Introduction
Over its history, Nestlé has faced numerous scandals; selling infant formula, especially in developing countries, was central to a heated debate. The lack of clean water was the first issue. People resorted to boiling drinking water since many individuals, particularly in Africa, lacked a source of clean water (Shah et al., 2020).
Many mothers, especially those with lower levels of education, were unaware of the ensuing risk. They continued to put their children in danger by diluting the infant formula with dirty water. Nestlé ignored this information and continued encouraging mothers to take the formula despite knowing the risks. Among the major considerations for a baby, especially in dirty places, that was disregarded is breastfeeding.
Nestlé advertised its infant formula as the closest thing to breast milk globally. The company affirmed that infant formula is a splendid accomplishment of care and science, and so, like mother’s milk, small stomachs will not recognize the difference (Johnson, 2020). However, the tiny baby’s stomach did take note of the change. Some underdeveloped countries raised concerns about the safety of the company’s bottled water brand. This paper compares and contrasts worldwide ethical concerns to conclude the company’s issues and the steps to address them. A critical reflection on the company’s problem-solving strategies is included in the research. The study considers what managers may do to avoid repeating the same mistakes in the future.
Ethical Issue
Since it participates in unethical business practices like human trafficking, forced labor, and the exploitation of semiliterate mothers in underdeveloped nations, Nestlé is presumably one of the most crooked organizations in the world. The management of Nestlé Company caused a stir when they tried to expand sales of an infant formula brand in developing countries. Organizations opposed to Nestlé’s plan voiced worry about the company’s plan to give infant formula to breastfeeding women as a replacement for breast milk (Shah et al., 2020).
Nestlé has been taking freshwater from Michigan, which the residents of Flint sorely need, and siphoning out 200 gallons at a time. There have been 12 fatalities and 87 injuries related to the crisis in Flint, Michigan. Nestlé has been profiting unethically while the people of Flint have been living in continual chaos, worried about how to put food on the table.
Groups said that newborns in impoverished nations were being put through unnecessary pain and death because they were being fed infant formula instead of breast milk, so they called for a worldwide boycott of the corporation and its goods. The anti-Nestle groups are adamant that there is no substitute for breast milk. They claim that Nestlé deceives moms to increase their revenues.
The World Health Organization was only one of many international institutions that rallied to support a worldwide boycott of Nestlé’s baby formula alongside the protest groups (Johnson, 2020). The arising issues are about what is more efficient than what is legal. The fact that Nestlé knows about the use of child labor but does nothing to stop it speaks volumes. The Nestlé case exemplifies the age-old debate between appearance and reality. They try to present a clean and professional front, but a closer inspection of their business methods renders the opposite true.
Facts
Nestlé was not held criminally liable for the mistreatment and deaths of children trafficked and compelled to labor on plantations, even though the company was aware of the problem. Nestlé controls most of the water market and charges exorbitant fees for their product. This is a significant challenge for moms in these developing nations.
Baby formula is intended to be mixed with water; there is a terrible predicament because Nestlé has two items that need each other (Shah et al., 2020). Due to their low income, many families cannot afford official and safe drinking water. They are forced to prepare the formula with dirty water because they do not want their infant to die. There is enough information to build up from the case, and extensive research is not necessary. Management at Nestlé ignored the moral issue when they approved the dubious promotion of their infant formula.
There are significantly more infrastructure and development problems in the less developed nations than in the developed world. A lack of access to reliable refrigeration services, poor sanitation, and contaminated water plague these regions. The administration acted unethically by pushing bottle feeding as the best option for moms and infants in developing nations.
Due to a lack of proper sanitation facilities, mothers were more likely to use unclean water to prepare infant formula (Johnson, 2020). Due to the high poverty rates, mothers were more inclined to dilute the baby formula to make it last longer. The babies would be at risk since the over-dilution of the infant formula would reduce its nutritional value and increase the likelihood of diarrhea.
The continuous use of bottles, encouraged by Nestlé’s promotion of substitute baby feeding, poses a risk of undermining mothers’ breastfeeding ability. The crushing poverty raised the stakes for mothers providing their infants with less nutritious food replacements. Since the bottles were readily available, the mothers could quickly fill them with anything, regardless of their nutritional worth. The management at Nestlé did not give a damn about the risks their feeding bottles brought to newborns in developing nations (Shah et al., 2020). While this would not be a significant deal in the wealthy world due to higher living standards and better infrastructure, it posed serious risks for those in the developing world.
Nestlé’s intense promotion of the baby formula revealed the company’s intense focus on growing its bottom line. The company’s leadership was only interested in increasing revenues across its global market rather than in the well-being of its customers (Johnson, 2020). In addition, management approved of one of the most ethically questionable forms of advertising: sending ‘milk nurses’ to maternity hospitals to pressure new mothers into giving their infants the company’s infant formula.
The so-called ‘milk nurses’ were not registered nurses; they were Nestlé salespeople posing as health professionals. This action highlights the company’s unethical management practices. The corporation was aware that it had misled its clientele. Therefore, it had to disguise its salespeople as nurses to keep the business a secret. I would adopt the applied ethics moral philosophy in this situation since it denotes the practical facet of ethical deliberations.
