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01/25/2010

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Alexandra Crawford

Corporate Social Responsibility refers to operating a business in a manner that accounts for the social and environmental impact created by the business. It signifies a commitment to developing policies that integrate responsible practices into daily business operations, and to reporting on progress made toward implementing these practices.

In this particular case, the issue was that Nestle Alimentana, one of the world’s largest food-processing companies had been the subject of an international boycott as a result of the accusations that the company was directly or indirectly responsible for the death of Third World infants. The charges were based on the sale of infant feeding formula, which supposedly caused the mass deaths of babies in the Third World.

The charges primarily focus on whether or not the advertising and marketing of these products discouraged breast feeding among Third World mothers and led to misuse of the products. For example, many mothers in Peru used the water which came from a highly contaminated river to dilute the formula, which in turn resulted in formula-fed babies to come down with recurring attacks of diarrhea and vomiting. In some cases, mothers throughout the Third World fill bottles up with a small amount of formula and a large amount of water, depriving babies of nutrients, resulting in extreme malnutrition and in other cases, these mothers relied solely on the formula to feed their children for excessively long amounts of time.

Although many mothers in Third World countries misused the formula, Nestle argued that the company never supported the idea of replacing breast milk with formula, although it plays a vital role in proper infant nutrition as a supplement. The formula was also better in comparison to other supplemental feedings that were harmful to infants, including herbal teas, rice water, corn water and sweetened, condensed milk as these feedings can also be prepared with contaminated water and served in unsanitary conditions.

In this case, Nestle displayed negligence and did not fulfill their corporate social responsibility to the public. The company’s marketing practices were unclear, which led to the misconception that formula was a good way to replace breast milk and other forms of nutrition vital to child development. The company did not play its role in educating the public as to the proper methods of using the product, and also did not consider the different living conditions as a factor which could lead to misuse. For example, countries similar to Peru, being economically underdeveloped do not have direct access to many resources, including uncontaminated water, which mothers were using to supplement the formula they were giving their children. Nestle permitted the use of clever radio jungles to imply that certain products distributed by companies established in certain countries would make a baby grow, allowed the distribution of samples by nurses in hospitals and homes, which encouraged mothers to give up breast feeding and turn to bottle feeding because it was “the new thing to do”, thus infringing on their commitment to the responsibility of developing policies that integrate responsible practices into daily business operations.

Karin Ruiz

After reading the case about Nestle, it is in my opinion, that the company was attacked on several occasions and blamed unjustly for the deaths of many infants. It appears that the activists were looking for any cause to implicate Nestle as the sole factor of increased infant mortality. Many of the charges against the company are in regards to promoting bottle feeding and discouraging breast feeding. They were doing this by giving away free samples to new mothers and telling them about the nutritional benefits as well as advertising through TV and radio with jingles such as "white man's powder that will make baby grow and glow." Activists have blamed Nestle for pushing bottle feeding, however they failed to mention that the actual product is not the cause of deaths, rather it is the fact that women in Third World Countries are unable to financially support their families therefore unable to feed them the amount needed. In response to this these women are diluting the bottle formula with contaminated water, which Nestle has nothing to do with, and instead of feeding one bottle to one child, which is what is advised by the company, mothers are having two babies share portions of one bottle, and many times try to make that one bottle last a few days. Nestle, attempting to change their advertising strategy decided to promote their brand with health programs that informed mothers of their products proper use while still educating them that breastfeeding is the best nutrition a baby can have.

I believe that Nestle did a good job trying to learn how best to advertise and educate women. It is their responsibility to understand their advertised regions and their financial status. I think the samples were actually beneficial to a degree, just because it was free and could give the babies nutrition while the mother was unable to buy the product. The mothers are also poorly nourished, resulting in the production of less breast milk than the average mother. If these mothers are able to only breast feed their babies for a few months and have no access to bottled milk then their babies will still die. Nestle should have probably considered having the formula in hospitals or stores where if the mother wanted some milk they would have to go to experts that can make sure contaminated water was not being mixed with the milk and that the baby was being properly nourished. Nestle needed to be more aware of who they were selling to and the possible issues they were going to face (trying to make the milk last longer, mixing it with contaminated water). If they had been more aware of their target demographic before they started distributing they would have been able to avoid many obstacles.

