Identity theory & Sports management

Having managed one of the biggest sports brands & guiding quiet a few business to take advantage of sports associations, I think it’s time to understand why sports works for brand building in our context. More so because I was suggesting an isight yesterday and have continued to refine it over the night.

"Consumers believe that automobiles have continued to be our “freedom machines,” a means of both transportation and personal expression. Such long drives/races are a pinnacle of performance for man & machine. While they may not have the necessary skills or perseverance to participate but social causes and associated activities helps them with a fan identity, as with any group identity, being beneficial to the individual in that it may provide a sense of community thus triggering imitation syndrome.”

It’s time for me out down my thoughts on identities and how they build from strictly a sports/celebrity perspective & how it becomes important for brands to learn to distinguish between fan and spectator. We must understand the root of word ‘ Fan’. It comes from ‘Fanatic’.

Within social psychology, there are two dominant theory of identity – 

• Identity theory and 
• Social identity theory

Identity theory is a direct derivation of McCall and Simmons (1978) role-identity theory, which suggests that individuals will base their actions on how

• They like to see themselves 
• They like to be seen by others. 

Therefore, the role-identity requires two components, specifically, the role itself and the identity to be associated with that role. With this in mind, identity theory is rooted in the concept of roles and role-identities. 

Social identity theory, however, is based on Festinger’s (1954) social comparison theory, which suggests that individuals will strive to attach themselves to other individuals who are similar or slightly better. Social identity theory, therefore, focuses on the ways in which individuals perceive and categorize themselves, based on their social and personal identities. Rather than emphasizing role and role behaviors, social identity theory emphasizes group processes and inter-group relations. Both of these theories posit that, theoretically, the self is multifaceted, dynamic, and is generally responsible for mediating the relationship between social structures and individuals behaviour. However, the social identity theory has come to dominate the study of intergroup relations (Brown and Capozza, 2000), while identity theory focuses on the concept of role identities. 

Most sport fan researchers have focused exclusively on social identity theory; however, I argue that identity theory should be used as well. Within identity theory, the process of identity formation requires the individual to define him/herself in terms of the social relationship. In the creation of a fan identity, the individual will develop either a personal identity, a social identify, or both. Identity theory suggests that individuals have choices and it examines why they make the choices they do. The questions that arises and remain to be answered are, why, and how have they chosen a specific team? Furthermore, if identity is created through interaction, what types of interaction led the individual to make the choices he/she made? why individuals find sports to be enjoyable. These reasons include benefits associated with self esteem, an escape from everyday life, entertainment, economic factors, aesthetic or artistic qualities, group affiliation and family needs..

As for the differences between spectators & fans, the former will observe a sport and then forget about it, while fans will have more intensity and will devote parts of every day to the team or the sport itself. Fanship has also been defined as “an affiliation in which a great deal of emotional significance and value are derived from group membership”. Key here is word “group membership” so it makes sense to create communities of like minded people for us i.e. Superbike racing, Endurance racing. In that sense social media becomes very important.. remember its a community of like minded people.

Every activity that we plan must have an objective linking up to one grand idea. It must reinforce the brand relationship with subjects of adulation & create a favourable neighbourhood in consumer mind.

May be this is theory but has been basis of building brands in past i.e. Gillette Mach3, Smirnoff, Captain morgan, Chennai Super kings as I have seen

Decoding children of Saraswati, their thoughts & goodness!

A lot of indians are literally hypnotised, mesmerised or suckered by certain English terms. One of these is:Introspect/Introspection: Examine one's own thoughts or feelings. 

Now very few native English speakers or writers use this term, as it tends to have deep psychological or philosophical elements, but it is among the Indian press and pseudo-academics where it comes to the be used very often, as a term for shutting down any cogent discussion or rebuttal. For example Indians are often asked to 'introspect' which really translates to know your place, and don't get ideas above your station..

