Introduction - Comparing Nestlé’s Practices with Responsible Industry Leaders
Responsible management is the commitment of recognizing the environmental as well as ethical behavior impact on organization’s decisions and sustainable commitments. There is also a rising demand of people from company to maintain sustainability within their business operations (Dzhengiz and Niesten, 2020). Corporate social responsibility is one of the initiatives that focuses on sustainability for future growth as well as survival of companies and also protect environment. Nestle is the well-known multinational corporation dealing with food and beverages (Nestle, 2023). The company has around 2000 brand linked with international icons to local customers. This has established their identity in 191 nations throughout the globe.
Nestle engages within the supply and manufacturing of prepared food and cooking aids, ophthalmic products, baby cereals as well as milk based goods. The company by evaluating the quality of life as well as contribute to an improved future aims to bring sustainability within enhancing financial performance and earns trust of consumers. Within recent time Nestle if running boycott for the irresponsible marketing and also has been criticized for the range of organizational practices including unsustainable practices. Nestle has advertised the use of children milk formula which considered very harmful for babies health as well as mother’s health too. The firm was especially criticized for encouraging unethical formulas as a replacement of mother’s milk.
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Identify the operations attributable to Nestle, either currently or past that could be regarded as contentious
Claim on baby milk formulas
Nestle has been criticized for unethical promotion codes as well as forcing consumers by confusing nutritional asserts regarding their baby milk formulas. Manufacturers make unsupported claims regarding their products that are connected with actual breast milk and cause infants issues (Wong and Kim, 2020). The company has now introduced organic formulas that are made from milk of goats which are promoted with the guidelines of special advantages related. The company also criticized for targeting caregivers, families as well as health professionals by promoting their products on social media as a best choice. The company also failed to support confirmation that its goods to infant health and their development. The code was formed as a international public health tactic to make sure that infants mothers are not dampen from breastfeeding as well as that alternate should be used with safety when requires. At the same time, the advantages of breast feeding has been highlighted that breastfeeding increased the infant’s chance of survival by 6 times, on the other hand child without breastfeed can face blindness as well as risk from death due to common illness. The company was slammed Nestle in baby milk formula for using unethical promotional strategies are aggressively targeting health worker and parents.
Nestle was eliminated by eight former child slaves for assisting as well as aiding the unlawful dependence of many children’s on cocoa within their supply chain. Children below 15 ages constant to work at cocoa farm linked with the Nestle. The company obliged to end the use of child labor within its supply chain. Allegations of child labor as well as employees’ rights mistreatment have strong-willed Nestle for years (ElAlf et al, 2020). Child labor is an issue where children were browbeaten to a range of amount throughout various periods. With the awareness of education and the enhancement of labor laws, a child slave labor has reduces. However, child labor is still a major issue in many part of the globe in both developing as well as developed countries. The company now taking care of mitigating child labor, Nestle is committed to operate with local communities as well as suppliers to handle child labor risk within its green supply chain. The company also has future plan by 2025, to be able to outline all cocoa support to be particular group of farms as well as make sure 100% of the cocoa while maintaining sustainability.
Palm oil
Nestle consuming a huge quantity of palm oil has been under criticism for long time. The company was suspended by palm oil team for following unsustainable practices. The company can no longer assert to use palm oil within its chocolate products as well as various other goods. After months criticism against Nestle for the use of palm oil connected to rainforest destruction forced by Greenpace (Montiel et al, 2021). The company uses palm oil as a major ingredient in a range of its products. For maintaining sustainability within its business operations and mitigating challenges they have started understanding the production of palm oil. The company has now started working with various well established organizations in different countries to improve environmental as well as social practices within its business operations.
