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Class # 12 Guajilote Cooperativo Forestal, Honduras Case

Tanya Tucker
Organizational Policy and Strategy MGT 590 OL
Dr. Arthur Meiners
December 2, 2004

History
Guajilote Cooperativo Forestal (Guajilote) was founded in 1991 (Wheelen, 2004, 26-1) due to
mounting concern over the disappearance of forests in Honduras. Guajilote is the only forestry
cooperative in Honduras that was given the right to exploit naturally fallen (not chopped down)
mahogany trees in La Muralla [National Park](Wheelen, 2004, 26-1). According to a report
by the National Forestry School, if steps are not taken to protect Honduras forests, then they will
practically vanish by 2011 (Fiallos, 1999, par. 1).
Guajilote currently consists of 16 members. The original 15 members were chosen by the United
States Agency for International Development (USAID) and Corporacion Hondurena de
Desarrollo Forestal (COHDEFOR). Many of the members of the cooperative have little
education. Some are even illiterate. As a result, the group has come to rely heavily upon Santos
Munguia, who has been their leader since 1995 (Wheelen, 2004, 26-2). Munguias administrative
style resembles that of a dictatorship. He makes all of the decisions for the cooperative with only
a little help from a family member that is designated as second in command. Munguia is reported
to have only a primary school education, he was energetic, intelligent and had proven to be a
very skillful politician(Wheelen 2004, 26-2). The reason that he is considered a skillful
politician is that he was able to almost double the rate that the coop receives for its product from
the only purchaser in the region.

S.W.O.T. Analysis
S.W.O.T. Analysis refers particular Strengths, Weaknesses, Opportunities, and Threats that
are strategic factors for a specific company (Wheelen, 2004, p. 109). S.W.O.T as it pertains to
Guajilote can be summarized as follows:
Strengths
1. Permit. The only strength that Guajilote has is its permit or governmental authorization
to remove fallen trees from the National Park.
Weaknesses
1. Management. Munguia may have helped the coop increase its revenue, however, there is
still much progress to make. In order to make progress, the participation of the people
that are most familiar with the daily challenges are needed. Putting the success of the
coop in the hands of one man without any kind of checks and balances is clearly a
mistake. The coop also needs a strong leader that has political ties that can ensure the
protection of the forests from illegal cutting. After all, trees cut illegally only diminish
the Guajilotes supply.
2. Operations. The group should focus on what changes are needed in order to get the
product to the distributor quicker. For instance, according to the case study, most of the
time men or mules carry the wood out of the forest. Obviously, this is time consuming.
Finding the downed mahogany is also time consuming. Perhaps, there is technology that
can enable the coop to speed up these processes without further damaging the
environment.
3. Price. There are three types of forest production; they are, legal, illegal and legalized.
Guajilote operate a legal forest production. Forest production is considered illegal
when operators, acquire no forestry permits, pay no taxes, and [are] not included in
national statistics (Fiallos, 2003, par. 3). Those that participate in legalized

production possess all the necessary legal documentation, pays corresponding taxes
and is registered in official forestry statistics, but without following the authorized
permit and ignoring forest laws and regulations(Fiallos, 2003, par. 3). Legalized
production usually occurs because operators are not able to comply with all of the
stringent requirements. The economic effect of legalized and illegal forest production is
an increase in supply, which causes a reduction of the auction price for Guajilote.
Opportunities
1. Government. The government of Honduras has implemented at least one cooperative
permit and designated certain areas as protected land in an attempt to stem the tide
diminishing forests. Unfortunately, the government hasnt taken the necessary steps to
ensure that designated areas, like La Muralla, are protected. According to one source,
colonization of the forest by poor Hondurans seeking land, lumbering, migratory
agriculture, cattle ranching and illegal wildlife trade continue to deplete the valuable
resources of the forest with little or no recourse sustained to the culprits of these
activities (TED, par.4). As the resources in La Muralla National Park are exhausted,
Guajilote will find it more difficult to find downed trees and eventually will have to
dissolve the coop. Therefore, national government involvement is imperative.
International involvement is also important; the United States alone imports
approximately, 39.9% from Honduras (http://honduras.com/vital-statistics/).
2. Market. There is only one distributor that the coop does business with, that is, Juan
Sauzo. Guajilote should actively pursue other distributors or possibly look to sell their
product directly to the markets in areas like Tegucigalpa or San Pedro Sula.
3. Farming. Although Guajilotes focus is in finding and bring fallen trees to market,
perhaps the coop should consider a mahogany tree farm as an additional source of
income. It will take many years before any monetary gain is realized, however, at least
they would be proactive and not have to wait on governmental agencies to protect the
supply of mahogany. Perhaps, the coop can seek the financial backing of either the
government of Honduras or some international backers.
Threats
1. Personal Threats. Mahogany is in high demand throughout the world; those people that
are involved in the sale of mahogany stand to gain a considerable amount of money. The
diagram below shows the impact that mahogany has on illegal export (Granada, 2002).

