Introduction
The company that I choose for analysis of their corporate social responsibility is Nestle. Nestle is a multinational company that serves in many countries across the world. Nestle company serves in the area of beverages and food and working efficiently from 135 years. Nestle products are mainly ranges from milk, beverages, chocolates and confectioneries. At Vavey in Switzerland there is headquarter of nestle. Nestle earned its name in giving high quality products from many years. It is now considered leading brand in the world. Nestle shows a remarkable success in its operations and this is due to the only fact that nestle gives value to their employees. They consider an important asset of company. Nestle provide opportunities for employment in developing countries and educational plans also offered by it in many countries. Nestle is the company where long term plans are always preferred than short term plans. There are lists of brands that nestle produces. This list approximately ends with 8000 names (Taylor, Simpson, 2013).
Good values at Nestlé:
Main value is given to people instead of infrastructure and money. It is learned in nestle programs that transparency and honesty should be their first priority. Nestle is famous from its innovative culture. Employees always be listened in nestle and give them proper training programs for their development.
Background of the company
In back 1866 there were two Swiss companies that later joint as a company nestle. These two companies rule the business world in United States and Europe in many decades. In 1867, two brothers established a condensed milk company in Cham, Switzerland. Henri nestle produced baby food that is milk based and started marketing of this product. After that milk chocolate is being introduced by nestle. In the following years nestle introduce condensed milk. After the First World War, need of dairy milk products increased and in that result nestle production became doubled. Nestle company have to bear the consequences of world war second. Second World War affects the profit of company. In early 1990s nestle had factories in United Kingdom, United States, pain and Germany. Nestle introduce Nescafe which became very famous among military of United States. And after development of years and years there were many mergers of short companies with nestle and now it has become leading food company in the world. Now in 2013 nestle announced that it is going to expand in Singapore .nestle as a leading company has earned its name it also take care its role in corporate social responsibility (Zu, 2008).
Objective of assignment
The main objective of this assignment is to explore the corporate social responsibility of nestle company. In this assignment I am going to explore all four pillars of corporate social responsibility that is of legal, economic, ethical and philanthropic. In my assignment I will give introduction of these entire pillars and then it will be seen that how company nestle is fulfilling its corporate social responsibility in term of its four pillars. And some criticism that is on this company regarding CSR also been discussed in this assignment (Urip, 2010).
Corporate social responsibilities
It is actually the process of self-regulations by the corporations itself. Their role is incorporated in its business model. It is ensured that where all the activities taking place in this organization is accordance in compliance of law as well as whether the company is behaving ethically. It is checked that company is working according to international laws and policies. Its production is going to put positive impact on overall society and all the stakeholders like consumers, investor, employee, and all others are benefitting from this corporation positively. CSR helps the company to achieve its mission and provide guidance about its production. According to the perspective of consumers it is seen that if company is achieving the business target then the company should also do corporate social responsibility with their achieved target. How company can approach towards its consumer’s .there are three ways that a corporation can spend its CSR resources (Prabhu, 2004).
- Value creation
- Risk management
- Philanthropy
Value creation
It means that innovation should introduce in its product. The product will add value with the passage of time. The benefit of value creation is that it increase the business competition and it help in developing the human capital as well.
Risk management
Risk management main purpose it actually the compliance. These impact the organizational strategies from medium to high level. This will help the company in mitigating risk of operational as well as external risk.
Philanthropic approach
It means finding the society and provides funds for employees also to learn different skills. This gives a good image of the corporation to society .many charities are given which result in good and soft image about the company (Zu, 2008).
Components of corporate social responsibility
There are four main components of corporate social responsibilities.
- Economic responsibility
- Legal responsibility
- Ethical responsibility
- Philanthropy responsibility
Economic responsibility
The main responsibility of a company is its economic responsibility. It means that company should do its operation in the best favor of economy means company should generate profit. If a company fails to produce profit then it will not be able to fulfill its economic responsibility. The impact will be very bad on overall economy. There will be unemployment and it will burden for the economy of that government also (Prabhu, 2010).
Economic responsibility actually says that the organization should do its working profitably so that the entire stake holders will be benefited by operations of company and the overall economy in which that corporation is working also get benefit like in form of tax revenue.
Legal responsibility
Legal responsibility means that the corporation is accordance with the legal policies of the country as well as it is checked that whether the company is operating in legal manner or not. The production of the company is a legal item or not. For example in an Islamic country if some company is indulge in wine production then it will be against law of that country. Legal responsibilities also include the security regulations and environmental regulations. We can say that in legal responsibilities it is checked that all the laws regarding labor, society, environment, security and productions fulfilling or not (Urip, 2010).
Ethical responsibility
For a company the main two responsibly are legal and economic responsibilities. Then here comes a third responsibility that is not properly defined according to terms and conditions but it is from inside of corporation. Like company will behave in ethical manner. We can justify this by taking an example that if a company o towards the monopoly and increase prices too much then this behavior will not be ethical. Although legally and economically it is correct but ethically it will not because it will burden on the consumers. Ethical responsibilities are those for which company is not bound to do so but if a company do such things it will give a soft and good image of the company and ultimately loyalty of consumers will increase (Mullerat, 2011).