Advertisements of unhealthy products
Nestle multinational food and beverage industry has obliged to stop making promotions on high sugar goods targeting children (Holland, 2023). The company has also forced to stop its hot chocolate as a healthy snack after health professionals accused it of purposely deceptive parents and caregivers. The product featuring “great start of a day” on packed bottles throughout advertisements banned it for endorsing children to consume sugar. According to the report Nestle new policies reaffirms it is ban on goods promoting that targets young people and children around the age of 6 (Meseguer-Sánchez et al, 2021). The firm has been taking voluntary policies on social responsible marketing to kids. The company has now restricted paid media promoting to kids under age 16. The policy has been applied at all Medias including social media, TV, gaming platforms and various other channels. The company has also gathered data from people and develops collaborations with social media influencers. Prior the firm has also assurance to share more information’s on the nutritional values of it benchmark of food and beverage products. The firm also committed to report on its portfolio within 14 nations using endorsed packaging label systems particular to each country.
Discussing the impact of negative behaviors of Nestle in terms of customer response, reputation and profitability
Unethical business operations’ within Nestle has lead to very serious impact that has caused the company money and time in direction to secure their brand image and legal issues because of various controversies. The rise of obesity all over the globe has leaded an major discussion about the responsibility of the Nestle. Where food used to be a pleasure has now turning to be more harmful for customers (Gunawan et al, 2020). The customers nowadays are faulting companies within food and beverage industry for being overweight as well as diet related illness. The marketing department of the Nestle blaming for not maintains social responsibility for the well being and health of customers. The company false and misleading claims on goods, unfair target marketing and selling harmful products has lead to negative impact on brand image.
Unethical behavior in marketing as well as sales has been major aspect of Nestle strategy that customers are aware of. The company being the largest food and Beverage Company has a good brand reputation and image in the minds of the customers. Within few times customers boycotted Nestle for unethical practices within business operations’ by selling baby milk formulas and also marketing of unhealthy products (Lubowiecki-Vikuk et al, 2021). The company targeted by promoting of their baby milk formula in developing nations where people do not have enough knowledge and education, which makes them believe that Nestle baby milk product is better option than breastfeeding. This has created a huge criticism for the company and destroyed its brand image and trust of loyal customers.
The major impact of Nestle’s unethical and unsustainable behavior within business has incurred huge losses. This also has a huge impact of firm’s credibility, negative relationship among employees and failure in maintaining long term connection with customers. This also reduced employee productivity and efficiency within the organization. Unethical behavior has damaged the firm’s reputation and eroded customers’ faith (Silva, 2021). This has lead to loss in sales and profits as buyers choose to buy products from other firms to satisfy their requirements. Nowadays customer preferences and demand plays an important role in enhancing Nestle’s business practices as well as in analyzing profitability. The customers are demanding ethical and sustainable products form Nestle that link with their ethical consideration and values. Integrity breakdown has cost Nestle millions of dollars as well as huge time.
An unethical behavior of company has created false profile on the social media that harm the reputation of whistleblowers that pay attention to harmful products as well as fraudulent behavior. Unethical behavior of the company has leaded to workers losing respect and trust for company. It is now challenging for Nestle to gain back trust as well as respect, this has also caused difficulty for Nestle to run their business operations’ (Khaled et al, 2021). The company has also lost credibility that outcome within clients abandoning sales with Nestle and not holds respect for them. Unethical behaviors have leaded to various legal problems that resulted in loss of money, time, penalties as well as large fines.
Unethical behavior of Nestle has negatively impacted on business stock price as well as shareholders value. Shareholders have sold their shares when they believed that the firm is engaged within unethical operations’ that has placed huge impact their stock price. Nestle by employing child labor within their business operations’ has faced various regulatory and legal issues, as many nations have strict laws on prohibited the use of child slave labor. The company has faced legal actions, fines and rise tracking as well as compliance cost (Van der Waal and Thijssens 2020). As child labor has resulted in an employment with the under skilled as well as unqualified that is detrimental for economic growth in various countries. Child labor has resulted in tremendous corporal as well as mental harm. This has lead to slavery as well as financial exploitation.