I had always looked Indians asking for introspection as a very Hindu thing which is summed up best by a couple of lines from the Bolywood song from "Guddi" - "Hum ko mann ki shakti dena"

The lines are (I copy paste)

दूसरों की जय से पहले, खुद को जय करे 

or

"Conquer yourself before trying to conquer others"

This requires introspection and Indians are stuck in a cycle of introspection about themselves like a program that loops on itself or a scratched record. But your point about asking others to introspect is valid because there is a naive (Indian) assumption that every human is grounded with the basics qualities of right and wrong as we see them (typically dharma values - truthfullness, sanctity of all life including prevention of cruelty to animals etc). There is a huge cognitive bias in imaging that "The other guy surely thinks like I do and if he introspects he will see the logic exactly the way I see it' 

This Indian tendency may well be related to several millennia of not having to face invasions from people who are brought up with ideas so different from our own that Indians stiil don't understand what hit them. Typically Abrahamics from outside India (or those who grow up in a non Indian environment) have no foundational training in the values of introspection. In fact in the religions Islam and Christianity, introspection has already been done for the aam Abdul and he already knows that those who don't agree with his world view are wrong. No introspection required. Nothing to look inside. Nothing to discover. It's all there in the book.

It reminds me a thing from past. Whenever any guests would come home my mom would ask me to adjust n compromise on my things so that the guests be given preference and be kept as much happy as possible. When we used to go to some relatives as guests, then also she would tell me to compromise and be least intrusive and demanding so that the host should not be troubled. As a kid, I would ask when the hell then I get preference???     

What does this tell you?? This is a tendency I have seen in many dharmik desi people. Ans I see this as a part of equation why we give a lot of importance to others i.e. outsiders and what they think, do or say.

Looking internally is a very Indian thing and it certainly results in some unique social consequences. Indians have been bringing up children to look internally for so many thousands of years that it is almost in our genes. It results in interesting social consequences - especially a phenomenon that has been remarked upon by many - that is areas of Indian cities, towns and villages that are secure and law abiding despite the near-absence of police.

Indian "inward thinking" has never been empty of aims - it prompts one to judge what is right and wrong for others based on what is right and wrong for oneself. One significant consequence of the "ideal" of searching within oneself is that the idea of forcing one's own beliefs on others, or even using violence to make a point on someone else except for self protection comes out looking as unnecessary because it is expected that the other guy too is looking inside himself and has found answers which can be discussed in debate.

This mental attitude is suicidal when faced with an ideology that does not require any thought. Thoughts have already been thunk by others and put down in a rule book. All you need to do is follow the rule book. One of the reasons why people find India to be anarchic is because no one sees "rule books" as the ultimate source of wisdom that trumps self examination and eternal truths of dharma. What Indians forget is that having a constitution and a "rule book" of laws is essential for self protection of a nation in a world where everyone has retreated into his own "nation". The Indian concept of "vasudaiva kutumbakam" has been chopped up into multiple cake-slices called "nation states" each of whom claim superiority, moral ascendancy and unique laws that exclude others.

Our philosophy has always put a lot of emphasize on understanding yourself to understand the universe, look inwards, conquer yourself etc etc. I have argued with many dharmik and libtards over this that how this is alright when everyone is doing this. But this necessarily introduces some kind of passivity in the system. When your neighbour is hell bent on killing you, introspection does not help. Precisely because of this, when we have Arjun complementing over killing his own relatives, we have Krishna to make him understand that it needs to be done. The way I see it is, we have a balanced system where if the first and foremost importance is given to the virtue of knowledge and wisdom, the second in line is Kshatriya Dharma which ensures that our way of life be preserved. Sadly we lost this one. As the Kshatriya dhrma was eroded, we became more and more vulnerable and ultimately total slaves under brishit rule.

Today this tendency to introspect has become a bane for us where we are contemplating everything we are doing but we do not question worse things from others because perhaps we think its none of our business. There are countless Hindus who vehemently oppose animal sacrifice to some local deity in some small community but tend to discount large scale sacrifice on Eid (And I am not even talking about libtards). It is truth that we are not raised to follow rule books and we are free to question anything and everything. Anyone can accept or discard any belief and still be a Hindu. Its not very difficult to find pakka religious, agnostic and atheist persons in same family, but all of them be happy Hindus. We are not raised to blindly follow something. And its one of the biggest strength of our civilization. But the passivity that comes with this is suicidal and to balance this Kshatriya dharma is defined. We need to revive the system in its entirety to make it work properly. 

