Free Essay

Price of Bananas

In: Business and Management

Submitted By grnboy2
Words 655
Pages 3
International business is wrought with ethical issues. The Chiquita Banana documentary, “The Price of Bananas,” made this point ever more apparent. I fully believe, as stated in the documentary that Chiquita Bananas was complicit and was willing to accept death to keep the banana operation running. Anyone involved in this decision should be prosecuted to the fullest extent of the law. My first thoughts about this situation and putting myself in the position of Chiquita CEO, I would utilize the Weber model of organizational ethics and/or the Army-Baylor 7 step method for decision making. The first question or principle in the Weber method is the organizational interests take precedence over individual self-interest. I would say the CEO rationalized his decision and thought he was doing this. And given the situation, I do not necessarily think the CEO was making a decision to pay the AUC in a motivation of self-interest.
The second principle is individual rights take precedence over organizational interests. This can get a little sticky given Chiquita decided to pay para-military troops millions of dollars. If individual rights were of great concern to the CEO, he probably should have made sure his workers and the working conditions were safe, secure, and healthy. Instead, farming bananas in Columbia is one of the most profitable means because of low income earning.
The third principle is community good takes precedence over organizational interests. If the CEO was truly concerned about the community and the people who worked for him in the fields of Columbia, he probably should have considered hiring a third-party or government agency to ensure his workers and people were safe and cared for. Paying the para-military for what he thought was safety was not only naïve, it was unethical, and immoral.
The fourth principle is community good takes precedence over individual self-interest. As with the last principle, the CEO did not care about the community or the people; he cared about his workers farming bananas so he can make a profit.
The fifth principle is individual rights take precedence over individual self-interest. This is probably the most fitting principle to this situation. Human rights and individual rights were being trampled continuously in Columbia. The best answer for the CEO was to conclude doing any business in Columbia until human rights violations stopped, peace returned to the land, and people were willing to work in the fields free from harm or fear. This was not what the CEO did. Instead, he rationalized his decision to pay under the guise of trying to protect the people who worked for Chiquita.
I bet never once did the CEO visit the country, talk to those people, or see how the living conditions. I am confident he never ventured to Columbia to inspect his fields and praise his people for making him and the Chiquita Corporation the wealthiest fruit business in the world. Instead, he turned a blind eye while allowing himself, either willingly or through naiveté, to participate in paying para-military soldiers who slaughtered thousands of people I say the CEO should step down, if he hasn’t already, and he deserves all the prosecution and judgment he receives.
The reality of Chiquita Banana makes me really think about being cautious if I ever deal in International Business. I can say I will not buy any more Chiquita products or bananas. But more than that, the principle and ethics of human rights and individual rights are paramount. I am ashamed that American businessmen are willing to make steep profits off the backs of the weak and meager in other countries. America has become solely focused on the bottom line and profit margin, many have forgotten what right looks like. The atrocities that occurred in Columbia and continue throughout the world deserve our attention, compassion, and resolve to help, not to capitalize on them while making more money.

Similar Documents

Premium Essay

Comparitive Advantage

...matters is not absolute production ability but ability in producing one good relative to another. Reckoned in physical output—for example, bunches of bananas produced per day—a producer’s efficiency at growing bananas depends on the amounts of other goods and services he sacrifices by producing bananas (instead of other goods and services) compared with the amounts of other goods and services sacrificed by others who do, or who might, grow bananas. Here is a straightforward example. Ann and Bob are the only two people on an island. They use only two goods: bananas and fish. (The assumption of two persons and two goods is made only to make the example as clear as possible; it is not essential to the outcome. The same holds for all subsequent assumptions that I make using this example.) If Ann spends all of her working time gathering bananas, she gathers one hundred bunches per month but catches no fish. If, instead, she spends all of her working time fishing, she catches two hundred fish per month and gathers no bananas. If she divides her work time evenly between these two tasks, each month she gathers fifty bananas and catches one hundred fish. If Bob spends all of his working time gathering bananas, he gathers fifty bunches. If he spends all of his time fishing, he catches fifty fish. Table 1 shows the maximum quantities of bananas and fish that each can produce. If Ann and Bob do not trade, then the amounts that each can consume are strictly limited to the amounts that......

