The Nestle Infant Formula Controversy - Book Report/Review Example

The Nestle´ Infant Formula Controversy Contents Contents 2 Introduction 3 Infant Formula Controversy 3 Conclusion 6 Work Cited 7 of the Name of the Professor Course Number Date The Nestle´ Infant Formula Controversy Introduction In the modern era, the scope of antitrust practices of the giant corporate organizations has significantly increased across all marketplaces. The contemporary business firms often rely on unfair trade practices to serve its vested interest in the market. This article throws light in the consumer boycott principle undertaken by the company of Nestle for marketing infant formula in all the third world countries during 1970. The concerned case of the company became a famous case of ethics in the business world. The article tried to analyze the extent up to which contemporary business organizations like Nestle, practices unethical behavior in business dealings, for grabbing greater opportunities in the industry. The company of Nestle was found to unethically instigate the mothers to use its infant formula instead of breast feeding their newly born babies. However, according to the World Health Organization, this was unethical because use of infant formula for feeding children could cause several health related hazards (Boyd 283-293). Infant Formula Controversy During 1960, social activists in the markets started to criticize the giant organization of Nestle for its unethical means of marketing in third world nations, adopted for sale its milk product (powered milk for infants). The company was found to be a victim in a very organized boycott campaign. The case became popular in the world of business studies because it elaborated the necessity of legitimacy to be incorporated in the activities of the corporate organizations in public domain (Boyd 283-293). It was stated in the article that the company of Nestle distributed free samples of infant milk powder to the several maternity units in third world countries, under its infant formula marketing program. However, the distribution task was executed by the sales representatives of the company, who were dressed as quasi-medical personal. The marketing of the product was unethical as it persuaded the mothers of the maternity units to feed their children on infant formula instead of breast milk. It was claimed by the social activists that if at all the mothers started to use infant formula and then in the later stage they would not be able to change their purchase decision in future (Boyd 283-293). Rather the critics stated that if the children were given infant formula instead of breast milk then they could die due to three reasons. Babies would tend to lose their immunity and would catch more communicable diseases. This is because infant formula does not contain the essential antibodies that are very much present in breast milk. Infants could very easily catch severe diseases if the infant formula was prepared with contaminated water instead of boiled pure water. Mothers often could not completely afford to purchase the expensive infant formula in many situations. Under such circumstances the mothers provided diluted formula to the babies and hence carved the way for future malnutrition. The company tried to sustain its brand image in the market through use of several business damage control techniques. The company appointed Ernest Saunders to fight the criticism against its brand raised by the World Health Organization (WHO). The company offered a sum of $25000 to the Washington Research Centre for financing the publication of a magazine of Fortune written opposing the view of the WHO campaign (Boyd 283-293). However, the article of fortune could not irradiate the poor image of the company in the market. The ill reputation of the company generated a boycott campaign against it. However, in the later stage the organization though Saunders tried to negotiated with W.H.O. Ultimately the boycott against the product of the company was ended in 1984 (Boyd 283-293). With the assistance of Saunders, the company of Nestle could recover its business from the infant formula issue. Moreover, Saunders was also responsible for introducing several new nutritional product lines of the company and the target customers of such products were vulnerable population of the less developed economies across the globe. However, many researchers claimed that some of the senior officials of the company of Nestle were responsible for making the organization practice such a grave error in business ethics. It was stated in the article that though the company of Nestle resolved the ethical controversy with the assistance of Saunders but still its corporate culture was completely ruined due to 7 years of commodity boycott and 10 years of business controversies (Boyd 283-293). It was claimed that all the stakeholders of its business were affected from negatively due to this arising controversy. Especially the turnover and morale of the employees were severely affected due to the controversy. The costs that the company needed to bear for resolving the controversy was so high that it negatively influenced the company’s other business decisions and activities. However, it was analyzed that the company’s senior management team was highly efficient in nature. Right from the beginning, they were extensively keen to resolve any sort of upcoming business problems of the company. The unfair marketing means infant formula for an industry wide practiced initiative. However, the social activists kept their focus only on Nestle because it was the leading business corporation in the concerned industry (Boyd 283-293). Conclusion It was stated in the article that infant formula controversy was actually subjected to the entire infant formula industry but not on one organization namely Nestle. The action of Nestle became famous in the business world but this unfair marketing practice was actually executed by many other companies in the industry. The article clearly examined the unethical behavior conducted by Nestle under the regime of the controversy. However, it should be noted that the article failed to analyze the impact of Nestlé’s unethical business practice on the rest of the companies of the industry (Boyd 283-293). However, it should be noted that article indirectly analyzed the value of an efficient worker for an organization. It was almost not possible for Nestle to overcome all the business issues without the string strategic actions undertaken by Saunders. It would be correct to conclude that under the operations of Saunders, Nestle after the controversy launched several new nutritional products for the vulnerable population in the third world nations. However, such initiatives were undertaken by the organization to expose its high corporate social responsible attribute in the market. The programs were commenced by the company to enhance its brand value in the economy (Boyd 283-293). Work Cited Boyd, Colin. “The Nestle´ Infant Formula Controversy and a Strange Web of Subsequent Business Scan.” Springer Science+Business Media, 106, (2012): 283-293. Read More