Alex McLeish has warned that world football's governing body is "opening a can of worms" by wanting clubs deducted points for fans' discriminatory chants.
Alex McLeish says Rangers must be politically correct
The Rangers manager was speaking after the Scottish FA admitted that it would comply with a new Fifa directive.
"You open a can of worms with this," he said, wondering which chants would be acceptable and which would not. "Where does it stop and where does it start?
"But we have to look after our domestic scene and maybe set an example."
Rangers were this week cleared after an investigation by European governing body Uefa into alleged discriminatory chants by their fans during the Champions League ties with Villarreal.
However, Uefa suggested that it had not acted because sectarianism was a problem specific to Scottish society.
But Rangers chairman David Murray this week issued a strong statement saying that his club recognised the problem and would continue measures to eradicate certain chants by their support.
McLeish added: "I think it's a wake-up call. The warnings are there and we'll have to achieve this goal of political correctness."
However, he stressed that potentially offensive songs or banners, whether sectarian or racist, were an issue around the world.