Fonterra as a Socially Responsible Company

Topics: Social responsibility, 2008 Chinese milk scandal, Milk Pages: 6 (1884 words) Published: October 10, 2014
Executive summary
Fonterra is a co-operatively owned multinational dairy company and also New Zealand’s largest company. The purpose of this report was to determine the company’s public image as well as investigate whether the company operates in a socially responsible manner. An analysis of various instances in which Fonterra has appeared in the media was conducted with the perspectives on corporate social responsibility in mind. The conclusions were that the public image of the company has been tainted as a result of ineffectively attending to crisis and not demonstrating sufficient initiative in socially responsible activities, as well as that the company is yet to be a truly socially responsible company. Introduction

This report aims to determine Fonterra’s public image, and whether it operates as a socially responsible company. A socially responsible company is one that “has obligations to society beyond the pursuit of profits” (Bovée & Thill, 2013, p. 75). Through the analysis of past instances in which Fonterra has appeared in the media, specifically the Sanlu melamine scandal, the Milk for Schools program and the latest botulism milk scandal, the ways in which the company has been positively recognized as well as criticized from the perspective of corporate social responsibility will be identified. The analytical concept used in the discussion is the perspectives on corporate social responsibility, which considers whether a company has taken a minimalist, cynical, defensive or proactive approach to corporate social responsibility (Bovée & Thill, 2013). The report will then present conclusions on whether Fonterra operates as a socially responsible company and how it is perceived by those outside of the company. Discussion

The public image of Fonterra and whether it operates as a socially responsible company are considered in relation to the perspectives on corporate social responsibility. The measures Fonterra took in handling past instances where it has appeared in media have all contributed to how the company is perceived in the public eye. It is important for a company such as Fonterra to consider the significance of corporate social responsibility as fulfilling its social responsibilities will enable it to be viewed in a favorable light by the public and improve its public image, especially in a society where media is becoming increasingly prevalent. Sanlu Melamine Scandal

In 2008, high levels of melamine were found in powdered baby milk and other dairy products produced by Sanlu (a company in which Fonterra owned 43% of shares) in China, which resulted in the death of several infants and the hospitalization of many more (“Timeline: China milk scandal”, 2010). Although appropriate, Fonterra’s response to the crisis received criticism from the media for being “too late” (Van, 2008), implying that the company was inefficient in handling the crisis. The company was also criticized for obeying local rules instead of following principles when human lives were at stake (Van, 2008), which suggests the company was more concerned with its legal responsibilities instead of ethical ones. While fulfilling its legal responsibilities is important, how a company meets its ethical responsibilities is what distinguishes a socially responsible company from an average one. Ethical responsibilities apply to Fonterra in this case as it was important for the company to “prevent ethical norms from being compromised in order to achieve corporate goals” (Carroll, 1991). The company did not meet these expectations in dealing with the melamine crisis, as they favored local rules over the ‘right’ thing to do and did not consider the best interest of those affected by the situation. Fonterra’s further action of donating $8.4 million to set up a rural maternity and infant community healthcare program in China was met with mixed reactions by the public. New Zealand farmers felt that the good...

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Carroll, A. B. (1991). The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders. Business Horizons, 34(4), 39-48. Retrieved from Business Source Premier
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ROTHERHAM, F. (2011, December 24). Fonterra milks the public relations. Waikato Times. p. B4. Retrieved from Australia/New Zealand Reference Centre
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