Blood Bananas Directions
BUSA 4980 • Strategic Management • Fall 2013
Assignment – Blood Bananas: Chiquita in Colombia
Access: Students have to purchase a copy of the case from Harvard Business School Publishing. Please follow the link below to access the case study, which will cost $3.95. https://cb.hbsp.harvard.edu/cbmp/access/22949615 Description: Chiquita Brands International and its leaders learned a very hard lesson about paying off terrorist groups to protect their employees. Over the past 25 years, no place has been more perilous for companies than Colombia, a country that is finally beginning to emerge from the effects of civil war and narco-terrorism. In 2004, Chiquita voluntarily revealed to the U.S. Justice Department that one of its Colombian banana subsidiaries had made protection payments to terrorist groups from 1997 through 2004. The Justice Department began an investigation, focusing on the role and conduct of Chiquita and some of its officers in this criminal activity. Subsequently, Chiquita entered into a plea agreement that gave them the dubious distinction of being the first major U.S. company ever convicted of dealing with terrorists, and resulted in a fine of US$25 million and other penalties. To make matters worse, the industry was facing pressure from increasing retailer purchasing power, major changes in consumer tastes and preferences, and Europe's imposition of an “onerous tariff” on companies that sourced bananas from Latin America. With this in mind, Fernando Aguirre, Chiquita’s CEO since 2004, reflected on how the company had arrived at this point, and what had been done to correct the course so far. He faced major challenges to the company’s competitive position in this dynamic industry.
Assignment: Students must address the following questions:
1. What do you think were the root causes for Chiquita’s actions in Colombia that led to the penalties? Did Chiquita’s managers have a choice? Why or why not?
2. What can current management do
Assignment – Blood Bananas: Chiquita in Colombia
Access: Students have to purchase a copy of the case from Harvard Business School Publishing. Please follow the link below to access the case study, which will cost $3.95. https://cb.hbsp.harvard.edu/cbmp/access/22949615 Description: Chiquita Brands International and its leaders learned a very hard lesson about paying off terrorist groups to protect their employees. Over the past 25 years, no place has been more perilous for companies than Colombia, a country that is finally beginning to emerge from the effects of civil war and narco-terrorism. In 2004, Chiquita voluntarily revealed to the U.S. Justice Department that one of its Colombian banana subsidiaries had made protection payments to terrorist groups from 1997 through 2004. The Justice Department began an investigation, focusing on the role and conduct of Chiquita and some of its officers in this criminal activity. Subsequently, Chiquita entered into a plea agreement that gave them the dubious distinction of being the first major U.S. company ever convicted of dealing with terrorists, and resulted in a fine of US$25 million and other penalties. To make matters worse, the industry was facing pressure from increasing retailer purchasing power, major changes in consumer tastes and preferences, and Europe's imposition of an “onerous tariff” on companies that sourced bananas from Latin America. With this in mind, Fernando Aguirre, Chiquita’s CEO since 2004, reflected on how the company had arrived at this point, and what had been done to correct the course so far. He faced major challenges to the company’s competitive position in this dynamic industry.
Assignment: Students must address the following questions:
1. What do you think were the root causes for Chiquita’s actions in Colombia that led to the penalties? Did Chiquita’s managers have a choice? Why or why not?
2. What can current management do