Nestle Formulas Success - Case Study Example

Global Business Environment Table of Contents Introduction………………………………………………………………………………………2 The Facts……………………………………………………………………………………….3 2. Global Corporation’s Point of View…………………………………………….……….…..7 3. Other Global Actors’ Points of View………………………………………………………...8 4. Recommendations…………………………………………………………………………….8 Conclusions……………………………………………………………………………………….9 References…………………………………………………………………………………..10 Introduction The dawn of a society filled with knowledge together with economies that may be information-driven, as well as trade on the cross-border basis as effects of globalization and liberalization policy, may be said to have placed new requirements on organizations for innovative business morals approaches at both global and local business environments. Capitalism might have been an international perspective of the extent to which man went in search for world discovery. Ever since, the economic system might be said to have attained the necessary confidence within the people upon making suppression on other models of the economy. The most recent capitalism model may be said to subscribe to the globalism notion ensuring the economic interchange within the basis of long distance. Ethics could be said to have accompanied business processes from time immemorial. Business frauds including deceptive and faulty weighing scales may be known to have occurred from past times. Thomas Aquinas may be said to have placed a lot of emphasis on his ardent moral teachings on justice and honesty in the buying and selling processes. Labor exploitation could be identified as amongst the hottest topics addressed by Karl Max in a bid to rise against the concept of capitalism. The nourishing business industry at the time of the Industrial Revolution resulted to a number of ethical issues associated with the environment. Even with the progress of the business with an expansion of the global dimensions, the sprouting of unethical behavior became a key dilemma source experienced by the global businesses. Nestle, an extremely successful organization that covers several parts within the world and has extremely high standards of quality, might be said to have undergone insurmountable criticisms as regards its unethical practices (Aldag 2001, p 46). The facts Its discovery of a formula meant for the infants, who would be to the infants having mothers who might not be capable of breastfeeding could be a major boost to its already popular name. The idea had been purely the idea of a man called Henri Nestle, the ultimate founder of the organization. The successful discovery might be said to have resulted to the formation of this company. Having obtained considerable success in marketing its infant formula, its production considerably increased especially after other companies’ acquisition. The company’s portfolio on products attained a marginal expansion including noodles, cereals, mineral water, infant foods, ice cream, confectionaries, milk and dairies, chocolate, coffee and tea. Together with the company’s humongous success as regards the market sales’ growth, it might be said to have been faced with moral issues in the course of its operations within various parts of the globe. Instant Nestle formula’s success might have expanded into the western countries, which had considered the product extremely helpful to those mothers who would not be able to breastfeed because of health or work-related issues. Its marketing spread to the Asian and South American countries. The company had been subjected to criticisms due to its strategy on free sample distribution, which later on pushed the mothers into purchasing the product after which, it cut off the free sample after these infants had grown accustomed to the products. As a result of information inadequacy and the false adverts that claimed the products to be more ideal than mothers’ milk, these breastfeeding mothers’ beliefs especially the illiterate drifted in favor of the nestle formulas for infant feeding. Due to this, it received condemnation reports together with boycotts globally for its unethical behavior of putting the infants’ health at risk (Arthaud-Day 2005, p 47). Nestle may be said to have faced a series of other condemnations as regards the issues under dispute with claims of compensation from the government of Ethiopia as regards the nationalized Schweinfurt Group in 1975 by the Government of Ethiopia. The government had been said to have offered 1.5 million US dollars although the company pushed 6 million US dollars. The world rapidly made a broad step of criticizing the earning net profits of the company, which had been estimated to have been worth billions of dollars thus forcing a poor government that had been famine stricken to pay such an unaffordable amount. Ethiopian citizens had already been undergoing extreme suffering from a government filled with depleted revenues. This issue might be said to have tainted the organization’s reputation for putting too much pressure on an already pressurized economy having extremely limited and almost scarce resources needed to support its people’s needs. With the looming unethical issues impacting on the environment, aquifer pumping within Michigan for the mineral water bottling from 1980 filed a case in the court of law. The operations of this organization may be said to have been reported to result