Social Performance of Nestle Company - Case Study Example

Nestle Introduction The need for corporate to be involved in addressing social issues has been raised by different quarters of the government. The world cries out a plea to be saved from the social problems that seem impossible to overcome, making the involvement of corporate necessary. Non-governmental organizations (NGOs) have worked tirelessly in recent years to establish worldwide standards for corporate social accountability. (Margolish and Walsh, 2001). They encourage corporations to give importance to broader social issues. Most corporate have realized the need for social performance and are doing well. Nestle, is one such company that has been involved in social development, mainly in the aspect of environmental well being. Social performance Nestle is one of the corporate that have been enthusiastic and have pioneered environmental protection policies all over the world, their researchers spending a lot of time coming up with innovative ideas to enable technology to make their corporation environmental friendly. Further, they are involved in social activities that are not directly associated with the manufacturing or management of the corporate. They are seen taking a personal state in environment protection strategies, encouraging their employees to do so as well. Their commitment toward environment protection surpasses the aims of the environment legislation, doing a lot more than they are expected. They continue to look for new ways to not only minimize waste, pollution and packaging, and save energy and resources, but to address these concerns early in the product and packaging design processes. (nestle.com.au). Nestle has taken initiatives in social performance by the formulation of environment protection policies and ideas. The corporation is committed to the cause of helping in making a better environment, working to make an impact. The chairman and CEO of Nestle, Peter Brabeck-Letmathe says, “We believe that the true test of a business is whether it creates value for society over the long term.” In Australia, The Nestle Oceania Environmental Policy allows the organization to "constantly strive to identify new ways to reduce packaging, to minimise waste, to prevent pollution, to save energy and to conserve natural resources". (nestle.com.au). this policy ensures sound business practices by placing the requirement that all Oceania employees must play their role in protecting the environment. The policy includes three practices that will implement the policy efficiently. Firstly, they integrate environmental principles, into the operations of each of its factories, offices and distribution centres. Secondly, they work to continuously improve environmental performance, bringing the Nestlé Environmental Management System into force. Thirdly, they train their employees by giving appropriate information and training so that employees may understand the commitment Nestle has toward the environment. The corporation strives to fulfill their current needs without causing damage to the future generations, ensuring that they follow environment protection strategies. The Nestle Policy on Environmental sustainability states that the company is “committed to create shared value over the long term by increasing the world’s access to higher quality food and beverages, while contributing to environmentally sustainable social and economic development”. (nestle.com). they strive to reach improved environmental in other aspects as well. Nestlé globally supports an integrated approach to packaging waste minimisation that favours reduction, reuse, recycling and energy recovery to minimise the impact of packaging on the environment. (nestle.com.au). The packaging of Nestle requires to prevent product waste, while also ensuring that it is tamper proof to prevent spoilage of dairy products. They use different kinds of packages, some in metal cans, some in recycled cartons, most of the packaging in recyclable or recycled products. The company has also taken special care in minimizing waste. In Australia, the No Waste @ Work was implemented. It was first brought into practice at Blacktown, Sydney factory and in the head office in Sydneys CBD in 2003. (nestle.com.au). the structural and well designed tool kits help in making the process of waste minimization as effective as possible. Fulfilling the needs of the society Nestle is a leading food and beverages company that strives to fulfill the nutritional needs and deficiencies present in the society. most importantly, the issue of osteoporosis is becoming increasingly common, affecting one out of three women and one out of eight men, the reason being lack of vitamin D. Nestle being a dairy products company can efficiently help in this particular need as milk products are a direct source of calcium, helping in overcoming these deficiencies. The company plays an important role in the aspect of nutrition as they are a leading brand of baby food products, which has a large impact on the nutrition of babies and children. The company is quite successful in doing its share of fulfilling the nutritional needs of the society by making available to people even from rural areas, the food and dairy products that aim at a health living. They have implemented a system which ensures positive nutritional impact through its