SPT 600 Final Project

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1 Final Project- Advising The Astros Tim Nicely Southern New Hampshire University SPT 600: Management of Sport Organizations February 14th, 2024 Vision, Mission, Goals The Astros mission statement reads “Our organization operates under a strong commitment to Trust, Integrity and Excellence. It is a simple idea that a company built around the best people, utilizing the best resources and adhering to the mission statement will be a

2 success. We want to foster an environment in which talented individuals are challenged, held accountable for their work and rewarded for success.” ( Missions, Vision and Values/Diversity , n.d.) Trust, Integrity, and Excellence were values that the Astros proclaim to hold, and their mission was to build a winning foundation on those values. Instead their greatest winning achievement, their first World Series title, was overshadowed by scandal that represented the opposite of those values. During the 2017 season and their World Series run, the Astros used cameras to illegally steal sign from opponents. They would relay the signs via loud noises such as banging on trash cans to the batters allowing them know what pitch was coming (Rosenthal & Drellich, 2019). The Astros mission is to strive to win championships, deliver memorable fan experiences, be a great place to work, and make Houston proud. While they have surely accomplished the first three of those items, it is important the Astros successfully navigate the handling of this scandal to complete the mission of continuing to make Houston proud. Role and Power The Astros have a large governing body consisting of 27 staff members considered part of the Executive Office. In addition to their legal team, they have 14 Vice Presidents and eight Senior Vice presidents overseeing a variety of departments. All these executives, however, ultimately fall under the umbrella of Chairman and CEO Jim Crane ( Houston Astros Front Office | Houston Astros , n.d.). All decisions for everything from marketing, stadium operations, accounting, and much more ultimately come with Crane’s approval. Crane's acquisition of the team was almost immediately successful as he was able to transform one of the worst franchises in baseball into one of the best.

3 While Jim Crane represents the top of the hierarchy in the Astros organization, the rest of the staff uses a line and staff model to operate. The various Vice Presidents each oversee a department that have a staff working underneath them. This allows those staff members to be specialized and focus on their particular area. For example, the marketing team can focus solely on marketing and not have to concern itself with the baseball operations side of things. This is very effective for sports organizations such as the Astros so the on-field product can be managed by those with a better understanding of the game, and the various business departments can still have qualified employees running them. Governing Body Effectiveness The Astros organizationl setup has allowed them to be both financially successful and successful on the field as well. Since Crane took over, management has found success on the field by winning multiple championships. Off the field, their success has been demonstrated by undergoing major improvements and renovations to their stadium and fan experience and donating over $50 million to various charities and foundations. The Astros have also been among the leaders in MLB in supporting various diversity initiatives ( Astros Front Office Directory | Jim Crane | Houston Astros , n.d.). Most importantly, the value of the franchise has skyrocketed. Under Crane’s ownership, the organization he purchased for $465 million now has an estimated value of $2.25 billion (Gough, 2023). How They Addressed the Issue The Houston Astros led by owner Jim Crane had a black cloud hanging over the organization as a result of the cheating scandal and were determined to do everything they could

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4 to remove it without sacrificing their success on the field. MLB and the MLBPA made this much easier on the Astros by coming to an agreement that allowed all active players involved to be immune from punishment. The Astros did decide to fire both their manager A.J. Hinch and GM Jeff Luhnow, as even though they have significant influence on the on-field product, the organization knew it would be much easier to replace them and firing them would show they were distancing themselves from the previous cheating administration. When speaking on the firings, owner Jim Crane said that although “Neither one of them started this,” “neither one of them did anything about it.” (Boeck, 2020). This statement paired with his actions were Crane’s way of saying anyone involved with the scandal was not welcome with the Astros going forward, although he did not share the same zero tolerance for the players. The only factors the Astros were truly concerned with was salvaging their image without sacrificing their on-field success. Potential Decision-Making Models The decision-making models that could have been used in this situation were the Economic Person Model, the Administrative Person Model, or the Implicit Favorite Model. In the Economic Person Model simply wishes to maximize the benefits while minimizing the costs. In the Administrative Person Model the decision maker is simply looking to “satisface” rather than maximize, meaning they are going to choose the first option that is both satisfactory and sufficient, minimalizing costs of searching for a solution by not spending the extra time attempting to maximize the outcome. In the Implicit Favorite Model, the decision maker will develop a preference for one option early in the search and any additional search is meant to confirm the original favorite (P Chelladurai, 2014).

