The multinational business and ethical responsibility are parallel topic. Nestle faced with the rising of consumer boycott which came to be a broadly issue in case of business ethics. This essay extends three specific ethical issues of excessive price of bottled water which provided quality as similar as tap water and should not be placed value by money, child labours in cocoa supply chain that are threatened by hard job tasks and low wage, and powdered breast-milk formulation which is impractical for uneducated mothers and leads to the number of infant death in poor countries. Those ethical dilemmas are approached by Nestle responsibility. It reveals that Nestle deals with those difficulty issues through CSR program which this company could protect and achieve brand image at the same times. The essay offers some possible future actions which are related to international business management theories to prevent unethical problems happening in the future.
Nestle is the one oldest multinational businesses which was established in Switzerland since 1866 by a Swiss pharmacist, Heinrich Nestle. He developed a milk food formula for infants. This company had gone in many name changes from 1866 to 1947, and the last name Nestle has used since 1977. There are eleven categories such as Baby Foods, Sports Nutrition, Chocolates, Waters, Coffee, Beverages, Frozen Meals, Ice Cream & Frozen Treats, Imported Foods, Healthcare Nutrition, and Pet Foods. Base around the world is in 83 countries 461 factories, and 45% of all factories are approached to settle manufacture in developing countries where include 48% of employees (Nestle 2010). In this essay, it will be evaluated that Nestle has faced with ethical issues in three product segments of unethical water supply, child labor in cocoa supply chain and breast powdered-milk boycott which this firm has some keys to dealing with those challenges. Moreover, this essay will be provided about further improvements which are implied to international business management theories.
The multinational company such Nestle, agricultural raw material in particular milk, coffee, cereals, vegetables, cocoa, or spices through farmers or trade channels directly. Nestle has provided technicians to improve production quality, output and efficiency. Those technical assistances have observed the sustainable development of domestic fresh milk and coffee production, for instance; they have to improve yield and quality of coffee farms in China as similar as in Indonesia, Mexico, the Philippines and Thailand (Nestle 2006). According to Nestle (2012), it enhances with highly successful with innovative organic growth. There are seven brands which get high sales volume and the percentage each brand is as below. NestcafeNestleNanMiloNestpressoNestle Pure lifeNestle NidoMaggiTotal 11%18%13%22%11%11%10%7.7%
In the role of multinational business and corporate social responsibility (CSR), Nestle has chosen corporate strategy to handle business and society together and changed CSR to the concept of Shared Value Creation. Those activities are improved skills and job stability of employees, improved life quality of consumer and greater stability of economic and social development. Alby (2012) mentioned that every Nestle segment contributes with their own CSR projects, and those use the same theme of Shared Value Creation. Goals of this project are to wipe out extreme poverty and hunger, achieve global primary education, push gender equality and empower women, decrease child fetality, improve mother health, fight with HIV/AIDS, Malaria and others, certify environmental sustainability, and progress global partnerships. Challenge Issues and Current Actions
Since Nestle founded, this company has confronted with numerous human rights and ethical issues while expanding a new section of bottled water to global market,...