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Blood Bananas Chiquita In Colombia Case Solution

Solution Id Length Case Author Case Publisher
2010 1428 Words (6 Pages) Mary B. Teagarden, Andreas Schotter Thunderbird School of Global Management : TB0245
This solution includes: A Word File A Word File

Chiquita Brands International is one of the three big players in the market for fresh fruits and vegetables. The company, previously known as the United Fruit Company, is single-handedly responsible for making bananas popularized in the US and Europe. The company, however, has been plagued with controversies since its inception. While the company was responsible for building much-needed infrastructure and providing employment to thousands of workers in many South American countries, like Columbia, it was also deeply involved in the politics of its host countries. The company used its operations as leverage to get government concessions in terms of land holdings, taxes, and even labor laws. 

Following questions are answered in this case study solution

  1. Introduction & Problem Statement

  2. Statement of the opposing forces (antagonist/protagonist) 

  3. Alternatives available for solving the problem 

  4. Analysis (pros/cons) of each alternative 

  5. Recommended Action Plan 

Case Analysis for Blood Bananas Chiquita In Colombia

Infamously, Chiquita was involved in the Banana Massacre that resulted in the deaths of thousands of workers, who were striking for better working conditions at the hands of the Columbian Army. The most incriminating situation that Chiquita was implicated in concerning payments made to a designated terrorist organization. The company was prosecuted and had to pay a fine for its dealings with the organization. The revelation also triggered a series of lawsuits against Chiquita, resulting in more legal costs. The most serious fallout, however, was its tarnished reputation.   

2. Statement of the opposing forces (antagonist/protagonist) 

The company did willingly deal with and made payments to groups associated with violence and causing instability in the region. Columbia and similar developing countries presented Chiquita with a lucrative option whereby the company could have the rules bent in their favor. Paying bribes and extortion was a small price to pay in return. The company continued to operate in conflict areas because it benefited them financially. Chiquita was far too big and, with the backing of the US government, was heavily involved in the politics of the region. It purposefully manipulated the political players in these countries for corporate gain, and paying protection money was part of the deal. The company paid around $1.7 million to the United Self-Defense Forces of Columbia (AUC) alone from 1997 to 2004, even though the group was designated a terrorist outfit by the US government in 2001. The company was, in essence, dealing with terrorists and funding their operations while the top company executives willingly ignored the issue.

While the company was wrong to strike a deal with a terrorist organization, it is important to contextualize the issue. Chiquita is usually portrayed as a neo-imperialist organization profiting off the misfortunes of less developed, politically unstable countries. Yet the company has facilitated these countries to export their natural resources and earn foreign exchange. Chiquita had the technology necessary for this to be made possible, especially in the case of bananas. The company also provided employment to thousands of locals, and its deal with the AUC was done in order to protect its workers. Abruptly leaving would have spelled disaster for all the workers who would have lost their jobs, and not paying the AUC would have risked the lives of these very same workers. Additionally, the AUC has not declared a terrorist organization until 2001, while Chiquita had been making the payments since 1997. Even the US government officials concluded that the situation was a complicated one.  

3. Alternatives available for solving the problem 

Alternative 1: Do Nothing

Chiquita has been prosecuted and made to pay $25 million in fines. It has also sold its Columbian subsidiary, Banadex S.A, to a Columbian holding company.

Alternative 2: Make Amends

Chiquita should compensate the victims of the violence perpetrated by the organizations it paid. The company protected its own interests and became an accessory to atrocities that led to many innocent people losing their lives.

Alternative 3: Adopt Social Corporate Responsibility

Chiquita has been accused of treating workers poorly, environmental damage, shady business practices, and funding terrorists. The company needs to overhaul its image, and this can be done by proving its commitment to all stakeholders involved.

4. Analysis (pros/cons) of each alternative 

Alternative 1: Do Nothing

The company has already dealt with the issue legally and should let the past go so it can focus on the future. It has taken a financial hit and must recuperate the losses. The advantage of this option is that it will keep the company on the goal towards finding a new direction. The past cannot be changed, and Chiquita has done everything legally to rectify the mistakes that were made.

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