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.