Football success offers lessons
Guangzhou Evergrande made history by winning the Asian Football Confederation Champions League title for China, which is the first time a Chinese club has won the competition since China introduced professional soccer 20 years ago. Guangzhou Evergrande’s insistence on market-oriented operation and professional management experience provided a useful reference for institutional reform and operating management of the industry, says an article in the Economic Daily. Excerpts:
As an enterprise established only three years ago, Guangzhou Evergrande club has initiated a series of innovations in football professionalism and marketization, which are different from the traditional operations of a Chinese football club, and its experience can offer lessons for managers in other industries and even for market reforms.
First, the reform direction toward market-oriented operation and professional management should be maintained. Since China embarked on the development path of professional football in 1994, there have been a number of problems, such as matchfixing, bad management of clubs and the poor performance of the national team.
The success of Guangzhou Evergrande demonstrates that it is not the malfunction of professionalism and marketization, but insufficient reform that gave rise to these problems. Therefore, we must keep deepening reform to solve problems that arise during the process of reform.
Second, within the framework of a market economy, the functions of various subjects must be clearly defined. An important management experience of Evergrande is that the investor, the management and coaching team have a clear division of work.
Third, awards and punishments should be rigorously carried out with strict institutional constraints. Several key players of Evergrande have been subjected to heavy penalties for violating team regulations so as to ensure a high degree of integrity and sense of discipline. Only by constantly improving and perfecting the various incentive and punishment mechanisms and ensure that rules and laws are strictly enforced, can the market mechanism play its due role.
To ensure a clear division of labor among “responsibility, rights and interests” is an essential requirement for a market economy. China’s ongoing transformation of government functions is to further straighten out relations between government and market and between society and enterprises.