Ever since 1866 in Vevey, Switzerland where Nestlé was originally founded, integrity, honesty, fair dealing and full compliance with all applicable laws have governed its business practices. Since Nestlé products are distributed all around the world, it is important that their employees live the commitment in their everyday responsibilities to keep Nestlé’s reputation of having the their employees be the most important asset in the company. Nestlé is committed to enhancing the quality of consumers’ lives with their personal mission being, “Good Food, Good Life.” Nestlé believes that their products provide people with the most nutritious, best tasting food along with having a wide range of categories of food and beverages that can be supplied to people from morning to night.
As a nutrition, health, and wellness company, Nestlé holds the responsibility to promote it’s products in an encouraging balanced consumption, especially for children. Nestlé states that all of their products are always advertised responsibly by adhering to detailed policies and principles, along with voluntarily signing up for industry pledges in more than fifty countries. Nestlé promises to continue to review and update its principles to ensure that all of their products are advertised legally and in an honest manner. In the past, Nestlé has experienced a few ethical issues that have resulted in dishonest and unlawful scenarios. Some of the unethical cases that Nestlé had experienced, resulted in a major controversy as to how a resolution would evolve. The controversy was between Nestlé and the location in McCloud, California to build their bottling plant on. McCloud wanted the area to remain a healthy atmosphere and argued for the land so much that in order to end the dispute, Nestlé decided to build its bottling plant in Sacramento, California to make peace.
Although Nestlé built their water bottling plant in Sacramento, CA, they had other issues with their water product. However this time it did not involve destroying of the atmosphere. Nestlé’s new bottled water, “Pure Life” provided safe clean water for Asian countries, but priced the water at an unaffordable price that lower income groups would never be able to imagine purchasing. Nestlé also provided these small communities with water shortages, leaving individuals sick and desperate for clean water that could only be given to the people if they purchased water from them. This unethical case was a huge problem that Nestlé was faced with, along with the million of people in these Southern communities. People in Pakistan could not afford the basic human need for life, water. Individuals in Southern communities are not as fortunate as people in the United States for water is not free, clean, or an abundant natural resource. Water is considered to be sporadic and contaminated in the South Asian countries. How could water, a vital resource for the existing of life, be unaffordable?
In Pakistani, the filthy water that the village people are surrounded by, had no other source of water to accommodate their problems, therefore, many young individuals became very sick. The blame was put on Nestlé because of the well that had been dug in their community that not only is very dirty, but very scarce. “The water is not only very dirty, but the water level sank from 100-300 to 400 feet,” Dilwan says from an article in Worldcrunch. The village requested for clean water to be piped in and Nestlé refused their request. Nestlé gains its success from countries, such as Pakistani, that have extremely bad drinking water. The problem that Nestlé was facing was the fact that they were telling people that their product, Pure Life Water, is the answer to their problems. However, Nestlé was selling the Pakistan people, their own ground water that they have enhanced with minerals to make clean and healthy for them by at the same time, leaving them with no water coming out of their own house faucets. The little water that did come out of their faucets was dirty and undrinkable. The only way that Nestlé helps Pakistan people is by making them purchase Nestlé’s water that can only be afforded by a few families.
Nestlé defended itself by stating the fact that they have built two water filtering facilities that were providing over 10,000 people in Pakistan with clean drinking water, saving lives. The company also brings the community’s that it sells its water to tax dollars, are welcomed by officials, and is full supported by an armada of lawyers and Project resource people. Nestlé pumps several million cubic meters annually and transports the water in tanker trucks to bottling plants where their spending is minimum and their profit is the communities that purchase their product. Nestlé draining developing countries from their ground water to create their Pure Life bottled water that is purified and cleaned with minerals for the people to purchase back at high prices. This case is claimed to be unethical and will be evaluated in five different ways to illustrate the variety of viewpoints. Nestlé will be illustrated through the use of ethical theories that concentrate on their primary values that should be kept in mind, along with each ethical rule that should be demonstrated by each theory.
Stakeholders are considered to be anyone who is affected by the company in any manner. The stakeholder model that is located in the textbook on page 67 states that the stakeholder model of corporate social responsibility begins with the insight that every business decision affects a wide variety of people. These decisions benefit some and impose costs on others depending on the situation. The stakeholder model simply demonstrates what actions could impact the society as a whole and not just the people. The Nestle case can be interpreted in different ways based on this type of evaluation. The stakeholders that were affected in this case in a dramatic manner were the Pakistan families that have purchased the Pure Life water from Nestlé in an approach that seemed almost forced. The Pakistan families watched their small children suffer from disease and sickness due to unhealthy, dirty water. Although the prices of Nestlé’s water were high, their only other option to not support Nestlé’s profit was to watch their children suffer in pain. In this view, the children were also considered to be the stakeholders because they are the individuals who are directly affected by the Pure Life Water product of Nestlé. The products that are purchased by the Pakistan families is directly related back to the profit that Nestlé makes. This case is considered to be unethical in the stakeholder’s viewpoint due to the life or death circumstance that stands between purchasing Nestlé’s products or not supporting their products. Supporting Nestlé’s Pure Life product gives the Pakistan people clean, fresh, healthy water for their children to live a healthy life, but in order to do so, these people have to spend the only money they have on clean water and other minimal life necessities. Although they are receiving clean bottled water, they have traded the water they would usually receive from their faucet to bath and clean with, draining their water supply. However, by not purchasing Pure Life water from Nestlé, Pakistan families are forced to suffer and continue to live on the small income they make which is not the ideal situation. The viewpoint held from these stakeholders can be as broad as the public sees it, or on a personal level that effects each family in their household.