Philanthropic responsibilities
This fourth responsibility that comes under the head of CSR is very flexible. If a company is fulfilling all above mentioned three responsibilities than it will automatically fulfill this responsibility. Philanthropic responsibilities means that the contribution of the company towards the society in form of funds. Like a company may invest some money for the well fair of the society like invest money in health program and education program or it may start some campaigns to clean the environment. It is actually the role of company in development of a society. Company may start a project for educating people or may invest in art schools or may donate some charity for health improvement of a society. These responsibility increases the good will and image of company in society and people will love to buy products of the company that give benefit to society as well (Hopkin, 2012).
CSR at Nestle
Nestle is a large firm that daily sells its thousands products in market. Nestle actually fulfill its corporate social responsibility in term of “creating shared value”. It means that at each and every step of shared value, the society as a whole will be benefitted. Value chain actually consist of three main parts
- Agriculture and sourcing
- Manufacturing and distribution
- Products and consumers
We can illustrate company CSR when going through each step of this creating shared value. Following picture will depict the CSR role of nestle at each level of their shared value (Habisch, 2005).
Creating shared value at agriculture and sourcing
In agriculture and sourcing, nestle always prefer to support the activities on agricultural farms. They provide benefits to the farmers and give them training and learn them new methods of farming that will increase their production. Nestle company gather raw material from different rural areas of developed and developing countries and from farmers to whom they collect raw material give new methods and techniques to increase their production. Nestle also collaborate with the heath department of many countries where there is a problem of undernourishment. They also do research and development for the good yield production (Mullerat, 2010).
Manufacturing and distribution
In this stage nestle take care the food safety rules and protect its employees from any harmful activity and also they do the good practices on environmental issues. They do food safety by means of their standard operations and take care of all labor laws and give god incentives to their labor force. They try to improve good environmental standards .they do proper measurements for the risk associated with the food safety. They try to improve economic condition by giving opportunities for employment. They are always active in giving proper training and skills to their employees. For environmental development nestle introduce the greenhouse gases in its manufacturing process. Nestle is the first company in all industrial sector that use this greenhouse gal tool in Chile. They always promote the methods that are beneficial for environment. They do many reforms for waste management as well as water source (Zu. 2008).
Products and consumers
In this stage of value chain nestle develop many research and development houses for the benefit of customers .they always find the methods to improve the quality of the product .nestle is famous for its nutritious food across the world and they have maintained this standard from many years. They also do work for the benefit of the society. They give education for healthy life style. Nestle is the firm where a broad research is being done for the identification of the micro and macro nutrients that are good for elder people and for child and for young people. Nestle introduce products of different type for meet the needs of people of different age group. Company introduces balanced and affordable meals for society (Urip, 2010).
Other CSR aspects at Nestle
- Word cocoa foundation
- Sustainable agriculture initiative
- E-collaboration
- Expanding business in health care nutrition
- Member of fair labor association
Word cocoa foundation
Major industries like mars, Hershey, nestle and some other chocolate company found a foundation named as world cocoa foundation. This foundation is made mainly due to reason that now a day’s Ebola virus affected many areas of South Africa that is main supplier of coca in the world. This foundation donated 600000$ to such affected areas. WCF mainly focus on increasing the farmer income by giving them education about new methods of farming and many programs regarding environment and health is started by this organization to give benefit to common people (Prabhu, 2004).
Sustainable Agriculture Initiative
Nestle always try to help the farmers for implementation of sustainable agriculture growth therefore for this purpose nestle founded this SAI foundation. This foundation helps to identify the safety and quality problems in supply chain of food and by this foundation many programs are being started up for the development of rural areas and for the health of animals also. Nestle most products are made up of milk therefore nestle try to improve the health of animals as well. They introduce biodiversity method for production (Mullerat, 2011).
Ecolaboration
Nestle and rainforest alliance in 2009 signed an agreement called Ecolaboration. the main objective for this agreement is actually reduce the impact of production on environment and give social benefits to the farmers that supply cocoa beans. They try to give benefit to people for protection the wildlife, water conversion, clean water supply for drinking and access to health care centers and schools.
Expanding Business in Health Care Nutrition
In 2010 nestle announced that it will invest more than 500$ million for development of health and wellness programs to control many ailments like cardiovascular diseases, obesity, diabetes, Alzheimer’s .nestle found a new subsidiary names as nestle health care and nestle institute of health sciences for improving health of common people (Hopkin, 2012).
Member of Fair Labor Association
Nestle is also a member of fair labor association that is a nonprofit firm that safeguard the interests of labor force. Nestle consider human capital as most important asset of the company. They always try to introduce many benefits plans for the improvement in the, life of labor. Nestle is the first company that join FLA under head of cocoa plan and try to help to decrease the problem of child labor.
Conclusion
As a whole nestle is a company that safeguard all rule for corporate social responsibility. They mainly take-care all four pillars of corporate social responsibility. But there are some critics on nestle in case of external environment issues. Nestle is the half share owner of cosmetic company named as L’Oreal which test its finished goods on animals. For this nestle is also criticized by many people. Nestle become an alarm for the food sector because most of the food products are from Nestle and it is not sure sometime that the product does not have any harmful ingredient. In the following image there is a list of laws that are broken by the nestle company (Habisch, 2005).
However, good actions are taken by nestle are taken selflessly for the development of developing countries for agricultural farms are all in accordance with ethics and laws. The main purpose of these actions is no doubt profit generation but in return they do well for welfare of society as well.
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