Introduction
The case of Chiquita Brands International illustrates the ethical violations that can be committed by companies operating in developing countries. In many instances, these organizations do not follow any norms of the corporate social responsibility. Nevertheless, the failure to comply with these principles can significantly tarnish the reputation of these businesses.
Moreover, it can eventually lead to considerable financial losses. One should keep in mind that the senior managers of this corporation have long tried to conceal some of the unethical practices adopted by this enterprise. Nevertheless, there have been several scandals that attracted public attention to this firm.
For instance, one should consider such issues as dangerous environmental practices and even cooperation with military groups such as the United Self-Defense Forces of Colombia. In turn, this paper is aimed at examining the violation of workers’ rights. In particular, much attention should be paid to the harsh working conditions in the plantations run by Chiquita Brands International.
Apart from that, it is important to discuss the strategies that were supposed to prevent employees from unionizing. One should explore the main factors that contributed to this problem. Moreover, it is necessary to explain how the management can address these challenges. This task is necessary for ensuring the sustainability of modern businesses that can represent various industries.
The root causes of the problems
It is important to remember that in many cases, companies like Chiquita Brands International operate in the countries in which there is no rule of law. Admittedly, local governments can adopt various legislative acts that should ensure the proper work of businesses. For instance, one can refer to the laws that guarantee the rights of workers.
However, such rules are not always enforced. Moreover, foreign companies can easily bribe local officials (Emett, 2014). In turn, these officials disregarded the lack of safety practices that had to be adopted in the ships owned by Chiquita Brands International (Emett, 2014). Furthermore, journalists believe that the managers of this company tried to prevent workers from unionizing in a forcible way (Schotter & Teagarden, 2015).
In particular, this corporation relied on the right-wing militia that intimidated those employees who supported the work of trade unions (Emett, 2014). Additionally, in many cases, employees were exposed to dangerous chemicals that could have long-term effects on their health (Esty, 2009, p. 185). Overall, workers employed by this corporation did not receive any protection.
Very often, they were left to their own devices (Emett, 2014). So, the management assumed that the company would not have to face any consequences. However, this assumption was completely flawed. Moreover, the countries in which these businesses operate are affected by various military conflicts such as civil wars. To a large degree, this argument is relevant to Colombia that was affected by internal military conflicts and drugs.
In turn, the managers of this company had to give money to such an organization as the United Self-Defense Forces of Colombia. To a large degree, this money was supposed to buy protection (Tricker, 2014, p. 375). It was later revealed that this group was involved in drug trafficking and kidnapping (Tricker, 2014, p. 375).
Furthermore, Colombia was severely affected by unemployment, and people were looking for any jobs that could help them sustain themselves. Thus, the bargaining power of employees was not very strong. So, this situation can be partly explained by the legal and economic environment of many developing countries such as Colombia struggling with many internal problems.
Nevertheless, more attention should be paid to the absence of ethical safeguards that can prevent business administrators from adopting unscrupulous practices. In particular, the senior managers of this organization believed that they would never be held accountable for such actions.
Moreover, they did not attach much importance to such values as integrity and workers’ rights to dignity, decent wages, and safe labor. They did not focus on the needs of these employees because they were not protected by American laws. Furthermore, the managers could be driven by the desire to maximize the revenues of this corporation.
Some of them could stick at nothing to achieve this objective. These issues should be identified because they are useful for explaining the underlying causes of such behavior. Very often, the ethical standards adopted by international companies are determined by the policies of local officials. Sometimes, they do not want to enforce the existing laws.
In turn, the permissiveness of such governments is the main thing that attracts international companies from various advanced countries in which legislative norms are enforced more efficiently. Admittedly, one can argue that Chiquita Brands International complied with the standards set by the government of Colombia. Moreover, the representatives of this corporation stated that other American firms had adopted the same practices (Kline, 2012).
However, it is not a sufficient excuse for violating the ethical norms. Apart from that, the senior executives of this company wanted to show that it acted as a responsible corporate citizen. Nevertheless, their policies did not live up to their rhetoric (Schotter & Teagarden, 2015). It is one of the main details that should be taken into consideration.
Additionally, the company incurred considerable losses. For instance, this company had to pay the fine that equaled $ 25 million (Schotter & Teagarden, 2015). One should also keep in mind that the stocks of this corporation declined dramatically when the information about its practices was made public.
In part, this outcome can be explained by the fact that many buyers can evaluate businesses in terms of their environmental practices and labor relations. Furthermore, some of them do not want to buy the products of companies violating the rights of workers in developing countries. As a rule, these buyers are more educated, and they are not very price-sensitive.
It is one of the main trends that should not be overlooked by senior executives. They should not suppose that the absence of legal safeguards enables various malpractices that are not admissible in any advanced country. Such attitudes can have disastrous effects on the work of businesses, at least in the long term.