Individualism is the social theory that favors the freedom of action for individualism over a state of control. Ethically speaking, business actions under the practice of individualism should maximize profits for the owners of a business, but do so within the law as stated in the case manual.
Pakistan people. Although Nestlé has been draining developing countries groundwater to purify and bottle it, families have the complete freedom to make the choice on whether or not to support Nestlé’s actions. Nestlé’s main idea for targeting developing countries with their Pure Life bottled water is pronounced to be unethical in the individualism standpoint due to the fact that they knew that the customers in those areas would do whatever it took to provide a healthy life for their family. Also, by Nestlé raising the price levels to an inappropriate number, it leaves Pakistan families in a shortage of money that leaves Nestlé on top with a successful profit, but a selfish reputation. The employees will do anything it takes to create a prosperous outcome for the company itself.
In an ethical manner, business actions should aim to maximize the happiness in the long run for all conscious beings that are affected by the business action. Utilitarianism is explained in the case manual to bring forth happiness of all conscious beings that are affected by the business. Utilitarianism values are sometimes interpreted to be as simple as the pure satisfaction of desires. These “desires”, in the Nestlé case, are the purified bottles of water that the Pakistan people receive through an exchanging of money with the company. The need for water in developing countries is vital for people’s survival. Nobody can live without water, and no one can live healthy with the absence of clean water. Following the definition of utilitarianism, ethical action is evaluated by looking at its consequences, weighing the good effects against the bad effects, on all the people affected by it. Nestlé’s action did not follow ethical action, actually following the exact opposite of ethical action. “Pure Life” water produced the worst outcome for the greatest number of people in South Asia because people could not afford the basic human need, water. Water is sporadic and contaminated in Pakistan, which is why Nestlé made these Nestlé individuals their target group. Water is a vital necessity to live life, not a luxury item that some just wish to buy whenever they want. Although the Pure Life bottled water is the product that Nestlé supplies to these people to bring them happiness, they are also responsible for the unhappiness that is brought forth when the customers are left with nothing in their pockets, overdrawn. Utilitarianism is a strong ethical theory that needs to cover all of the business’s primary values and follow the rules in a strategic, ethical manner to bring a business to its highest level of success.
Kantianism is an ethical theory that many people are not aware of but is demonstrated often. The act of always respecting and honoring individuals and their choices is the definition of Kantianism. It is the principal to stay truthful, not lie, cheat, manipulate or do anything that may harm others in order to get the outcome that you wish to produce. Kantianism stresses the importance of informing stakeholders and holding a rational relationship with them. Kantianism may be one of the most essential, ethical theories that a business should demonstrate because of the everlasting relationships that can be built with its customers. Complimenting the developing relationships, an optimistic reputation for the company will exist and promote the company on a positive level. Kantianism is not expressed in the Nestlé case. Nestlé is straight-forward and honest with the Pakistan customers, but ripping them off with prices and leaving them with scarce water levels that come out of their faucets. If Nestlé just lowered the prices of its bottled Pure Life water, the shortage of water would not be considered as big of a problem for the Pakistan people because they would have access to more clean water. Another way of looking at the Nestlé case not following the ethical rules of Kantianism is manipulating others to get your way. Indirectly, Nestlé manipulates Pakistan people into buying their Pure Life water at the prices they are at in order to stop the sight of their children suffering from the unsanitary water they are provided with. Although Nestlé is not harming the Pakistan children, it is considered to be an unethical case because the people know that if they do not purchase Pure Life water, their only other choice is to watch their children suffer through the pain brought forth from dehydration, contamination, and overall, dirty natural resources that are forced to be consumed in order to stay alive. More children, in countries like Pakistan, die from drinking dirty water than AIDS, war, traffic accidents and malaria all put together. In order for Nestlé to get their way in selling their Pure Life, they present their product to these locations where the people are forced into a situation that results in the health of their family.
The Virtue Theory is similar to that of Kantianism for which they both resemble acting in ethical ways that will result in good character. Character is huge in the business world for the reasoning that it brings forth recognition and promising business to its customers. The primary values that are focused on in the virtue theory are the character traits that promote wellness of individuals within society. The virtue theory expresses the way in which a company should act to embody a variety of virtuous character traits. It is vital that immoral character traits are avoided and not demonstrated in the work place. In terms of the Nestlé Pure Life case, the way that Nestlé presents itself to the Pakistan customers is an in unethical manner. Nestlé does not care about the problems that it is creating for the Pakistan families losing their money on the bottled water and the struggle it has been for them to have a shortage of water obtained from their faucets that is undrinkable anyways. They’re using the Pakistan’s community water to make a profit off the Pakistan people. This act of manner does not reflect upon good character, nor does it promote the flourishing of the Pakistan people within their society. They have drained these individuals from their scarce supply of ground water and have made an excessive amount of profits from these helpless, sick, poor innocent people who have no body to turn to for help besides Nestlé.
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