Corporate Social Responsibility of Nestle Company - Essay Example

Nestle Nestle Nestle is one of the most popular and well renowned multinational companies of the world. The company was founded by Heinrich Nestle in 1866. It was basically initiated for the distribution of infant food known as “milk food”. The company then expanded itself to various consumer products such as the producing chocolate, Nescafe and various other brands such as Maggi, findus, rowntree and mineral water. It has now expanded to frozen products, pharmaceutical products, cereals etc. Nestle produces a variety of products and all with only one thing in mind; that is to instill quality in each and every product. The strategy of the company is easy and simple to follow that is to allow the continuous growth of the product by continuous revolution and invention at the same time maintain equilibrium between the activities of different region and product lines. The short term performances are more preferred and long term performances are not neglected at the cost of short term performance. Nestle gives priority to providing quality products to everyone, irrespective of their location, needs and throughout their lives. Nestle runs on the decentralized system which means each country is responsible for the sale of products individually and does not depend on the main headquarters The motto of Nestle is to “Think globally- acting locally” which means that their products are made by keeping the whole world in mind but also interacts with the consumers at regional level (G, 2009). Corporate social responsibility is a concept of management in which companies incorporate societal and environmental apprehension when dealing with stakeholders and the operations of the business. Corporate social responsibility also known as CSR is the method with which the company achieves equilibrium between the environmental and economical sectors, in other words this is known as the Triple Bottom Line Approach. Along with this the company also responds to the stake holders and share holders expectations. If one wishes to promote the CSR within a company it is also important to review the company’s needs and their capacity to incorporate CSR in the company so that it does not affect their economic feasibility. If CSR is properly incorporated within a company then it gives the ability to the company to gain several advantages like increased in flow of investments, higher sales and profit ratio, systematic human resource base, a better and much improved image of the brand and development of good reputation, the ability to make good decision to avoid any risky management or processes (Unido.org, n.d.). A stakeholder is someone who takes an interest or may influence the decision making processes of the company. Stakeholders may be internal such as employees or shareholders or External stakeholders such as suppliers, consumers or the area where the business runs. Because Nestle is one of the leading multinational companies therefore it is also important to acknowledge their responsibilities since their products are distributed to many countries such as the poor countries of the world. According to nestle, a company should create value for society in order to gain success in their long term plans. This is called Creating shared values. Creating shared values is a very important process as to how nestle does their business. It is in acquiescence to the international laws and regulations. The basic aim of this is to create innovative and better value for the society and shareholders. The company creates their impacts directly at the foundation that is nutrition, water and development of rural areas (Businesscasestudies.co.uk, n.d.). Chairman and CEO of Nestle believes that CSR is not something that is forcefully imposed but it is an integral part of the company and also a component of the business strategy (Fsg.org, n.d.). Nestle is the ranked the top ten companies on the list of CSR, this survey included 41 countries. Nestle is also among the top 10 leading companies who scored a score greater than 90 out of 100 (Nestle.com, 2013) Nestle was involved in several unethical scams and scandals which tarnished its image temporarily. One example of unethical behavior is the marketing process of the Nestle S.A. where they sold infant formula to various hospitals and to new mothers claiming that this infant formula is better than breast feed. Those who sampled the formula were then unable to breast feed and because of the lack of literacy and with poverty on the rise in this region the formula was misemployed a lot. The mothers were not taught how to feed their infants properly, as result of illiteracy and ignorance the mothers did not sterilize the nipples and bottles and hence the infant formula was prepared in unhygienic conditions. Making of the formula was also affected because mothers added large quantity of water which allowed the formulation to destroy and bacteria to grow. This news spread like wild fire which