A Case Study of the H.B. Fuller Case on Honduras Essay

As the CEO of the H.B brimfull Comp some(prenominal), I have a great degree of first-hand knowledge and can honestly say that when it comes to descent ethics, few American corporations have a better image than the H.B. afloat(predicate) Company of St. Paul, Minnesota. We argon a leading manufacturer of industrial gum trees, coatings and paints, having won non-homogeneous awards, honors and inclusion in a variety of socially conscious mutual funds, all of which attest to our standing as a good corporate citizen. Recently, however, its manipulation of a stubborn image-staining problem has tainted our reputation. Specifically, there was illegal abuse of its shoe take a shitrs glue by home little Central American children who became habituated to the products intoxicating and dangerous fumes (Henriques, 1995, p. 1). By ignoring this very serious getting even we are indirectly saying to businesses and stakeholders, the community and society in usual that we are have-to doe wit h with financial gain at the expense of peoples safety.Such perceptions, however, are in direct contrast to our imagination contention and it is of the utmost importance that we brand name all necessary changes to restore the faith of both the public and private heavenss. One of the ways that this can be accomplished is through a series of commercials that take aim the fatal affects of huffing glue and which lead erase the pairing of our brand name to drug use. In conjunction with various subsidized drug awareness programs, we can save costs in combating our recent negative publicity, restoring our profits and, more importantly, saving snuff its. A first step leave be to add a warning label or disclaimer directly to each tube of glue that whitethorn be harmful if inhaled.An additional and rise-documented plan is to add oil of table mustard to the product, which provide make it less attractive to inhale. In addition, for approximately one yr a portion of our proceeds wil l be reinvested into programs that will provide counseling to children ab out the dangers of drug abuse. Furthermore, we plan to work with the local regimen to enlighten locals about financial opportunities in their area, the lack of which is the primary cause of escape and overdosing. The overriding and primary plan will be to implement a well thought out CSR (corporate social tariff) plan, the foundation of which has been out profligated above. Our vision statement ought to serve as our guide.Vision StatementH.B. Fullers next vision statement includes our purposeand mission to be a leader in our industry as well as our commitment to our stakeholdersOur purpose is to deliver value to our customers using knowledgeable people and the best technologies.Our mission is to be a leading worldwide formulator, manufacturer and marketer of technology-driven specialty chemic products and related services and solutions.We are committed to the balanced interests of our customers, employee s, shareholders and communities. We will conduct business ethically and profitably, and exercise leadership as a responsible corporate citizen.Our commitment is to continually prove our capabilitiesExpand our presence in existing markets and our brand identitiesExtend our reach geographically and through immature businessesExecute our strategies with urgency and disciplineEnergize our employees by creating a culture that recognizes performance, values contributions, celebrates success, and respects work-life balance (H.B. Fuller, 2006, p. 1 2).H.B. Fullers environment, health and safety efforts are control by the following missionstatementWe will be a responsible follow with respect to the environment, health, and safety by operating in a manner that protects our customers, employees, shareholders and communities.We will provide the resources and technology to develop, implement, and re extradite environmental, health and safety programs that support the achievement of guild goals (H. B. Fuller, 2006, p. 1 -2).According to our vision and mission statements we are fundamentally responsible for the way we do business, and the companys progressive and proactive environment, health, and safety efforts reflect this philosophy (H. B. Fuller, 2006, p. 2). One of our primary goals is to continually progress toward reducing, and where possible, eliminating, the release of substances that cause environmental damage by the use of periodic self-examinations of manufacturing plants which help the company identifyrisks and exposures that may exist or develop, so that best management practices can be proposed and implemented (H. B., 2006, p. 2).embodied Environment, Health and Safety ProgramWe have already implemented a corporate Environment, Health, and Safety program, including a team of experts who provide specialized expertise to all H.B. Fuller operations worldwide. Standardized policies and practices, often