As my final decision I would not allow Nestle to publicly advertise their product because of the consumers’ financial situations, especially after discovering that the product was being tampered with and abused of. I would only allow hospitals to have possession of the milk for emergency cases where the newborn is nutritionally starving and the mother has no more breast milk to feed it.

I do believe that this case is very tricky because Nestle is attacked for selling their product, but now with HIV becoming an issue, if it does not sell and offer an alternative to breast milk more babies will die. I would have Nestle sell exclusively to those who need it, their profit will not be as high but it is their social responsibility to help these countries in need and try to promote an educated alternative to breast feeding, especially for mothers affected with HIV.

Chandra Sweet

Nestle faces a lot of problems in this infant formula issue. Nestle did not invoke social responsibility when they were advertising their products to economically deprived woman. At some point they would have known that these people were not capable of using the product properly. When they were called out on their practices they did make some changes, but were also said to be dumping products in the Third World.

Nestle did not have to follow any of the rules set by WHO since it was all voluntary, but had they not they probably would have seen a larger drop in sales around the world. I think the major problem with Nestle selling formula in the Third World is the lack of education. If Nestle is going to sell formula to these people and knows the risks associated with it then they have to also educate them of these risks. It is their social responsibility to tell them the outcomes in the language and manner in which they understand. After exploring all the options and mothers still choose this product Nestle cannot be held accountable. There is only so much that Nestle can do before it has to be put into the mothers hands.

If Nestle were to completely take away the product it would affect many mothers who are using it correctly and it is benefiting their children. The only thing Nestle can do is educate so consumers are aware of the proper way to use the products. This might result in removing it from certain areas where it is nearly impossible to use the product as directed.

Dominica Aufiero

In my opinion, I believe Nestle's intentions were in the right place as well as in the wrong. I don't believe that they wanted to sell this formula to these women in Third world countries to hurt them. Like their argument said, "all it's products carry a statement that breast feeding is best." Another valid point that Nestle makes is that people in third world counties do not get the proper nutrition and therefore can not sufficiently provide for their children through breast feeding. "The average well-nourished Western woman, weighing 20 to 30 pounds more than most women in less developed countries, cannot feed only breast milk beyond five or six months." This shows that no matter what, if you are selling something to women in less developed countries, more times than not this will be the outcome.

On the other hand, because they are selling this product to women in under developed countries, they do not do a very good job on explaining how to use it properly.

However, it is evident that they have done a number of things to try and correct what they have done. "Nestle then undertook to carry out more comprehensive health education programs to ensure that an understanding of the proper use of their products reached mothers, particularly in rural areas." Along with this, Nestle supports the WHO code where they were willing to meet with concerned church leaders, international bodies, and organization leaders who were concerned with their application of the code.

All in all, if Nestle makes a product and has the intentions for it to be sold world wide, they should make sure that it is suitable for each type of consumer.

Sabrina Lilienthal

I think it was horrible that Nestle was responsible for the death of third world infants. I’m not surprised that the marketing would be the first thing to blame. A lot of times the surface information presented in marketing campaignes never seem to be clear enough.

One of the bigger problems for nestle was their knowledge of local and surrounding area demographics. There should have been more research done. In this case the formula found its way into the Amazon Tribe deep in the jungle. In most cases when a surrounding area acclimates a product into the environment normally it would not be a problem however in this case the surrounding area was diseased with poor drinking water making it impossible to correctly mix the formula.

Although Nestle should be responsible for the proper use of the product I don’t think the company should be responsible for the misuse of the product. Nestle should also have done more research on the ability for consistant use of the product. If the economy can not support the continuous use of the product it should not be distributed. The parents in this case would dilute the product to prolong use. Nestle could not control this.

The fact that women in third world countries are malnourished and produce less breast milk also posed a problem. Although the risk of improper use can cause a problem the benefit can be greater.

