Case Description
Nestle is a global company that specialized in packed food products. Nestle is one of the leading international companies in packaged food industry established in 1905. International environment affects all operations and performance of the company, its organizational culture and climate. International staffing and development help Nestle to organize human resources (HR) in accordance with the needs of the company and its strategic goals.The historical case of ethical controversy dealt with the processed cow’s milk or baby formula. the problem was that Nestle distributed this product in developing countries including underdeveloped regions of South Africa. Globalization and internalization of trade opened new opportunities for Nestle to sell its baby food products and allowed poor African women to use these products. As a result of inadequate advertising and promotion campaigns, hundreds of children died because of food deficiency and lack of education about feeding among Africa women. The ethical issue was that nestle did not take into account education and development level of the African women. Many of them could not read, so they used Nestle’s products paying no attention to labels and information on the package (Brisset, 1997).
Case Analysis
The situation in Africa shows that globalization did not bring increased education levels and healthcare improvements to the less developed countries. Strategies and policies introduced by Nestle were considered unethical because of inadequate information processing and poor promotional messages. The controversy was that the same strategies have been never considered unethical in developed countries with high literacy and education levels. The total global environment suggests that that the big international marketing companies can accelerate their growth and performance by adopting and introducing effective management practices and techniques (Brisset, 1997).
In developed countries mothers always pay attention to instructions and suggestions given by the food producer. The company provides buyers with full information about the product and its usage. The critics underline that Nestle behaved unethically popularizing its baby formula in Africa with low literacy rates. Thus, cross cultural management should be seen as that part of business activity that is social as opposed to genetically transmitted. For Nestle, it comprises ideas through which managers perceive and interpret the world, symbols they use to communicate these ideas, and institutions that enable individuals to become socialized and satisfy their needs. For Nestle, it was appropriate to implement the BEST project aimed to introduce new methods of communication and service delivery. The need for the BEST was created by lack of skills and ‘old’ technology, lack of cooperation between division and size of organization, and new methods of doing business worldwide. Only in this case, Nestlé could compete on the global scale. The BEST project would help to disseminate knowledge and help employees to cope with new complicated tasks (Trevino and Nelson 2007).
Solutions and Strategies Implemented by Nestle
Also, the ethical dilemma faced by Nestle, was caused by resistance to change and lack of technical skills, ambitious timeline and lack of management support. The company did not focus on employee’s motivation and work design programs pursuing their own goals and development strategies. Most of the employees were afraid of changes they could not cope with. It is possible to say that it would be better to implement (and test) the BEST project in one of the divisions, and then, apply it to the entire organization. In spite of the fact that the BEST project failed and cost Nestle $210 million it helped to improve communication-based on technology and innovative systems as a part of the BEST project. Without IT change, Nestle would not be able to compete with national companies and respond to changing economic and social conditions (Trevino and Nelson 2007). New technology helped Nestlé to save time and improve information interchange. Using the ‘old methods of doing business Nestle would not be able to compete on the national (and global) scale. The BEST project provided global connectivity and served as a foundation for national systems. Also, it linked the supplier and customer logistics into one process (Brisset, 1997).
Conclusion
The risks associated with dilemma were babies’ health. The case f nestle shows that successful ethical management practices play a major and continuing role in the international arena, especially with the growth of large-scale international business organizations and the divorce of ownership from management. The decisions and actions of management have an increasing impact on individuals, other organizations and the community. It involves setting policies, formulating plans, and trying to make the best ethical decisions possible. All this is done in a context of how the international organization as a whole, and the HR manager in particular, the environment of the business, and the situation in which it operates. This may become even more important when the organization’s strategy is taking it into new countries, or different forms of alliance and collaborative ventures. International organizations can contribute to the success of such plans by ensuring that social differences are considered when common policies are defined, that announcements are made in a way that is most effective for each culture, and that managers who have to operate across country borders understand the nature of the cultural differences involved, and adjust their own behavior to obtain the best result. Attention to social issues can make a significant contribution to the ethical and moral practices of business.
References
Brisset, C. (1997). The Bottle that Kills. Web.
Trevino, L., & Nelson (2007) Managing Business Ethics: Straight talk about how to do it right (4th ed). Hoboken, NJ: Wiley.