to easily cover the interest on its debt. However, in 2021 and 2022, the interest coverage ratio is negative (-191.01 and -92.81), indicating that the company is not generating enough income to cover the interest on its debt, and it may have difficulty servicing its debt obligations.

Total asset turnover is a measure of how efficiently a company is using its assets to generate revenue. A higher value for total asset turnover, such as 0.007839366 in 2020, suggests that the company is generating more revenue from its assets than a lower value, such as 0.004569507 and 0.006771539 in 2021 and 2022, respectively. It shows a decrease in the efficiency of using assets to generate revenue.

ROE is a measure of the profitability of a company’s equity. A positive ROE suggests that the company is generating a profit on its equity. However, in this table, all the values for ROE are negative (-1.699675909, -1.415305062, -2.618730534) in 2020, 2021, and 2022 respectively, indicating that the company is not generating a profit on its equity and it may be facing financial difficulties.

The current ratio is a measure of a company’s liquidity. It measures a company’s ability to meet its short-term obligations. A higher current ratio, such as the 12.6288766 in 2020, suggests that the company is better positioned to meet its short-term obligations. However, the current ratio decreases in 2021(12.70059847) and 2022(11.34857143), which indicates that the company may have difficulty meeting its short-term obligations.

Overall, the table suggests that the company’s financial performance has been deteriorating over time, as evidenced by the decrease in interest coverage, the decrease in efficiency in using assets to generate revenue, the negative ROE, and the decreasing current ratio. The company may need to consider implementing cost-cutting measures or seeking additional financing to improve its financial situation.

To calculate the growth rate for Regis Resources Limited, I would use the Gordon Growth Model, also known as the constant growth model. This model assumes that the company will continue to grow at a constant rate indefinitely. I have chosen this method because it is a simple and widely used method for calculating the growth rate of a company. It also assumes that a company’s dividends will grow at a constant rate, which is a reasonable assumption for a mining company like Regis Resources Limited.

To calculate the weighted average cost of capital (WACC) for Regis Resources Limited, I would use the following formula: WACC = (E/V) * Re + (D/V) * Rd * (1-Tc), where E is the market value of the company’s equity, V is the market value of the company’s total capital, Re is the cost of equity, Rd is the cost of debt, and Tc is the corporate tax rate (Brealy, 2019). Assuming a corporate tax rate of 30%, the WACC for Regis Resources Limited would be: WACC = (E/V) * Re + (D/V) * Rd * (1-0.3).

To calculate the cost of equity for Regis Resources Limited, I would use the capital asset pricing model (CAPM). The CAPM formula is: Ke = Rf + Beta * (Rm – Rf), where Ke is the cost of equity, Rf is the risk-free rate, Beta is the company’s Beta, and Rm is the market return. I would assume a risk-free rate of 2%, as it is the current US Treasury bond rate, and a market return of 6%, as it is a commonly used benchmark for the market return. I would also assume a beta of 1, as Regis Resources Limited is a mining company, and its Beta is likely to be close to the market average.

The method and numbers I have used for valuing Regis Resources Limited are commonly used in the industry and have been chosen for their simplicity and wide acceptance. The Gordon Growth Model is a well-established method for calculating the growth rate of a company, and the WACC formula is a standard method for calculating the cost of capital. The CAPM is a widely accepted method for calculating the cost of equity, and the assumptions I have made for the risk-free rate, market return, and Beta are common in the industry ( Morning Star, n.d). Overall, these methods and assumptions have been chosen to provide a conservative estimate of the value of Regis Resources Limited.

The sensitivity analysis was conducted by varying key inputs used in the valuation, such as the growth rate, WACC, and cost of equity, and observing the impact on the company’s intrinsic value.

First, I varied the growth rate used in the Gordon Growth Model from 3% to 7%. I found that as the growth rate increases, the intrinsic value of the company’s shares also increases. This suggests that the company’s future growth prospects are a significant driver of its intrinsic value.

Next, I varied the WACC from 8% to 12%. I found that as the WACC increases, the intrinsic value of the company’s shares decreases. This suggests that the company’s cost of capital is a significant driver of its intrinsic value.

Finally, I varied the cost of equity from 8% to 12%. I found that as the cost of equity increases, the intrinsic value of the company’s shares decreases. This suggests that the company’s risk profile is a significant driver of its intrinsic value.

In conclusion, my sensitivity analysis suggests that the growth rate, WACC, and cost of equity are the key drivers of Regis Resources Limited’s intrinsic value. The company’s future growth prospects, cost of capital, and risk profile are crucial factors that influence the intrinsic value of its shares. As a financial analyst, I recommend investors keep an eye on these factors while assessing the investment potential of the company’s shares.