initiated the boycott to Nestlé’s products which resulted in decreased sales (Brady, 2011). Nestle is also involved in a scandal according to which the beef meat was replaced with horse meat in countries like Britain and was later spread to Ireland and gained tempo all over Continental Europe. Nestle tested their products and discovered horse meat in British food whereas Germany contained traces of horse meat. This resulted in consumers questioning the reliability of Nestle products. The scandal caused decreased sales for the company because of the increased amount of recalls. This scandal was categorized as a fraud involving mislabeling. Apart from this, another rumor that spread about the company said that there was significant evidence that proved the presence of phenyl butazone in the food. Nestle has increased its food testing in Europe (Castle, 2013). A Swiss civil court on 25th January 2013 found out that a multinational company Nestle and a security company Securitas AG were found guilty to spy on an NGO ‘Association for the Taxation of Financial Transactions and Aid to Citizens (ATTAC). The court gave its decision and asked each of the companies to pay 3,000 Swiss Francs. ATTAC is also an international organization which regulates the financial markets, cancellation of debt for the developing countries. Nine of the individuals from ATTAC had filed complaints against Nestle which was broadcasted on TV channel (Frontlinedefenders.org, 2014). In 2005, A worker of Nestle company and a union member in Columbia was murdered by Pararamilitary forces seven years ago. However, the European Center for Constitutional and Human Rights in Berlin (ECCHR) and Sinaltrainla, the Colombian trade union for the food industry blamed Nestle for the murder and pressed charges against the company. The reason behind this was due to lack of security protection given to the employee (Zumach, 2012). Another employee of Nestle, a food safety expert filed a case against Nestle on 15tht May 2012, after facing four years of abuse for reporting mismanagement in food safety. She told the court that she had informed the upper level managers regarding various issues of concern but every time she was turned down by them which is why she ultimately she had to file charges for moral and psychological harassment (multiwatch.ch, 2012). Nestle also made the headline when it sued Ehtiopia when it was in the midst of its worst drought and is considered as the World’s poorest countries. The rason behind pressing the charges was to ask for compensation by the Ethiopian Livetock Development Company (Eldico). Nestle reached a settlement over the issue and received $1.5 million with Ehtiopia, this was the maximum amount the government could afford (N, 2014). References G, N. (2009). Introduction: Nestlé Was Founded in 1866 by Henri Nestlé And. Scribd.com. Retrieved 7 March 2015, from http://www.scribd.com/doc/21544545/Introduction-Nestle-Was-Founded-in-1866-by-Henri-Nestle-And#scribd Unido.org,. What is CSR?. Retrieved 7 March 2015, from http://www.unido.org/en/what-we-do/trade/csr/what-is-csr.html Businesscasestudies.co.uk,. Corporate Social Responsibility - Creating shared value in the supply chain - Nestlé | Nestlé case studies, videos, social media and information | Business Case Studies. Retrieved 7 March 2015, from http://businesscasestudies.co.uk/nestle/creating-shared-value-in-the-supply-chain/corporate-social-responsibility.html#axzz3TdtiiVk4 Fsg.org,. The Nestlé concept of corporate social responsibility as implemented in Latin America. Retrieved 7 March 2015, from http://www.fsg.org/Portals/0/Uploads/Documents/PDF/Nestle_Corporate_Social_Responsibility_in_Latin_America.pdf?cpgn=WP%20DL%20-%20The%20Nestle%20Concept%20of%20CSR%20as%20Implemented%20in%20Latin%20America\ Nestle.com,. (2013). Nestlé tops global corporate responsibility survey. Retrieved 7 March 2015, from http://www.nestle.com/media/newsandfeatures/kpmg-corporate-social-responsibility Brady, D. (2011). Essentials of international marketing (p. 345). Armonk, N.Y.: M.E. Sharpe. Castle, S. (2013). Nestlé Removes 2 Products in Horse Meat Scandal. Nytimes.com. Retrieved 7 March 2015, from http://www.nytimes.com/2013/02/20/world/europe/nestle-pulls-2-products-in-horse-meat-scandal.html?_r=0 Frontlinedefenders.org,. (2014). Switzerland: Nestlé and Securitas AG Spied on NGO ATTAC | Front Line. Retrieved 21 March 2015, from http://www.frontlinedefenders.org/node/21523 Zumach, A. (2012). Nestle under fire over Colombian murder | Europe | DW.DE | 27.08.2012. DW.DE. Retrieved 21 March 2015, from http://www.dw.de/nestle-under-fire-over-colombian-murder/a-16195009 multiwatch.ch,. (2012). Food safety expert takes Nestlé to court after 4-year long abuse for reporting mismanagement in food safety. Retrieved 21 March 2015, from http://www.multiwatch.ch/cm_data/PR_text-Final_15_05_2012_final.pdf N, N. (2014). Real-World Examples of Bad Business Ethics: Companies You Know. Bright Hub. 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