Moreover, money brings out the worst in people, especially in areas that are impoverished.
This is the case in Honduras. According to Honduras This Week Online, indigenous leaders
that purse preservation of the environment suffer mistreatment including violence,
intimidation, death threats and assassinations (McGill, 2003, par.1). It stands to reason that

the members of Guajilote suffer some sort of abuse since they not only strive to preserve the
environment, but also cart away mahogany that cuts into the operations of illegal operators.
2. Extinction. Guajilote faces the threat that their main form of livelihood, mahogany,
could become extinct.

Strategy
Organizational strategy is a comprehensive plan stating how the corporation will achieve its
mission and objectives. It maximizes competitive advantage and minimizes competitive
disadvantage (Wheelen, 2004, p. 13). There are strategic differences and similarities between
forestry cooperatives like Guajilote and a for-profit organization. The coop and for-profit
organization both have a mission statement. The coops mission statement is found in the
language of its permit. That is, to preserve the forestry of Honduras by supplying mahogany
from trees that have fallen as an act of nature. Unlike for-profits, Guajilotes products are limited
to forestry and as such, they have a limited product line. Part of a mission statement is the vision
statement, which describes the organizations future development. Most for-profit organizations
have either a clearly defined or implied vision statement. Guajilote has no clearly defined vision
statement. The coops only goal for the future is to pool resources in order to get the product to
market. There is no apparent thought to growth or further development.
The final part of an organizations strategy is objectives. According to Wheelen, objectives are
the end results of planned activity. They state what is to be accomplished by when and should be
quantified if possible. The achievement of corporate objectives should result in the fulfillment of
a corporations mission (2004, p. 12). Guajilote cannot establish quantifiable objectives because
the coop strictly relies on nature for its product. That is, the coop can only harvest trees that have
fallen down as an act of nature. Because of this limitation, their product is limited.

References
Fiallos, M. (Oct. 25, 1999). Days of Honduran mahogany and Broadleaf Forests Numbered.
Honduras This Week Online. Retrieved on November 29, 2004 from
http://www.marrder.com/htw/special/environment/54.htm
Fiallos, M. (June 9, 2003). Can We Save Honuras Forests? Honduras This Week Online.
Retrieved on November 30, 2004 from http://www.marrder.com/htw/special/environment/
111.htm
Granada, I. (Jul. 22, 2002). Environmental District Attorneys Flee from Death Threats.
Honduras This Week Online. Retrieved on December 1, 2004 from
http://www.marrder.com/htw/special/environment/99.htm

McGill, O. (Jul. 28, 2003). Murdered Environmentalists, When Will it Stop? Honduras This
Week Online. Retrieve on December 1, 2004 from http://www.marrder.com/htw/special/
environment/114.htm

TED Case Studies. Honduras and Deforestation. Retrieved on November 30, 2004 from
http://www.american.edu/projects/mandala/TED/honduras.htm
Wheelen, T.L and Hunger, J.D. (2004) Strategic Management and Business Policy. 9th
Edition. Upper Saddle River, New Jersey: Prentice Hall.
Tanya. Excellent job on a difficult case. Grade A. Dr. Meiners.