CASE STUDY- Nestlé Corporate Social Responsibility
Issue: Understand the importance and role of corporate social responsibility in a business environment
REF: http://www.icmrindia.org/casestudies/catalogue/Business%20Ethics/Nestle%20Social%20Irresponsibility%20in%20Developing%20Nations.htm ------------------------------------------------- | ------------------------------------------------- | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Abstract: Nestlé was one of the most successful food-based companies in the world. Set up by Henri Nestlé in 1867, in Vevey, Switzerland, Nestlé grew over the decades by acquiring smaller companies to become the largest company in Switzerland by the 1960s. Nestlé's product portfolio included soluble and roast coffee, other beverages like tea and health drinks, several mineral water brands, dairy products, chocolates and confectionery, ice cream, frozen food, culinary products, breakfast cereals, infant food, pet care, pharmaceutical products and cosmetics. By the end of 2002, the company employed more than 250,000 people in 508 factories around the world. Although it was one of the most successful companies in the world, Nestlé was frequently criticized for using unethical marketing practices to promote the sales of some of its products. | | * The company was severely condemned by health agencies around the world for its marketing of infant formula in developing countries, by conveying the message that the formula was better for babies than mothers' milk. * There were also demands on the company to stop purchasing cocoa from the Ivory Coast, where bonded labor and children were used on plantations to harvest cocoa beans. * Nestlé also became mired in a controversy for selling genetically modified food in some Asian countries without labeling them explicitly. Pure Life, the mineral water brand the company launched in some Asian countries, was also criticized for being too high priced. * Many observers felt that the company's behavior was inexcusable. This was not the first time that Nestlé had been embroiled in controversy. The company had been castigated several times for using unethical marketing practices to promote its products in developing countries, for selling genetically modified foods without appropriate labeling, and for supporting the use of child labor in some places. Most of these offences by Nestlé had been committed in developing countries.-------------------------------------------------
Background Henri Nestlé, the founder of Nestlé, was born in 1814 in Frankfurt, Germany. A merchant, chemist and innovator, he developed a formula for infant nutrition by experimentally combining cow's milk, wheat flour and sugar in different proportions. He called this concoction "Farine Lactee".

The formula was meant to provide nutrition to infants whose mothers were unable to nurse them. In 1867, he fed the formula to a prematurely born infant whose mother was seriously ill. He was able to save the life of the infant, and subsequently, Nestlé's popularity soared. Later in 1867, Nestlé set up a facility in Vevey, Switzerland, to produce and market the formula commercially. This was called the Nestlé Company. | |
For the new company, Henri Nestlé adopted the logo of a nest with a mother bird protecting her young ones. This was in fact a graphic translation of his name, which meant 'little nest'. It was meant to convey values like security, protection, maternity and nourishment. (This symbol was later adopted as the corporate logo of Nestlé). | |

» Examine unethical corporate practices and their impact on a company's image and credibility -------------------------------------------------
Ethiopian ControversyIn late 2002, Oxfam, a relief group based in London, revealed that Nestlé SA