Nestle and American Home Products - Essay Example

? Case Study: Nestle and American Home Products Number Question Several moral issues arise in the Nestle infant formula developed since 1860s to save the lives of babies whose mothers could not breastfeed due to unavoidable circumstances. They include; whether any more information about the nutritive value of the formula was important to mothers; whether the nutritive and hygienic “insufficiencies” in the use of the infant formula as compared to breast milk was a good business was worth emphasizing; whether distributing free infant formula in hospital facilities amounted to unfair inducement of consumers to use the product or it was a normal marketing strategy; and, whether sending salesmen dressed in clinician clothes to distribute free samples of the product amounted to legitimizing the supposedly inferior formula by the clinical fraternity. As Shaw (2010) has noted, consumers have a right to autonomy and informed decisions. In light of these, an attempt to insinuate that the infant formula had the blessings of clinicians and the targeting of soft targets (mothers in hospitals) with free samples was an unfair marketing strategy conceived in bad faith. This is especially true because in Ivory Coast, for example, Nestle increased its free samples of the infant formula to counter the government campaign which was aimed at sensitizing mothers on the benefits of breastfeeding. Although, it is the core policy of business to make profit, it is the moral right of consumers to be furnished with all the necessary information related to a product on sale (infant formula) in order to make informed decisions. Unfortunately, Nestle’s marketing strategy was hell-bent on cashing in on poor, uninformed mothers. Question #2 Well, Nestle as an entity on its own cannot be realistically separated from its employees and other stakeholders within it. Under agency law, Nestle as an organization can be taken to task for violation of moral rules for any inappropriate decision made by its leadership. In light of this, the organization as an entity, but not individual directors and or executives should have the moral responsibility. Question#3 According to Shaw (2010), all corporations all companies are expected to return some of their business gains back to the society as a show of moral responsibility. Nestle and American Home Products (AHP) had exercised corporate social responsibility (CSR) by distributing free samples of infant formula to famine-stricken children and those who could not be breastfed. On the one hand, Nestle and AHP were of the opinion that their free donations of the infant formula did not violate the World Health Organization (WHO) code, which outlaws the distribution of free samples of the product to attract sales. On the other hand, critics such as Action for Corporate Accountability, and Infant Formula Action Coalition (INFACT) pointed out that the body language used by the food processors did not point to any effort aimed at encouraging breastfeeding alongside the use of the infant formula, especially in third-world countries. Nestle’s marketing strategies of enhancing the quantity of free samples of the infant formula to counter breastfeeding campaigns gave it away as an organization that did not care about CSR. This is a classic case of corporate bodies prioritizing their profit-making strategies instead of the moral responsibility, especially where millions of young, innocent lives are in danger. Question #4 Nestle’s CSR as viewed from a narrow perspective depicts the picture of a corporation that had and indeed showed some moral responsibility by saving millions of poor children in third-world countries from famine with its free samples of infant formula. In light of this, the dressing code for Nestle marketers tasked to distribute the product to consumers, and the lack of adequate information on the need to use the product to complement breastfeeding does not seem to attract any qualms. However, a wider perspective of the company’s activities reveals that Nestle used unfair marketing strategies to induce unsuspecting mothers to stop breastfeeding their babies and instead use the infant formula. Additionally, Nestle did not bother to inform such mothers of the need to maintain high hygiene in the use of the infant formula. By stepping up the issuing of free samples of the infant formula in Ivory Coast to counter government support for breastfeeding, Nestle abandoned the corporate responsibility of guaranteeing the society adequate safety (Shaw, 2010). Question # 5 At the inception of the infant formula, Nestle’s conduct seems to be moral in the sense that the product was a favorable option for infants who could not be fed on breast milk. Still, in the 1970s, Nestle’s response to the boycott spearheaded by Dr. Joliffe and INFACT showed high moral responsibility. For instance, the corporation’s assertion that its marketing strategies could not be directly associated with high infant mortality in third-world countries was fairly accurate given that the unhygienic handling of the infant formula during use was to mainly to blame for most of the deaths. The subsequent formation of Nestle Infant Formula Audit Commission (NIFAC) by Nestle was a good gesture aimed at implementing the WHO code internally. Moreover, Nestle was seen to have acted in good faith by publishing regular updates on the implementation of the WHO code. In the end, however, Nestle’s concerted effort to give out more free samples of the infant formula, especially when confronted with stiff breastfeeding campaigns like in Ivory Coast shows that the corporation was reluctant to fully enforce the WHO code, perhaps due to fears of a slump in sales. In light of this, Nestle’s response does not seem to show any sincerity or concern for consumers of infant formula who face health risks by using the product as a substitute rather than a complement for breast milk. Question # 6 Breastfeeding has immense benefits to infants. Therefore, as Shaw (2010) has stated, it is the moral responsibility of corporations to increase the demand for the product for sustainability, provided the consumers and prospects are given adequate information on the shortfalls of using the formula as the sole food for babies. Giving out adequate free samples of the infant formula to prospective customers is moral provided the main intention is not to enhance sales as stated in the WHO code. Nonetheless, there is a thin line between dishing out free samples of a product to enhance sales and carrying out a moral responsibility in the name of CSR. Question #7 Boycotts of products can be fairly successful in ensuring that corporations implement corporate social responsibility (Shaw, 2010). This is especially true for corporations that do not want to be eliminated from the market under low sales will be cowed into submission as was witnessed in the Nestle case. Nonetheless, it is difficult to identify a corporation that exercises CSR with its free product samples to customers and prospects, and one that is on a marketing move. An individual whose life is negatively affected by a corporate product has the moral right to take part in a boycott unless by doing so he or she would be subjected to more suffering. In the Nestle and AHP cases, mothers whose children’s lives are endangered by the use of infant formula may boycott the product only if they had other alternatives, otherwise the affected parties may be starve to death. Reference Shaw, W.H. (2010). Business Ethics: A Textbook With Cases: A Textbook with Cases. New York: Cengage Learning. Read More