When all the countries in the World Health Organization voted on the company’s marketing the United States was the only negative vote. I find this questionable. When 113 countries out of 193 voted positive towards the ban of marketing makes you question their involvement to the company.

Jarol Fabio

In the same notion that it is ridiculous for a man whom has never known hunger, to anticipate and prepare for famine; it is equally as justifiable to then too understand why such impoverished women/families in Third-World Countries endure these hardships of virtue, hedging on the off-set chance of infant immortality.

Powerful rich nations such as the United States and many European countries, perpetuate the ideal standard module of civility toward the more populous developing and/or third-world countries; whom ideally view our products and services in retrospect as a godsend. It is then absurd to fathom then that Nestle, a world-wide corporation, did in fact not research and properly access the methodology and accessibility of resources such as water, the indefinite substance to their formula; in such impoverished zones/nations such as the aforementioned latter in the case.

I will never forget the words of my International Trade Professor at my previous College said to us, "The business of business, is business". He said this in regards to sweatshop, out-sourcing, and many other unethical business factors still being investigated and tried at the WHO, and other U.N. Organizations. He of course didn't necessarily advocate these ethics and practices, but just merely emphasized the aspects of business and the ambition of profit. e.g., "Knock em down if you have to, just make a buck". Many companies do indeed estimate the cost of sales versus the cost of prospecting a lawsuit; and if profit out-weighs the potential liability suit, then there is still money to be made.

Katherine McCormick


Regardless of whether an MNC is the first to or the one hundredth to, one the business penetrates the market with their product they should immediate assume Corporate Social Responsibility, The idea is to encourage a healthy community inside and out of the business as a result of their product in the market. This means that before a MNC beings distribution, they should be fully aware of cultural norms that may be affected and have plans of action they intend to take to adhere to these norms.

The Nestle case is great example of how it is important to have a corporate social responsibility plan for each area they penetrate. Nestle proudly shows that they have learned their lesson by publicizing the fact that they have a great plan for Latin America because the effects of their product entering Africa will not be the same as when they enter Latin America.

I feel Nestle could have easily prevented the repercussions they suffered from the formula and still have marketed their product. To begin, Nestle could have educated the public on the importance of breastfeeding and the importance of using the formula properly. When Nestle was attempting to defend themselves, they claimed that they did do this by advertising their book on breastfeeding, but if they were to have taken their responsibility seriously, they would have notes that most of the people could barely buy food, let alone a book, and it they somehow did get their hands on the book, chances are that they didn’t know how to read it anyways because most of those people had never been to school. Nestle could have created a program where the mothers could understand the consequences of using baby formula.

Nestle could have labeled their product differently. Since many of the mothers couldn’t read, it would have been appropriate to use pictures and diagrams in the instructions, warning signs, and side effects.

The Nestle case has become the historical marking of MNCs accounting for the well being of the people they sell to. It became the example to show that a plan must be established because MNCs have such an influence in a consumers life that if the consumer feels mistreated, they will turn away and the business cannot survive without them, but if they feel the MNC cares for their well-being, there will be a strong and healthy relationship and the business will be able to do it’s job; provide us with what we need.

Arielle Laws

Nestle is a corporate powerhouse with entities all over the world. It’s a company comprised solely of intelligent minds capable of handling a large variety of situations including acquisitions and mergers, international expansion, and proper brand marketing.

In this case study, it’s my belief that the company thoroughly knew what they were doing and the consequences of their actions during the marketing of their infant formula in Third World nations. Because they are such a large corporation, they would have compliance teams and lawyers to refer to for all business decisions and transactions; this would have been an appropriate time to call upon such resources for guidance, as international marketing is a delicate practice.

It’s common knowledge to the general population that individuals living in Third World countries have many less opportunities to receive a decent education, therefore making them less developed intellectually than individuals living in industrialized nations such as the United States or Europe. How could Nestle be so insensitive as to market their infant formula to aggressively without proper education behind the messages they intended to send?