to unlawful inhuman lakes, wetlands and streams diminishment. The ruling judge had been in favor of the underground water users’ protection within Michigan which included auto industries, farming, golf courses, beverage companies and farming, all of which geared to the human existence. The aquifer pumping project could have been speculated to result to humongous water diversion, which then immensely impacted on the community. The problem on the diminishing supply of fresh water together with aquifer depletion may have been a problem affecting Michigan together with several other States which might have been pumped Perrier Waters Nestle subsidy’s bottling. The concerns as regards the environment with a couple of American states might be said to have been an identical issue fought be different global cultures (Apel 2008, p 129). The 2004’s Asian marketing of genetically modified food might be said to have been another key blow to the company. The western countries had been particular in their rulings as regards marketing these genetically modified foods that require accurate advertising and proper labeling to disclose appropriate information. Within Asia, the GM foods might not have been tighter than western rulings. The company, Nestle, may be said to have taken advantage of the situation of Asian markets, which may be said to have been less restricted than the others in the marketing of its GM products posing claims that there might be no problem with essentially treated GM products giving an appropriate example of China, which might have been unaffected by the utilization of the GM products. By the dire intervention of an organization known as the Greenpeace organization, Nestle might be said to have resulted to another key reason, which might have extended the campaigns on boycott against this organization in Asia together with the entire globe thus resulting to an increase in the awareness of GM foods (Reichberg 2002, p 39). The company’s involvement in the purchase of Ivorian cocoa from Ivory Coast together with controversial child and slave labor by 2006 had become a humongous unethical conduct organizational accusation. It could be said to have cared for its well being as a key importer of Ivory Coast’s chocolates thus taking considerable advantage on the products that might have been low priced and ignoring the forced labor that had been inhumane. With the support of Nestle as regards the products by the use of exploited labor, the organization might be said to have lost sense on the moral duties it might have been required to possess towards the workers, suppliers, consumers, the public and the community at large. Its immoral tendency might have called for a stop in its purchase of Ivory Coast’s cocoa. The company may be said to have been receiving unending claims or complaints of immoral practices. Several other widely addressed moral dilemmas may include the problems that associated with fixed pricing and outsourcing within Greece, in the year 2007, the Asian overpricing of the water commodity especially within Pakistan, an action that denied several individuals the right to access safe drinking water. As a food production giant, Nestle might not have dodged the claims of marketing and promoting unhealthy foods, which might have included the 2008 scandal on Cheese milk that allegedly being claimed to have comprised of minute traces of melamine, the Magi noodles health of 2008 might have raised a controversy associated with double organizational standard within advertizing thus bringing about claims that had been false within Asian nations, fraudulent labeling, fair trade violation and union busting. Most of these unacceptable conduct leveled against this company might have existed within the developing nations. Developed companies within the West might have exhibited more sensitivity to the issue than the developing ones. A variety of developing nations might have been reported to have drawn identical reactions to the publicly exposed claims against this huge organization although it may not be as extensive as the west had been. While the developed nations came up with boycott campaigns against the company, there might be a constant high demand on its products (Reichberg 2002, p 48). All the criticisms and claims on the company’s conduct might not have resulted to a considerable decrease in the sales units. It may be said to have maintained a steady and unwavering position in the world with the title of a globe’s top most food production company posing a great challenge to Kraft’s food. It might be said to have been working extremely hard into addressing the moral dilemmas that surround it. E.g. it might have initiated fair trading plans. All the milk products for nestle may have also compiled clearly with ruling in order to make an indication that it may be avoiding the product use as a substitute for milk. This organization might be said to have undergone a series of lawsuits together with a couple of ethical dilemmas, which might have been the effects of business globalization. Global Corporation’s point of view As an intellectual actor, the global corporation may be said to play ideally 4 essential and basic roles. These could be said to be developing norms, managing knowledge, institutionalizing ideas, and promulgating recommendations. It may be said to be a knowledge-management and a knowledge-based organization