Methodist Pilley Institute(in collaboration with UCSI)Bachelor in Marketing Unit: Management EthicsUnit code: BB219Assessment type: Group Assignment (30%)Names of students and IDs: Jocelyn Yu Wen Wen 1001851174Yew Tii Hui 1001851189Wong Huong Nie 1001851186Sia Kee Hong 1001851183Lecturer & Tutor: Dr Linda HiiDate submitted: 31/7/201830Mark:Table of Contents TOC o “1-3” h z u 1.0 Company background and type of business it is in PAGEREF _Toc520658268 h 32.0 Stakeholder Analysis PAGEREF _Toc520658269 h 43.
0 The moral obligations of the organization towards the society – discuss and review its current practices in terms of how it is fulfilling its moral obligations. PAGEREF _Toc520658270 h 64.0 Its Corporate social responsibility (CSR) PAGEREF _Toc520658271 h 81.
0 Company background and type of business it is inNestlé Company had started off from a single man’s idea, and developed into a giant corporation. Henri Nestlé is a man who created one of the first infant foods in 1867; in order to the meet the demand for healthy and affordable products to replace those who cannot breastfeed the baby’s mother CITATION His l 1033 (History, n.d.). In 1905, the company he founded merged with the UK-Switzerland to form what is now called the Nestlé Group CITATION Thend1 l 1033 (The Nestlé company history, n.d.
).Nestlé is the world’s largest food and beverage manufacturer. Nestlé headquartered in Switzerland, Nestlé is present in 191 countries around the world and they have more than 2000 brands ranging from global icons to local favourites. Since 1912, Nestlé have been nourishing Malaysians through their quality brands and products such as milo, maggi, nescafé and kitkat, while they also maintaining their halal excellence and integrity. This is consistent with their commitment to provide food and a better life to all CITATION Nes l 1033 (Nestlé (Malaysia) Berhad, n.
d.).The vision of Nestlé Company is to provide consumers with safe, quality food and provide optimal nutrition to meet physiological needs. In addition to Nutrition, Health and Wellness, Nestlé’s products also provide consumers with an important ingredient for taste and pleasure. The mission of Nestlé Company is to create better food and make people live a better life CITATION Ala10 l 1033 (Kolk, 2010).Nestlé’s goal is to improve the quality of life and contribute to a healthier future.
They want to help shape a better and healthier world. Besides that, they also want to inspire people to live healthier lives. This is how they contribute to society while ensuring the long-term success of their company CITATION Nes l 1033 (Nestlé (Malaysia) Berhad, n.
d.). They have defined three overarching ambitions for 2030 which guide their work and support the achievement of the UN Sustainable Development Goals. First, they want to help 50 million children live healthier lives.
Besides that, they also help to improve 30 million livelihoods in communities directly connected to their business activities. Last, they strive to achieve zero environmental impact in their operations CITATION Nes l 1033 (Nestlé (Malaysia) Berhad, n.d.
).2.0 Stakeholder AnalysisStakeholder is a person, group or organization that has interest or concern in an organization. Primary stakeholders are those whose continued association is absolutely necessary for a firm’s survival.
Secondary stakeholders are do not typically engage in transactions with the firm and are not essential to a firm’s survival.The Nestlé global stakeholder network is very broad, ranging from people they regularly pass through their business activities to the people who influence the public positions of their activities. Nestlé believes that the following groups are the foundation of their continuing business success CITATION Nes18 l 1033 ( Nestlé CWA, 2018).The primary stakeholders of Nestlé Company are customers, employees, shareholders, suppliers, community and Government. For example, Nestlé are working with retailers and food service providers to create an environment that promotes healthy eating and lifestyle to customers.
Long-term cooperation with strategic partners may include encouraging information on stores and online healthier choices, providing healthier options at checkout, and responsible marketing communications for parents and caregivers CITATION Nes18 l 1033 ( Nestlé CWA, 2018). Their Global Employee Satisfaction Survey “Nestlé and Me” contains six questions that are used to assess the treatment their employees treat them. They recently included their quality survey document in this company-wide employee survey, which currently covers approximately 62,000 employees to help improve the quality of the entire business CITATION Nes18 l 1033 ( Nestlé CWA, 2018).
To keep shareholders and others in the investor community informed, they publish annual reports, corporate governance reports and Nestlé society – creating shared value and fulfilling their commitment reports. They also reported half-year financial results, including sales summary for three-month and nine-month results, and regular press releases and presentations. Their event calendar includes their annual conference and annual investor seminar CITATION Nes18 l 1033 ( Nestlé CWA, 2018).Through the Nescafé program, they helped smallholder coffee farmers in Lampung Province of Indonesia to increase productivity and quality of Robusta coffee.