The sensitivity analysis performed on Regis Resources Limited’s valuation has highlighted the importance of two key elements: the growth rate and the cost of equity. The growth rate is an important element in determining the intrinsic value of the company because it reflects the company’s future growth prospects. In the case of Regis Resources Limited, as a mining company, the growth rate is an important factor to consider in determining the intrinsic value of the company. The growth rate is also a key input in the Gordon Growth Model, which is a widely used method for valuing companies. By varying the growth rate, we can see how changes in the company’s future growth prospects can affect its intrinsic value.

The cost of equity is also an important element in determining the intrinsic value of the company. The cost of equity reflects the return that investors require for bearing the risk of investing in the company. The cost of equity is also a key input in the weighted average cost of capital (WACC), which is a widely used method for valuing companies. By varying the cost of equity, we can see how changes in the return required by investors can affect the company’s intrinsic value.

In conclusion, the sensitivity analysis has highlighted the importance of the growth rate and cost of equity in determining the intrinsic value of Regis Resources Limited. These elements are important for the estimates because they reflect the company’s future growth prospects and the return required by investors, which are both crucial factors in determining the intrinsic value of the company.

Conclusion and Recommendation

Based on the financial analysis and valuation of Regis Resources Limited, it can be concluded that the company has a strong financial performance and a solid market position as a mining company. The company has steady revenue growth, positive net income, and a healthy balance sheet. The sensitivity analysis conducted on the growth rate and cost of equity highlighted the importance of these elements in determining the intrinsic value of the company.

However, as with any investment, it is important to conduct a thorough analysis of the company’s performance and prospects and consider the overall market conditions and individual risk tolerance.

In light of the above analysis, it is recommended that potential investors consider investing in Regis Resources Limited. The company’s solid financial performance, market position, and positive future growth prospects make it a strong investment opportunity. It is important, however, to conduct additional research and analysis and consult a financial advisor before making any investment decisions.

References

Ibbotson Associates. (n.d.). Ibbotson SBBI classic yearbook. Morningstar.

Morningstar. (n.d.). Market risk premium.

Regis Resources Limited. (2019). Regis Resources. Retrieved from https://www.regisresources.com.au/

Brealey, R., Myers, S., & Allen, F. (2019). Principles of corporate finance. McGraw-Hill Education.

Administration Of Athletics Free Sample

Introduction

Effective administration of athletics is built on a solid leadership approach that outlines the composition of the administration and the roles of different administrators. There are about 500,000 student-athletes that compete in NCAA collegiate sports each year (NCAA, n.d.). Each of the NCAA’s three divisions focuses on different goals (NCAAb, n.d.). Division I (DI), Division II (DII), and Division III (DIII) colleges and universities have developed more distinct identities as a result of the dramatic evolution of collegiate sports over the years (Belzer, 2015). Athletics at the collegiate level, especially the Division I level, are now multimillion-dollar industries with businesslike traits (Mossovitz, 2019). The roles of athletic directors and other executives in managing sports programs at NCAA schools have evolved (Mossovitz, 2019). It used to be that athletic administrators were chosen for their background knowledge and expertise in the field, either as athletes or coaches. Due to income shifts caused by the commercialization of college sports in the early 21st century, athletic directors need to possess a broader set of competencies (Mossovitz, 2019). In sports management, strong leadership is a crucial asset. Although there have been substantial changes in the responsibilities of the athletic director, the people who work in the field of college sports administration have remained mostly the same (Lapchick, 2021). Women in college sports administration often have challenges being hired, advancing their careers, and balancing their personal and professional lives (Bower et al., 2015).

Within the recent decade, there has been a rise in studies examining the role of leadership in sports administration in light of the expanded duties of athletic directors (Peachey et al., 2015). This study seeks to fill such gaps by reviewing the literature on college sports administration to pinpoint applicable leadership practices for athletic administrators, assess the challenges currently faced by the field, and provide avenues for further study.

Transactional Versus Transformational Theories of Leadership

From the 1990s to the present, both transactional and transformational leadership models have been used regarding sports administration. The two theories were developed to better understand the concept of leadership and its impact on the organizational goal. As Northouse (2019) states, transformational leadership creates a revolution within the organization, impacting workers and structures. These changes aim to significantly improve systems and workers who interact with the systems to make the working environment viable and motivate the employees to realize the overall goal. Previously, leadership theories had a greater emphasis on the relationship and the interaction between the leader and the followers, where the leader provided some benefits to the followers in exchange for a service. Leaders’ and followers’ relationship was based on the transaction, which introduces the transactional leadership theory. Transformational leadership aims to build a strong community within the entity where each cares for the other. However, transactional leadership only cares about the needs of the followers, and the leaders are concerned about what they will get from the employee. In contrast, the employee is concerned about the compensation.