more stringent than local regulations, are implemented and managed by regional and local EHS specialists around the world (H.B., 2006, p. 2). This team will be responsible for working with local drug agencies to provide public service anouncements. According to Jeffrey, the H. B. Fuller Companys employee profit sacramental manduction, corporate big and funding of a University of Minnesota chair in corporate ethics won it rave reviews from the Socially Responsible Investment (SRI) community and a leaning in the book The one C Best Companies to Work for in America (1995, p.1). Elmer L. Andersen, founder and chairwoman of the H.B. Fuller Company which he bought in 1941, was a gratis(p) Republican who as governor of Minnesota pressed for new park set ashore and human rights and helped turn Fuller into a Fortune 500 company (E. L. Andersen, 2004, p. 1).However, South of the Ro Grande, this transnational with 1995 revenues of $1.1 billion supplied the drug of choice to Latin American street children seeking an escape from poverty, abuse and family disintegration (1995, p.1)? As such, it is important that we instill in the children the sense that their lives are non hopeless and that they do in fact have opportunities. According to Henriques, some child eudaemonia advocates have demanded for years that the company add a noxious oil to its glue to warn abusers. The company had resisted that approach, possibly because it might reduce the glues effectiveness, possibly because the smell would be irritating to legitimate users. We have done all we reasonably could to prevent abuse. But by some estimates, tens of thousands of Central American children sniff some sort of glue. These kids are often called resistoleros, a reference to Fullers Resistol glue (par. 1995, p. 1). This is a dangerous association, which must be erased. By covering with local and national news media, we can insist that the media not refer to those who sniff our glue as resistoleros.Although our main consumers are shoemakers and leather workers, a vast though unknown quantity ends up under the nosesof street kids. The adhesives fumes go straight to the frontal lobes, the switchboard of the question, and to brain areas that control emotions. Resistol turns off the brains connection to reality, neutralizing stress, pain and fear, taking the place of parental affection. Short-term use can produce nosebleeds, rashes and headaches. It can likewise lead to long-term use because toluene is psychologically addictive. Chronic abuse can cause neurological damage, kidney or liver failure, paralysis and death (par. Jeffrey, 1995, p. 1).There is no doubt that our glue was designed for shoes, not immature brains, and although we are not responsible for product abuse, we do feel a moral and social responsibility to rectify this situation. We dont grapple to street children. We sell to legitimate users who are manufacturing a product, says Dick Johnson, Fullers executive vice president for investor relations. If people, children or adul ts, get it mother fuckerly, thats a concern to us, but youve got to remember thats not our main focus (Jeffrey, 1995, p. 1). In contrast, activists argue that glue makers can speak to the abuse dilemma in the manufacturing process.In 1968, the U.S. based Testor Corporation became an industry model as soon as it added mustard oil to its model plane glue. Mustard oil made the glue difficult to inhale, dramatically reducing Testor glue abuse and sales. Confronted with rising toluene addiction ten years ago, childrens activists in Central America requested manufacturers to learn from Testors case. Activists did not think that the additive would get rid of inhalant abuse, because hard-core users could turn to different substances. Instead, it was argued that additives would discourage first-time users and do away with the most available inhalant. Glue makers refused (par. Jeffrey, 1995, p. 1 2).Consequently, the Honduran Congress passed a law in 1989 that required the addition of must ard oil to toluene-based products to which we responded with a lobbying blitz. David Calvert, an advocate for street children in the Honduran capital, Tegucigalpa, stated that Fuller barraged shoemakers with claims that mustard oil would endanger our health, a tactic he called a campaign of lies (Jeffrey, 1995, p. 2). In retrospect, the triple bottom line could actually be great with the added mustard oil because of the positive publicity it would potential generate. In addition, by adding mustard oil, we can use this distinguishing factor as a marketing point.Concerned friends and family who care about their loved ones would certainlybe more liable(predicate) to purchase a product with the additive if they know it will deter the temptation for abuse. In conjunction with anti-drug campaigns we can bring the epidemic of inhaling chemicals to the surface. Once this issue is acknowledged, we can pair the additive