By 2016, 676 Farmer Field Schools trained approximately 20,000 farmers to work in good agricultural practices CITATION Nes18 l 1033 ( Nestlé CWA, 2018).Since 2009, they have worked with community stakeholders in the Mossel Bay area of South Africa to mitigate the effects of drought. Through their holistic approach to water management, they provided water for dairy farmers and began to address water quality issues in local lagoons. Their factory in the area will also become a zero water facility in 2017 CITATION Nes18 l 1033 ( Nestlé CWA, 2018).Feed the Future is a US government initiative to develop public-private partnerships to address the root causes of hunger and poverty. They signed a partnership in 2016 to support its Climate Smart Cocoa project, through which smallholder cocoa growers in Ghana and Côte d’Ivoire can learn about agricultural practices to offset the challenges of climate change CITATION Nes18 l 1033 ( Nestlé CWA, 2018).
The secondary stakeholders of Nestlé Company are trade association and Non-governmental organizations (NGOs). Since its inception, Nestlé has been active in the International Special Dietary Food Industry (ISDI), which promotes the high standards of production and trade of special dietary foods CITATION Nes18 l 1033 ( Nestlé CWA, 2018).In recent years, they have contributed to the world’s animal protection by contributing to the stakeholder consultation process for the Agricultural Animal Welfare Business Benchmark (BBFAW) and providing global metrics for food company animal welfare standards. Representatives of non-governmental organizations also supported their training of auditors on animal health and welfare issues and are helping to develop plans to expand their use of free-range eggs CITATION Nes18 l 1033 ( Nestlé CWA, 2018).
3.0 The moral obligations of the organization towards the society – discuss and review its current practices in terms of how it is fulfilling its moral obligations.Morally, Nestlé’s moral obligation is to consider the impact of the product before placing it on the market. In marketing, the product market can be subdivided, especially in this case, the basic needs should apply to everyone. As long as the quality is not affected, the company is required to produce products that are affordable in third world countries.
Management should focus on public issues CITATION mcand l 1033 (mcaby, n.d.).The relationship between business interests and the community is very awkward. Contact with the community is often seen as philanthropy and not necessarily at the heart of a “real” business.
There is a natural tension between profit motives and social influences. However, when we think that companies are sitting in a wider community and relationships are interdependent rather than independent, there are good reasons to put social strategy at the top of the company’s agenda. Corporate ethical obligations are not separated from profit maximization goals. They go hand in hand and, if utilized, can produce strong results. For those who do the right thing, the reward lies in competitive advantage and lasting business value.
This is mainly a business idea CITATION PHI11 l 1033 (PRESTON, 2011).Nestlé is one of the world’s largest chocolate producers, and the company said it will work with the Fair Labor Association (FLA) to address this issue. The company said in a statement that the FLA will check Nestlé’s cocoa supply chain in Ivory Coast in January. Critics ask if Nestle knows that children are involved in their cocoa production, why Nestle is taking action now.
Nestlé and the world’s other largest chocolate producers signed an international commitment to end the child labor agreement in the cocoa industry 10 years ago CITATION Hum11 l 1033 (News, 2011). Second, Nestle and milk powder event. Nestlé is a Swiss multinational company accused of violating ethical marketing regulations and manipulating customers’ misleading claims about their milk powder. A new report released by the Change Market Foundation found that although the UN World Health Organization has banned, Nestlé believes that its milk powder is “closest”, “inspiration” and “examples of human breast milk in several countries” marketing(WHO). The study analyzed more than 70 Nestlé baby products in 40 countries and found that Nestlé often ignored its nutritional advice in advertising. In South Africa, the company uses sucrose in milk powder and promotes its Brazilian and Hong Kong formulas that do not contain sucrose “to keep babies healthy.
“In Hong Kong, it promotes its formula for milk powder to be healthier because they have no vanilla flavor. However, vanilla milk formula is sold elsewhere. Nusa Urbancic, director of the Changing Markets Foundation, told the Guardian: “We understand that the company manipulates the emotional response of consumers to sell a variety of products, but this behaviour is particularly unethical for the health of vulnerable babies” CITATION Art18 l 1033 (Neslen, 2018). Third, Nestle and the Poland Spring.
