Nestlé's Global Citizenship: Balancing Profit and Social Responsibility

Nestlé is a Swiss multinational company whose main currency is the Swiss Franc. At Nestlé, the core spirit of world citizenship is 'creating shared value.' At present, Nestlé's operating conditions are divided into two types, one for the outside and one for the internal problems. Nestle is an enormous company and in this essay I will consider how it to be a citizen of the world from business perspective.

Be a Citizen of the World - Treat the Entire Supply Chain as Your Partner

For many companies, CSR is only an independent department engaged in public welfare; but we integrate the awareness of 'global citizenship' into every aspect of business operations. Christian Frutiger, deputy director of public relations at Nestlé Headquarters, said that the fixed staff at the headquarters is from as many as 90 different countries! The strong tolerance of a civil society is concretely and microscopically presented in this enterprise. The other side of tolerance is respecting differences.

Localization - Adjust Milk Recipe for Different Country Issues

In Vietnam, Pakistan, Sri Lanka and other coffee producing areas, Nestlé works with local governments and farmers to develop irrigation technologies that can save up to 60% of water use. In the Philippines, cases of infant brain development retardation are much higher than in other developed countries. Nestlé also works with local research institutes to identify the problem and develop special milk powder which can adding iron.

In rich countries, children who are overbalanced by diet or over-nutrition are serious problems affecting the health of the entire country. Nestlé is therefore planning a global “child nutrition program” to communicate with government, schools and civil society organizations and convey the right diet concepts.

In addition to cocoa, coffee and other crops that can only be produced in a specific climate, the local foods sold by Nestlé's branches are mostly from the surrounding areas; the purpose of this is to ensure as much as possible through direct interaction with producers. The supply chain can also abide by the spirit of 'shared value.'

Sustainable Management - Long-term Plan for Child Labor

The Ivory Coast of West Africa is an important source of cocoa in Nestle, but it is also the area with the most serious problems of child labor. Many children leave the campus to improve their family livelihood and work on the farm. Nestlé is committed to not using child labor to participate in the production of raw materials, further into the countryside, to promote the importance of educating children, and the concept that minors should not be exposed to chemical pesticides; on the other hand, Nestlé is also building schools and sanitation facilities in the local area, allowing children to enter the school nearby and trying to use systemic as a way to reverse child labor.

Communicate Universal Values - Provide Assistance to Ultimately Improve People's Lives

'In fact, the conflicts and differences between two jobs are much smaller than I thought.' Fu Tige explained, 'For me, the important content of the two jobs is 'providing assistance'. At the Red Cross, I distribute food and medicine to refugees in critical situations; in business, what I do is of the same nature and may even have a more positive impact. '

'Humanitarian relief is to help people get through the difficulties, but if you want to improve people's lives in an all-round way, you must provide employment and long-term plans. After these values are created, they will not disappear, and will continue to expand. I believe that working here can have a bigger and more positive impact on the world,' Fu Tige said.

'Everything that creates shared value is related to social engagement. As long as you master the core principles The content can be very diverse,' Fu Tige said.

Effectively Improve Operational Efficiency Through Internal Management Plans

Brabeck's first step is to cut the company's low value-added brands, such as selling the frozen food Findus and the coffee brand Hills Brothers, and classifying 125,000 products into six strategic brands to reduce the distribution of marketing.

On the other hand, the company is strengthening its investment in high-growth businesses, including Ralston Purina, the second-largest pet food in North America, Dreyer's, the third-largest ice-cream brand in the US, and a joint venture with the French cosmetic brand L'oreal. ...and so on, are the ways in which Nestlé can quickly enter high value-added industries.

Secondly, under Brabeck's leadership, Nestlé implemented the Target 2004+ program to reduce manufacturing costs, the FitNes project to reduce administrative costs, and the Global Business Excellence to achieve enterprise information management. It is expected to improve operational efficiency. According to these three major projects, Nestlé has successively closed or sold 167 factories with poor performance, which reduced the cost of raw materials and optimized the production process. It successfully saved the company about 4 billion Swiss francs between 1997 and 2001. Cost of the cost.

And through the improvement of management efficiency, the company saved 1 billion francs of administrative department expenditure. At the same time, the global unified information platform allows Nestlé to strengthen the information management of the branch, provide more accurate raw materials and inventory information through the system, and also make the procurement model fast and convenient, thus improving the productivity of the supply chain.

Conclusion

After internal and external reorganization, reform and repositioning, Nestlé’s total turnover between 1997 and 2005 grew by 30% and net income doubled; from 2005 to 2013, the company’s Operating profit margin rose from 13.5% to 15.8%, net profit margin rose from 7.06% in 2003 to 10.87% in 2013, while the administrative expense ratio fell from 35.7% in 2006 to 21.4% in 2013. 

The main external postulates indicate the company's focus on its consumers and care for them. The Nestlé company understand what does it mean to be a citizen of the world and positions itself an influential company that can change the lives of many people for the better.