Essay Example: Root Causes for Chiquita's Actions in Colombia

Chiquita Brands international considers bananas as a serious business that represents many social, economic, legal and political activities. Apparently, the company was accused of remitting taxes to government officials in Latin America to be treated differently from other businesses. Also, Chiquita supported the coup of the United States of America against smaller nations, which created the foundations of dictatorship governments in the "Banana republics" of Central America. Chiquita was also accused of workers' exploitation which led to the creation of a bad working environment. Its latest accusation is conducting businesses with terrorists. For instance, in 2004, the company agreed having made protection payments to terrorists from 1997. The political situation in Colombia at that time could have contributed to the actions of Chiquita. The illegal drug trade, U.S War on Drugs and the emergence of powerful cartels intensified the conflict in Colombia. Rebel groups, the Revolutionary Armed Forces of Colombia (FARC) and National Liberation Army (ELN) emerged and put up war against Colombia authorities. The CEO of Chiquita contends that Colombia was a land where there was no law, and the protection of the company's employees by the government was an impossibility. Thus, Chiquita paid "taxes" to these terrorist groups when they were in control of the lands. A strong signal was issued if the company could not pay the "taxes". Prior, fifty employees of the organization were murdered in cold blood, which meant that Chiquita had to comply (Schotter & Teagarden, 2010). These actions by Chiquita, ranging from bribes, labor exploitation, funding terrorists and supporting the creation of dictatorship governments contributed to its conviction in Colombia after its secrets were revealed.

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Did the Managers Have Any Choice?

The primary goal of business enterprises is to make profits while at the same time ensuring sustainability. To ascertain whether the leadership of Chiquita had much of choice in their dealings, I will evaluate every activity and possible course of action.

Making protection payments: Chiquita leadership did not have any other choice but compliance. Considering its mother company, the United Fruit Company had received many levels of criticism for holding extra land. These objections could not fade, and they were bound to be administrative errors that would impact the company's operations. Also, having had its fifty employees killed by terrorist groups, it was apparent that they had to cooperate to avoid continued killings. Chiquita had to pay the "taxes" to these terrorist groups to avoid being attacked by the rebels. Besides, Colombia was under siege by terrorist groups which fought against government administration. This means that the protection by the government over the employees of Chiquita was not guaranteed. The leaders did not have much of choice but to cooperate and make the "tax" payments.

Payment of bribes to government authorities: The leadership of Chiquita had a choice against this particular activity. As a big organization that generates profits worth billions in its banana business, it is evident that the company is capable of meeting the tax demands of the revenue authorities. The leadership of Chiquita could generate more revenue from its scope of activities that its mother organization introduced. The many business activities could help in offsetting tax payments rather than using underhand methods.

Restoring Reputation of Chiquita and Ensuring Competitiveness

To restore its reputation and ensure future competitiveness, Chiquita should:

Compensating families of victims: This would show that the company regrets its actions of funding terrorist activities and that it is ready to start a new chapter. This would ensure that the public trust and confidence is reassured.

Focus on Corporate social responsibility: Aguirre should introduce systems and uniform corporate responsibility standard to show the trustworthiness and quality of Chiquita about this aspect. The senior officer for corporate responsibility should be given maximum freedom of expression and the power of executing activities.

Ensure that its business operations reflect it five core values: The company leadership introduced five core values that govern services and these were integrity, respect, opportunity, and responsibility. Therefore, the daily business activities should reflect these core values, meaning that the company should not engage in bribes anymore. Also, Chiquita should not exploit employees and not bankroll terrorist groups. This would be an act of commitment to its values, one which ensures public trust is earned back and fostering customer loyalty.

Aguirre should focus on the motivation of employees: The motivation of employees can be carried out through rewarding and promoting them. This will make them feel appreciated, and the overall productivity of the organization will improve. This will have an effect of ensuring the reputation of the company is guaranteed. Chiquita was accused of exploitation of employees, and this is significant step in providing that public image of the organization is assured

The CEO Fernando Aguirre should focus on refocusing the culture and staff of Chiquita. Employees who were previously engaged in payments of terrorist groups should be relieved of their duties.

Reference

Schotter, A., & Teagarden, M. (2010). Blood Bananas: Chiquita in Colombia. Arizona: Thunderbird School of Global Management.