Words: 1464 - Pages: 6

Premium Essay

Banana Cartel Case in Europe

...fines banana suppliers € 60.3 million for running price cartel, EC IP/08/1509, October 2008, http://europa.eu/rapid/press-release_IP-08-1509_en.htm 2) COMMISSION DECISION of 15 X 2008 relating to a proceeding under Article 81 of the EC Treaty Case COMP/39188 – Bananas, COMMISSION OF THE EUROPEAN COMMUNITIES, Brussels, 15 X 2008, http://ec.europa.eu/competition/antitrust/cases/dec_docs/39188/39188_2291_2.pdf In 2008, the European Commission, found that the banana importers Dole, Chiquita, Weichert and Del Monte involved in a cartel between 2000 and 2002. The allegation was on the basis of secret bilateral pre-pricing communications. The cartel affected the North European region specifically Austria, Belgium, Denmark, Finland, Germany, Luxembourg, Netherlands and Sweden with banana consumption estimated to 1.6 million tones and a shared retail value of sales amounted to €2.5 billion in 2002. How was the collusion achieved? The banana business is organised in weekly cycles. During the relevant period the importers of leading brands of bananas into the eight European countries served by North European ports set and then announced every Thursday morning their reference price (their “quotation price”) for the following week. On numerous occasions over the three year period there were bilateral phone calls among the companies, usually the day before they set their price. During these calls the companies discussed or disclosed their pricing intentions: how they saw the price......

Words: 796 - Pages: 4

Free Essay

Chiquiti

...October 24, 2002 G302 Breakout Session 9: International: Chiquita Banana Case Goal of this session: To appreciate the importance of government trade policy to a company’s profits, and thus the importance to the company of trying to figure out why protectionism happens and how to counteract it. Handouts for students: none. Handouts for TA's: Nov. 29, 2001, Seattle Times article "Chiquita Files for Chapter 11". Overheads: Exhibit 1, income statement. Chiquita Brands Case Write-up Questions: 1. What is the European Union's past and present policy on banana imports? How would you defend their 1993 policy? 2. What problems does Chiquita have in this case? Look carefully at the numbers in the exhibits. 3. What did Mr. Lindner do about the EU's banana policy? What should he have done? The Chiquita case teaching notes are quite good. All of the questions I have below are important. Chiquita’s appropriate response is perhaps the least important, since it isn’t clear there is much they could do. Be sure and save time for your wrap-up at the end. (5 minutes) Administration We will post the midterm scores on Oncourse when they are available. That could be as early as Friday, but since they are machine-graded, there is always a chance of a glitch. (20 mins) Chiquita's Problems Q. In 1994, Keith Lindner has lots of problem. What are they? A. Here you want to put a list up on the board. The Harvard teaching note has a......

Words: 1346 - Pages: 6

Premium Essay

Gbu 204 Ethics 1

...act of viewing the leaked data of the competitors would give Bananas! a great advantage in the industry. Which in the business world, isn’t viewed as such a terrible thing. Actually using the data would be very useful to Bananas! as well. Any company who is behind in any industry is going to be looking for anyway to get ahead. The fact that none of the information they will be using is illegal is just another incentive to go ahead and use the data for their own advantage. On the other hand, there is the deontological theory. This theory applies to a more personal level. Jennifer could feel guilt about using the data, knowing that the competitors do not know about the leak of their data. The universal rule would be to tell the competitors about this, and let them get their data protected. Of course, she wouldn’t let her employees use the information either. Even though there is no law saying Jennifer’s company couldn’t look at the data, the ethics behind it would be violated. It is like finding someone’s money they dropped, you could take it but you know the right thing to do is give it back. It is a matter of is Jennifer wants to put her company first, or her morals. 2. The resolution chosen would affect both Bananas!, and their competitors. Bananas! would be able to gain a big advantage in the industry. They would be able to have the newest features, and they could put them at a lower price. Bananas! would also be able to gain a lot of their customers......

Words: 905 - Pages: 4

Premium Essay

Chiquita

... The EU's regulatory regime for imported bananas was enacted in 1993. Prior to 1992 each of the 12 EU member states had its own banana import regime. Germany operated on a free market system and had no import restrictions. The other 11 members imposed a 20% tariff, and 6 members (France, Italy, Portugal, Spain, Greece, and the UK) also applied quotas on bananas produced in Central and South America. These latter restrictions were designed to protect the EU market for bananas produced in former EU territories and in the ACP countries (developing countries in Africa, the Caribbean and the Pacific. As part of its 1992 integration program the EU established, effective July 1, 1993, an EU-wide banana trade regime. Under this complex system banana imports were subject to one of two two-tier tariff rate quota systems based on their country of origin. ACP bananas received duty-free entry up to a ceiling of 8577000 metric tons, allocated to each of the banana-producing countries on the basis of their historic exports to the EU. ACP imports in excess of this amount paid 750 ECUs per metric ton. Non-ACP bananas were subject to a duty of ECU 100 per metric ton on imports up to 2 million metric tons, and ECU 850 on imports above that amount. Thirty-three and a half percent of the 2 million tons of non-ACP bananas subject to the lower duty of ECU 100 was reserved for European marketing firms, most of which historically had marketed only ACP bananas. Implications on Chiquita......