Alternative Actions
The Utilitarianism principle, which seeks to foster happiness and pleasure instead of pain, can contribute to Nestlé’s upholding ethical practices such as ending forced labor and engaging in genuine marketing approaches. After more than a century in business, Nestlé has likely exhausted all possible approaches. Globalization, aiding developing nations’ economies and environmental consciousness, and forming successful cooperative ventures have contributed to Nestlé’s success.
Nestlé should avoid doing things doomed to fail if it wants to enhance its ethical procedures (Shah et al., 2020). A competent management group will consider whether their plans could backfire, like the infant formula, bottled water, and child labor scandals. They should have foreseen that this could lead to shady dealings and prepared accordingly. The stakeholders impacted by Nestlé’s decision include its employees, clients, partners, cocoa farmers, and shareholders. Nestlé should rally governments, NGOs, and other actors in the industry to enhance the quality of life of cocoa-farming households and provide children with the opportunity to learn and grow in a safe and healthy environment.
Nestlé needs to spend more money on research and development to introduce new items and improve the quality of its products. Nestlé, founded to meet infants’ nutritional needs, should include calcium and other essential nutrients in their products to satisfy the needs of both children and their mothers. The fitness of infants is dependent on the health of their mothers; thus, this is where they should begin (Johnson, 2020). Nestlé should keep up the cooperation initiatives to provide them a competitive edge. Yet they should refrain from doing business with firms that buckle under the weight of the market and the scrutiny of rivals. They need to pick competent companies that have shown signs of promising performance.
International businesses should take into account ethical management and conduct. As different countries have distinct cultures, beliefs, development levels, norms, and social behaviors, it is crucial that multinational corporations think about ethics before making managerial decisions. It is important to remember that what one culture sees as morally acceptable may be seen as unethical in another.
The legal compliance that needs to be followed ensures the satisfaction of every individual with the right to life. Nestlé’s marketing of infant formula could have gone more smoothly if the company had given more thought to the role of ethics and legal compliance in marketing (Shah et al., 2020). The business approved the action because it saw no other way to make so much money so quickly, regardless of the moral or legal implications. In the bottled water crisis, Nestlé again did not practice the significance of ethical advertising. The company’s advertising campaigns give the impression that it will stop at nothing to increase its revenues, including deceiving potential buyers.
Decision
Nestlé needs to look out for the interests of its employees and the public by providing a secure workplace. The corporation should weigh the distributive justice theory against alternative options before making any decision. Distributive justice is likely to improve under transformative leadership practices (Shah et al., 2020). Therefore, transformational leadership should apply the idea of distributive justice when making decisions. Employees who work in dangerous conditions, clients, and youngsters subjected to forced labor are all involved in the decision-making process (Cardenas et al., 2022). Concerned parties may also include the children’s parents and other family members.
The decision that has been made should be tested by teaming up with the World Health Organization to create a business ethics code to prevent future blunders and scandals. Notwithstanding the extensive resolution framework, Nestlé should address and rectify all concerns relating to its operations and promotional activities. Nestlé should take the necessary corrective actions during its dispute resolution over the infant formula, including establishing new policies to boost its corporate performance rather than battling critics.
Act and Reflect
The decision can be implemented with the utmost care and consideration for the interests of all stakeholders by keeping the public transparently updated on the company’s new business practices and policies. Hence, the firm will strive to increase market and public trust by keeping everyone apprised of its new ethical principles and promotional initiatives. Nestlé’s leadership can do its part to improve the company’s reputation by taking on a wide range of corporate social responsibility initiatives (Shah et al., 2020). The decision turned out successful, with much of Nestlé’s corporate social responsibility efforts directed at nations in which the company has been accused of encouraging unethical business practices. The lesson learned from the situation is that the public’s trust in a corporation may be restored with considerable assurance and ethical actions.
Conclusion
Many scandals have arisen over Nestlé’s business practices and products. The corporation’s public image has suffered because of these scandals, despite its status as the leading food business in the globe. The business launched an intensive advertising campaign to boost demand for its infant formula and raise revenue. Several moral concerns were raised about the company’s claims that its product was a healthy alternative to breastfeeding. Its bottled water has been at the center of controversy after it was found to be adulterated despite the company’s assurances to the contrary.
The ultimate decision to settle the issue was for Nestlé to satisfy the interests of its workers, customers, and the public by providing a favorable workplace and quality products. The best action was to improve the company’s status by taking on a broad array of corporate social responsibility projects. New policies and a standard of conduct should be developed and closely followed to prevent similar incidents in the future.
References
Cardenas, D., Davisson, T., Hardy, G., Ochoa, J. B., Barrocas, A., Hankard, R., Hannequart, I., Schneider, S., Bermudez, C., Papapietro, K., Pounds, T., & Barazzoni, R. (2022). Nutritional care is a human right: Translating principles to clinical practice. Nutrition in Clinical Practice, 37(4), 743-751. Web.
Johnson, D. A. (2020). Confronting corporate power: Strategies and phases of the Nestle boycott. Journal of Human Lactation, 36(4), 756-765. Web.
Shah, N. H., Khan, H., Alvi, A. K., & Khan, H. Z. (2020). The impact and level of cultural values and ethically-minded consumer behavior on the consumer-based brand equity of Nestle: Evidence from Pakistani cultural context. Ilkogretim Online-Elementary Education Online, 19(3), 2579-2595. Web.
