Blood Bananas: Chiquita in Columbia
As learned in class, the advantages of international business are great, but so are the risks. Some of the risks involve ethical issues as the ones Chiquita faced doing business in Columbia. Chiquita was the first to successfully internationalize banana trade; Chiquita did so by paying special attention to retail development and followed industry trends. Their competitive advantage was acquired when the company revolutionalized the banana trade by using refrigerated ships for the first time. Chiquita was involved in paying bribes to Latin American government officials in exchange for preferential treatment, encouraging US coups against smaller nations, putting in place dictatorships in Central America’s, exploiting local workers and creating abusive monopoly and doing business with terrorists. The time in which the business of bananas was booming had a very important role to play with Chiquita’s conviction. At that time, Columbia was in a very unstable political environment. The Revolutionary Armed Forces of Columbia (FARC) and alter the National Liberation Army (ELN) were constantly fighting. The cultural presumption of “no law” made it less challenging or morally okay for Chiquita to get caught up in the no law land and make unethical decisions.
The bananas industry was very prevalent at the time, number 3 on the list of staple crops in the world after wheat and coffee. Bananas were heavily consumed so it was an attractive market for many companies at the time. Banana supplier or producers who had the most crops of bananas were in many European countries, Columbia. Ecuador and Costa Rica were the largest producers. Chiquita choose to have outsourced in Columbia because it was one of the top banana producing country in 2007. A close attention to the vertically integrated supply chain of producing bananas was essential because bananas are a perishable good. It required...