The issue of corporate social responsibility is in question. Nestle could and SHOULD have taken much better precautions to educate the Third World individuals in their marketing concepts. Compare it to the cigarette industry in the United States where cigarette industry professionals are required by law to label cigarette packages with phrases such as “Smoking may cause cancer” and “Do not consume tobacco products while pregnant.” Such labels educate the consumer because 1) they are written at a level appropriate for its audience, and 2) take much of the blame off of the corporation. If Nestle executives had implemented a similar practice, they wouldn’t have been seen as a corporate monster in the eyes of so many people.

Partnering with the communities in the Third World nations to educate the mothers with two-day workshops would have been a wonderful tool to sell the infant formula in an ethical way. In exchange for a large cost, which Nestle could probably afford, the company would have saved their image in the long run and in turn positioned themselves as a socially responsible company.

Allison Bartlett

Every company around the world advertises to help build their company and customer base. Nestle, followed what just about every company does, they appealed their product to customers to make a sale. Often times advertisements can be perceived the wrong way or misunderstood, especially from other countries.

I do not fully believe that Nestle is at fault, although it is shocking to see what their product has done to certain countries. After reading this article I found myself extremely disturbed by the way women were using the formula. The amount of malnutrition among these children is incredible.
I believe that Nestle started off with the same intentions as any other company out there. The main point, when developing their business, was to have women want to choose their product over traditional breast feeding. When doing this the company included all pros not cons (as most companies do). Many women in these poor countries found it the right thing to do. However, the women in these countries do not have the correct supplies to feed their children this formula.
It seems that when Nestle decided to go international they did not look at every detail and or problem that could arise. Someone should of brought up this question before they went over and started selling.

Evelyn Ramirez

The responsibilities of this company as well as any other company should be to implement policies and regulations that account for their business practices on a humane and social level.

In my opinion, this case was about a company that went global and decided to market their product without really taking into accounts the environmental circumstances of these markets-and got burned for it! Nestle could have avoided the accusations by initially reinforcing that the formula is a vital role in proper infant nutrition as a SUPPLEMENT when a mother cannot breast feed, and not as a primary source of nutrition for infants. The initial marketing campaigns should have highlighted this point and perhaps had different results from radio jingles as, “white man’s powder that will make a baby grow and glow” be less negative.

After this experience, I believe that other companies could learn from Nestle and do further research of the environmental circumstances in certain developing countries. Such facts should include:

1) Where will we distribute the product?
2) If this product needs another element such as water, is it in a clean source it comes from to avoid negative implications of our product?
3) Who is our consumer and will this product affect them long-term in any way?
4) Are we complying with social responsibilities and practices?

Carolina Ferreira

It is unconceivable that a company like Nestle, one of the largest and most profitable food processing companies in the world, has committed such mistakes, in launching a product in a foreign country without making the necessary marketing research. They did not take into consideration the local infrastructure, as well as the local culture. In addition, they did not have any monitoring policy or any educational practices in order to make sure that consumers were making the right use of the product. Moreover, It was not taken into consideration the risk in launching a product without a clear understanding of current legislation.

After all the controversy, theoretically, I believe the policy created in 1970’s was made under a social and ethical responsibility standards. The policy takes into consideration the distribution, as well as, the availability of the product in the marketing, regulates the advertising and marketing practices and makes sure that the product commercialization are in accordance with the regulatory agencies.

Thinking from the business side, the spreading of HIV through mother’s milk could be used as a form of marketing. Since, the infant formula could be an option in substituting the breast feeding. Therefore, many newborns were able to survive without getting contaminated by their mother’s milk.

Chandra Sweet

Jarol: Your quote “the business of business, is business” is perfect for this case. Someone at Nestle had to know the affects of their product on the market, but the end result of making money outweighed that. They probably couldn’t foresee all potential problems, but they could obviously see there would be some. Not taking that into consideration is extremely unethical, but sadly a part of business.