5 What is the Appropriate Decision-Making Model? The appropriate decision making model in this instance would have been the Administrative Person Model. This model is the best for this situation because in a scandal like this, there will always be come cost making the Economic Person Model not feasible. The Implicit Favorite model wouldn’t necessarily be a bad option, but in this situation the Astros organization needed show swift action and not drag out the decision making process. This would give off the impression they were acting under a policy of zero tolerance for cheating and were willing to act quickly remove those involved. The Administrative Person Model is the model that brings about the quickest resolution and allows the organization to begin moving on sooner. Did the Organization Utilize the Most Appropriate Decision-Making Model? The Astros did, in fact, utilize the best decision making model, in this case being the Administrative Person Model. The Astros did not waste time going through a lengthy decision making process, opting to fire the GM and Manager mere hours after MLB announced their sanctions. Jim Crane decided removing those two would be a satisfactory and sufficient resolution and would enable the organization to quickly move past the scandal. Devising Their Decision In devising its decision, the Astros utilized Vroom’s Expectancy Theory. This is a simple theory where an individual or organization, in this case The Astros led by Jim Crane, evaluate the various courses of action that are available to them and choose the one they expect to lead to the outcome they prefer (P Chelladurai, 2014). The Astros wanted an outcome that would allow them to show they condemn the cheating without sacrificing on-field performance. There were

6 multiple courses of action they could have chosen including disciplining players as well as management, but that would not have given them the outcome of being successful on the field, so they chose the course of action that allowed them to keep the players active by choosing the GM and Manager to be scapegoats and firing them to show they condemned the cheating. The type of leadership behavior used by the Astros follows the Path Goal theory, meaning in simplified verbiage, the leader is behaving in a way they believe will put their followers on a path to achieve their goals. More specifically Jim Crane exhibited achievement- oriented behavior by setting expectations that the Astros will remain competitive and among the top teams in MLB even while dealing with the fallout of the cheating scandal. Did the Organization use the Appropriate Theories and Models? The Astros organization almost certainly used the most appropriate theory and model when devising its decision. Both were chosen with the intention of keeping the team successful on the field despite the decisions made to deal with the cheating scandal. Since the 2020 season when the scandal broke and the team made the decision to fire their GM and Manager, they have continued to make the post-season each season, winning their division in each year since then including having the league’s best record in the 2022 season, and reaching the World Series in both 2021 and 2022, winning the championship in 2022 ( Houston Astros MLB Team History - Major League Baseball - ESPN , n.d.). The Astros continue to be one of the premier teams in baseball. Labor Relations

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7 The cheating scandal and the way the Astros handled it both have likely had a significant impact on labor relations. The scandal itself gave the organization a metaphorical black eye. Future players and staff might be hesitant to join the Astros organization due to its perception as a dirty organization. This will likely cause the Astros to have to offer additional compensation it normally would not have to help overcome these objections. This perception of being dirty also likely rubbed off on the players and staff. Players and staff that were part of the organization during the scandal have been branded cheaters. This will affect everything from their reputation to their marketability, ultimately limiting their ability to maximize potential income. There is a strong possibility that this will make it difficult for them to land endorsement deals and possibly even affect contract negotiations with other organizations. The handling of the scandal by the Astros organization after the fact, however, likely helped their image in the eyes of players to an extent. The organization supported its players and showed loyalty to them. This loyalty shows potential future players that the Astros organization can be trusted to take care of them. Issues Arose The Astros were forced to deal with some serious issues as it pertained to labor management and the collective bargaining agreement. One of the most significant was the suspensions of both manager A.J. Hinch and GM Jeff Luhnow, both of whom faced year-long suspensions for their roles in the scandal (Nightengale, 2020). The Astros decided the best course of action would be to cut ties with both Hinch and Luhnow completely, firing them both within hours of the suspensions being announced (Nightengale, 2020). The other significant penalty relating to labor management and the CBA that the Astros were faced with was the loss of draft

