The situation of Chiquita Brands International is serious. Bananas, the main source of revenue of Chiquita, cause an ethically questionable situation. Bananas are a very popular food in Europe and the United States because they is inexpensive and convenient. Especially the price of the fruit can only be provided because the bananas are grown in large plantations along the Equator. These large plantations cause social and environmental problems. In order to control the situation in Colombia Chiquita decides to pay paramilitary groups. Due to changes in legislation the ethical problems change to legal and political and thus become a big business risk. A decision must be made that will solve business and legal issues and will satisfy the situation in the country.
During the period between 1997 and 2004 Chiquita Brands International represented by the Colombian subsidiary Banadex S.A. paid a total of US$1.7 million to the paramilitary group AUC in Colombia. The purpose of these payments was the protection of their employees in a country that has become a source of violence and lack of government due to several problems. One part of ethical problem in this situation that the money represents a further funding of violent forces and the situation become rather worse than solved. A second and more difficult part is that Chiquita is an originator and promoter of the problematic situation. In addition, the change in the legislation adds a legal problem to the situation.
The banana industry is a highly profitable business for large companies such as Chiquita, Dole, and Del Monte. In order to reduce the volatility of the business and control costs of the natural product banana the companies take various actions. First, ...
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The proposed solution can convince on all ethical levels. First, the solution violates not relevant principles or standards of conduct. It would be even more positive when the public finds out about these activities, because it would then possibly give even more support and also other companies (e.g. Del Monte and Dole) would be forced to rethink. Second, in the long run Chiquita and its executives can establish itself as an honest business partner and have the basis for excellent organizational performance, because the actions can speak for themselves. Communication with all stakeholders could improve the outcome of the proposed solution. Third, all consequences of the proposed solution are positive. In the short term, the Colombian employees are preferred, but the long term all stakeholders benefit and the core values of the company are respected.
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