Fonterra Case Study
1.0 Introduction
As the world’s development continues the global market continues to thrive through trade and global business interactions. A major commodity traded globally is food. This has led to a persistent concern about food safety and regulating food quality throughout all stages of production in recent years (Iyengar, 2013). When this doesn’t occur it raises questions regarding government policies, corporate social responsibility (CSR) and multiple ethics issues. Recently this occurred in China with the adulteration of milk products. The company at the centre of this scandal was baby milk formula producer Sanlu, who were responsible for the death of six babies and the illnesses of a further 300,000 babies (China dairy products found tainted with melamine, 2010). As the new international marketing manager for Fonterra who had a 43% stake hold in Sanlu this report will analyse the ethical and CSR issues now facing Fonterra and provide insight into how Fonterra should approach rebuilding their image after this scandal.
2.0 Identification of Issues and Problems
As Fonterra attempts to move past this ethical dilemma of the milk scandal in China it is important to take note of CSR and the socially conscious consumer. In recent years CSR has become almost essential for global success as it strengthens public relations and improves reputations, creating a stronger brand image (Jhunjhunwala, 2014). These aspects of a company are now essential as the number of socially conscious consumers continues to grow. Mohr, Webb and Harris (2001) say companies are being pressured to be socially responsible by consumers. This is supported by Webster (1975) who found consumers now take into account the public consequences of their own consumption. Since Fonterra has been directly linked to the Sanlu scandal through their joint venture, consumers are now questioning the ethics Fonterra holds and whether purchasing Fonterra products is socially and ethically acceptable.
The
As the world’s development continues the global market continues to thrive through trade and global business interactions. A major commodity traded globally is food. This has led to a persistent concern about food safety and regulating food quality throughout all stages of production in recent years (Iyengar, 2013). When this doesn’t occur it raises questions regarding government policies, corporate social responsibility (CSR) and multiple ethics issues. Recently this occurred in China with the adulteration of milk products. The company at the centre of this scandal was baby milk formula producer Sanlu, who were responsible for the death of six babies and the illnesses of a further 300,000 babies (China dairy products found tainted with melamine, 2010). As the new international marketing manager for Fonterra who had a 43% stake hold in Sanlu this report will analyse the ethical and CSR issues now facing Fonterra and provide insight into how Fonterra should approach rebuilding their image after this scandal.
2.0 Identification of Issues and Problems
As Fonterra attempts to move past this ethical dilemma of the milk scandal in China it is important to take note of CSR and the socially conscious consumer. In recent years CSR has become almost essential for global success as it strengthens public relations and improves reputations, creating a stronger brand image (Jhunjhunwala, 2014). These aspects of a company are now essential as the number of socially conscious consumers continues to grow. Mohr, Webb and Harris (2001) say companies are being pressured to be socially responsible by consumers. This is supported by Webster (1975) who found consumers now take into account the public consequences of their own consumption. Since Fonterra has been directly linked to the Sanlu scandal through their joint venture, consumers are now questioning the ethics Fonterra holds and whether purchasing Fonterra products is socially and ethically acceptable.
The
References: Degategno, P. (2008, September 29). China, Land of tainted milk and honey. New Atlanticist. Retrieved from http://www.atlanticcouncil.org/blogs/new-atlanticist/china-land-of-tainted-milk-and-honey Dellios, R., Yang, X., & Yilmaz, N D 'Eon, J. (2013). Respond quickly when crisis strikes. Bottom Line, 29(11), 11-11,15. Retrieved from http://search.proquest.com/docview/1442712195?accountid=13380 Enderwick, P England, V. (2008, September 29). Why China’s milk industry went sour. BBC News. Retrieved from http://news.bbc.co.uk/2/hi/asia-pacific/7635466.stm Greyser, S Iyengar, V. (2013). Food Safety Measurement Issues: way forward. Journal of Radioanalytical and Nuclear Chemistry. Retrieved from http://link.springer.com.ezp01.library.qut.edu.au/article/10.1007/s10967-012-2407-5/fulltext.html Jhunjhunwala, S Keck, F. (2009). The contaminated milk affair. China Perspectives, (1), 88-93. Retrieved from http://search.proquest.com/docview/1494686286?accountid=13380 Lau, F O’Sullivan, F. (2009, January 7). Sanlu scandal still tripping up Fonterra. The New Zealand Herald. Retrieved from http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10550729 Rashid, M Webster, F. (1975). Determining the Characteristics of the Socially Conscious Consumer. Journal of Consumer Research, pp. 188