with reduced levels of abuse. As such, there would likely be a subsidy for our commercials. We could recommend that people buy only glue with mustard oil, such as our particularly. Our lobbying campaign worked and a government commission decided that toluene products in Honduras do not have to contain any mustard oil. This resulted in controversy and poor media publicity. In 1992, a few days before NBC Dateline was to tape a critical Fuller piece, we sworn to discontinue its production of solvent adhesives where we are known to be abused (Jeffrey, 1995, p. 2). In addition to this, any loss of profits could be remade by concerned people who do not want their loved ones to be tempted by inhalants.EconomyHonduras economy has a GDP per capita of $2,050.00 (U.S.) per year (1999). It has persisted to increase gradually but the sharing of wealth continues to be quite polarized normal wages are persistently low. Economic growth is approximately 5 percent per year. Nevertheless, several people stick to below the level of poverty. It is anticipated that there are over 1.2 million unemployed people. The rate of unemployment is 28 percent. The World Bank and the International Monetary entrepot recorded Honduras as eligible for debt relief. This debt relief was given in 2005 (par. Wikipedia, 2006, p.1).According to the Global Business Center, U.S. GDP per capita for 1999 was roughly $30,200.00 and the GNP was $8.083 trillion (GDP, 2001, p. 1). In addition, there is greater distribution of wealth among the U.S. population as well as a democratic form of government and free economy.In contrast, Honduras has a centralized government that shows little concern for the welfare of its people resulting in poor economic growth and lack of stabilization in that soil. Both the electricity services (ENEE) and land line telephone services (HONDUTEL) were run by government monopolies, with the ENEE receiving heavy subsidies from the government because of its chronic financial problems. HONDUTEL, however, is no longer a monopoly, the telecommunication s ector having been opened after December 25, 2005(Wikipedia, 2006).Although there is a somewhat overwhelming and even helpless sense of unemployment rate in Honduras, there are in fact opportunities. Regardless of education, the tourism industry is booming and if the locals are educated about such opportunities. With the knowledge of how to break into the tourism industry, kids and teenagers who are more likely to be attracted to drug abuse may realize that there are in fact other opportunities. Whether it be selling trinkets to tourists, taking them on guided tours or other opportunities, tourism can offer people from Honduras a constant flow of cash. With these opportunities the sense of hopelessness which breeds drug abuse in general and huffing of our glue in particular, will be greatly reduced. To implement such an educational program would not be very costly and could make a significant difference in many peoples lives.The Honduran government started to actively encourage touri sm in the late mid-sixties (Ritchie et al 1965). Emphasis was placed on building three separate physical as well as cultural geographical areas which include the following the Mayan archeological site of Copn, the beaches and colonial history of the North Coast, and the coral reefs of the Bay Islands (ibid). La Mosquitia and the Ro Pltano Biosphere Reserve were added as ecotourism became a popular world trend in the mid-nineties (Rivas 1990). In the 1980s,the government of Honduras established a set of laws that established special tourism zones. These zones were helpful in plan foreign investments by making available liberal tax and import enticement. Nonetheless, Article 107 of the Honduran Constitution prohibits foreign land ownership within 40 kilometers of the Caribbean Sea and the Gulf of Fonseca as well as the international borders of Nicaragua, El Salvador, and Guatemala.Aware of this barrier, in 1990 the Honduran National Congress passed Decree Law 90/90 to permit foreign property purchases in specific tourism areas, recognized by the Ministry of Tourism. This was done to construct never-ending or vacation homes (Tourism as a Geographical Phenomenon, 2006)Regions all along the North Coast and the Bay Island were among the most well-liked for investment. Sustained speeding up of these neoliberal financial policies took place during the 1990s in particular with the formation of Tourism Free Zones in 1993 (Decree Number 98-93 1993). Tourism investors were give thesame benefits as the private Export Processing Zones. This includes 100 percent foreign ownership of property, federal and municipal tax exemptions, tax free imports for any materials needed to further the industry (Decree Number 98-93, 1993).Within the setoff five months of 1995 the tourism industry in Honduras produced $90 million US dollars, a 62 percent increase from 1994 (Durn, 1995). The