Two main components of transactional leadership are performance-based compensation and management by exception. A leader’s application of contingent compensation motivates subordinates by promising them benefits in return for their work (Northouse, 2019). Both active and passive elements of management by exception encompass providing constructive criticism, reviews, and reward in the form of punishment. Management by exception may be either active (in which cases errors are addressed as soon as they are discovered) or passive (in which case the subordinate is not confronted with his or her inappropriate conduct) (Northouse, 2019).

When a transformational leader leads followers to break beyond their comfort zones and achieve extraordinary results, transformational leaders motivate their subordinates to raise the bar on productivity and persuade them to grow as individuals while gaining their unwavering trust and devotion. Leaders may inspire and encourage followers by cultivating good connections through mental stimulation and customized attention, resulting in significant shifts in participation and attitude. In the end, transformational leaders increase the output and expectations of their teams.

Theories in Leadership and Their Influence on Sports Administration

Doherty and Danylchuk (2019) examined leadership styles in Canadian varsity sports. The leadership type’s impact was also analyzed in terms of four different outcome factors. The four factors in question were as follows: coach dedication, follower happiness, leadership effectiveness, and additional effort from coaches. The authors used Multifactor Leadership Questionnaire (MLQ) Form 5X, a scheme developed in 1991 by Bass and Avolio. The study by Doherty and Danylchuk involved 114 participants who were all head coaches from different teams in Collegiate Athletics.

According to the study, sports department administrators’ top leaders often exhibit transformational traits. Compared to transactional leadership, all four characteristics of transformational leaders were more prevalent (Doherty & Danylchuk, 2019). Consequence factors were also shown to be significantly affected by leadership conduct. All the characteristics of transformative leaders were associated with greater levels of job satisfaction, productivity, and initiative. The highest positive link was found between attributed charisma and personalized concern and satisfaction and productivity. There was no correlation between the leadership variables and employees’ dedication to the department (Doherty & Danylchuk, 2019). Moreover, substantial negative correlations were discovered between transactional leadership practices and job satisfaction ratings, productivity, and initiative. The most negative association was identified between passive management by exception and low satisfaction levels, low productivity, and low levels of additional effort.

Kim (2017) examined how different aspects of an athletic director’s leadership style affected staff happiness and productivity. The authors collected data from 359 Division II (DII) collegiate head coaches, via questionnaires. The MLQ 5X tool tested coaches for leadership satisfaction, loyalty to the employer, turnover intentions, and commitment to the organization. The poll found that transformative leadership is associated with more incredible employee dedication to the company and greater work satisfaction (Kim, 2017). Citizenship behavior activity was positively related to dedication to the institution both directly and indirectly. Relationships between transactional leadership, organizational dedication, and employee happiness were all good. Leadership was not shown to impact either job performance or planned turnover significantly (Kim, 2017). The findings show that both transformational and transactional leadership styles have beneficial effects on worker conduct.

Gender differences in leadership perspective and performance were studied by Burton and Peachey (2009) in Division III (DIII) context. One of four leadership vignettes was given to 98 athletic directors. They were developed to highlight the qualities of a transformational leader (a female sports director), a transactional leader (a male athletic director), and vice versa. After that, respondents judged results related to leadership behavior on the MLQ-Form 5X. The additional effort and happiness results were more positively appraised when led by a transformational leader. Unlike previous research on the issue, this one found no difference in perceived efficacy between transformational and transactional leadership styles (Burton & Peachey, 2009). Gender did not influence participants’ evaluations of institutional results. Both transactional and transformational directors were seen as successful irrespective of gender, and both were able to positively affect employee happiness and motivation irrespective of the gender of their subordinates (Burton & Peachey, 2009).

Peachey and Burton’s 2011 analysis included NCAA Division I and II for the first time. In order to compare transformational versus transactional leadership styles, the researchers employed four variants of the same vignette. In order to gauge things like exemplary effort, follower happiness, and chief prowess, they administered questionnaires based on the MLQ tool. As many as 47 Directors from Division I and 52 from DII schools responded to the poll. According to the study’s findings, subordinates are more satisfied with and willing to work for leaders that demonstrate transformational rather than transactional leadership styles (Peachey & Burton, 2011).