Officials in California have concluded that Nestlé has been bottling and selling water, but it has no legal right to use it CITATION Jer17 l 1033 (Francisco, 2017). According to the lawsuit, Nestlé’s Poland Spring Water Company allowed US consumers to try to pay a premium for ordinary groundwater drawn from the most populous area of Maine, rather than the company’s public springs. Although the Poland Spring said that its water bottle contained “100% natural spring water” from the depths of the Maine forest, the Federal Court of Connecticut filed a lawsuit on August 15 that the Nestlé Water North America Company had installed a well that did not meet US requirements.
water. The US Food and Drug Administration defines spring water. The lawsuit includes claims for breach of contract and fraud, as well as compensation for violations of state law, including New Jersey, New York and Massachusetts. In a statement, Nestlé Waters vowed to fight the lawsuit.
Nestle said: “Poland Spring is 100% spring water. It complies with the US Food and Drug Administration regulations on spring water. All state regulations stipulate spring classification standards, as well as all federal and state water collection, good manufacturing practices, product quality and labeling regulations. We are still confident in our legal status CITATION Sel18 l 1033 (Wang, 2018).
” Nestlé is a sample of the development of multinational corporations, and it is also a model of a hundred-year enterprise. This situation makes people think of ‘big business illness’.4.0 Its Corporate social responsibility (CSR)Corporate social responsibility means that companies are not only responsible for shareholders, but also for the impact of their actions on various stakeholder groups. In addition to promoting their own interests, companies are obliged to take action to protect and enhance the well-being of their stakeholders. Companies should protect the welfare of their stakeholders by avoiding the possible negative effects of their actions.
As for improving the welfare of stakeholders, companies can achieve this goal by bringing positive benefits to society CITATION Kha14 l 1033 (Khalidah Khalid Ali, 2014). Corporate social responsibility is an organization’s obligation to maximize positive impact and minimize negative impact on stakeholders. There are four levels of social responsibility which are economic, legal, ethical and philanthropic.
Economic is maximizing stakeholder wealth or value. Legal is abiding by all laws and government regulations. Ethical is following standards of acceptable behaviour as judged by stakeholders.
Philanthropic is giving back to society.For the environment, Nestlé Malaysia has carried out specific corporate social responsibility activities that benefit and influence both areas to promote sustainability. RILEAF is scheduled to launch in 2011 as a reforestation and palm oil sustainability initiative to strengthen relationships with local communities and oil palm small farmers. According to the Nestlé Social Report (2015), 484,580 trees have been planted since 2011, covering more than 2,300 hectares of degraded forests. This is related to medium and long-term strategic corporate social responsibility. As for the workplace, The Contact Community and Child Employee Volunteer Program or ROCKS is an active employee engagement that contributes to the community within the company’s initiative.
During Buka Puasa and Deepavali, Nestlé volunteers have the opportunity to participate in children’s books and toy collections, ROCKS anniversary exhibitions, fundraising fairs, school murals and children’s family visits. This is also part of the stakeholder perspective, which is part of the problem they need to solve as a company CITATION Ang16 l 2052 (Est, 2016).Nestlé is a leading Nutrition, Health and Wellness Company. As a responsible company, it has been involved in business activities since its inception, helping to improve the quality of life in its communities.
It focused on 3 areas which are nutrition, water and rural development.In terms of nutrition, Nestlé is changing its foods recipes by eliminating 75,000 tons of trans fat, 15,000 tons of salt and 638,000 tons of sugar in its products. Nestlé is the largest food fortifier for vitamins and minerals.
In September 2010, Nestlé announced that it will invest more than $500 million in the development of health and wellness products between 2011 and 2020. It created a wholly owned subsidiary, Nestlé Health Science, as well as a research institute, the Nestlé Institute for Health Sciences CITATION Bea13 l 1033 (Botezan, 2013).Besides that, there are 217 clean drinking water projects in South Asia that help to improve access and sanitation of more than 100,000 school children.
Nestlé has operated 489 water-saving projects in its factories, saving 6.5 million cubic meters CITATION Bea13 l 1033 (Botezan, 2013). For example, India is one of the world’s most water-stressed regions. Therefore, safe drinking water is a problem in many parts of the country. The company will focus on helping farmers reduce agricultural water use, raise awareness of water conservation, and provide water and sanitation CITATION Nes16 l 1033 (Nestlé India Limited, 2016).
Moreover, Nestlé works directly with 690,000 farmers who produce raw materials and 73% of their factories which are located in rural areas. Nestlé Cocoa Program, in 2012, more than 27,000 farmers were trained, 1.1 million factories were distributed worldwide, 12 schools were built or refurbished in Ivory Coast, and a cooperation agreement was signed with the Fair Labor Association to further assist them in eliminating the work of child labor CITATION Bea13 l 1033 (Botezan, 2013).