The Chiquita in Colombia participated in the tropical growing and marketing of bananas. However, the business was later referred to as “Blood Bananas” because the company was linked to many criminal activities. For instance, Chiquita was tied to bribing Latin American government officials to receive preferential treatment. Moreover, the company encouraged US coups against small nations and dictatorships in Central America’s “banana republics.”
Additionally, it exploited its local workers, created an abusive monopoly, and worked with terrorists. Based on the reading, my perspective on business abroad has changed since I understand that besides being immensely rewarding, it is characterized by significant risks, including companies having a damaged reputation and receiving threats against their properties and employees.
One of the most significant risks faced by businesses abroad is a damaged reputation. For instance, Chiquita in Colombia received enormous rewards for the bananas as they made tens of millions in profit. However, it also faced substantial risks since its reputation is damaged due to its association with terrorists who took many people’s lives. Chiquita voluntarily admitted being involved with terrorists between 1997 and 2004, leading to a high-profile investigation and a legal trial. In 2007, Chiquita accepted a plea deal to avoid criminal prosecution. However, the victims’ families sought compensation by filing a lawsuit against Chiquita in 2010. Furthermore, Chiquita was exposed by the Cincinnati Enquirer under the title, “Chiquita Secrets Revealed” on May 3, 1998, with many allegations (Teagarden and Schotter 9). Some of the most significant ones entailed bribery, worker exploitation, environmental pollution, and the forceful prevention of worker unionizing. Chiquita denied these allegations, and an investigation was started. It was later discovered that Gallagher had hacked into Chiquita’s voicemail system. Hence, Chiquita’s sued the newspaper, and Gallagher lost his job. The company was also given a one-page apology and a cash settlement in excess of US$10 million (Teagarden and Schotter 1). Therefore, one of the most significant risks that businesses abroad have to experience is a damaged reputation.
Aside from the risk of a damaged reputation, businesses abroad have to deal with threats against their properties and employees. For instance, Chiquita’s Colombian subsidiary received threats against its properties and employees and had to fund the United Self-defence group of Columbia(AUC), which was meant to protect the local economic, social, and political interests by fighting insurgents in the area, in 1997 (Teagarden and Schotter 10). The company used to send the money almost monthly to the AUC to protect its properties and employees. Chiquita pleaded guilty to this, but Chiquita’s general counsel, James Thompson, defended the company’s actions to be morally right since they were not acting on empty threats because the guerillas had killed four employees already in two separate accidents. Therefore, one of the significant risks that the businesses abroad face is serious threats to their properties and the employees.
In retrospect, although I associated doing business abroad with significant rewards and little risks, I have learned that the domain is linked to substantial risks after receiving the resource provided. The most significant ones I have identified include the possibility of a damaged reputation and threats against employees and property. Therefore, companies should be aware of such risks when venturing into international business.
Teagarden, Mary B., and Andreas Schotter. Blood Bananas: Chiquita in Colombia. Harvard Business Review, 2010.