Bay Islands made up close 25 percent of this total. According to Maria Callejas de Durn (1995), Seni or Commercial Officer for Honduras, in 1995 tourism ranked fifth in the revenue genesis for the country, but it did not reach its full potential. Despite the tourist attractions offered by the continuously warm weather, it was believed that the country still lacked supplemental motivation in the areas in which the flow of foreign visitors was the highest. Nevertheless, with the institution of the Tourism Free Zone Law, ecotourism programs, and the national demand for additional tourism projects, she felt tourism had the potential to become the countrys leading industry (Durn 1995).By 1997 tourism ranked third in foreign exchange earnings (US $ 143 million) behind coffee (US $330 million) and bananas (US $ 239 million) (Tourism as a Geographical Phenomenon, 2006).Social ConscienceFuller claimed that that mustard oil was itself a toxic substance which cause harm to the respiratory system and mucous membranes stating that it did not make sense to add toxic chemicals to our products wh en our goal was to reduce overall toxicity. When asked about the Testor decision, Fuller responded that maybe 50 percent of our sales of glue went down when we added oil of mustard. Were we only selling to abusers (par. Jeffrey, 1995).The Fuller experience provides a textbook example of the thorny moral equations that lie beyond the simple arithmetic of the bottom line (Henriques, 1995). Did we leave themselves open for attack? Or does this case emphasize the importance of a corporation to live up its self-created image? Fuller does repeatedly present itself as a good citizen. Year after year it sprinkles its annual reports with statements proclaiming that it has a commendable corporate conscience (Henriques,1995). Fuller must live up to its good citizen image if it wants to survive.A family 1995 study by the Washington, D.C. based Social Investment Forum (SIF) found that $639 billion, or one out of every 11 professionally managed investment dollars, is held in a fund subject to som e kind of ethical screen. More than 1,000 members of SIF, which includes large institutional investors, technical analysts, foundations and individual investors, pledge to invest responsibly by applying honest, thorough and diligent methods of research and evaluation to investment picks. Interviews with SRI firms, many of which are bullish on Fuller stock, suggest that this pledge is easier to take than to practice (Jeffrey, 1995).We are not the only company guilty of exaggerating its adherence to its good citizen principles. In addition, glue-sniffing is not a new issue for the makers of solvent-based adhesives. The Testor Corporation added a noxious ingredient to discourage abuse of its hobby glue in July 1969. And Henkel, a German chemical company that competes with Fuller, stop making certain toxic glues in Central Americain 1994 (Henriques, 1995) We too plan too add a similar additive to discourage such abuse. Nevertheless, our company dominates the Central American market wit h its Resistol brand of glue and it seems to have been singled out. If we had a lesser reputation we would be less of a prey (Henriques, 1995).Finally, Fullers board adopted a resolution in 1992. For years, the directors had been under pressure by a loose alliance of child advocacy groups concerned about the hazards of glue-sniffing among the homeless children of Central America. Then, on July 16, 1992, the board abruptly but unanimously voted to stop selling Resistol adhesives in Central America.As the company explained in its 1992 annual report Faced with the realizations that a crusadeable replacement product would not be available in the near future and that the illegitimate distribution was continuing, the Board of Directors decided that our Central American operations should stop selling those solvent-based Resistol adhesives that were commonly being abused by children (Henriques, 1995). Unfortunately, by October 1992, the advocates had learned that we had not stopped selli ng Resistol in Central America and did not intend to. It nolonger sold the glue to retailers and small-scale users in Honduras and Guatemala, but it did sell large tubs and barrels of it to industrial customers in those countries, and to a broader list of commercial and industrial users in neighboring countries (Henriques, 1995). Consequently, we have since taken other steps to address the abuse. We have changed the products formula, dropping the sweet-smelling but highly toxic solvent toluene and substituting the slightly less toxic chemical cyclohexane. It has tried to develop a water-based glue, which is not intoxicating. It has studied the issue thoroughly and carefully and has contributed to community programs for homeless children in Central America (Henriques, 1995).Many of our critics and experts in business ethics have accused the company of