Based on Paper by Ryan Scott
Business Ethics Case Study by Ryan Scott
Case Description:
Chiquita, a world leading American
based produce supplier, is a multibillion dollar international company.
Chiquita was founded in 1870 by Captain Lorenzo Dow Baker, merged with Fresh
Express brand in 2005, and is immediately recognized by “Miss Chiquita” found
as the focal point of their logo. Chiquita proclaims themselves to be a leader
in social and environmental responsibility in the produce market, joining with
the Rainforest Alliance to preserve biodiversity, and to make money, with core
values of integrity, respect, opportunity, and responsibility. Despite these
more recent efforts to put a positive light on the company, Chiquita has gotten
into trouble after admitting before the U.S. Dept of Justice that they had paid
money to the tune of $1.7 million over the course of 7 years to private militia
groups in Columbia. Chiquita paid this money to appease these groups, believing
that if they hadn’t, more money would have to be paid out to make up for loss
of product, damage to property, and possible injury to employed personnel. Upon
further investigation into the case by the Justice Department, this same group
whom Chiquita was paying money, then used the money to fund the alleged torture
and killing of several hundred Columbians, causing huge uproar by those
involved towards Chiquita. A formal suit was brought before Chiquita in a
Florida District Court in 2007. Chiquita plead guilty to charges of funding
these groups in Columbia, and paid the resulting fines and restitution settlements
of $25 million.
The Stakeholders:
The stakeholders involved are all people employed by Chiquita, their immediate families, suppliers
of Chiquita, retailers of Chiquita products, consumers of Chiquita retailers,
all affiliates of Chiquita, and all of the
citizens of Columbia attacked by the groups who received funding from Chiquita.
Individualist Perspective:
The
individualist theory focuses on profit maximization by any legal means
possible. From the Individualist/Friedman perspective, Chiquita acted in an
unethical manner when choosing to pay money to local militia groups. Paying
this group at the threat of retaliation from the group if Chiquita refused to
pay is illegal within the country of Columbia where the particular plantation
was located. The decision to be made from this perspective would be to open a
plantation within a nation that maximizes profit, and is absent of such militia
groups and such powerful extortionists. If it was legal for these groups to
require money from landowners within their region of operation, this would not
have been unethical according to the Individualist Theory of Economics.
Utilitarian Perspective:
The Utilitarian Theory of business
ethics considers levels of happiness of all those involved in the business
transaction under consideration. Profit maximization is an important part of
the theory, as the desire to make money in business is understandable, however
different from the Individualist Theory, it is not the first priority. It is
also accepted that there may not be a solution that maximizes the happiness of
all everyone involved, in which case the highest possible level of happiness is
the choice that should be made. From a Utilitarian perspective, Chiquita’s
choice to build plantations in these environments was not an ethical one. The
happiness of employees under constant threat of attack by volatile militant
groups is not a maximum when compared to those employees in other prospective
nations. The happiness of the employees who did eventually find out about the
incident was also not maximized, and in most cases was minimized, losing the
support of some consumers for life. The happiness of the natives within
Columbia is also minimized. This is caused by the furthering of power of these
groups, because the majority of the country is at their mercy, since now they
can buy more munitions and armaments to commit atrocities with. If Chiquita had
never set up an operation in this kind of environment, there would have been no
legal case, and no bad publicity. The damage and loss of life would have been
smaller, as well as greater happiness in the stakeholders.
The Kantian
Theory of business ethics focuses on the idea of rationality, and promotes
enhancing a person’s rationale so they can make the best decision for
themselves. The Formula of Humanity, one of the most important pillars of the
Kantian thought process, states that humans ought to be respected as a fellow
human being with the ability to feel and think, not as a mere means to an end. The Kantian believes companies and
consumers should be motivated by "Good Will" only when making decisions, doing
the right thing because it’s the right thing to do.The Kantian is also responsible to their own belief system to
respect the autonomy of others, their needs, and their differences. From a
Kantian perspective, Chiquita’s choice to pay these groups for protection is an
unethical one. This choice is unethical because when consumers purchased
Chiquita’s products, they were funding groups who terrorize Columbian citizens
as a means to gain power. Chiquita did not allow the consumer populace to know
about this decision for several years. Had these people known their money was
going to this cause, the consumers would most likely not have bought the
product. Furthermore, if Chiquita made the choice to pay the paramilitary
groups money, and informed their consumer that their money was going to
terrorism, the choice by Chiquita would still be unethical, because the people
of Columbia are not being treated as beings capable of making rational choices.
The choice was also unethical because the choice to pay these groups is not
motivated by “Good Will”. Funding the arming of hostile civilian militant
groups who then intentionally take those arms and use them against their fellow
man is not “doing the right thing because it’s the right thing to do”. The
choice violates Kant’s Formula of Humanity by not respecting the rationale of
the citizens of Columbia who are affected by their choice to fund these groups.
The feelings and desires of the Columbians would understandably tend towards
Chiquita not paying protection money, because they have a desire to live, and
live free of the fear of unjustified loss of life, liberty, and property.
The Virtuist Perspective:
The Virtue Theory of business ethics
is centered on the idea and definition of “good”. While many people may define
good as “effective”, or, in terms of behavior, “morally upright”, the Virtuist
defines good as “having the quality of serving an intended purpose well”. According to Virtue Theory, a “good person” is one who serves the purpose of living
well, or uses rationality well, according to Aristotelian Virtues. These
virtues are chiefly courage, honesty, temperance/self-control, and
justice/fairness. The Virtuist would consider this decision made by Chiquita to
be unethical. The reasoning behind this is the lack of honesty, courage, and
justice/fairness. This choice was not an honest one because the company knew
who they were dealing with; these groups are not new, and their behavioral
history is well documented. Chiquita could have made the honest choice of
choosing to open a plantation in a different area where this type of behavior
can be avoided. Instead, Chiquita bowed down to these paramilitary groups out
of fear, lacking courage, with the end of making more money. The company went
further with its dishonesty by withholding this information from the consumer,
knowing it would sway profits. This decision was also unjust, in protecting
some at the expense of heightened hostility towards others. Those working on
the plantation were largely, but not completely, protected from the civilian
militants, while those outside the plantation now are in even more danger
because the militants have more resources than before.
"Going bananas;
Business ethics." The Economist [US] 31 Mar. 2012: 74(US). Academic
OneFile. Web. 29 Mar. 2013.
"US: Chiquita fails to halt
torture lawsuit." just-food.com 6 June 2011. Academic OneFile.
Web. 29 Mar. 2013.
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