Chiquita’s Dilemma: Balancing Security and Ethics
Chiquita Brands is a highly profitable company with operations in more than 70 countries. Banadex is the Colombian subsidiary of the company. Banadex has been operating in the country for more than 100 years. The subsidiary employs more than 12,000 people either directly or indirectly. Increased insecurity in Colombia threatens the continued existence of the subsidiary.
United Defense Forces of Colombia (AUC), a terrorist group, would like Banadex to offer the group a few thousand dollars monthly to prevent the group from disrupting the activities of the company.
If Chiquita pays the ‘security’ fee, it would be financing a terrorist group. On the other hand, if the company fails to pay the money, the group may kidnap and execute its employees. The company may also relocate to a different country leading to the loss of livelihoods of thousands of its employees.
Chiquita has four options that it may undertake to tackle the problem. In the first option, the company may choose to pay the ‘security’ fee that AUC demands. The US government does not term the organization as a terrorist group (Wheelen & Hunger, 2012).
Therefore, it is legal for the company to transact with the group. Paying the ‘security’ fee would ensure that AUC does not kidnap or execute Banadex employees. This would make the company continue with its operations without interference from the group.
However, paying the ‘security’ fee would fuel the activities of the terrorist group. In addition, the company does not have a guarantee that the group will keep its word. AUC can still kidnap or execute employees of the company.
On the other hand, the company may choose not to pay the ‘security’ fee. However, this would jeopardize the lives of its employees. AUC may kidnap or execute Banadex employees. In addition, the group may interrupt other activities of the company. This would lead to huge losses.
Chiquita may also hire a separate security firm to protect its employees. However, this would be very expensive. The private security would not be able to cope with the massive size of the terrorist group. Only government forces can cope with the massive size of the group. However, the Colombian and American governments are not willing to provide the company with the protection it needs (Wheelen & Hunger, 2012).
Chiquita may also choose to exit the country. This would make the company lose a sizeable percentage of its revenue. This is because Banadex is one of the major international subsidiaries of the company. In addition, exit from the country would make thousands of people who depended on the company to lose their source of livelihoods.
Since the Colombian and American governments are not willing to provide the company with protection, this may be the only viable option for the company. In addition, the company does not have guarantee that AUC will keep its word. The company should develop an exit strategy that would not have huge financial impact.
Is it ethical for companies to deal with terrorists when the security of their operations is at risk?
Companies can deal with terrorists when the security of their operations is at risk. Companies should always strive to protect their interests. Failure to deal with terrorists may have devastating effects on the company.
Should companies relocate from failed states?
The political environment affects the operations of companies. Therefore, it is vital for companies to operate in a peaceful environment. Companies should relocate from failed states since political instability is not suitable for the long-term growth of the company (Jain, Trehan & Trehan, 2010).
References
Jain, T.R., Trehan, M. & Trehan, R. (2010). Business environment. New Delhi: FK Publications.
Wheelen, T.L. & Hunger, J.D. (2012). Concepts in strategies management and business policy, 13th edition; Upper Saddle River, NJ: Prentice Hall Inc.