Contrasting behaviors with examples of organizations who have behaved in a more responsible manner
Danone a global food firm builds on dairy, water, nutritional and plant based products. The company’s mission is to improve health through food by maintaining sustainability and social responsibility within their business operations’. For considering babies health, Danone believes that breastfeeding is the best source of nutrition for infants. The company is continuously raising the awareness of responsible advertising of baby formula to give confidence infant as well as maternal health and nutrition (Tsalis et al, 2020). Mothers trust the organization by encouraging them by supporting trust, science based data regarding nutrition food for their babies. The company also provides information in transparent, responsible and in open way that build the trust of the customers and enhance company’s reputation in market. The company is more committed with maintaining responsible marketing of baby formula as featured with their breast-milk substitute promotion policy.
Mars Inc is a chocolate manufacturing multinational company. The company is social responsible cocoa ambitions to make sure that 100% of their cocoa is foundation responsibly internationally. The company is accountable for existing certification needs from rainforest and fair-trade as well as require extra elements that engage child labor monitoring as well as remediation systems in dangerous areas. The company condemns the utilization the use of risky child labor as well as is dedicated to work with suppliers, governments, farming communities and various other stakeholders (Mihalic, 2020). The company by monitoring as well as tracking system has reduced the risk involve in child labor within cocoa supply chain. The company is also focusing on protecting children and also improving farmers wages throughout the business operations’.
Unilever a fast moving consumer goods company which includes food products, beverages, home care goods, supplements and many more goods. The company commitment is to maintain sustainability as well as deforestation free palm oil and to source from lower risky location throughout the globe. The company is also engaging with various suppliers and stakeholders by rising the traceability as well as honesty within its supply chain. Unilever is evolving with palm oil to evolve direct sourcing (Fu et al, 2020). This facilitates to get collected with resources as well as enhance the livelihood of the individuals the company is associated with. The corporation has also enlarged the accessibility of deforestation free palm oil and appreciable. Direct sourcing includes working with producers as well as mills to manufacture the palm oil directly. The firm is doing this to handle real modification within palm oil manufacturing. Unilever also engage with various industries that have conventionally being left from sustainable supply chain within their business behaviors.
Kellogg is a nutritional food MNC which is focusing on improving customers’ health by modifying their eating behaviors. The company’s mission is to change the customer mindset by providing them health benefits and nutritional based food. The firm is leading in providing nutrition messages, product information and recipes on their packaging. The company makes a range of cereals from handful of ingredients, grains as well as some nutrients including vitamins, minerals and fiber. The firm is also committed to cut high sugar products and other snacks that increase the obesity among children (Barbosa et al, 2020). For the balance diet breakfast cereals are low in fats, contains vitamins as well as better source of fibers which is good for people. This helps the business to gain trust from customers as well as also improve their performance in long run.
Conclusion and Recommendations Conclusion
In summing up, it has been concluded that in past years Nestle faced various criticisms within their business operations. These criticisms have negatively impacted company which has damaged their brand image and customer retention. The company by focusing on sustainability and responsibility within their business operations can gain competitive advantage. The company should implement and adopt sustainable development goals within business to promote responsibility towards society and community.
Recommendation
SDG 2 Zero hunger: This is to create a globe free from hunger by year 2030. The international problem of food and hunger insecurity has risen because of climate, conflicts, pandemic changes and various inequalities. Nestle needs to protect children and empower women’s as well as communities within their cocoa supply chain. The company should focus on protecting children and mitigate human right problems by working and collaborating with stakeholders.
SDG 3 Good health and well-being: The aim of this goal is to end hunger as well as malnutrition by year 2030. This aim is to provide people with specially children with nutritious food. Nestle needs to change its composition by reducing bad ingredients such as sugar, salt as well as trans fats. The company can include beneficial ingredients such as protein and fiber within its production to enhance the responsible business operations. The company can implement food reformulation policy to make sure safe as well as nutritious food for every individual. The firm should also move towards sustainable in addition to healthy consumption patterns.