8 picks. The league decided the Astros’ violations were sufficient enough to strip them of their first and second round draft picks in 2020-2021 (Nightengale, 2020). Representing Employees The MLBPA was extremely effective in coming to the aid of the players in relation to the Astros cheating scandal. Despite the MLB commisioner specifically referring to the scandal as being “player-driven,” none of the active players involved in the scandal were disciplined. Early into the investigation, the league knew it would be in for a major battle with the MLBPA if it were to try to discipline players, so rather than go that route, the league instead negotiated a deal with the MLBPA. In exchange for testimony and cooperation with the investigation, all active players were given full immunity (Diamond, 2020). Stakeholder’s Needs Met The stakeholders of the Houston Astros, being majority owner Jim Crane and the minority owners in the Greenberg-Ryan group, Ultimately had their needs met by the decisions and outcomes of the cheating scandal. While there were some obvious short-term issues with the suspensions, fines, and other penalties, the team was able to come out of it without any significant long-term harm. The organization was able to immediately move on from the suspended individuals and more than recouped the amount of the fines in the following years. The deal with the MLBPA allowed them to avoid losing any of their players for any amount of time, so the on-field product which is the focus of the organization suffered little to no impact. Other than a slightly damaged reputation, the outcomes of the scandal allowed the stakeholders to continue with business as usual.

9 Theories and Behavior Models The motivational theory incorporated by the Astros appears to fall within the Expectancy Theory. This theory suggests that individuals will evaluate various courses of action and choose the one they expect to lead to the outcomes they prefer (P Chelladurai, 2014). The Astros ownership was focused on moving past the scandal as quickly as possible with minimal impact to the on the field product. The MLBPA helped their cause by gaining immunity for the players involved. The only real decision forced upong ownership was in regard to the GM and manager. The ultimate focus of the expectancy theory is on the outcomes. Everything is assigned a value based on the outcome. In the case of the Astros, the valence, or preference for a preferred outcome (P Chelladurai, 2014), was no change to on-field personnel as they believed that would help them obtain the results they wanted. The organization had an expectancy, meaning they estimated that their effort would result in their ideal outcome, that maintaining on-field personnel would get them the continued on-field success they sought. Ownership believed that the continued on-field success would be instrumental, another element of the expectancy theory, in continued financial success of the organization as well as helping repair their reputation by shifting focus back to their accomplishments and off the scandal. The behavior model the Astros followed was that of the Path-Goal theory. While some models such as Fielder’s contingency model and McClelland’s model focus on leadership traits, the Astros organization chose to empower the employees such as staff and players. The organization emphasized the pay-offs the staff and players would obtain by achieving the goals of the organization, those goals being redeemed reputations and enhanced legacies that would come from continued on-field success.

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10 Appropriate Theories and Models relating to Labor Concerns The theories and models chosen have proven to be the most appropriate in dealing with the cheating scandal relating to labor concerns. Going through the thought processes of the expectancy theory allowed the team to focus on the singular goal of continuing on-field success and making decisions that would directly correlate with that. They were able to combine that theory with the behavioral model that empowered the staff and players who would in-turn obtain that success for them. This showed their existing players, as well as potential future players that the organization will be loyal and do whatever they can to help the team succeed. This has allowed the Astros to return to multiple World Series since the scandal, win another championship and turn what was at first a major scandal consisting of some of the harshest organizational punishments ever handed out into a mere footnote as the team’s reputation now is simply that of one of the most successful organizations in baseball. Organizational Model The Astros utilize a Parsonian organizational mode. They have a board of directors that make up the institutional subsystem that handles matters in the general environment. They are the figureheads that will be seen discussing the issues publicly, such as owner Jim Crane when he releases statements to the media. There is a managerial subsystem with managers and senior staff members who are more closely involved with day to day operations and the business tasks at hand. Then there is the technical units. These are the units that the clients and customers will directly interact with, including the account executives who handle customer accounts and stadium staff who service them on gamedays. This also includes the on-field staff which consists of players and coaches, as this is the main product the fans come to the organization for.