Words: 1192 - Pages: 5

Premium Essay

Chiquita Banana

...doing well since its inception and had created a place for itself as a leader in the banana industry. Confident about its political connections and standing, Chiquita believed it could fight the EU policy. The company launched an aggressive and costly lobbying campaign in Washington denouncing the EU policy. Chiquita spent time and money trying to regain their power rather than looking for alternatives. Given the unpredictable politics that drive trade disputes, and the uncertain influence of arbitration institutions like the WTO, betting on a legal battle can be highly risky. They failed to realize that sometimes it is smarter to maneuver around a barrier than to try to tear it down. Under pressure from the United States, the World Trade Organization ruled that the policy was discriminatory and ordered that it be dismantled .But the Europeans were slow to comply, and so “began the "banana war"-the worst transatlantic economic dispute since World War II. With a limited ability to export AGP bananas, Chiquita lost a third of its European Market share between 1992 and 1995” (Marcelo, 2005, 24).Determined to regain its position, Chiquita continued to fight the EU policy, increasing its debt as its hold in Europe kept slipping. Analysis of international challenges faced by Chiquita (4 C’s) Country risk/Political risk – Chiquita was facing major political risks after the introduction of the new banana trade policy. The new policy restricted access to major markets and......

Words: 905 - Pages: 4

Premium Essay

Apple Pie Short Story Case Summary

...Each partner has an equal vote on all matters involving the venture and equal representation on the board of directors. The board of directors has four positions; Banana designates two, while Berry designates the other two. In the event that the two parties cannot reach an agreement on an issue requiring a board vote, an independent arbitrator will be used to resolve the conflict.     • Embedded in its equity interest, Berry has an option to put its investment in Cherry common stock back to Cherry for the greater of $20 million or appraised value after two years. The option expires after year five.   • In the event that either joint venture member chooses to sell a portion, or all, of its ownership interest, the other member has the right of first refusal to acquire the available interest.     • Cherry expects losses of $20 million.   • Cherry sells its product directly to end customers.   Additional Facts: • Each entity has all the requisite information to determine whether it is a variable interest. • There are no other arrangements that give Banana or Berry power beyond the stated agreement. In anticipation of filing its year-end financial statements, Banana reviewed the joint venture arrangement and determined that consolidation of Cherry was not required.   Required:   * Question 1 — Determine if Banana, Berry, or both, are required to apply the provisions of the variable interest entity (VIE) model in ASC 810-10 (Interpretation 46(R), as amended by Statement......

Words: 880 - Pages: 4

Premium Essay

Gap in Japan: Market Expansion

...international brands such as Uniqlo and Zara. In order to retain the current customers and expand on market share, Gap, Old Navy, and Banana Republic must each develop more distinct and specific market position. According to Deloitte’s report on Global Power of Retail, the apparel and footwear industry scored 3.05 on the Q ratio. Q ratio measures publicly traded company’s market capitalization to the value of its tangible assets; the higher the ratio, the more financial market participants believe that part of the company’s value comes from its non-tangible assets, such as market dominance, customer loyalty, and differentiation. However, Gap Inc. scored a 2.17 Q ratio, which is below the 3.05 of the industry, while competitor H&M scored a 5.5. When consumers think of affordable fashion brands, they would immediately relate to H&M. And when consumers are asked where they would get basic clothes, they would without a doubt answer Uniqlo (Q ratio 3.41). As of now, the brands of Gap Inc. lack clear selling point and consumer loyalty. Stated in Japanese fashion market report, “Because of doubts about the future of the economy, Japanese consumers have become increasingly cost and quality conscious.” Moreover, the flourish of fashion magazines and blogs annexes to the intense fashion market of Japan. In order to diverse the audience and attract both price and...