that flags problems and clearly lays them on the respective reluctant governments. In the case of the Nescafe, it might not have joined in the public boycotts but it might be said to have analyzed the root causes of the issues and put them to table for the organization to make the necessary adjustments, failure to which would result to a further intervention. The policy ideas might be said to be disseminated, discussed and concluded within global conferences and public forums. Immediately the necessary knowledge has been acquired, there would be an articulation of norms thus resulting to policy formulation. There might be a supervision of monitoring and implementation of the policies to govern the reported issues (Toulmin & Jonsen 2008, 254). An environment meant for a business that minds all individuals’ concerns (as regards the benefits from the business’ activities and nobody may be harmed, together with one that can be allowed to do its own plans due to the existence of democratic laws other institutions, which might the public and businesses) might constitute a paradigmatic case: a proper labor division rule. Yet, only such situations, which might not be shielded by appeal to a single person, would one find problems; yet in such cases the ardent concern to act in the right way may result to moral issues or questions. Other global actors’ point of view Within war, prima facie rule which meant that no killings had been allowed, it became extremely problematic. As regards business, the appeal to proper labor divisions between corporations and governments might be likened to this rule when the government under review might not be addressing the good or may not be representing its people. In this section, the private sector might not be allowed to perform its own operations since by doing so; it might be given too much freedom to do unnecessary harm. In Nestlé’s case, appropriate labor division between the public and private sectors so as to maintain demographic control. This move would make it take up public responsibility so as to rectify the harms made to the entire global community. Recommendations While it might be clear that business organizations might need to be friendly and familiar with the consumerism, environment and demands of the environmentalism movements that organizations and individuals should strive to operate with extreme care and love for the necessary environment. Even thought every corporation might have placed the emphasis on the shareholders as amongst the most significant group of stakeholders, failure to put every stakeholder might result to diverse ethical lapses. The key purpose behind the understanding of risks and concerns of stakeholders may be to point out issues, which could be able to trigger the process of ethical decision making. If the issues associated with morals may be perceived of having any relations with the significance of the interaction of the stakeholders with the firm, then a sound framework would exist in order to aid in the assessment of the significance of a perceived problem; the problem’s intensity (Westphalia & Bjelland 2008, 38). Conclusion Perfect business organizations might be said to be those that keep, win and grow their consumers through the building of strong ultimate relationships with them with the basis of superior customer satisfaction and value. An extremely crucial step in the development of strong consumer relationships may be said to be the understanding of different customers. In order to gain competitive advantage, an organization may not necessarily need to make use of oppressive means but, it might just have to make use of the understanding mentioned above in order to design offers on the market, which might deliver the most value. The key element in the creation and achievement of sustainable competitive advantage could be sad to be through the incorporation of professional ethics together with sustainable business practices within an organization. References Aldag, R. J. & Stearns, T. M. (2001). Management. Cincinnati, OH: Southwestern Publishing co. Arthaud-Day, M. L. (2005). Transnational corporate social responsibility: a tri-dimensional approach to international CSR research. Business Ethics Quarterly, Vol. 15, No. 1: 1-22. Apel, K. (2008). Transformation der Philosphie Das Apriori der Argumentationsgemeinschaff. Sturggart: Suhrkamp Veriag. Apel, Karl-Otto (1990). La position de Karl-Otto Apel sappuie sur un essai de réfutation des thèses de Karl Popper." Sturggart: Bartlett, C. A., Ghoshal, S. & Birkinshaw, J. (2004). Transnational Management. Text, Cases, and Readings in Cross-border Management, 4th Ed. Boston, MA: McGraw-Hill Irwin. 28. Reichberg, G. M. (2002). ‘‘The hard questions of international business: Some guidelines from the ethics of war’’, in Heidi von Weltzien Hoivik (ed.), Moral leadership in action. Building and sustaining moral competence in European organizations. Cheltenham: Edward Elgar. Toulmin, Stephen & Jonsen, A. R. (1998). The abuse of casuistry. A history of moral reasoning. Berkeley: University of California Press. Westphalia, M. & Bjelland, K. (2008). Nestlé: The Robustness of Large Conglomerates against Negative Publicity: A Quantitative and Qualitative Analysis of Risk, and Crisis Management Based on Financial Indicators. Saarbrücken: VDM Verlag Dr. Mueller E.K. 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