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H.B Fuller and the Street Children Of Central America (Honduras)

Introduction
Background of the case is the misuse one of the adhesives, Resistol, a toluene base glue,
by the street o children of america, where the social economic were taken part of this
situation. The resistol were produced by H.B Fuller company,a global manufacture of
adhesives, selalants, and other specialty chemicals, and had operations in over 40 countries in
North America, Europe, Asia and Latin America. H.B Fuller 1994 total revenue : $ 1.097 B
with total profits $ 354 M and by the year 1995 total revenue : $ 1.243 with total profits $ 392
M, 15% of sales revenue came from latin america or 27 % accounted of its profits.

Case Analysis
Honduras and guatemala are two countries where fuller markets it glue products and the
two countries where resistol abuse is most pronounced, in 1993 honduras had per capita
GDP of only $ 1950, rate of unemployement up to 20 %, guatemala was doing slightly better
with per capita GDP of $ 3000 and rate of unemployment rate about 15%. More than a third
of people in Honduras and guatemala are below poverty, and this ecnomic condition directly
affected to Family Life situation commonly unstable, stressful conditions, husbands
abandoned their wives and children, the countless children runaway from homelife and
roamed the city street, street children uses glue (H.B Fuller) by sniffing them (glue addicted)
as the way to get-away from their real life condition.
For years H.B Fuller had been pressure by child advocate groups in central america and
the united stats, and encouraged the company to minute amounts of mustard seed-oil a
common food additive, reported virtually eliminated abuse of its glue. In march 1989
legislature of honduras passed decree 36-89 which banned importing or manufacturing
solvent based adhesives that did not contain mustard oil. This situation surely disadvantages
for H.B Fuller company business envorenment , H.B. Fuller subsidiary began lobbied the
government to have the law revoked, brought some data and showed by adding the mustard
seed oil caused : reduce the glue effectiveness, the smell would irritating to legitimate user,
the substance was potentially carciogenic.
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H.B Fuller also took several actions related to help to prevent glue addiction for street
children, in order to reduce the avaibility of glue to children they discontinued selling the
glue in small jar, paying the social worker to work with street children and began providing
information to distributors warning of the dangers of resistol addiction. The actions keep
continued on july 16th, 1992, the company stop selling the glue to retailer and only sell the
glue to industrial customer in large tubs and barrels and cooperate with dirstributor to set up
new control restricting distributions in retailer, on 1994, the company decided to change the
toluen based into cyclohexane and increased the price up to 30% it further out of reach of
children, of these moves, the company said, would discourage use of this glues among street
children.
In 1995, company issued a statement claiming that in reality it, neither manufactured
nor sold resistol instead the company, asserted it was a subsidiary of a subsudiary of the
company in central america that had actually made and sold resistol, and claims that the
company was responsible the deaths of children are nothing More than attempt to hold fuller
liable for acts and omissions of its secon tier guatemalan subsidiary.

Questions and answer of this case
1. In your judgment, is H.B Fuller responsible for the addiction of street children to
its resistol product ? Do you agree or disagree with the statement that the social
conditions in honduras and guatemala are ultimately responsible for misuse of
H.B fullers products and that neither the product nor the company is to blame ?
Do you agree or disagree that a parent company is not responsible for the
activities of its subsidiaries ? Explain your answer fully.
a. We dont think its entirely the company s responsible, the countries socio economical
conditions are the major factor for the addiction of street children to H.B Fuller
resistol product, the social worker in the case, stated when he inhales resistol, he
hallucinates about his mother caressing him it was what an abandoned child who
habitually sniffed glue in mind.
b. Our syndicate opinion agree, the government and childrens advocate also should took
an action, not just blemed the company, the situation is more to socioeconomic
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condition, the company just doing the market of their product properly, evenmore
with these situation they already did their best acts such paid social worker to work
with street children.
c. Subsidiaries operations and activities are known by the parent company, parent
company should responsible to take an action if theres any illegal activities by its
subsidiaries, in this case the subsidiaries juast doing fine with their business and help
the countries economic condition.
2. In your judgment did H.B. Fuller conduct itself in a morally appropriate
manner? Explain your answer.

We think that the company already did their best actions :
discontinued selling the glue in small jar
paying the social worker to work with street children
providing information to distributors warning of the dangers of resistol addiction.
on july 16th, 1992, the company stop selling the glue to retailer and only sell the
glue to industrial customer in large tubs and barrels.
set up new control restricting distributions int retailer
on 1994, the company decided to change the toluen based into cyclohexane
increased the price up to 30% ---> to further out of reach of children
3. What, if anything, should the company have done that it did not do?
There are some actions that company should be taken :
Cooperate with the government (social departement) to campaign the dangerous
and the effect if the product being misused.
Company should recruit one person of the street children community and hes
former of glue addiction as the figure and make some testimonial about the
dangerous of glue addicted.


