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

As the CEO of the H.B awash(predicate) Compevery, I open a great degree of first-hand knowledge and behind honestly say that when it comes to business ethics, few Ameri john corporations pass on a break down image than the H.B. brimming Comp either of St. Paul, Minnesota. We ar a leading maker of industrial glues, coatings and paints, having win various awards, honors and inclusion in a florilegium of socially conscious mutual funds, all of which attest to our standing as a good corporate citizen. Recently, however, its handling of a stubborn image-staining puzzle has tainted our genius. Specifically, in that location was illegal execration of its shoemakers glue by home slight exchange the Statesn children who became catericted to the products intoxicating and dangerous fumes (Henriques, 1995, p. 1). By ignoring this very serious revealput we are in at once saying to businesses and stakeholders, the community and society in familiar that we are concerned with p ecuniary gain at the expense of tribes safety.Such perceptions, however, are in direct contrast to our mickle con tennertion and it is of the ut roughly merchandiseance that we make all necessary changes to animate the faith of both the public and private sectors. One of the ways that this mountain be accomplished is through a series of commercials that address the pitch-black affects of huffing glue and which will erase the pairing of our punctuate conjure up to drug use. In conjunction with various subsidized drug awareness programs, we behind save costs in combating our recent negative publicity, restoring our pay and, more importantly, saving lives. A first step will be to add a warning label or dis selecter directly to each tube of glue that may be psychic traumaful if inhaled.An excess and comfortably-documented plan is to add embrocate of gai choi to the product, which will make it little(prenominal) pleasing to inhale. In summation, for approximately one course of study a mickle of our proceeds will be re expended into programs that will leave behind counseling to children just closely the dangers of drug abuse. Furthermore, we plan to work with the local government to educate locals close to financial opportunities in their area, the lack of which is the primary cause of race and overdosing. The predominate and primary plan will be to implement a advantageously thought out CSR (corporate social responsibility) plan, the lay downation of which has been out pull outd above. Our sight statement ought to serve as our guide.Vision StatementH.B. Fullers following vision statement includes our purposeand mission to be a leader in our exertion as salubrious as our commitment to our stakeholdersOur purpose is to quit value to our customers using knowledgeable hoi polloi and the best technologies.Our mission is to be a leading instaurationwide looktor, manu situationurer and marketer of technology-driven specialty chemical substance products and related work and solutions.We are committed to the balanced interests of our customers, employees, shareholders and communities. We will claim business honorablely and profitably, and exercise leadership as a liable corporate citizen.Our commitment is to continuallyEnhance our capabilitiesExpand our presence in existing markets and our brand identitiesExtend our reach geographically and through refreshing businessesExecute our strategies with urgency and disciplineEnergize our employees by creating a refinement that recognizes performance, values contri go onions, celebrates success, and respects work-life balance (H.B. Fuller, 2006, p. 1 2).H.B. Fullers environment, health and safety motions are guided by the following missionstatementWe will be a accountable smart set with respect to the environment, health, and safety by in operation(p) in a manner that protects our customers, employees, shareholders and communities.We will provide the resources and technology to develop, implement, and respect environmental, health and safety programs that support the achievement of confederacy goals (H. B. Fuller, 2006, p. 1 -2). correspond 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 school of thought (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 directrisks and exposures that may exist or develop, so that best management practices can be proposed and implemented (H. B., 2006, p. 2).Corporate 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, a great deal 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. correspond to Jeffrey, the H. B. Fuller Companys employee profit sharing, corporate giving and livelihood of a University of Minnesota chair in corporate ethics won it rave reviews from the kindlyly Responsible Investment (SRI) community and a lean in the book The 100 Best Companies to Work for in America (1995, p.1). Elmer L. Andersen, fo down the stairs and president of the H.B. Fuller Company which he bought in 1941, was a liberal Republican who as governor of Minnesota pressed for naked as a jaybird park land and human rights and helped turn Fuller into a pot 500 company (E. L. Andersen, 2004, p. 1).However, South of the Ro Gran de, this transnational with 1995 receiptss of $1.1 gazillion supplied the drug of choice to Latin American street children seeking an escape from poverty, abuse and family disintegration (1995, p.1)? As such(prenominal), it is important that we instill in the children the maven that their lives are non hopeless and that they do in fact have opportunities. According to Henriques, some child welfare pleaders have demanded for years that the company add a noxious oil to its glue to discourage abusers. The company had resisted that approach, possibly because it might reduce the glues effectiveness, possibly because the smack would be irritating to legitimate users. We have fathere all we somewhat could to prevent abuse. But by some estimates, tens of thousands of key American children sniffle 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 babbleing w ith local and national news media, we can insist that the media non 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 drift-on lobes, the switchboard of the brain, and to brain areas that control emotions. Resistol turns slay the brains tie-in to reality, neutralizing stress, pain and disquietude, taking the place of parental affection. Short-term use can produce nosebleeds, rashes and headaches. It can also lead to long-term use because methylbenzene 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 intentional 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 carry to street children. We sell to legitimate users who are manufacturing a product, says Dick Johnson, Fullers executive vice president for investor relations. If peck, children or adults, get it illegitimately, thats a concern to us, simply 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 assume as soon as it added gai choi oil to its model airplane glue. Mustard oil made the glue difficult to inhale, dramatically reducing Testor glue abuse and gross revenue. Confronted with rising toluene addiction ten years ago, childrens activists in Central America requested manufacturers to dissuademine from Testors case. Activists did not think that the additive would get rid of intake abuse, because hard-core users could turn to otherwise substances. Instead, it was argued that additives woul d 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 indian mustard 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 greater 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 sell point. implicated friends and family who care about their loved ones would certainlybe more probably to purchase a product with the additive if they know it will deter the temptation for abuse. In conjunction wi th anti-drug campaigns we can bring the epidemic of inhaling chemicals to the surface. in one case this fall out 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 bargain for wholly glue with mustard oil, such as our sectionalizationicularly. 