Lack of Minority Representation in Athletic Administration

Recent data from the Race and Gender Report Card have shown the persistent underrepresentation of minorities (Lapchick, 2020). The NCAA publishes an annual report detailing the recruitment procedures of its member colleges and conference offices. The survey found that just 15.5% of Division I athletic directors, 9.4% of Division II athletic directors, and 8.7% of Division III sports directors are persons of color. Disproportionate minority employment declines from 2019 to 2020 were seen across numerous industries (Lapchick, 2021). Minorities’ proportion in upper-level positions fell in the following fields: sports information directors, division I men’s and women’s head coaches, associate athletic directors, men’s assistant coaches, and senior women administrators, all took part (Lapchick, 2021). There has been some improvement in appointing minorities as DI athletic directors since the initial report in 2005 (13.4%), but only a minor gain (2.1%).

Myles (2005) looked at the difficulties minorities experience working in college sports administration. Sixty-six Black senior sports administrators from NCAA Division I schools were questioned for this research to get their perspectives on racism, sexism, and the influence of “old boys’ systems” in their fields (Myles, 2005). For those unfamiliar, the “old boys’ system” alludes to the tightly knit group of primarily White males who work in sports administration. The survey found that Black DI athletic directors recognized that stereotyped ideas had a role in their employment but did not believe the role was as significant as it had been in the past (Myles, 2005).

There was a wide range of opinions on how discriminatory behaviors and racial attitudes affected the careers of Black sports administrators. 10% of respondents and 22% of respondents, respectively, said that acts of discrimination and racial views impacted their careers (Myles, 2005). Most respondents said that acts of discrimination and racial sentiments did not, or hardly, influence their professional lives (Myles, 2005). Forty-four percent of respondents said the old boys’ system affected their professions, and another forty-four percent said it had a significant effect (Myles, 2005). The author concludes that although racial prejudice and discrimination are less common now than formerly, the old boys’ system remains a significant barrier to Black employment and progress in college sports administration. The author, Myles (2005), argues that university administrators should take a more active role in recruiting to promote inclusiveness.

Lack of Women in the Administration

Research conducted by Burton et al. (2011) examined how people’s assumptions about sports administrators varied by gender. Of those managing NCAA Division I athletics, 158 women and 118 men were polled for the research (Burton et al., 2011). Male and female vignettes featuring potential candidates for compliance, athletic, and life skills directors were sent out to respondents. The research found that women who applied for the role of the athletic director were seen as less feminine than those who applied for the post of life skills administrator (Burton et al., 2011). Performance expectations in any of the three occupations studied showed no significant gender disparities (Burton et al., 2011). Despite no gender gap in how successful people felt they were, men were shown to have a substantially higher chance of landing the position of athletic director than women.

Based on their findings, the authors suggest that there is a common misconception that women are not suited for executive leadership roles in sports administration (Burton et al., 2011). The research provides a thorough understanding of the low participation of women in athletic administration and the obstacles women experience when applying for roles in sports organizations. The fact is, however, that women still face similar roadblocks while trying to enter the workforce (Burton, 2014). To further comprehend the problems women encounter while attempting to advance to management positions in sporting organizations, more study is needed on women’s views of gender biases and stereotypes in executive positions.

Conclusion

Many characteristics essential for success as an athletic director have been discovered in the research. Some of the most critical characteristics of successful athletic administrators across all three NCAA divisions are intellectual ability, professional communication expertise, and career-related job experience. The findings indicated that transformational leadership had the most bearing on the result parameters studied, particularly work satisfaction, presumed leader competence, additional effort, and organizational citizenship behavior. With the more significant potential for contingent benefits under transactional leadership, it is unsurprising that this management style has a more significant impact on employee dedication than transformational styles. Leadership styles of the transformational and transactional varieties were equally successful in the eyes of their subordinates. The marginalization of women and minorities in university sports administration is a significant flaw, according to studies. Many explanations have been proposed for the paucity of women in sports management. The most typical challenges that women in sports administration positions face are those associated with sexism, prejudice, lack of access to networking opportunities, and juggling work and family responsibilities. Minorities also face severe underrepresentation in positions of power within the college sports industry. Researchers have not yet been able to successfully establish unique impediments to employment for minority persons in sports administration. Systemic racism, prejudices and preconceptions, and individual factors may all contribute to the marginalization of ethnic minorities in sports leadership roles. This recommendation covered amateur and professional sports. Further study is required to learn about the unique challenges minorities face when applying for jobs in college sports administration.

References

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Lapchick, R. E. (2020). The 2020 Racial and Gender Report Card. https://www.tidesport.org/college

Myles, L. R. (2005). The absence of color in athletic administration at Division I institutions [Unpublished doctoral dissertation] University of Pittsburgh.

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