Preventive and corrective measures
The senior executives of this company can use several strategies that can be helpful for addressing such problems. At first, they should consider preventive practices. In particular, one should mention the adoption of the ethical code that should be followed in every case, regardless of the legal environment in which a company operates.
The provisions of this code should cover such aspects as HR practices adopted by the organization. For instance, there should be requirements for working conditions, minimal wages, and safety policies. Additionally, these provisions should explicitly prohibit any attempts to bribe local officials.
Apart from that, senior managers should enforce the norms of this code. In some cases, this objective can be achieved by penalizing those business administrators who try to act in an unethical way. This argument can be relevant to those managers who disregard safety standards. Some of them hope that in this way, they can minimize operational costs.
Sometimes, these managers can be dismissed. It is one of the policies that should be used by the senior executives of this corporation. Nevertheless, more attention should be paid to the educational activities that can be useful for preventing possible dangers. For instance, every business administrator should be informed about the consequences of non-compliance with the ethical standards.
At first, they need to keep in mind that such practices can profoundly influence the attitudes of many customers who are now more informed about the unethical practices of corporations. As a result, they may be unwilling to buy the products offered by the company. So, the profitability of the organization will be reduced. It is one of the dangers that should be avoided.
The key issue is that the attempts to reduce operational costs at the expense of workers can undermine the performance of a company. One should also consider the role of leaders who can play several roles. In particular, they can openly object to unscrupulous practices that can impact clients or employees (Maxwell, 2002). In many cases, these individuals should express opinions that can contradict the views held by the majority.
For instance, these people can state that some cost-cutting initiatives are not permissible from an ethical perspective. Moreover, in some cases, they have to act like whistle-blowers who raise people’s awareness about unscrupulous business models. These professionals will ensure that the company is not involved in any corporate scandals.
Admittedly, their actions can cause the discontent of those business administrators who are mostly concerned with the need to maximize revenues. However, their ethical responsibility is vital to the sustainability of firms working in developing countries. Furthermore, one should mention certain corrective measures. In particular, the company should hire those workers who could be dismissed only because they disagreed with the policies of the company such as the blatant disregard of safety rules.
Apart from that, business administrators should ensure that the health and lives of workers are not exposed to any threats while working on the plantations owned by Chiquita Brands International. Admittedly, this policy can lead to greater operational expenses. However, one should remember the cost of non-compliance can be much higher.
To a large degree, Chiquita Brands International has already incurred considerable losses due to its unscrupulous practices. So, the management of this corporation should reject the unethical policies that were adopted previously. It is one of the details that should be taken into account.
Discussion
The analysis of this case can be of great use to many business administrators, especially if they work at the international level. They should remember that integrity and ethics are the essential prerequisites for the success of the organizations. Indeed, corporate social responsibility does not immediately contribute to the financial performance of businesses.
It is not directly associated with the increased profitability of enterprises. Nevertheless, these principles are necessary for avoiding potential losses. Moreover, they are essential for attracting customers who focus on the ethical practices of businesses. They do not look only at the prices of products or their quality.
This change can be partly explained by the fact that the development of the Internet has made information more accessible. So, buyers can learn more about the practices of businesses and unethical decisions that could be taken by the management.
Conclusion
The example of Chiquita Brands International suggests that international companies should single out the core ethical principles that should be followed in every case. They should not believe that the absence of proper legislation or poor functioning of the state enables businesses to neglect the rights of workers.
Apart from that, one should not suppose that the public will never learn about the cooperation with corrupt policy-makers. In the long term, such policies can adversely impact the profitability of these businesses. In turn, one can also say that the adoption of higher ethical standards has several benefits. At first, this strategy can reduce the risk of fines that can be eventually imposed by the state.
Furthermore, this approach is vital for securing the trust of customers. Finally, one should consider the inherent value of such policies. They can demonstrate that the actions of a person can live up to the rhetoric of senior executives.
Chiquita Brands International can become more resilient to possible risks if it meets higher standards of the corporate social responsibility. So, the executives of this organization should change their attitudes towards the role of ethics that should not be regarded as a burden. More likely, it is a guide for reducing various risks.
Reference List
Emett, A. (2014). Blood and Bananas: Chiquita’s Deadly History of Drugs, Corruption, and Cover-ups. Web.
Esty, D. (2009). Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage. New York, NY: John Wiley & Sons.
Kline, H. (2012). Historical Dictionary of Colombia. New York, NY: Scarecrow Press.
Maxwell, J. (2002). Leadership 101: What Every Leader Needs to Know. New York, NY: Thomas Nelson Inc.
Schotter, A., & Teagarden, M. (2015). Blood Bananas: Chiquita in Colombia. Boston, MA: Harvard Business Review.
Tricker, B. (2014). Business Ethics: A Stakeholder, Governance and Risk Approach. New York, NY: Routledge.