Assessment of Chiquita’s embeddedness and resulting sustainability effects in Guatemala

 

Nina Ellenbroek

Abstract

In this research it is hypothesized that embedded multinational enterprises are able to contribute to a sustainable development of a region or an economic sector as they invest in long-term sourcing in their host countries. The study assesses Chiquita’s local embeddedness in Guatemala and possible positive sustainability effects resulting from the company’s presence. Interviews were conducted with Chiquita Guatemala management, external experts and Chiquita farm employees focussing mainly on social, economic, environmental, technological, infrastructural and relational embeddedness.

As Chiquita is an important employer in the region it is expected to create and sustain jobs and maintain economic stability. The study therefore looks at Chiquita’s on site activities to show their impacts on the immediate and wider communities. Chiquita’s networks and strategic partnerships with external actors such as the local government, research institutions and NGOs are examined to see the potential to create positive social and economic sustainability effects and whether Chiquita has been successful in capturing these effects.

The study further investigates the role of embeddedness for plantations to sustain production in remote areas that lack physical infrastructure and public institutions.

The study reveals the embedded ties that create value through mechanisms such as trust, knowledge transfer, and jointly seeking solutions to solve pertinent problems; bringing international standards to local businesses and integrating them into markets. By assessing the quality and extent of «local embeddedness» the study contributes to the designing of a tool-kit that should measure the degree of embeddedness and the positive sustainability effects of locally embedded Swiss-based multinational companies in developing countries.

Keywords: Guatemala, Chiquita, labor conditions, health, environment, paternalism

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