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Recommendation For HB Fuller Company
1. Make Innovative Product
It is stated that in 1994, the company decided to change the chemical formula of its glue
make it less attractive to children. The toluene in the glue was replaced with the chemical
cyclohexene which smells less sweet and is less volatile than toluene, although like toluene it
too produces an intoxicating high and has similar toxic effects on the body.
It will be much better for Fuller if they can make glue product that do not contain any
dangerous substances. Cyclohexene itself still able to make high and the tremendous health
problem effects still remain inside it. In 2001 the banning of toluene and cyclohexane
outright in Latin America is now the goal. Chile, Venezuela and Argentina already have laws
prohibiting their use . If Fuller do not want to use mustard seed oil due to the stickness
quality, Fuller can try to produce a safe product, this kind of matter will not occur in the
future, and it will be much easier to Fuller to re-enter the Latin America market.
By producing a safe product, Fullers employees will be more loyal to the company. Because
when they produce the product, they will have direct contact with the product that will
endanger their health in the future.
Thus, the research here is extremely needed in order to avoid the misuse of the product and to
maintain the customer and employees loyalty. The research will be costly at first, but after the
winning product is produced, all the cost and the wait will be worth.
2. Controlling the Subsidiary Company
In 1995, the Fuller company issued a statement that the holding company did not have any
relation and responsibility with the subsidiary company did. A holdingcompany must also
responsible in what subsidiary company does, because it is related with the company
reputation. By controlling the subsidiary company, this kind of matter could be avoided
before, so the cost in recalling the product could be eliminated.


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Recommendation For the Government

1. Fix the Economic Condition
According to ChildHope, there are about 40 million street children in Latin America. It
estimates that nearly all of these children use or have used common street drugs, glue and
thinner being the most widespread because they are among the cheapest . These large
numbers of street children is rooted from the poor economic condition in Latin America,
especially in Honduras and Guatemala. The hard economic conditions in these two countries
make the parents easily abandon the children. They are too busy or too poor- to take care of
their children. The parents should fulfill their basic needs like home, food, clothes, education
and love.
Here is the role of the government. The government should fix the economic
condition, like opening more job opportunities. The street children are valuable assets. If the
government can educate and train them well, the prosperity of the street children will increase
and they can have a better life. By having a better life, they will not depend to drugs anymore
as a media to escape from reality.
2. Monitor The Distribution of The Product
In 1992, Fuller recalled its product from the market. But in Honduras and Guatemala, the
company still sells the product directly to industrial users, eliminating the distributor in order
to have better Resistol control off the black market. The government has try to tighten its
distribution system, and is no longer selling the glue through retail outlets but many activists
say there are many ways to make the product reach the hands of children, like pay the factory
worker to pass the glue or even try to steal the jars glue. The government should pay more
attention in this matter. By better monitoring the distribution, the government can reduce or
minimize any leaks to avoid this matter.
3. Collaborate with NGO and Fuller Company
The government can collaborate with NGO and Fuller to discuss together so all party can
have win-win solution to solve this problem. So any decision or law made will not harm one
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party. Like the company gives the street children a course to improve their positive ability so
it can be used in the future to earn money. It could be as part of company CSR and the
government could subsidy the company to bear the cost together.

Conclusion
Although Fuller made every attempt it thought was necessary to prevent its products from
causing harm, it could have provided more intervention. First, H.B. Fuller should have put
more research into mustard seed oil and its effect on adhesives like the United States
chemical companies had done. Research into this solution would involve consulting with the
FDA to solidify positive results. This could have very well been an easy solution to Fuller
and the Latin American children. Second, Fuller should have decided to discontinue its
product earlier than it did. If it did make this decision, then all sales should be eliminated,
not just to retailers but to industrial vendors as well. Lastly, the company should have
communicated more effectively with its parent company in the US to formulate a sound plan
to addressing its ethical dilemma.

References
Khan Dr. AR, Business Ethics, 2
nd
Edition June 2011, p.93-107
Griffin-Nolan, Dealing Glue, p. 26.
Griffin-Nolan, Dealing Glue, p. 27.
Griffin-Nolan, Dealing Glue, p. 28.
Norman Bowie and Stefanie Ann Lenway, H. B. Fuller in Honduras: Street Children and
Substance Abuse,
in Thomas Donaldson and Al Gini, eds., Case Studies in Business Ethics, 3rd ed. (Englewood
Cliffs, NJ:
Prentice Hall, 1993), p. 287.