SDG 12 Responsible Consumption and Production: This goal promotes more sustainable growth as well as production pattern by a range of measures such as laws and policies on management of resources that are harmful for environment. Nestle should make deforestation free as well as maintain sustainability to produce from lower risky locations. The company should engage with a range of suppliers to increase transparency and openness within its supply chain. The firm should improve the livelihood of individuals that they work with.
Goal 4 Quality educations: The aim of this goal is to make sure that equitable education as well as lifelong learning opportunities are provided to all. Nestle should empower local communities by skill development. The company should invest in various training and development plans for their employees too.
References
Books and Journals
Barbosa, M., Castañeda-Ayarza, J.A. and Ferreira, D.H.L., 2020. Sustainable strategic management (GES): Sustainability in small business. Journal of cleaner production, 258, p.120880.
Dzhengiz, T. and Niesten, E., 2020. Competences for environmental sustainability: A systematic review on the impact of absorptive capacity and capabilities. Journal of business ethics, 162(4), pp.881-906.
ElAlfy, A., Palaschuk, N., El-Bassiouny, D., Wilson, J. and Weber, O., 2020. Scoping the evolution of corporate social responsibility (CSR) research in the sustainable development goals (SDGs) era. Sustainability, 12(14), p.5544.
Fu, R., Tang, Y. and Chen, G., 2020. Chief sustainability officers and corporate social (Ir) responsibility. Strategic management journal, 41(4), pp.656-680.
Gunawan, J., Permatasari, P. and Tilt, C., 2020. Sustainable development goal disclosures: Do they support responsible consumption and production?. Journal of Cleaner Production, 246, p.118989.
Khaled, R., Ali, H. and Mohamed, E.K., 2021. The Sustainable Development Goals and corporate sustainability performance: Mapping, extent and determinants. Journal of Cleaner Production, 311, p.127599.
Lubowiecki-Vikuk, A., D?browska, A. and Machnik, A., 2021. Responsible consumer and lifestyle: Sustainability insights. Sustainable production and consumption, 25, pp.91-101.
Meseguer-Sánchez, V., Gálvez-Sánchez, F.J., López-Martínez, G. and Molina-Moreno, V., 2021. Corporate social responsibility and sustainability. A bibliometric analysis of their interrelations. Sustainability, 13(4), p.1636.
Mihalic, T., 2020. Conceptualising overtourism: A sustainability approach. Annals of Tourism Research, 84, p.103025.
Montiel, I., Cuervo-Cazurra, A., Park, J., Antolín-López, R. and Husted, B.W., 2021. Implementing the United Nations’ sustainable development goals in international business. Journal of International Business Studies, 52(5), pp.999-1030.
Silva, S., 2021. Corporate contributions to the Sustainable Development Goals: An empirical analysis informed by legitimacy theory. Journal of Cleaner Production, 292, p.125962.
Tsalis, T.A., Malamateniou, K.E., Koulouriotis, D. and Nikolaou, I.E., 2020. New challenges for corporate sustainability reporting: United Nations' 2030 Agenda for sustainable development and the sustainable development goals. Corporate Social Responsibility and Environmental Management, 27(4), pp.1617-1629.
Van der Waal, J.W. and Thijssens, T., 2020. Corporate involvement in sustainable development goals: Exploring the territory. Journal of Cleaner Production, 252, p.119625.
Wong, A.K.F. and Kim, S.S., 2020. Development and validation of standard hotel corporate social responsibility (CSR) scale from the employee perspective. International Journal of Hospitality Management, 87, p.102507.
Online
Holland, f., 2023. Nestlé to ban marketing of high sugar products to under-16s. Online. Available through. :<https://foodmatterslive.com/article/nestle-stop-marketing-high-sugar-products-under-16s/ >
Nestle, 2023.Online. Available through. :<https://www.nestle.in/ >
