Nestle and the Global Issue of Water Supply - Case Study Example

Nestle and the Global Issue of Water Supply Introduction Nestle SA is a Swiss based company which started its business operations in 1866. The company produces a wide variety of goods and it possesses a number of popular brands such as Vittel, Perrier, Nescafe, Sveltesse, and Nestle Ice Cream. The financial data show that the Nestle is the world’s largest food and beverage company presently with nearly 265,000 people. While extending its operations to other potential global markets, the Nestle may face an array of social challenges as the bottled water market involves a sequence of ethical conflicts. This paper will identify the feasibility of social responsibility programs and the ethical elements to be considered while entering a new market segment. 1. The case study indicates that the Nestle faces a series of challenges associated with corporate responsibility while planning its international business expansion. Nowadays, a number of international organizations are working toward the protection of various human rights and environmental sustainability. As part of their global operational strategies, some organizations strongly argue that access to water is not a matter of choice; on the other hand, it is a basic human right which insists that water should not be bought and sold. Hence, Nestle considers water supply as one of the most serious issues to be resolved in relation to its position in the global bottled market. In order to overcome such issues, the company has recently planned several social responsibility programs in its marketing strategy. By practicing social responsibility programs as part of marketing strategy, a company can attain a number of potential advantages. Today, a company cannot continue its sustainably profitable operations unless it practices some sorts of corporate responsibility policies. The World Business Council on Sustainable Development states that “companies cannot remain on one side, they are an integral part of our societies and cannot continue to produce wealth if the society surrounding it is collapsing” (Harribey, 2011, p.24). During the last few years, a range of theories and practices of corporate social responsibility has been formulated with intent to assist organizations to continue its operations profitably and smoothly. In the opinion of DuBrin (2008), the most potential advantage of social responsibility is that it aids organizations to achieve a good market stature which sets them apart in the competitive business world (pp.100-101). In addition, such strategies may assist companies to comply with government regulations as well as the norms of other non-governmental public welfare organizations. Finally, the concept of corporate social responsibility would be helpful for a company to convince its clients that it has taken all initiatives to protect the environment and thereby to ensure public welfare. 2. Variances in ethical views among people is found to be a potential threat to multinational companies like Nestle as they need to serve a large number of different customer segments. In the view of Briscoe, Schuler, and Claus (2008), the extent of this ethical variance may be determined by a range of elements including family background, education level, economic status, and other cultural variables (pp.137-138). In countries like China and India, orthodox families would not be willing to change their conventional ideologies and hence they may not easily adapt to a “disposable culture”. It would be a cumbersome task for the Nestle to attract such customer segments because their consumerist perceptions have evolved over a long period of time. In addition, people’s education level may also be a crucial factor in defining their ethical views. The people who have attained a high level of education would be more concerned about health as well as environmental safety. According to Vaccari and Fletcher (n.d), bottled water is transported over long distances from its point of production to consumption and this process has an important environmental impact, in particular on atmospheric pollution and climate change because of fuel combustion. Therefore, educated people may not support bottled water culture. 3. Vaccari and Fletcher (n.d) describe that global companies like Nestle face numerous human rights and ethical challenges when selling its bottled waters overseas, especially to developing countries. However, the ethical differences between countries are determined by various factors including cultural variables, social recognition of the product on sale, and economic conditions of the market. Cultural variables can have a significant influence on ethical perspectives a society. To illustrate, Europeans have greatly adopted a “use and throw” culture which in turn positioned Europe at the top of world bottled water consumption. Hence, Nestle can easily market its bottled water products in European countries. However, bottled water consumption culture is very different in developing and underdeveloped countries as they depend more on ground water resources for drinking purposes and consequently this situation may raise potential challenges to Nestle in those regions. Similarly, social recognition of product on sale must also be taken into consideration while developing marketing strategies for a global company. Water is considered as one of the basic human requirements and therefore social activists argue that water should be easily accessible to humans. As water is the most essential requirement for human survival, its sale involves a sequence of intense ethical issues. Such social issues may be the same at various parts of the globe regardless of territorial differences because water is the basic requirement of humanity. Economic aspect of the market is also a key element in determining ethical variances between countries. For instance, the Nestle can implement price raising policies easily in economically developed countries like the United States whereas the company may face strong protests to any price change in financially struggling countries. Tager (1982) says that a country’s political spectrum also plays a significant role in setting its ethical stands. A marketer may face huge difficulties while he deals with product positioning in a democratic country as he needs to cop up with large number of external as well internal market elements. Conclusion From the above discussion, it is clear that the concept of social responsibility bears a range of potential advantages. It assists a company for its market strategy to be comprehensive enough to hit its ultimate targets. Likewise, ethical views and norms differ from country to country and even from individual to individual, the extent of which may be determined by a sequence factors including cultural variables, socio-economic status, and political influences. Reference Briscoe, D., Schuler, R. S & Claus, L. (2009). International Human Resource Management: Policies and Practices for Multinational Enterprises. Abingdon: Routledge. Dubrin, A. J. (2008). Essentials of Management. USA: South-Western Cengage Learning. Harribey, L. E. (2011). “Strategic value of Corporate Citizenship”. In Theory and Practice of Corporate Social Responsibility. S. O Idowu & C. Louche (Eds.). New York: Springer. Tager, F. (1982). Critical review: The relation between policies and culture in the teaching of the working class students. Curriculum Inquiry. 12(2). 209-219. Vaccari, S & Fletcher R. (n.d). Nestle Waters and the global issue of water supply: Integrating social responsibility in the management process. Contemporary Challenges in International Marketing, 826-829. Read More