image polishing but the company has been praised for a high level of corporate philanthropy, including giving 5 percent of its profit s to charity in each country where it operates (Henriques, 1995). Nevertheless, on Jan. 3, 1995, Mr. Hendler and a co-counsel, Michael Brickman of Charleston, S.C., filed a wrongful-death claim against Fuller in state court in Dallas which was eventually dismissed. We stopped distributing solvent-based glues in Latin America on November 30, 1999.We spent the better part of the past decade trying to make our solvent-based glues harder for children to obtain and less attractive to inhale, while at the same time developing water-based alternatives (par. Kokmen, 2000). Industry watchers, however, suspected that our change in policy may also have to do with shifts in Fuller management. The president and chairman retired and I was brought in to head the firm. Another theory is that the company pulled out of Latin America for fear of litigation and poor sales due to the change in the formula (par. Kokmen, 2000).ConclusionAfter failing to keep our initial heralded promise to withdraw abuse d adhesives, we eventually pulled our glue off the market. Even with such skillful management, another company might not have been able to escape further scrutiny. But Fuller has a bid advantage Its good name, its dollars, and its employees are woven so deeply into local politics, business, media, and nonprofits that to tug at its reputation means to rip big holes into the model of Minnesota Nice. In addition to its network of community and business connections, Fuller has taken advantage of a keyprinciple of corporate relations hasten your story out first, and your critics will bear the burden of refuting it. Thats how the glue issue could be defined as a blemish on an other spotless reputation, rather than as one of the problems created by a large, multinational chemical company (NKauoa, 1993). The solution is not for Fuller and other companies to stop selling toxic glues, but rather to help get children off the streets and into productive lives. Fuller has said previously that its goal is to help get children off the streets in Central America.It donates thousands of dollars each year to childrens groups aiding in that effort (Kurschner, 1995). Like Central America and the Honduras, the US also has social issues such as outlaw(a) drug use and homeless children. Fuller and other companies should use their resources for improving the quality of life for the citizens of the US and Central America. And we have the money to do full that. According to Shah, Fullers global adhesive revenues grew 13% for its fiscal first posterior ended February 2005 and our sales were strong in Europe, as well, during the quarter (Shah, 2005). We plan to help children by introducing them to opportunities such as tourism this will hopefully allow them to realize that there is in fact hope for the future. In partnership with anti-drug campaigns, we can raise awareness of the dangers of a inhaling glues and the benefits of buying only products that contain mustard oil and which are simultaneously less harmful. In short, we will convince and prove to the public that our product is safer and less likely to be abused.ReferencesAndersen, E.L. 95, Ex-Minnesota Governor. (2004, November 17). The New YorkTimes. p. A27.GDP. (2001, January 2). Global Business Center Online. Retrieved family line 26,2006, from http//www.glreach.com/gbc/en/Englishphp3H. B. Fuller, About Us. (2006, September 24). This is H.B. Fuller Online. RetrievedSeptember 24, 2006, from http//www.hbfuller.com/About_Us/index.shtmlP0_0Henriques, D. B. (1995, November 26). Black Mark for a Good Citizen. Money andBusiness/Financial Desk The New York Times, p. NA.Jeffrey, P. (1995, December). Glue Makers Image Wont dumbfound Online. RetrievedSeptember 24, 2006 from http//pangaea.org/street_children/latin/fuller.htmlKokmen, L. (2000, February 9). Coming Unglued. City Pages Online Online.Retrieved September 26, 2006, fromhttp//www.citypages.com/databank/21/1001/article8414.aspKurschner, D. (1995 July/A ugust). Product Liability Is Resistol Too Sticky For H. B.Fuller To Handle Litigators want to paste company with wrongfuldeath suit over childs misuse of product. Business Ethics Online. RetrievedSeptember 27, 2006, from http//pangaea.org/street_children/latin/ethics.htmLee, L. (1996, August 30). Free, unlimited energy brightens rural Honduras but at acost. Honduras This Week Online. Retrieved September 26, 2006 from,http//www.marrder.com/htw/aug96/national.htmlNKaoua, L. (1993, August 11). The Sweet Smell of Success (Part 2 of 2) Online.Retrieved September 23, 2006 from,http//pangaea.org/street_children/latin/citypg2.htmlShah, V. (2005, September 28). Prices Rise, But So Do Costs. Chemical Week, 167, 42Honduras. (2006, September 24). Wikipedia Encyclopedia RetrievedSeptember 24, 2006, from http//en.wikipedia.org/wiki/Honduras