International events are an important part of cities’, regions’ and countries’ cultural make-up and represent more than simply entertainment for interested consumers. Given this importance it is imperative that their ability to operate on a regular and ongoing basis is supported by a strong financial awareness of their management teams. How will we price the event to ensure that our objectives are met? How can we ensure that the management team and staff stay on-time and on-budget? How can we determine if we are generating enough revenue from our event to cover our costs, and how important is our cash-on-hand for our immediate survival. These are all finance-related questions that managers of international events should have a sound understanding.Depending on the size and scope of the event managers have different financial processes. The organizational context (Stewart, 2007), or basic business model of the event business is crucial for determining these reporting needs. These models consist of a number of types; the basic types are that of sole-traders or partnerships where the owners are the legal entities that make up the business. For international operations this is a risky form as if an event fails to be held the owner or the partners are legally responsible for all the debts that the event incurs. Therefore other legal forms are required. The formation of a company that is a legal entity in the eyes of the law is generally the preferred option for managing large-scale, international events. Andersson and Getz (2008) claim that many event organizations seek these legal, institutional forms in order to establish legitimacy and promote sustainability in the event industry. Stewart (2007) identifies two types in particular, the proprietary, or limited company and the company limited by guarantee. A limited company is a form of organization that is limited by shares. The company can either by private and owned by a number of shareholders, or it can have its shares publically traded on a stock exchange. In the UK, Ireland and Australia a Company Limited by Guarantee is a private legal entity that consists of a company backed by a group of members who make a contribution if the business is wound-up. Getz’s (1997) event types consisted of a variety of these forms of organizations with varying company structures however even in the case of government organizations the pricing, budgeting and reporting requirements have similarities. Therefore the finance issues discussed in this chapter should be of relevance to all event management organizations.
|Title of host publication||Events Management: An International Approach|
|Editors||Nicole Ferdinand, Paul James Kitchin|
|Place of Publication||London|
|Publication status||Published (in print/issue) - 1 Mar 2012|