Words: 1091 - Pages: 5

Premium Essay

Chiquita

...notable reasons are: 1. Lack of Product Diversification Compared to its competitors, Chiquita had close to 60% of sales linked to bananas as compared to other companies with exposures closer to 40%. The chart below illustrates this: While trying to save its banana business, it should have hedged its risks and diversified in different businesses. Despite a company strategy devised in the 1980’s to convert some banana fields to other crops, Chiquita did not adhere to that policy and invested in more banana fields in 1991. Instead it should also have bolstered its presence in European markets by acquiring controlling stake in European suppliers and gaining control of traditional suppliers in EU or by partnerships with ACP region producers. 2. Lack of Market Diversification As mentioned, EU accounted for close to 40% of Chiquita’s sales. This meant that it exposed a significant chunk (25%) of Chiquita’s sales to vagaries in just one region. Chiquita did not put any effort to develop other markets. The US & EU were Chiquita’s main markets. Unfortunately, the regulated EU market pushed a lot of the unused banana supply to the US market rendering it unattractive. Even though Asia was an attractive market, Chiquita’s presence there was negligible. Other markets in Soviet Union and Eastern Europe were significantly under developed. Even Chiquita’s banana production was significantly concentrated in Honduras & Panama which were outside the framework agreement proposed by......

Words: 951 - Pages: 4

Premium Essay

Microeconomics

...of ethanol. Because resources are not equally productive in all activities, the PPF bows outward—is concave. The outward bow of the PPF means that as the quantity produced of each barrel of ethanol increases, so does its opportunity cost. Part B c. The equilibrium price = $2.5 The equilibrium quality = 225 d. At the price $1.5 a box, the equilibrium demanded is 275 boxes and the equilibrium supplied is 175 boxes. There is a shortage of banana by 275-175=100 boxes; the quantity demanded of pizza exceeds the quantity supply. The shortage forces the price higher to the equilibrium price. e. When the quality of banana supplied decreased by 50 boxes, the equilibrium price rises to $3 and the equilibrium quality decreases to 200 boxes a week. f. An decrease in banana supply and increase in banana demand raises the equilibrium price from $2.5 to $3.5. The equilibrium quality does not change because the increase in demand increases the quality and the decrease in supply decreases it. In this case, the decrease in banana supply equal to the increase in banana demand. Question 2: Part A: a> The total expenditure at the price $600 per night = $600 x 4 = $2400 The total expenditure at the price $500 per night = $500 x 8 = $4000 * The total expenditure of the tour agency...

Words: 910 - Pages: 4

Premium Essay

Filtron Corporation

...Crantwell Division to spend $149,000 in capital funds for the purchase and installation of the equipment necessary to produce starch from waste bananas. In addition, I have to arrive at a decision whether to accept or reject the proposal. COMPANY BACKGROUND “The Filtron Corporation is located in Dallas, Texas, is a diversified company involved in activities ranging from the manufacture of machine tool parts to the importation and sale of bananas.” The company had sales of $900 million and after-tax profits of $40 million respectively for the fiscal year ended September 30, 1974. The company’s Crantwell Division runs the company’s banana business, accounts for 14% of the company’s total sales and 11% of the profits. The Crantwell Division manufactures the boxes used to ship bananas grown on company-owned land and owns a fleet of refrigerated cargo ships. The division used 100% percent of the output of box operations, but space on the ships was often rented to other companies. This accounted for 5% of the division’s revenue. THE PROPOSAL The proposal submitted by Crantwell concerned the production of corn starch from waste bananas for one of its box manufacturing plants. The division currently purchased corn starch in the United States for use in all its box-making plants. More corn starch is produced from the available waste bananas than could be used in the box-making plants. So the excess produced corn starch should be used for other uses. ADDITIONAL......

Words: 1103 - Pages: 5

Premium Essay

Economic Disruption

...Question 1 a). Since the cyclone is a non-price determinant, it will affect the supply of bananas. The supply of bananas will decrease as a result of the cyclone. Supply curve will shift from S0 to S1. This will cause a shortage in the original equilibrium of Eq0. Demand now exceeds supply causing a rise in the price of bananas. Concurrently, the quantity supplied will increase (movement upward the new supply curve, S1) while the quantity demanded will decline (movement leftwards of the demand curve, D0). Price of bananas will continue increasing up to the point where the quantity demanded equals quantity supplied and shortage is eliminated. We have now reached the new equilibrium of Eq1. b). School holiday season is deemed to be a non-price determinant; it will affect the demand of interstate air travel. The demand for interstate air travel will reduce as the school holidays end causing the demand curve to shift to the left from D0 to D1. This will create a surplus in the original equilibrium of Eq0. Supply is now exceeding demand and causes deterioration in the price of interstate air travel. As the price reduces, the quantity supplied will reduce (movement down the supply curve, S0). Simultaneously, quantity demanded increases (movement downward the new demand curve, D1). Price of interstate air travel will decrease up to the point where the quantity supplied equals quantity demanded and the surplus is eliminated. This will bring us to the new equilibrium of......

