Major Focus of the Article
The article titled, “Strategic Opportunity, And Anguish, For U.S. Companies That Are FIFA Sponsors” by Groves centers on the ethical decision that the sponsors of the world’s football governing body, FIFA ought to make regarding its recent scandalous allegations involving money laundering, bribery, and racketeering. Among these sponsors include the United States leading companies such as McDonald’s, Adidas AG, Nike, Coca-Cola Co, and Visa. Groves implies that all the FIFA sponsors are caught in the cross-fire, that is, between taking part in FIFA’s prosecution and capitalizing on profits. Just like all other organizations, FIFA sponsors have an obligation always to follow the required principles, values, and characteristics when conducting their business operations. According to Grove, these sponsors need to uphold their fiduciary responsibility to capitalize on profits and at the same time cooperate with the prosecutors against FIFA, which contributes immensely towards their generation of profits. Grove suggests that the best course of action for sponsors is to demand reforms at FIFA and postpone their long-term commitments until it toes the line. According to him, doing so will not affect their profits.
The connection of the article to strategic management concepts
It is worth noting that Grove’s article best illustrates some key concepts in the subjects of corporate governance and business ethics. The business ethics and corporate governance aspects impact the organizations and how they function. In corporate governance, the regulatory and legal environment, the issues of accountability and transparency, suitable measures of risk management, and responsibility of board of directors, as well as, senior management are the main points of interest (Arjoon, 2005). Corporate governance, thus, deals with the question of who benefits from the decisions and actions of the senior management in the organization. Groves (2015) calls for good corporate governance within the US companies sponsoring FIFA by advising them to take part in the prosecution of their crucial business partner. In essence, the senior management of US companies will demonstrate good governance by cooperating with the prosecutors against FIFA. Good governance in organizations represents the value framework, the ethical framework, and the moral framework under which they take decisions.
The problem presented in the article entails what should be done and what should not be done by the US companies sponsoring FIFA due to its current scandal. Organizations are required to act ethically to build trust with their stakeholders and prevent harm to the members of the public. For this reason, the decision taken by the US companies sponsoring FIFA regarding the current issue should neither harm the general public nor destroy the stakeholders’ trust to them. It is worth noting that FIFA is a crucial stakeholder to these companies. The advice that the article gives to the US companies regarding their actions towards FIFA is consistent with the moral code of conduct that organizations are required to follow. In essence, the senior management of these US companies will exhibit ethical conduct by demanding its reform as advised by Groves in the article.
Proposed solutions
In my opinion, the US companies sponsoring FIFA should help the prosecutors take legal action against all the individuals who have been alleged to take part in the mega-scandal even if it means they have to forego their profits. Although profits are necessary for the growth and survival of these sponsors, it is high time for them to suspend their long-term commitments with FIFA until it reforms. The senior management of these companies needs to understand that their quest of profits should always stay within the ethical bounds. As a result, they will get support from the customers and investors and, as a result, their companies will continue creating profits despite taking part in the prosecution of the organization that contributes toward their profit generation. It is vital for the senior managers of the US companies that sponsor FIFA always to act in an ethical manner and base their decisions on the principles of fairness and integrity.
References
Arjoon, S. (2005). Corporate governance: An ethical perspective. Journal of business ethics, 61(4), 343-352. Retrieved from https://sta.uwi.edu/conferences/financeconference/Conference%20Papers/Session%205/Corporate%20Governance%20-%20An%20Ethical%20Perspective.pdf
Groves, R. (2015, May 28). Strategic Opportunity, And Anguish, For U.S. Companies That Are FIFA Sponsors. Forbes. Retrieved from http://www.forbes.com/sites/rogergroves/2015/05/28/the-strategic-opportunity-and-anguish-for-us-companies-that-are-fifa-sponsors/
