“Business Ethics”
Group A:
Jahanzaib Khokhar (051)
Syed Mateen Ahmad Rizvi (114)
Ali Bin Qasim (232)
Ayesha Nasar (159)
INTRODUCTION
Nestle is a Swiss- German word which means “little nest” which is its trade mark
An Anglo-Swiss company founded by Henry Nestlé in 1867
Its headquarter is in Switzerland and operates in almost more than 80 countries.
It is the fifth largest company in the world
Objectives of nestle is based on there motto of "Good Food, Good Life" to
provide consumers with the best tasting, most nutritious choices in a wide range
of food and beverage categories and eating occasions, from morning to night.”
Nestle Head Quarters
NESTLE PAKISTAN
Nestle started its operations in pakistan back in 1988
by aquring a dairy company Milkpack LTD.
It is now one of the major company in Pakistan with
vast product line up.
Ethical Issues & Challenges Faced
by Nestle
Nestle encouraged mothers to start bottle feeding
instead of breast feeding. In order to promote this,
they started using free samples. They claimed that
malnourished mothers and mothers with twins do not
have the ability to breastfeed their child, however
there was no evidence by health organizations that
supported this misleading claim.
Exploiting farmers, trafficking and
child labor
• In 2001, Nestle faced huge criticism for
buying cocoa from farmers that were
located in Ghana and Ivory Coast, which
may have been produced using child
slaves. An investigation by BBC showed
how children who lived in Burkina, Togo
and Mali were being purchased from their
parents and sent to Ghana and Ivory
Coast. As a result a lot of health and labor
organizations criticized Nestle in order to
put a stop to this.
Promotion of Unhealthy Food
A report by the UK Consumers Association claimed
that seven out of the fifteen cereals with the highest
levels of sugar, fat and salt were Nestle products.
Although the company promotes its products under
the mission “ Good Food, Good Life”, it does not live
up to its name when it comes to marketing as said by
CSPI nutrition policy director Margo G. Wootan
Mislabeling
Nestle bringing in old powdered milk from a different
country and labeling it as new and local is highly
unethical. This happened in November 2002 when the
police ordered Nestle Colombia to decommission 320
tons of powdered milk because they were falsely
relabeled.
Causes & Consequences
Causes of unethical issues
Lack of integrity
Misleading advertisement
Violation of laws and policies
Unethical leadership
Motivation by greed and profit
Unethical promotion and mislabeling
Conflict of interests
Consequences of unethical issues
Bad reputation
Losing employees
Missing out on customers
Nestle lost their credibility
Productivity decline
Financial loss
Losing respect/bad-mouth about the company
Severe legal issues resulting in loss of time, large fines
and penalties
NESTSLE’s initiatives & Solutions
Child Labor
• Child Labor Monitoring and Remediation
Service (CLMRS) to tackle child labor in Côte
d'Ivoire since 2012
• The first company in the food industry to
become an affiliate partner of the Fair Labor
Association (FLA), a non-profit, multi-
stakeholder organization
• The company has partnered with the World
Cocoa Foundation (WCF) to build schools in
Côte d’Ivoire
Baby Milk Scandal
Nestle is committed to remove:
• Sucrose & Vanilla compounds
from all its products for babies
aged under 12 months
• Contradictory nutritional advice
on sucrose and vanilla
flavorings
• Shifting its position and
promoting breast-feeding
Consumer Engagement Centre
Launching Digital Consumer Engagement
Centre to:
• Deepen relationships with consumers all
across the world via digital channels
• Make the consumers fully aware about their
products
• Identify the needs of market segments
• Track problems & respond appropriately
Recommendation
Reasons for
Unethical Behavior ?
• Trade publications have
reported that managers
feel pressured to engage
in unethical behaviors
to achieve corporate
goals.
• Managers presume that
there is relationship
between unethical
behavior and success
• Such perceptions would
serve as strong
motivators for unethical
behaviors.
Ethics as a
Marketing tactic
Marketers have been
among the fastest to
perceive the market's
preference for ethical
companies, often moving
faster to take advantage of
this shift in consumer
taste. This results in the
expropriation of ethics
itself as a selling point or a
component of a corporate
image.
What needs to be done?
design self regulatory codes in their companies including
ethical norms, truth, decency, and legal points
keep tracking the activities and remove ads which don’t
fulfill the codes.
Inform the consumers about the self regulatory codes of
the company
Pay attention on the complaints coming from
consumers about the product ads.
Maintain transparency throughout the company and
system.
Thanks!
