Sunday, March 21, 2010

Nestle Philippines:Business Case Study About Business Ethics

Backgrounder:
As Nestls popularity grew more businesses wanted to merge and become
partners with Henri Nestl's business. From 1866 to 1947 the Nestl
Company had gone through several name changes. In 1905, Anglo-Swiss
Condensed Milk Co. and Farine Lactee Henri Nestl merged, and the
companys name became Nestl & Anglo-Swiss Condensed Milk Co. Then in
1929, Peter-Cailler-Kohler Chocolats Suisses S.A. merged with the company.
The name was then changed to Nestl & Anglo-Swiss Holding Co. Ltd, on
November 27, 1936. In December 1947, Co. acquired all the shares capital of
the Alimentana S.A. company so this point the name was at Nestl
Alimentana S.A. And then finally, the last name change that the company
would endure was in 1977, where it adopted the name Nestl SA ).
Along the way Nestls company remained successful, which allowed them
expand to new regions and territories throughout the world, making them
the worlds biggest food and beverage company. Nestls headquarters are
located in Vevey, Switzerland, but the Nestl Company has factories or
operation in almost ever country in the world.From CastelarArticl

Nestle Philippines
Nestl Philippines, Inc. (NPI) today is a robust and stable organization, proud
of its role in bringing the best food throughout the stages of the Filipino
consumers lives. The Company employs about 3,400 men and women all
over the country. It is now among the top companies in the entire Nestl
world, and is among the countrys Top 10 Corporations. Its products are No. 1
or strong No. 2 brands in their various categories.

The Nestl culture

Apart from its commitment to safety and quality and its respect for diversity,
Nestl is committed to a number of cultural values. These values come partly
from its Swiss roots and have been developed during its history. They are
also evolving so as to support the permanent reshaping of the Company.
They can be described as follows:
Commitment to a strong work ethic, integrity, honesty and quality.

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 Personal relations based on trust and mutual respect. This implies a
sociable attitude towards others, combined with an ability to communicate
openly and frankly.
A personalized and direct way of dealing with each other. This implies a
high level of tolerance for other ideas and opinions, as well as a relentless
commitment to co-operate proactively with others.
A more pragmatic than dogmatic approach to business. This implies being
realistic and basing decisions on facts.
Openness and curiosity for dynamic and future trends in technology,
changes in consumer habits, new business ideas and opportunities, while
maintaining respect for basic human values, attitudes and behavior.
Pride in contributing to the reputation and the performance of the
Company. This calls especially for nurturing a sense of quality and long-term
achievement in the daily work beyond fashion and shortsighted gain.
Loyalty to and identification with the Company.
The Case Study
Consider this case involving the Company and a distributor, Forefront IT
Trading Corp., owned by Filipino investors who are now complaining of unfair
and unethical business practices by their foreign partners. In a disgusting
display of corporate bullying, the multinational refused to pay Forefront's
more than P12 million in collectibles unless it signed a Release and Quit
Claim dropping all other legitimate claims. This when a ranking official of the
foreign firm had promised, verbally, the settlement of all just and reasonable
claims.
The amount consisted of close to P1 million in withheld expanded value-
added tax (EVAT) for 2007 that the multinational should refund to Forefront,
plus P11.07 million representing performance incentives, advances made by
Forefront for the company's promotional activities and cost of products taken
back by the multinational.
The multinational allegedly took back the products in Forefront's possession
after terminating the distributorship agreement when the latter protested the
meddling and unprofessional conduct of the multinational's sales official
assigned to it. The distributor had wanted a replacement.
It turned out that the multinational's sales official was carrying on an
extramarital relationship with a Forefront executive, a married man. She
exploited this relationship to secure unusually large orders of her employer's
products and even slow-moving items that Forefront had to dispose of even
at cost, even to the extent of forgoing profits. Santa Banana, she even
succeeded in passing on to Forefront some poorly paying accounts not
included in the original agreement. All these eventually resulted in huge

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losses to the distributor.
This came to a point where Forefront experienced difficulties in meeting its
payroll, the 13th month pay for December 2007, and separation benefits for
some 80 employees who had to go as a result of severe financial stress.
When advised of the affair and the resulting conflict of interest situation, the
latter simply dismissed the matter as "a purely personal affair between two
consenting adults," and ignored the request that their sales official be
replaced. Yet, the multinational's own Corporate Business Principles and
Code of Conduct states, among other things, that the company "requires its
management and employees to avoid even the appearance of impropriety in
its business relationships on behalf of the company."

"All business depends upon men fulfilling their responsibilities." Mahatma

Gandhi

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