Eva Kaljuvee

It seems to me that the large food and nutrition companies are even poisoning their own people in developed countries. Thus, reading about the Nestle case study and how they operate their marketing strategies in the third world countries does not surprise me at all. Moral values are not the concern of many food companies these days. The only motivation that thrives those companies is to make higher profits in which ever way every possible.
There are also cases when one is expecting to buy quality products when for example they are marked as organic, yet in reality, the label is simply the result of efficient lobbying. There is no governing body in the government that would require and demand for food products to be healthy and nutritious. Also, unless a company poisons people, there is penalty for misrepresenting information on labels. As a result, consumers have to be extra cautious in terms of what food products they consume since the companies do not live up to their promises. They are often backed up with big entities that have nicely paid off to do so.
As far as the Nestle case study, I am convinced that Nestle just saw an opportunity to grow their business in those third world countries and did not think there would be any consequences. The question of course is how do you sell infant baby powder that is to be mixed with water? I assume Nestle has enough information to indicate that many of those countries have no clean drinking water. Also, people are not educated in those countries so they are much easier to fool and mislead. Fortunately Nestle was not so lucky and the public did speak out. Also, it was detrimental for Nestle not to react quickly enough to the complaints
In my opinion, morality is one of the biggest concerns in many big powerful businesses and more often than human conditions are sacrificed in the name of the bottom line. Nestle did not only caused many infant deaths but also reshaped the cultural values in a bad way.

Nitara Tigre

The infant formula controversy certainly damaged Nestle’s corporate image. On one hand it can be seen as an honest mistake that the company went to great lengths to take responsibility for. On the other hand, it is still very shocking that a MNC would be so negligent as to not do their research about the lack of clean drinking water in the region. They also have a product that is not necessarily the most healthful (compared to breast milk), and were clearly using false advertising methods to encourage women in the Third World to potentially risk their child’s health by using their formula. A better marketing strategy might have been to advertise their product as a good option for supplementing a baby’s diet. Also, since large scale education about the use of clean water may be difficult in some areas, perhaps Nestle should include clear diagrams that warn mothers about this risk and provide easy-to-follow instructions on how to prepare the formula.

What I find to be the most eye-opening aspect of this case study is the need for thorough research on the part of the MNC before they enter into a new market. It seems like the controversy could possibly have been avoided if more research and testing had been done with the product prior to its mass marketing. Going forward, Nestle has new challenges to face with regard to the rise of the HIV/AIDS virus in Africa and the demand for an alternative to breast milk. It seems that education will have to be an increasingly important part of their marketing campaign in this area if they want their product to be used properly. Unfortunately, due to the nature of their product and its impact on infants, Nestle and other formula manufacturers will always be held to a higher set of standards than the makers of other products. This means that as new challenges arise, consumers will always look to them to “do the right thing” and there is no room for another error like this in the future.

Alberto Gomez

Corporate responsibility is a very taboo topic to speak about when it comes to vast corporations such as nestle and MNC because although, both companies are trying to be aware and conscious of the issue that arise due to its services and products, at the end of the day, the company still wants to promote and make their profit. Nestle in my opinion made sure that their company was viewed as the responsible type as soon as the media surrounded the case. The company clearly had not done the proper research involved when making such an impact on a countries culture, clearly the formulas were being marketed and distributed irresponsibly and this had a lot to do with the company's consumer awareness.

I believe that nestle could have been more aggressive in terms of their research about the places where their product was being distributed and marketed. Clearly due to the circumstances, the nestle company was negligent in being more proactive in the proper distribution of the marketing materials and product. Nestle was well aware of their impact on cultures and knew that they would be inducing a type of culture shock because of their products implied uses.

Nestle and other companies of its sort could do more to study the social and medical effects of their products and services. Companies that provide these types of food products, can have a psychological effect on cultures, with the assumption that products replace certain vital nutrients. A smarter marketing approach could be use, one that would include information written in the language of the places where the product is being distributed, also, doctors could have been more educated in educating their patients.

