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    Football Scandal - Edited

    Uploaded by

    Edwin Miano
    1. The FIFA scandal represents a form of political risk for companies as it highlights weak institutions that some took advantage of for personal gain, though regulatory authorities are now investigating and companies that benefited may face legal consequences. 2. Major companies like Nike and Coca-Cola benefit from sponsoring soccer organizations in foreign countries through increased international exposure and revenues, like Nike recording a 21% sales increase after sponsoring Brazil in the 2014 World Cup. 3. These companies use intermediaries in weak institutional environments to help establish contracts by paying bribes, though this strategy risks legal issues if uncovered.

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    Football Scandal - Edited

    Uploaded by

    Edwin Miano
    316 views3 pages
    1. The FIFA scandal represents a form of political risk for companies as it highlights weak institutions that some took advantage of for personal gain, though regulatory authorities are now investigating and companies that benefited may face legal consequences. 2. Major companies like Nike and Coca-Cola benefit from sponsoring soccer organizations in foreign countries through increased international exposure and revenues, like Nike recording a 21% sales increase after sponsoring Brazil in the 2014 World Cup. 3. These companies use intermediaries in weak institutional environments to help establish contracts by paying bribes, though this strategy risks legal issues if uncovered.

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    football scandal.edited

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    1. The FIFA scandal represents a form of political risk for companies as it highlights weak institutions that some took advantage of for personal gain, though regulatory authorities are now investigating and companies that benefited may face legal consequences. 2. Major companies like Nike and Coca-Cola benefit from sponsoring soccer organizations in foreign countries through increased international exposure and revenues, like Nike recording a 21% sales increase after sponsoring Brazil in the 2014 World Cup. 3. These companies use intermediaries in weak institutional environments to help establish contracts by paying bribes, though this strategy risks legal issues if uncovered.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    316 views3 pages

    Football Scandal - Edited

    Uploaded by

    Edwin Miano
    1. The FIFA scandal represents a form of political risk for companies as it highlights weak institutions that some took advantage of for personal gain, though regulatory authorities are now investigating and companies that benefited may face legal consequences. 2. Major companies like Nike and Coca-Cola benefit from sponsoring soccer organizations in foreign countries through increased international exposure and revenues, like Nike recording a 21% sales increase after sponsoring Brazil in the 2014 World Cup. 3. These companies use intermediaries in weak institutional environments to help establish contracts by paying bribes, though this strategy risks legal issues if uncovered.

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    1.

    How does the FIFA scandal represent a form of political risk for companies operating in

    foreign countries?

    FIFA scandal is one thing that people are taking advantage of for personal gains and its

    due to the weak infrastructural institutions found in many countries. However, this is a norm that

    will soon come to a standstill, as many other legal international investigative organizations

    around the world, have begun to initiate their indictment inquiries about this rampant scandal.

    Many soccer fans have been feeling that these scandals have been hurting the football industry

    and were so much excited to learn that many organizations have been planning several

    indictments and this reflects the great rule of law that companies that benefited from this scandal

    will face.

    2. What are the benefits to companies such as Nike and Coca-Cola acting as sponsors of soccer

    organizations in foreign countries?

    With FIFA being an international organization, Nike and Coca-Cola would get

    international exposer to advertise their commodities which would give them more revenues in

    return. A good example of the benefits the companies would get was when Nike an official

    sponsor of the CBF soccer, during the 2014 World cup, recorded a 21% increase in sales after

    selling $2.3 billion worth of soccer products. It's therefore a clear image of how companies get

    enormous opportunities by being involved.


    3. What international strategy is being used by the major companies holding these sponsorships?

    Please explain.

    Due to the weak infrastructural institutional across the world, many organizations are

    taking advantage of this opportunity since corruption is pursued through intermediaries, and

    companies pay them exorbitant amounts of money to help them establish contracts. These

    intermediaries channel the collected bribes to the FIFA related organizations and also wire some

    to the country leaders associations. An example of this is Nike, which paid Traffic Brazil a

    marketing agency in Brazil 30 million dollars in the year 1996 to 1999, because they wanted to

    get a contract to sponsor some of the leagues in Brazil. This bribe made it easier for Nike to

    become an official co-sponsor of the Brazilian confederation for a span of 10 years.

    4. Given the process described for gaining sponsorships (e.g., through sports marketing

    agencies), should Nike and other major companies realize that bribes and other corrupt practices

    were taking place?

    Yes, other organizations should realize about the bribes, because this would trigger

    debates and the corrupt agencies would be unmasked, therefore raising an alarm for international

    organizations to start probing into the bribes offered and come up with proper indictments for

    disciplinary actions. For a company like Nike, they wouldn't be affected much after learning

    about the bribes, because they had already been part of a deal to help them sign a deal in Brazil.

    If other companies understand this inappropriate act, it would be easier for those that took part in

    such acts to be brought to book.


    5. How can companies handle corrupt practices in foreign practices? Can they find ways to

    compete there without engaging in these practices? Please explain.

    The best way for companies to handle corrupt practices is to come up with better policies that

    regulate how sponsorship requests are processed, to ensure that the processes are transparent.

    With these new policies, the playing ground can be leveled and thus increase competition among

    companies.

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