Words: 879 - Pages: 4

Premium Essay

Parkin Microeconomics

...CHAPTER 3 Problem 7 (page 80) Price Quantity Quantity demanded supplied 20 180 60 30 160 80 40 140 100 60 100 140 70 80 160 80 60 180 100 20 220 a. Suppose that the price of gum is 70¢ a pack. Describe the situation in the gum market and explain how the price adjusts. At p=70, there is a surplus (excess supply), and we should expect the price to go down. b. Suppose that the price of gum is 30¢ a pack. Describe the situation in the gum market and explain how the price adjusts. At p= 30 there is a shortage (excess demand) and hence we should expect the price to go up. Problem 8 (page 80) The following events occur one at a time: (i) The price of crude oil rises. (ii) The price of a car rises. (iii) All speed limits on highways are abolished. (iv) Robots cut car production costs. (i) The increase in the price of crude oil (a factor in the production of gas) will shift the supply curve for gas inward. Hence, the equilibrium price of gas will go up, and the equilibrium quantities demanded and supplied of gas will go down. (ii) If the price of a car rises, then the demand of gas will shift inwards. Hence, the equilibrium price of gas will go down, and the equilibrium quantities demanded and supplied of gas will also go down. (iii) If all speed limits are abolished, then the demand of gas will shift outwards. Hence, the equilibrium price of gas will go up, and the equilibrium quantities demanded and......

Words: 1387 - Pages: 6

Premium Essay

Macroeconomics Report

...CONSUMER PRICE INDEX The consumer price index or CPI is a more direct measure than per capita GDP of the standard of living in a country. It is based on the overall cost of a fixed basket of goods and services bought by a typical consumer, relative to price of the same basket in some base year. By including a broad range of thousands of goods and services with the fixed basket, the CPI can obtain an accurate estimate of the cost of living. It is important to remember that the CPI is not a dollar value like GDP, but instead an index number or a percentage change from the base year. Each month, the Bureau of Labor Statistics publishes an updated CPI. While in practice this is a rather daunting task that requires the consideration of thousands of items and prices, in theory computing the CPI is simple. CONSTRUCTING THE CPI: The CPI is computed through a four-step process. 1. The fixed basket of goods and services is defined. This requires figuring out where the typical consumer spends his or her money. The Bureau of Labor Statistics surveys consumers to gather this information. 2. The prices for every item in the fixed basket are found. Since the same basket of goods and services is used across a number of time periods to determine changes in the CPI, the price for every item in the fixed basket must be found for every point in time. 3. The cost of the fixed basket of goods and services must be calculated for each time period. Like computing GDP, the cost of the......

Words: 1366 - Pages: 6

Premium Essay

Econ 201

...Econ 201 Tutorial #1 Date: Week 3 Coverage: Chapters 1 and 2 Introduction and Tools of Analysis Multiple Choice Questions: 1. Which of the following would not promote economic growth within a society? A) Increasing the skill level of the workforce. B) An increase in technological expertise. C) More people looking for jobs than there are jobs available. D) An increase in the stock of machines and productive equipment. 2. The opportunity cost of attending college is likely to be highest for a high school graduate: A) who has access to student loans. B) whose family is extremely wealthy. C) who will attend a more expensive college. D) who started a successful business in high school. 3. Benny has one hour before bedtime and he can either watch TV or listen to his new Korn CD. He chooses to listen to the CD. The scarcity problem's influence on Benny is seen in: A) a the decision to listen to music. B) the decision not to watch TV. C) the fixed amount of time before bed. D) the decision to choose between TV and music. 4. All of the following statements are false except: A) Normative economic statements are statements of fact. B) In positive economics, we are detached scientists and personal values do not enter our description of economic events.z C) "The unemployment rate for September, 1987 was 5.9 percent" is a normative statement. D) "The government should provide a minimum income to every citizen" is a positive statement. 5.......

Words: 1198 - Pages: 5