In terms of the spread of HIV through mothers milk, this problem can be addressed by educating and being more active in the communities of these people where this is a problem in educating them. Promoting safer sex and health habits is a big part of this issues that is often over looked, perhaps handing or speaking to these indigenous people that are not aware of this will help the situation. Nestle should be an advocate (an active) advocate in the promotion of their products help as well as promoting healthy habits for mothers, like having regular doctors check up and showing them healthy habits.

Lani Schmidt

In the case Nestle: The Infant Formula Controversy, Nestle was blamed for the death of many infants in third world countries and punished wrongly. Many activists looked for causes to accuse Nestle of the increased rate of infant deaths due to their formula. Some charges against the company were to promote bottle feeding and discourage breast feeding, advertising and marketing through jingles and television and giving samples to new mothers. The article wrote that Nestle pushed the bottle feeding on new mothers in third world countries but in fact the activists failed to tell that the actual formula was not the cause of the deaths. The cause of the deaths were that the women in third world countries were financially unstable to feed their babies the correct amount of formula or mixing it with contaminated water or other products to make the formula last longer. Nestle gave the women nutritional facts on the formula and it was up to the women in these countries who did not feed their baby the correct amount or contaminated it. Nestle is not responsible for showing a mother how to take care of their new born baby. Nestle is a company who is there to sell a product. A product that was nutritional for babies.

I believe that Nestle was smart to save their reputation by attempting to change their advertising strategies. They decided to promote their brand with health programs that informed mothers of the formula and the proper usage. Nestle still told the mothers that breast feeding is the best nutrition for a baby. I think Nestle did a good job trying to save their brand by smarter advertising and educating the women. It only helped Nestle. By Nestle giving free samples out to women was a good strategy only to help women who were not financially stable or healthy enough to produce the breast milk needed.

Although I agree with Nestle, I do believe that they should have researched the demographic of the areas they were marketing to just to avoid problems. I would allow Nestle to publicly advertise their product because there may be some people that could afford the formula. Tobacco products and alcohol are advertised around the world and they are not healthy but readily available. People choose what they want to buy. Advertising is global. I believe and this may be harsh but if you can't afford to buy something you don't buy it and if you can't afford to have a child don't have one.

Now with the HIV epidemic in third world countries becoming an issue, bottled formula is now needed since breast feeding has caused HIV in new born babies. Nestle infant formula was once blamed for death and now needed for survival. The demand is so high in South Africa that Nestle is trying keep up. Nestle is doing as much as it can by the opening of a new factory in Brazil. I believe that Nestle is doing its best to conform to the needs of women and their babies.

laura simons

The Nestle Case to me is an example of companies which are purely only concerned about their own personal motivations and money schemes. While as everyone else has stated, the case itself concerns the malnutrition and death many of babies in third world countries.Nestle has a company chose to colorfully market their formula product as a product which can fully offset the need to breast feed. Nestle also played the lack of education and knowledge of this underpriveledged people. Convincing them and not interjecting when mothers believed that the bottles themselves could serve as nutritional suppliments. While the company did try to comply with the WHO, once caught and charged with killing innocent infants, they still remained to do business within those countries. Personally, I think Nestle should be charged and made to pay reparations to those families affeceted by their bad marketing.

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Andrea Wilson

While I believe that Nestle practiced social irresponsible behavior I also believe that Nestle was wrongly targeted in the cause of infant deaths. The contaminants that taint the infant formula have very little to do with Nestle, they are the result of the mothers lack of access to clean water and other necessary components for making the formula.
I do however believe that Nestle should have provided all of its consumers, especially those in third world countries some basic educational details for use and a notation regarding formula vs. breast milk prior to the boycott. But I believe that Nestle acted promptly after hearing of the boycott. Why the United States was the only country of the 115 to lobby against the implementation of a regulation code requiring more responsible advertising and marketing of infant products is clear and obvious. The U.S. is probably guiltier of false advertising and depriving consumers of necessary adverse information in its advertising than Switzerland, and any other country as our economy is largely based on consumer ship. So to advocate for something that would ultimately result in loss of sales would only eventually create the need for a reassessment of US advertising practices and no good could come of that.

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