W2 - CASE Flashcards
What is the core idea of Resource Dependency Theory?
Firms depend on external resources and seek to minimize vulnerabilities.
Developed by Pfeffer & Salancik in 1978.
What percentage of Chiquita’s banana sales relied on the European market?
45%.
This significant reliance made Chiquita vulnerable to changes in EU policies.
What regulatory changes impacted Chiquita’s revenue and operations?
The EU’s new banana import regime including quotas, tariffs, and licensing.
These restrictions limited Chiquita’s access to the market.
How did Chiquita attempt to reduce its dependency on EU policies?
Explored ACP production investments, acquired EU distributors, and shifted exports to other markets.
These strategies were aimed at diversifying their market presence.
What is the core idea of Public Choice Theory?
Political actors act in self-interest, influenced by incentives and lobbying rather than the greater good.
This theory was proposed by Buchanan.
Who did Chiquita engage in political lobbying to influence trade policies?
U.S. Senator Bob Dole.
Chiquita leveraged his influence to pressure Latin American governments.
What was the purpose of Chiquita’s Section 301 petition?
To accuse the EU of discrimination.
This was part of their strategy to seek U.S. trade actions against EU-supported countries.
Who were the demanders in the context of public policy related to Chiquita?
Chiquita, Latin American banana exporters, and the U.S. government.
They sought market access and fair trade policies.
Who were the suppliers in the context of public policy related to Chiquita?
The EU’s executive and legislative branches.
They implemented protectionist policies favoring ACP countries and EU producers.
What was one major impact of the EU’s restrictive policy on Chiquita?
Increased transaction costs due to licensing, tariffs, and compliance.
This made operations less efficient for Chiquita.
What did Adam Smith argue regarding the government’s role in market systems?
Governments should protect economic rights but also maintain market competition.
This perspective is essential in understanding market dynamics.
What conflict arose from the EU’s policies regarding Chiquita?
Free-market vs. Protectionism.
Chiquita argued that EU policies led to market inefficiencies and higher consumer prices.
What was a direct impact of the EU’s regulations on Chiquita?
Distorted competition, reducing incentives for efficiency and innovation.
This created a challenging environment for Chiquita.
What was an indirect impact of the EU’s policies on consumers?
Cost to EU consumers was $1.6 billion annually.
This reflects the broader economic implications of protectionist policies.
What does the Chiquita case exemplify regarding business outcomes?
How government policies, institutional frameworks, and political lobbying shape global business outcomes.
It highlights the need for businesses to navigate complex regulatory environments.
Fill in the blank: The case underscores how businesses must navigate _______ to survive in a complex global economy.
regulatory environments.
This is crucial for adapting to institutional constraints.
