Malaluan, Joselito S.

BSAM-3203
Mgt 108 (Business Policy and Strategy)
Blood Bananas
Case Analysis

I.

Central Problem
The problem which the Chiquita Brands International Inc. facing off is that the
latter was forced to decide whether to pay the AUC for protection or risk the lives of
every employees of the said company in Colombia due to the increasing crime rate by
1990s. Colombia had become a very violent country. Kidnappings and murders of
wealthy Colombians and foreigners had become common place. Due to this instance, it
has been a threat as well as a problem not only to the employees but also to the
operation of the Chiquitas Banadex as well as the implications whether to accept the
offer of the paramilitary organization known as AUC.

II.

Areas of Consideration
Chiquita Brands must consider the safeness of its employees since they are a
vital part of the organizations success. They shall be ensured with security that should
be given by the latter. Since they are the largest banana producers in the world and a
major supplier of bananas in Europe and North America, they must consider their vital
role in the industry of commerce if they will just move their branch in Colombia.
Another area that should be consider is the service that being offered by the
AUC, they must evaluate carefully and critically analyze what will be the effect of this
not only to the employees but also to the reputation of the Chiquita Brands.
The issues about crimes in Colombia shall not be easily ignore by the latter since
it will be a big threat to their operation especially to the lives of every individual who are
employed in the Chiquita brands.
Engaging in the local governments operation and securing the needs for safeties
of the individual as well as implementing well-planned and alternative strategies and
decisions before taking actions shall be consider by them.

III.

Alternative Forces of Action

IV.

Agree to pay: if Chiquita agreed to pay for protection they might forestall
killings and kidnappings; however they would be financing a group of terrorists.
The money it paid would be used to further the activities of AUC.
Refuse to pay: if Chiquita reject the offer of protection from Castano, then
there was the real likelihood that Banadex employees would be kidnapped
and/or executed. There was ample evidenced of the brutality of AUC and similar
organizations currently operating in Columbia. While a legitimate security
company might be found to protect the plantations and employees would be
inordinately inexpensive. Only the governments had the strength to mount such
a protective service and neither the U.S. nor Colombian governments were
willing to support such an effort. Furthermore, it was unlikely that the
Colombian government would welcome a mercenary force hired by the Chiquita
into the country.
Exit the country: if the decision was made to abandon the plantations in
Colombia what would happen to the 12000 individuals whose livelihoods
depended upon the work or workers on the plantation? Contributing 70 million
dollars annually to the economy, a rapid exit would represent a significant loss
to the Colombian people. Further, Banadex exports represented a significant
portion of the bananas sold by Chiquita brands. The loss of this supply would
not only affect Chiquita Brands profitability and shareholder value but also the
profitability of numerous Chiquita distributors around the world.

Conclusion/Recommendation
It would be better if the Chiquita Brands will choose not to pay the AUC although they
are not been designated as terrorist by the U.S government, still the Colombian organization
as well as the government will not welcome those groups who is known in doing some
brutal things. Aside from that, the cost of payment for the service that will be rendering by
the AUC is far too much expensive that it could already support sufficient men from legal
and authorized institutions that can withstand 8000-11000 paramilitary fighters.
The U.S government as well as the Colombian will not let their co-residents without
sufficient security that could handle the safeness of every individual.
If the Chiquita Brands will communicate and cooperate with the government for the
fulfillment of their needs for security for company and employees, it would be 100% success
and granted.