11 An Effective Entity The only goals of the organization management hadn’t fully met was achieving their other goals with an image of integrity and honesty due to the cheating scandal. This is a goal the organization is worked hard to commit to in the wake of the scandal and has since won a championship with no cheating involved. While the organization is operating with integrity and honesty now, it is still marred by their past in the court of public opinion. Despite this, the team has continued to have fan support and has been able to field teams that are among the most successful in the league as evidenced by their consistent winning seasons, playoff appearances, and World Series victory in the years following the scandal. Changes to the Organizational Structure The Astros made no changes to their organizational structure following the cheating scandal. They continued to utilize a Parsonian model, and they operate a bureaucracy following a hierarchical authority structure. While there are many executives and a vast board of directors, ultimately everything falls under the authority of owner Jim Crane. His leadership through the cheating scandal has allowed the Astros to make it through this situation with minimal negative impact to the organization. Evaluating the Approach Ultimately the approach the Astros led by Jim Crane took has proven to be the most successful path he could have taken. Crane made the decisions that would help the team move on

12 quickly and efficiently and work to put the scandal behind them. Despite two seemingly significant firings directly involved in the on-field product, the result turned out to allow the Astros to use those firings to make the statement that they have addressed the issue without making any changes that significantly impacted organization performance at any level. They were able to continue to operate as normal with continued focus on the on-field success that drives the organization. Effectiveness Resolving the Issue in regards to Vision, Mission, and Goals While the organization was successful overall in handling the scandal, essentially what they were able to do was move past it. When analyzing whether or not the issues were resolved, specifically regarding the stated values and mission of the organization ultimately there was very little effectiveness. Trust and Integrity make up the first and largest part of the Astros mission statement, yet none of the players who participated in the scandal have been disciplined. They were the biggest piece to the scandal and the ones who were utilizing the cheating system to better their games and yet no action has been taken. It was essentially ignored and glossed over to allow continued on-field success. In the end, the Astros were only truly effective in meeting the biggest unofficial mission statement in sports. It’s a mission statement that while you wont find it on any corporate releases, has guided professional sports as long as they’ve kept score. It even inspired a book about the Astros scandal written by the reporter who broke the story. As long as the game continues to be played, the only mission statement that matters is “Winning Fixes Everything.”

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13 References A stros Front Office Directory | Jim Crane | Houston Astros. (n.d.). MLB.com. Retrieved December 22, 2023, from https://www.mlb.com/astros/team/front-office/jim- crane

14 Boeck, S. (2020, January 13). Astros owner Jim Crane fires manager A.J. Hinch, GM Jeff Luhnow after MLB suspensions in cheating scandal. USA TODAY. https://www.usatoday.com/story/sports/mlb/astros/2020/01/13/aj-hinch-jeff- luhnow- houston-astros-fired-cheating/4457554002/ Diamond, J. (2020, January 22). Astros Players Cheated. Baseball Wanted Answers. So It Made a Deal. WSJ; Wall Street Journal. https://www.wsj.com/articles/astros- players-cheated-baseball-wanted-answers-so-they-made-a-deal-11579694400 Gough, C. (2023, May 17). Houston Astros franchise value 2023. Statista. https://www.statista.com/statistics/194616/mlb-franchise-value-of-the- houston- astros-since-2006/#:~:text=In%202023%2C%20the%20Houston %20Astros Houston Astros Front Office | Houston Astros. (n.d.). MLB.com. Retrieved December 22, 2023, from https://www.mlb.com/astros/team/front-office Houston Astros MLB Team History - Major League Baseball - ESPN. (n.d.). ESPN.com. Retrieved January 28, 2024, from https://www.espn.com/mlb/history/teams/_/team/hou Missions, Vision and Values/Diversity. (n.d.). MLB.com. Retrieved December 22, 2023, from https://www.mlb.com/astros/team/jobs/mission

15 Nightengale, B. (2020, January 13). MLB hands down historic puni shment to Astros for sign stealing, including suspensions for manager A.J. Hinch and GM Jeff Luhnow . USA TODAY. https://www.usatoday.com/story/sports/mlb/astros/2020/01/13/astros- stealing-signs- penalties-jeff-luhnow-aj-hinch-suspended-year/4456644002/ Our History | Houston Astros. (n.d.). MLB.com. Retrieved December 22, 2023, from https://www.mlb.com/astros/team/jobs/our-history P Chelladurai. (2014). Managing organizations for sport and physical activity : a systems perspective . Holcomb Hathaway, Publishers. Rosenthal, K., & Drellich, E. (2019, November 12). The Astros stole signs electronically in 2017 — part of a much broader issue for Major League Baseball . The Athletic; The Athletic. https://theathletic.com/1363451/2019/11/12/the-astros-stole-signs- electronically-in-2017-part-of-a-much-broader-issue-for-major-league- baseball/

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