products. It has improved the nutritional value of products by lowering salt and sugar, and adding vitamins and has been working with the ministry of health in Colombia to develop crackers that contain more iron and vitamin B for anaemic children. (iblf.org). Stakeholders affected by the company A company that is profitable operates by providing jobs and investments and doing so by supporting local communities and not degrading the environment. (iblf.org). Nestle does exactly this. The truth is that, no company is all powerful and flexible. (iblf.org). Investors are a key factor in the debate as they decide whether they are supportive of social responsibility or wish to reap the whole of the profits for individual gain. The Nestle Corporation is able to take such positive steps as the stakeholders of Nestle are equally interested in the involvement of the company toward environmental concern. The governing board of the company, consisting of 14 members are well aware of the environmental plight that we are subject to and show equal interest in environment protection plans. While Nestlé does not have an external stakeholder engagement policy, it does make a commitment to engaging with external stakeholders such as NGOs in its Corporate Business Principles. (oneworldtrust.org). The stakeholders of the company include consumers, customers, employees, investors and others. Beginning in about 1970, Nestle became involved in a controversy over the morality of selling any infant formula in the Third World and of using specific promotional and marketing techniques considered immoral by some as it resulted in deaths due to improper use. (homepages.bw.edu). At this point, the stakeholders were affected as the company did not discuss the implications of this act and suffered an issue with the reputation for several years. The stakeholders were said to be unconcerned with true social improvement. It was a while before Nestle gained back its reputation of social performance with the implementation of many other policies. The stakeholders have suffered very less ill from being associated with the company and have seen more positive effects of it than negative. Impact on society and stakeholders Nestle has a done a considerably good job in improving the lives of some communities in specific, such as the Latin America, improving the nutritional aspect of the society in general , and in satisfying its external stakeholders sufficiently, enabling them to see the positive outcomes of the claims that they have made, also in the interest of the company. The NGOs that are stakeholders of the company have greatly benefitted from the company as they have had the opportunity to implements a number of policies that would help improve the society and the environment. The impact that the company has had one its stakeholders, shareholders and customers is enormous. Not only have they had a global market and promoted it perfectly, they have also maintained the standards and have been successful in being constant in their focus. They have ensured to improve and revise their policy each year, bringing in changes. The company arranges for stakeholders conventions once in a year, inviting experts in the field of environmental protection, to help them improvise their environment protection strategies. The stakeholders are free to suggest ideas that would help them achieve a more sustainable pattern. Conclusion The Nestle Corporation has come a long way in making the changes in society. Undoubtedly, they have made changes in the society, keeping their focus on the improvement of quality of life, fulfillment of nutritional needs of the society and environmental protection. They have taken steps to implement their ideas and believe that social performance or social responsibility of a company determines the real growth of a company and that there would be no sustainable development over the years if they were not keen on making decisions that would benefit the society or the environment. From this paper, we see that the company has had considerable impact on the society, its stakeholders and has on the whole, been successful in its social performance. The belief that social performance pays off is certainly true, as people are willing to support the causes of broader concern, giving importance to the fact that organizations and companies must indulge in social practices. Nestle is an example or rather a model for other corporations that might wish to be as socially responsible. Reference nestle.com. Waste Minimization. Retrieved April 13, 2010 from http://www.nestle.com.au/Community/Environment/Waste/Default.htm Margolis, J.D & Walsh, J. P. (2001). Does Misery love companies. How social performance pays off. Retrieved April 13, 2010 from http://hbswk.hbs.edu/item/2369.html icograda.com. Designs and Ethics: Good, Bad, Innocent or Arrogant. Retrieved April 13, 2010 from http://www.icograda.org/feature/current/articles1651.htm iblf.org. What is the relationship. Retrieved April 13, 2010 from http://www.iblf.org/docs/events/nestlereport.pdf. homepages.bw.edu. Stakeholder Management. Retrieved April 13, 2010 from http://homepages.bw.edu/~dkrueger/BUS329/readings/chapter3.html oneworldtrust.org. Participation dimension. Retrieved April 13, 2010 from http://oneworldtrust.org/index.php?option=com_docman&task=doc_download&gid=94&Itemid=55. Read More