H.B Fuller and the Street Children

Topics: Subsidiary, Parent company, Holding company Pages: 6 (1936 words) Published: August 25, 2013
H.B Fuller and the Street Children Of Central America (Honduras) Introduction
Background of the case is the misuse one of the adhesives, Resistol, a toluene base glue, by the street o children of america, where the social economic were taken part of this situation. The resistol were produced by H.B Fuller company,a global manufacture of adhesives, selalants, and other specialty chemicals, and had operations in over 40 countries in North America, Europe, Asia and Latin America. H.B Fuller 1994 total revenue : $ 1.097 B with total profits $ 354 M and by the year 1995 total revenue : $ 1.243 with total profits $ 392 M, 15% of sales revenue came from latin america or 27 % accounted of its profits.

Case Analysis
Honduras and guatemala are two countries where fuller markets it glue products and the two countries where resistol abuse is most pronounced, in 1993 honduras had per capita GDP of only $ 1950, rate of unemployement up to 20 %, guatemala was doing slightly better with per capita GDP of $ 3000 and rate of unemployment rate about 15%. More than a third of people in Honduras and guatemala are below poverty, and this ecnomic condition directly affected to Family Life situation commonly unstable, stressful conditions, husbands abandoned their wives and children, the countless children runaway from homelife and roamed the city street, street children uses glue (H.B Fuller) by sniffing them (glue addicted) as the way to “get-away” from their real life condition. For years H.B Fuller had been pressure by child advocate groups in central america and the united stats, and encouraged the company to minute amounts of mustard seed-oil a common food additive, reported virtually eliminated abuse of its glue. In march 1989 legislature of honduras passed decree 36-89 which banned importing or manufacturing solvent based adhesives that did not contain mustard oil. This situation surely disadvantages for H.B Fuller company business envorenment , H.B. Fuller subsidiary began lobbied the government to have the law revoked, brought some data and showed by adding the mustard seed oil caused : reduce the glue effectiveness, the smell would irritating to legitimate user, the substance was potentially carciogenic. H.B Fuller also took several actions related to help to prevent glue addiction for street children, in order to reduce the avaibility of glue to children they discontinued selling the glue in small jar, paying the social worker to work with street children and began providing information to distributors warning of the dangers of resistol addiction. The actions keep continued on july 16th, 1992, the company stop selling the glue to retailer and only sell the glue to industrial customer in large tubs and barrels and cooperate with dirstributor to set up new control restricting distributions in retailer, on 1994, the company decided to change the toluen based into cyclohexane and increased the price up to 30% it further out of reach of children, of these moves, the company said, would discourage use of this glues among street children. In 1995, company issued a statement claiming that in reality it, “neither manufactured nor sold resistol” instead the company, asserted it was a subsidiary of a subsudiary of the company in central america that had actually made and sold resistol, and claims that the company was responsible the deaths of children “are nothing More than attempt to hold fuller liable for acts and omissions of its secon tier guatemalan subsidiary.

Questions and answer of this case
1. In your judgment, is H.B Fuller responsible for the addiction of street children to its resistol product ? Do you agree or disagree with the statement that the social conditions in honduras and guatemala are ultimately responsible for misuse of H.B fuller’s products and that neither the product nor the company is to blame ? Do you agree or disagree that a parent company is not responsible for the activities of its subsidiaries...

References: Khan Dr. AR, “Business Ethics,” 2nd Edition June 2011, p.93-107
Griffin-Nolan, “Dealing Glue,” p. 26.
Griffin-Nolan, “Dealing Glue,” p. 27.
Griffin-Nolan, “Dealing Glue,” p. 28.
Norman Bowie and Stefanie Ann Lenway, “H. B. Fuller in Honduras: Street Children and Substance Abuse,”
in Thomas Donaldson and Al Gini, eds., Case Studies in Business Ethics, 3rd ed. (Englewood Cliffs, NJ:
Prentice Hall, 1993), p. 287.
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