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Ethical Dilemmas in Business: The Nestle Baby Formula Scanda

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on 19 November 2014

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Transcript of Ethical Dilemmas in Business: The Nestle Baby Formula Scanda

1. It can be easy for a company to disguise fundamental flaws in products.
2. At the same time, they can undermine competitors convincingly.
3. ‘Doing good’ can be used to hide doing ill.
4. Do your best to examine the costs and benefits of products.

Ethical Dilemmas in Business: The Nestle Baby Formula Scandal
Summary
-Children in developing countries consumed Nestle’s infant-formula and had mortality rates five to ten times greater than those who were breast-fed,
-Uniformed nurses distributed the baby formula to poor mothers which caused lactating mother’s milk to dry up.
-This caused the mother and child to became entirely dependent on Nestle’s infant formula,
-Most of them could not afford the formula and gave their children an insufficient quantity of the formula.
-The formula also required clean water, which most mothers did not have access to.
Stakeholders
Shareholders
Employees
Management
Customers
Nestle's Competitiors
Health Care systems (Hospitals and Medical staff)
Ethical Lenses
Rights/responsibility:
The duty of the company was to provide safe and healthy formula to mothers.
Relationship:
Nestle gave their customers something for free, which can help create loyalty among customers.
Results:
they sold their baby formula at a high price to make a profit.
Reputation:
Nestle did not provide enough information/lack of clarity on their product sold to protect their reputation.

Ethical Alternatives
Send real nurses to offer accurate instruction of baby-formula.
It should include the warning & specific instruction on the product.
Stop distributing baby formula powder or lower the market price so that more mothers could afford the price.
Nestle should stop promoting their baby products to the health care institution in order to let customers make their own decisions.


Best Possible Outcome
1. Send real nurses.
2. No free formula.
3. Work for clean water.
4. Lower the price.
5. Less aggressive marketing.
6. ‘Breast milk is best’.

- Nestle did none of this.


Conclusion
What You Can Learn
1. Educate about any possible dangers.
2. Don’t sell to uneducated customers.
3. Clarify a product’s purpose.
4. Follow any laws applicable to the product.

From Nestle's Perspective
From A Consumer's Perspective
Bibliography
Krasny, J. (2012, June 25). Every Parent Should Know The Scandalous History Of Infant Formula. Retrieved November 18, 2014, from http://www.businessinsider.com/nestles-infant-formula-scandal-2012-6?op=1
“Marketing Of Breast-Milk Substitutes.” (n.d.). Retrieved November 18, 2014, from http://www.nestle.com/csv/human-rights-compliance/baby-milk
Nestle Profile. (n.d.). Retrieved November 18, 2014, from http://blogs.baruch.cuny.edu/mgt4880nestle/2013/04/22/crisis-facts-problems-and-issues/
Solomon, S. (1981, December 5). THE CONTROVERSY OVER INFANT FORMULA. Retrieved November 18, 2014, from http://www.nytimes.com/1981/12/06/magazine/the-controversy-over-infant-formula.html
“Why Was A Nestle Boycott Launched? (n.d.). Retrieved November 18, 2014, from http://www.nestle.com/aboutus/ask-nestle/answers/nestle-boycott
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