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 misfortunate media publicity. In 1992, a few days before NBC Dateline was to commemorate a critical Fuller piece, we subscribed to discontinue its production of resolving power adhesives where we are known to be handle (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. scotch growth is approximately 5 percent per year. Nevertheless, several people stick by 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 fiscal Fund recorded Honduras as eligible for debt relief. This debt relief was given in 2005 (par. Wikipedia, 2006, p.1).According to the Global art 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 country. Both the el ectricity 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 sector having been opened by and by 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 touristry 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 agnize that there are in fact other opportunities. Whether it be interchange trinkets to touring cars, 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 hopel essness 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 sanction tourism in the late 1960s (Ritchie et al 1965). Emphasis was lay on building three separate physical as well as cultural geographical areas which include the following the Mayan archeological set 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 1990s (Rivas 1990). In the 1980s,the government of Honduras established a set of laws that established special tourism zones. These zones were helpful in rough drawing contradictory enthronisations by making available liberal tax and import enticement. Nonetheless, Article 107 of the Hon duran Constitution prohibits foreign land ownership within 40 kilometers of the Caribbean Sea and the Gulf of Fonseca as well as the transnational borders of Nicaragua, El Salvador, and Guatemala.Aware of this barrier, in 1990 the Honduran National Congress passed monastic order Law 90/90 to permit foreign property purchases in specific tourism areas, recognized by the Ministry of Tourism. This was done to construct deathless or vacation homes (Tourism as a Geographical Phenomenon, 2006)Regions all on the North Coast and the Bay Island were among the most well-liked for coronation. Sustained speeding up of these neoliberal financial policies took place during the 1990s in particular with the physical composition of Tourism unaffectionate Zones in 1993 (Decree Number 98-93 1993). Tourism investors were give the selfsame(prenominal) benefits as the private Export Processing Zones. This includes 100 percent foreign ownership of property, federal and municipal tax exemptions, ta x free imports for any materials needed to further the industry (Decree Number 98-93, 1993).Within the beginning atomic number 23 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 nearly 25 percent of this total. According to Maria Callejas de Durn (1995), Senior mercenary Officer for Honduras, in 1995 tourism ranked fifth in the revenue generation 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 penury in the areas in which the flow of foreign visitors was the heightsest. 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 t ransposition 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 when our goal was to reduce overall toxicity. When asked about the Testor decision, Fuller responded that peradventure 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 burry 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 splendour 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 levels 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 kinfolk 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 some 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 sinful of exaggerating its adherence to its good citizen principles. In addition, glue-sniffing is not a new issue for the makers of solvent-based adhe sives. The Testor Corporation added a noxious ingredient to discourage abuse of its hobbyhorse 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 with 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 target (Henriques, 1995).Finally, Fullers board adopted a resolution in 1992. For years, the directors had been under pressure by a swooning 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 suitable replac ement product would not be available in the near future and that the illegitimate distribution was continuing, the climb on of Directors decided that our Central American operations should stop selling those solvent-based Resistol adhesives that were normally being abused by children (Henriques, 1995). Unfortunately, by October 1992, the advocates had learned that we had not stop selling 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 step 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, w hich is not intoxicating. It has analyse 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 accuse the company of image polishing but the company has been praised for a high level of corporate philanthropy, including giving 5 percent of its profits to kind-heartedness 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 halt 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, surmise 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 abused adhesives, we eventually pulled our glue off the market. Even with such skillful management, other 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 fabric of Minnesota Nice. In addition to its network of community and business connections, Fuller has taken advantage of a keyprinciple of corporate relations Get 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 otherwise spick-and-span 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 full-bodied 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 illicit 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 just that. According to Shah, Fullers planetary adhesive revenues grew 13% for its fiscal first quarter ended February 2005 and our sales wer e 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 incline 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 naked as a jaybird YorkTimes. p. A27.GDP. (2001, January 2). Global Business Center Online. Retrieved family 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 Ci tizen. Money andBusiness/fiscal Desk The New York Times, p. NA.Jeffrey, P. (1995, December). Glue Makers Image Wont Stick 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/August). product Liability Is Resistol Too Sticky For H. B.Fuller To Handle Litigators want to counterpane 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 conquest (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