Nestle's Business Ethics
Ronald David Johnson Jr.
Nestlé’s Business Ethics
Many transcontinental corporations take the classical view of corporate social responsibility (CSR) by focusing on their main objective of maximizing their profits rather than focusing on both profits for the company and the welfare of society. Taking this view can taint a corporation’s reputation as often times bad decisions in business ethics are the result. The Nestlé Corporation ruined its reputation among its customers over thirty years ago as a result of taking the classical view of social responsibility. Since that time, the company has invested much of its resources in gaining back its reputation among both society and its consumers.
Nestle is by far a transcontinental corporation. The company is the number one food company in the world and also a world leader in coffee. Nestlé brands more than 8,500 products. (Nestlé Corporation 3-6) The company was founded in 1867 by a Swiss Pharmacist named Henri Nestle who developed the first infant formula. Today 50% of the world’s infant formula is produced by Nestlé. (www.Nestle.com)
What did Nestle do wrong in ruining its reputation of being a corporation upholding corporate social responsibility? In the late 1970’s and in the early 1980’s, the company was condemned by health agencies around the globe for its marketing of infant baby formula in third world countries. Nestlé’s marketing campaign conveyed the message that their formula was better for babies instead of a mother’s own milk. The company provided free samples of their formula to new mothers in these countries causing them to become dependent on the formula. Nestlé was greatly criticized by the public for not teaching mothers in third world countries the importance of sterilizing formula bottles. This resulted in cases of severe diarrhea and dehydration of infants, often killing them. (McCoy et al. 3) In addition, after mothers continued to use Nestlé’s infant formula, the mother’s milk would
Nestlé’s Business Ethics
Many transcontinental corporations take the classical view of corporate social responsibility (CSR) by focusing on their main objective of maximizing their profits rather than focusing on both profits for the company and the welfare of society. Taking this view can taint a corporation’s reputation as often times bad decisions in business ethics are the result. The Nestlé Corporation ruined its reputation among its customers over thirty years ago as a result of taking the classical view of social responsibility. Since that time, the company has invested much of its resources in gaining back its reputation among both society and its consumers.
Nestle is by far a transcontinental corporation. The company is the number one food company in the world and also a world leader in coffee. Nestlé brands more than 8,500 products. (Nestlé Corporation 3-6) The company was founded in 1867 by a Swiss Pharmacist named Henri Nestle who developed the first infant formula. Today 50% of the world’s infant formula is produced by Nestlé. (www.Nestle.com)
What did Nestle do wrong in ruining its reputation of being a corporation upholding corporate social responsibility? In the late 1970’s and in the early 1980’s, the company was condemned by health agencies around the globe for its marketing of infant baby formula in third world countries. Nestlé’s marketing campaign conveyed the message that their formula was better for babies instead of a mother’s own milk. The company provided free samples of their formula to new mothers in these countries causing them to become dependent on the formula. Nestlé was greatly criticized by the public for not teaching mothers in third world countries the importance of sterilizing formula bottles. This resulted in cases of severe diarrhea and dehydration of infants, often killing them. (McCoy et al. 3) In addition, after mothers continued to use Nestlé’s infant formula, the mother’s milk would
Bibliography: Bentley, Stephanie. Nestlé Chief Fights Back Over Ethics Ruling Marketing Week, February 18, 1999. Hoffman, Michael W. and McNulty, Robert E. International Business, Human Rights, and Moral Complicity: A Call for a Declaration on the Universal Rights and Duties of Business. Center for Business Ethics at Bentley University. Blackwell Publishing, 2009. McCoy, Charles et al. Nestlé and the Controversy Over the Marketing of Breast Milk Substitutes. Council for Ethics in Economics, 1995. Nestlé.com 10. Oct. 2011 http://www.nestle.com/AboutUs/History/Pages/History.aspx The Nestlé Concept of Corporate Social Responsibility Nestle Corporation, 2011. Toenjes, Richard H. Why Be Moral in Business? A Rawlsian Approach to Moral Motivation. Business Ethics Quarterly, Vol. 12, Issue 1, 2002.