Академический Документы
Профессиональный Документы
Культура Документы
According to utilitarianism, ethical action is evaluated by looking at its consequences, weighing the
good effects against the bad effects on all the people affect by it (Shaw & Barry, 2004). Most
developing countries laced basic drinking water facilities. A very high water price was charged by
Nestle limiting a number of people to buy it. Nestlé�s action produces the worse for the greatest
number of South Asian because people could not afford for water which is basic human needs and is
sporadic and contaminated in south Asiacountries.
Child labor was also employed on the plantation. UNICEF and The International Institute of Tropical
Agriculture (IITA) studies (2002) revealed that over 200,000 children were shipped to Ivory Coast and
other cocoa producing countries in Western Africa from neighboring countries like Mali and Burkina
Faso, to work on the plantations, especially during the harvesting of cocoa or coffee beans.
Another unfair labor practice was occurred in Thailand. When a group of 13 workers, wording in a sub-
contracting facility of Nestle in Thailand, organized themselves to form a union, Nestle immediately cut
the number of orders to that company and asked the company to put the unionized workers on indefinite
leave with half pay. The workers were force to quit because of their lowered pay (Manager 2001). In
doing so, Nestle had clearly denied these workers their right to organize themselves to better their
interests.
International business ethics refers to the conduct of MNCs in their relationships to all individuals and
entities with whom they come into contact (Daft, 2002). Ethical behavior is judged and based largely on
the cultural value system and the generally accepted ways of doing business in each country or society.
MNC Manager must decide whether to base their ethical standards on those of the host country or those
of the home country and whether these different standards can be reconciled (Donalson, 1996).
1.2.1.����� Do no harm
Thompson & Stickerland, (2003, p. 65) asserts that �a company has ethical duties
to owners, employees, customers, suppliers, the communities where it operates,
and the public at large.� The norm of doing no harm requires Nestlé�s management to look
beyond its own interests (i.e., cheap cocoa, and high market-share). Unethical marketing of infant
formula and GM foods in developing countries are example of doing harm knowingly and willingly and
of benefiting from the lack of legal restraints to the detriment of the eventual consumers. If business
follow Kant�s rule, it will provide a quality and safe product to its entire market.� Nestle decide to
sell unsafe (GM) foods even it knows that the product is unsafe. In addition, Nestlé�s marketing
strategy in developing countries was to distribute free samples to nursing mothers, thus getting the baby
used to the formula very early in order to get a hold on its captive market. Unethically, Nestlé promoted
the use of infant milk formula as a substitute for mother�s milk. This unethical manner causes
widespread infant malnutrition and susceptibility to infection, which could even lead to infant death.
Following this norm, Nestle should preserve the safety and health of consumers by disclosure of
appropriate information, proper labeling and accurate advertising.
Workers on cocoa production from Ivory cost were paid below minimal wages and were practiced as
slave labor. Despite its awareness of the conditions of the labors, Nestle continued purchased of cocoa
from these suppliers. The company must pressurize its suppliers to change because it is in a position of
major buyer. Regarding to Nestlé�s inThailand, the company should respect the right of employees to
organize for the purpose of collective bargaining. Nestle had better prohibit retaliation to their
employees, though disciplinary action, or an anti-harassment policy. �In addition to Anti- harassment,
companies need to develop policies and procedures to prevent retaliation against individual who file
complaints of harassment or discrimination or who participate in their investigation (Zimmerman,
2002).
Importantly, Nestle should integrate social and ethical issue in strategic process (see figure4). Along
with an investment appraisal, such planning should include an environmental impact assessment.
According to Whetton & Cameron (2005) leadership is the key success for organizational change as
well as the key to aligning organizational systems and follower behaviors around a new organizational
vision. Ethical leadership practices are necessary prerequisite for organizational effectiveness
(Ausguien, 2001). Therefore, Nestle top management must train to be ethical leadership (see
Recommendation action in appendix3).
Figure4: Integrating social and ethical issues in the strategic management process
Social & Ethical Issues
Environmental Analysis
Establishing Organizational Direction
Strategic
Implementation
Strategic Formulation
Strategic
Control
Source: Adapted from Thompson & Stickerland (2003, p.7)
To upgrade company�s ethics, Nestle must impose codes of conduct that treating other person with
respect and should provide leadership�s ethical training as leaderships are key person to make a
strategic-decision. Examples of codes of conduct include do not use child or forced labor, provide a safe
working environment, and respect worker rights to unionize (Refer to figure2). Corporate moral
excellence can be alternative to develop Nestlé�s ethical culture. For a corporate to be morally
excellent, it must develop and act out of a moral corporate culture (Hoffman, 1994). In a situation with
intolerance arise, manager should be guided by precise statements that spell out the behavior and
operating practices that Nestlé�s demand. Nestle must be careful when placing a foreign manager in a
country whose values are incongruent with his own because this could lead to conflict with local
managers, governmental bodies, customers and suppliers.
[1] Genetically modified foods are lab-crated grains, vegetables, fruits and other primary foods. Their
use has been somewhat controversial. Some people are concerned about the consequences to their
health of the use of these products. European countries require all GM foods to be clearly labeled as
such; however, in countries Canada and the US, labeling is optional.