Everytime some outsider comes and points a finger at us, we sit down and introspect what wrong we are doing. And the outsiders have exploited this to the fullest.

Have you ever noticed this in past - a couple of decades ago perhaps - if some outsider comes complaining about a kid, the kids parents would slap the kid first and ask why he did it rather than first trying to figure out if that outsider is even telling truth or not. In general more trust would be shown on outsider than one of your own family member

The lunacy of fixed fiscal deficit targets

Fiscal deficit is the excess of payments over receipts of the government. The quantum of fiscal deficit in budgets in India is fixed by law — the Fiscal Responsibility and Budget Management (FRBM) law enacted in 2004 by ABV government in order to balance the budget. The FRBM law has mandated that, in every budget from 2005, the fiscal deficit should keep coming down till the 3 per cent limit is achieved by budget 2009. But because of the global financial crisis in 2008, the UPA government deferred the target date, justifiably. But with the passage of FRBM law, the rate of fiscal deficit has come to play determinative role on budgets. If a budget moves on the road map to get to 3 per cent fiscal deficit, the finance minister is glorified. If not, he gets demonised.

I have been saying for long that fiscal expansion or contraction should be aligned with credit contraction or expansion respectively, in the economy. There is an inverse correlation between fiscal deficit (fiscal expansion) and bank credit (monetary expansion). That is, if credit growth falls, fiscal deficit may need to rise and if credit rises, fiscal deficit ought to fall — to ensure adequate money supply to the economy. I have been pointing out for some time that the current strategy of “loose monetary “ policy with tight fiscal policy (taxation/spend policy) is not going anywhere and will lead to perpetual stagnation by keeping asset prices high while limiting the means of middle class to buy them. 

Not many people even know how this limit of 3% came into existence? Is there any mathematical reason or logic behind it? Nope! It was just accepted as as number to align with EU target, which too was not an arithmetical deduction but  a negotiated one between various countries of EU. It made its advent in fiscal economics when European nations signed the famous treaty at Maastricht in the Netherlands to form the European Union (EU) as an economic and monetary union in 1992. The treaty named after the university city Maastricht was preparatory for the EU to evolve as a single currency — the Euro — zone from January 2002. A national currency is the product of a politically sovereign state in exercise of what is known as its “seignorage power”. Put in layman’s language, seignorage power is the authority to print nation’s currency or borrow from central bank. In monetary economics, this means creating money if the economy needs it.
It is critical for survival of Euro as currency because if the individual nations do not comply with the package, the Euro will not survive as a common currency. The package agreed stipulated that a member’s inflation should not exceed 1.5 per cent over the average of three member states with the lowest inflation; its public debt should not exceed 60 per cent of GDP, and importantly, its fiscal deficit should not exceed 3 per cent of its GDP. For Eurozone’s survival as one monetary unit, individual nations cannot have inflation, debt, interest or fiscal deficit beyond the agreed limit. This is how the magic figure of  ‘3’ made its way in the fiscal greatness parameter discourse.

But how did the Eurozone honour the deficit figure 3 per cent of GDP? Of the 12 members, 10 breached the 3 per cent limit during the twelve years, 1999 to 2011 — Greece, every year; Portugal,10 years; Italy, eight; France, seven; and the strongest one, Germany, five. Also the ceiling 60 per cent of debt to GDP, inherently linked to fiscal deficit, too was violated by most including France, Spain, Belgium, Austria, Italy, and Germany. The Maastricht treaty, including the 3 per cent rule, is observed more in breach.

How did this farce made it's way to India?

