Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA

authorsUrs Müller, Ulrich Linnhoff and Bernhard Pellens discuss the development of their award-winning ESMT case on Borussia Dortmund.

About the case

In its 100th year of existence in 2009, Borussia Dortmund (BVB) was the only German soccer club listed on the stock exchange. With three days to go before the annual shareholders' meeting on 24 November of that year, the club's managing directors, Thomas Tress and Hans-Joachim Watzke, went through the year-end figures one more time. Although the situation had improved since 2005 when the club was on the brink of insolvency, the closing accounts once again showed a negative net income. After nine years as a publicly traded company, the BVB had to report its fifth loss, this time for 5.9 million euros, which added up to a cumulative loss of more than 145 million euros. After the passing of a century, many stakeholders were concerned about the way forward. What was the organisation's purpose? What was more important, finally making a profit and meeting shareholders' expectations, or playing for the fans and the club's honor? What could the managing directors offer to their shareholders, who had seen the value of their shares drop from 11 euros at the IPO to less than 1 euro in November 2009?

An inside perspective


Some years ago Bernhard established a relationship with the Borussia Dortmund management team whilst advising the club on some accounting issues. Members of the team later became frequent guest speakers at ESMT’s executive education program. This long-standing relationship was vital for us to include an inside perspective from the club in the case.

Why a football club?

Courses on accounting and/or finance have traditionally been clearly focused on the idea that businesses are all about maximizing shareholder value. In our classes we also wanted to include a more holistic or balanced perspective by challenging, or at least discussing, the shareholder primacy doctrine. A football club that is listed at the stock exchange allows for exactly such a discussion.

In addition, professional sports companies differ from most other organisations because they can identify the players (licenses) in the balance sheet, so a case about a football club allows us to ask very interesting questions.

Bringing the stakeholders into the classroom

In order to bring additional stakeholder perspectives into the classroom we filmed a DVD to accompany the case. The DVD includes an interview with the managing director Thomas Tress, and comments from other stakeholders including the coach (Jürgen Klopp), fans and shareholders. The video footage also captures the atmosphere in the stadium, something we felt was very important to convey to students in the classroom.

Teaching the case

We believe that this case is best used in the context of sessions on finance and/or accounting. The case then allows the educator to enlarge the picture and to bring some of the finance/accounting topics into a more holistic context.

Our main teaching objectives are focused on the idea of organisational purpose, the importance of different stakeholders, the relation of organisational purpose and corporate governance and the question of shareholder primacy. In addition the case allows for discussion of the accounting of assets and some ethical issues when identifying players as assets, but also other topics such as executive remuneration and the business strategy of sports companies. When teaching the case it is important to select your learning objectives and focus on the aspects of the case that meet them.

Professional sport is usually a subject that interests the majority of students, and we find that almost everybody has an immediate reaction to the case questions. Accordingly the case usually stimulates a lively discussion that allows for a truly participant centred learning experience.

Supporting material

The case goes well with Milton Friedman’s famous article “The social responsibility of business is to increase its profits.” We also highly recommend Andrew Crane and Dirk Matten’s textbook Business ethics: Managing corporate citizenship and sustainability in the age of globalization. This book inspired the preparation of the case and offers a comprehensive overview of ethical issues in business. In addition to these two sources Borussia Dortmund’s 2009 annual report is a useful read.

Advice for case writers

Next to the importance of getting an early sign-off by the company we recommend using new cases as soon as possible in a safe environment. While the teaching might not have an impact on the case itself, it will certainly help you to improve your teaching note substantially!

Case details

Defining the Purpose for Borussia Dortmund GmbH & Co. KGaA
Urs Müller, Ulrich Linnhoff and Bernhard Pellens
ESMT European School of Management and Technology
Ref ESMT-713-0134-1
Also available:
German version

Ref ESMT-713-0134-1D
Ref ESMT-713-0134-3
Teaching note
Ref ESMT-713-0134-8
Teaching note supplement software (powerpoint slides)
Ref ESMT-713-0134-9

This case won the hot topic case writing competition at the ecch Case Awards 2013.

About the authors

Urs Müller is Head of the Practice Group Consumer Goods and Retail at ESMT European School of Management and Technology, Germany.

Ulrich Linnhoff is Faculty Professional and Head of USW Netzwerk Programs at ESMT European School of Management and Technology, Germany.

Bernhard Pellens is Professor of International Finance and Accounting at Ruhr-Universität Bochum, Germany.

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