Case Synopsis
Chiquita Brands International and the leaders of the company learnt a very hard lesson, after paying off money to the terrorist groups, in order to protect their employees. Colombia has been a very perilous country for many people, but now it is coming out of the effects of narco terrorism and civil war. It was in 2004, when one of the subsidiaries of Chiquita Corporation had revealed to the United States Justice Department that, it was paying off money to different terrorist groups for protecting their employees. An investigation had begun immediately and Chiquitaentered a plea agreement. It was the first Colombian company to deal with terrorist activities and thus it resulted into a fine of US $ 25million. No matter what the situation was, it was an unethical way of doing business by justifying it throughthe egoism theory and disturbed environment of Colombia. The company had somehow moved out of their ethical dilemma of making payments to terrorists but it is now facing major challenges to restore its reputation and regain its competitiveness in future. A number of things could be now done by the CEO of Chiquita to restore its reputation such as becoming more transparent, following core ethical values, compensating the people of Colombia and strictly creating ethical boundaries of conducting business in Colombia.
Blood Bananas Chiquita In Colombia Harvard Case Solution & Analysis
Question 1
What do you think were the root causes for Chiquita’s actions in Colombia that ultimately led to their conviction?
In my opinion, the actions of Chiquita stem from a number of different reasons which led to their ultimate conviction. First, the company itself suffered from a very complicated and sordid past. The predecessor of Chiquita called ‘United Fruit Company’ had merged with another company called ‘AMK Corporation’ and this merger had taken place in 1970. Most of the mergers created an imbalance for both the companies and this is also what exactly happened in this case. For instance, the SEC had uncovered a bribe of a total amount of 1.25 million in1975 after the merger had taken place and this was a deliberate attempt to reduce their taxes by ‘merging’. Along with this, Carl Lindner, who had a well-known reputation within the financial community for bottom fishing, ended his ownership when the company had exited under Chapter 11 bankruptcy. All of these problems hindered the merger to kick-start smoothly and led to the ultimate corrupt actions of Chiquita in Colombia.
Secondly, Colombia, at those times, was a country with an unstable nature and these factors according to me, contributed to the actions of Chiquita. A less than perfect atmosphere had been created by the country for the company due to recession, income inequality, violence and the focus on banana as their only product. Due to recession and income inequality, an atmosphere was created in the business world where people could take advantage of other people easily(Jin, 2012). Along with this, an environment of violence and fear had been created by AUC, ELN and FARC in Colombia........................
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