Our economic gurus of UPA devised a formula to deflect criticism of copying EU. It was first reported that the magic figure was recommended by a committee of the finance ministry, but no such recommendation seems available on record. Later, somewhere in 2006, long after FRBM law had adopted the 3 per cent limit, Dr S Rangarajan and Dr Subbarao explained the logic of the magic 3 per cent thus: out of the average financial savings of India, which was 13%, 5% would “go” to private sector cos and of the balance 8%, 2% would go to public sector undertakings — “leaving” 6% for central and state govts to be appropriated 50:50 between them to fund their deficits. That was how the 3% limit for the central govt in FRBM was rationalised. What if the pvt sector refuses to utilise 5% of the allocation or doesn't have the capacity to use As evident from the decreasing credit to GDP ratio? What if the pvt sector needs more? Is the basis for fiscal deficit not linked to the extent of credit demand by private corporates rather than by the amount of savings notionally allocable to them?

See what S Gurumurthy has to say about this madness of fiscal responsibility and needs..

"The logic of correlation between credit expansion and fiscal deficit has five sequential limbs.

One, money is the blood of economic growth.

Two, most money that fuels the economy is created by banks, not by government.

Three, banks and financial institutions fund business and others, and it is that credit money which drives the economy.

Four, if, for whatever reason including lack of business confidence, the bank credit to the economy does not adequately grow, like it did not in the last few years, economic growth will suffer for want of adequate money.

Five, that is when the Budget needs to step in, to pump money into the economy by incurring deficit (spending more than the income), and, for the purpose, borrow the money lying with banks or even by printing more money, if that is needed.

The fifth limb ensures that growth does not decelerate for want of enough money circulating in the economy. Otherwise, it will. The FRBM law has ignored the fourth and fifth limbs of the logic and fixed the 3 per cent fiscal deficit as inviolable. The time has come to uncover how far its intents match with the reality and how rational its fixation with the 3 per cent limit is. The working of the FRBM law, particularly in the last few years, needs a reality check." 

It seems that for their own very selfish reasons a Group of economist now being promoted by Bloomberg Group called “Modern Theorists” (?) have started calling for higher fiscal deficit limit.

Eventually loose monetary policy + loose fiscal policy will convert the present stagnation to stag-inflation (stagflation).

" Money supply growth had averaged 17.8 per cent between 2006-7 to 2010-11. It began declining later. It declined from an average growth of 16.5 per cent in the two years ending 2010-11 to an average growth of 13.5 per cent in the three years ending 2013-14. In 2014-15 its growth had come down to 11.5 per cent — a fall in growth of 45 per cent as compared to 2010-11. The money supply growth is less than the growth of nominal GDP for 2014-15. The year-on-year growth in bank credit too more than halved from 16.7 per cent in 2009-10 to less than 8 per cent in 2015-16. As a proportion of the growth of nominal GDP too bank credit growth has fallen. The credit growth, which had equalled the growth of nominal GDP in 2010-11, almost halved in 2014-15. The credit expansion as related to GDP too fell to 5.6 per cent in 2014-15 and to 4.4 per cent in the nine months of 2015-16, from 11 per cent in 2009-10. This establishes that, in the last six years, both money supply growth and credit expansion have halved absolutely and in relation to GDP growth. Even the combined fiscal deficit (fiscal expansion) and credit growth (monetary expansion) as a percentage of GDP has halved from 17.4 per cent in 2009-10 to 8.8 per cent, which is less than nominal GDP growth. Three things are obvious. Money supply growth has reduced. Credit expansion has fallen. And even fiscal deficit and credit growth put together have declined, all pointing to the growing economy being starved of the needed money needed, in which the FRBM Act has also lent its hand. "

We should have reasonably loose fiscal policy but tight/controlled monetary policy. The artificial limit of 3% GDP for fiscal deficit has to be replaced by dynamic limit based on :-

1. Rate of GDP Growth
2. Velocity of money , CRR/SLR Ratio, Monetary policy etc
3. Amount of Budget invested in productive assets
4. Reasons of inflation whether it is cost push or due to excess moeny in the system

For India I think that Prime Interest Rate hovering around 10% should be around 8% while Fiscal deficit limit should be 5% with massive Govt Investment in Infrastructure and seed money for high tech industries. 

Quotes from S Gurumuthy's article in The Hindu

http://www.thehindu.com/opinion/lead/frbm-acts-3-limit-on-fiscal-deficit-hinting-at-paradigm-shift/article8320964.ece