H B Fuller in Honduras Street Children and Case Study

Excerpt from Case Study :

H.B. Fuller in Honduras: Street Children and Substance Abuse

The discussion of ethics in business is one that continues to receive increased attention in today's society, especially in viewing the ever-increasing technological business facets that exist in today's business environment. With the increased transparency of the internet age, as well as growing emphasis on a connected, global economy, the issue of Corporate Social Responsibility (CSR) is one that has risen to the forefront in the minds of many business owners and stakeholders, alike. Ethical issues in the business world occur quite frequently in the business world today, and certain courses of action must be taken in order to ensure that a business fulfills its duties, not only to itself but to its stakeholders, in undertaking a course of action on such ethical dilemmas. In these situations, each step -- or misstep -- can alter the future of a company forever, and it is with great care and deliberation that such decisions must be undertaken, as seen in the case study: "H.B. Fuller in Honduras: Street Children and Substance Abuse."

Case Study Background: Issues at Hand

The case study opens with a focus on the ever-increasing problem of the use of the product -- Resistol -- a contact cement glue, widely-used by shoe repairers, as a hallucinogenic that is being utilized by an immense number of poverty-stricken children in Honduras slums. The children, who are able to find the product easily in household goods stores, are said to overwhelmingly turn to the drug to lift their spirits, as the huffing of the Resistol provides them a sense of contentment and happiness that many of the children who abuse the drug cannot find in their own lives living in one of the poorest areas in the world.

Honduras, the study notes, is certainly not the only country in the world to sell such products, thereby facing such problems of misuse and addiction. However, in countries such as the United States, certain states have regulated that products containing narcotics also include a type of chemical that makes sniffing the glue excessively painful and therefore impossible to tolerate. It is here that the issue of business ethics and CSR come immediately into play. Countries such as the United States, the study notes, are not federally mandated to include such chemicals in their products in order to deter misuse and addiction; these companies choose to include it themselves.

Resistol is manufactured by H.B. Fuller S.A., which is a subsidiary of Kativo Chemical Industries S.A., which in turn is a wholly owned subsidiary of the H.B. Fuller Company of St. Paul Minnesota. As of the publication of the case study, Kativo was one of the 500 largest private corporations present in Latin America, and Resistol products were shown to have a large product market in Honduras. Further, due to the international status of the Kativo Company, local managers throughout the world -- and throughout Latin America -- are given a high degree of authority and autonomy to make local decisions for themselves and for the betterment of their own branch of the company. Additionally, despite the unstable political and economic climates in which many Latin American branches of the Kativo Company operate under, mangers consistently emphasize the importance of going above and beyond the company's mission, which is to adhere to "a profound philosophy and ethical conduct, worthy of the most advanced firms." Kativo also cites itself as "carrying out business with the utmost respect for ethical and legal principles and its orientation is not solely directed to the customer, who has the highest priority, but also to the shareholders, and the communities in which it operates."

It would seem then, that when the issue of child drug addicts found its way into the media, Kativo would put its own mission statement to work, immediately doing what it could to make the children and the effected communities of Honduras the priority. It would seem. The Kativo Company -- on paper -- should hold the notion that the problem of product misuse and addiction within Honduras -- one of the company's largest Resistol distributors -- not only merits an ethical response, but mandates one, based on the company's own mission statement.

Actions Taken

When the issue of product abuse rose into the media spotlight, Kativo managers rushed to have the blame placed not upon the company, but upon the larger social issue of drug abuse. Resistol, the managers noted, was not the only product children were sniffing. Therefore, society -- and not Kativo -- was to blame. Additionally, publicized, was Kativo's Vice President, Humberto "Beto" Larach, a Honduran himself, to which all of Kativo's Central American divisions reported.

However, as time wore on, Beto, and the whole of Kativo began to understand that its reputation, market value, profitability, and future were all on the line. It was time to act. With growing publicity on the topic pouring into the media, Beto requested that staff members at company headquarters look into the viability of adding a mustard oil chemical into Resistol (as done in many U.S. states) in order to make the product incapable of being sniffed. The addition of this chemical, the company thought, could be a step in the right direction, but when toxicology reports returned results stating that the mustard oil could cause cancer and other prolonged health issues, it was clear that managers needed to go back to the drawing board in order to fix the issue and uphold the ethical values upon which the company was founded.

Being at the center of the scandal, Beto began to understand that education on the topic of drug abuse and product misuse was likely the key to solving the problem faced within Honduras. It was certainly the beginning. Beto worked to sway public opinion on the topic, pushing for educational reforms in the media and at the government level. He argued that an addition of the mustard chemical into products was merely a dangerous quick-fix, which was not what the Honduran society, or the suffering children needed. Beto linked with organizations such as Parents Resource Institute for Drug Education (PRIDE) and began pushing the movement of drug education. Beto noted that he wanted Kativo to be known as the company who realized this problem went deeper that what was seen at face-value, and made a move to fix the problem and adjust society itself in the process.

However, despite its efforts, Kativo and its parent company, H.B. Fuller, continued to take significant heat from stakeholders on an international level who argued that such a problem should have never been allowed to escalate to this level, noting that the companies were acting now only to save themselves from scandal. Vice President for Corporate Relations, Dick Johnson, pressured by stakeholders who were appalled by the company's actions, was galvanized into action, looking himself for solutions -- ultimately traveling to Honduras to view the situation firsthand. Like Beto, Johnson soon realized that despite the presence of Resistol, the issue of drug abuse by the "street children" of Honduras was an issue that went above and beyond the company's involvement.

The company decided to continue advocating government mandates and enforcement, as well as education, but each of these paths left H.B. Fuller an outsider to the problem. To remedy this fact, and the problem itself, the company began a complex and risky community relations approach within Honduras that acted upon its mission statement to its Honduran customers and employees. While the road ahead would be rocky and tumultuous, the H.B. Fuller Company returned to its ethical values, upheld its mission statement, and began to aid the community, stakeholders, and its employees in a manner which best aligned with its mission to provide ethical and quality service to anyone who would deal with the company in any capacity.

Fleming's Four Principles

In beginning to understand the ethics of the H.B. Fuller Company's decisions, one can weigh these decisions against Fleming's Four Ethical Principles: utilitarianism, rights, duties, and justice and fairness. To begin, the principle of utilitarianism states simply that an action should product the greatest good for the greatest number of individuals. This type of utilitarianism can be seen in viewing the decisions of H.B. Fuller with regard to the Honduran Resistol problem. The company understood that the issue at hand was more deeply-rooted than it seemed on the forefront. Only with prolonged education and work within the community would such a problem cease to exist.

Next is the ethical principle of rights, which is based on the entitlements that an individual possesses to act in a certain way or to have others act toward him or her in a special manner. In this sense, H.B. Fuller understood that not only did customers have the right to continue purchasing Resistol for its intended use, but the world and Honduran society had the right to be educated regarding the deeper social issue of poverty and drug abuse in its children.…

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