THE BUSINESS OF WATER
CORPORATE GOVERNANCE AND BUSINESS ETHICS
CASE STUDY ANALYSIS
Who are the main stakeholders of beverage companies such as Cocoa Cola and Nestle in this case? How would you prioritize their stake and how legitimate are the different stakes?
Consider the following stakeholders for beverage companies such as Nestle and Cocoa Cola in terms of legitimacy and importance of the stakes held.
Shareholders and Board of Directors: These are directly interested in the profitability of the company and will be impacted by any decision that the company makes. While their stakes are legitimate and must be prioritized in terms of company ...view middle of the document...
They also have a legitimate stake in the business
Competitors: Decisions made by beverage giants such as Cocoa Cola and Nestle also impact the decisions made by competitors, in terms of types of resources used. Cocoa Cola’s commitment to conserving water has impacted several other organizations to adopt similar practices
Industry: Again, the decisions taken by a large beverage producer impacts the decision making process and best practices by the industry in which the company operates
Consumers: Final consumers of the product also hold a legitimate stake in the corporation, since they will be consuming the final packaged water product
Ancillary and Subsidiary Industries: That use packaged water and bottled water products and supply raw materials for the same e.g. the bottling industries, the packaging industry etc. are also impacted by these companies and hold a legitimate, if not important stake in the business.
Think of the Role of Nestle in terms of Carroll’s pyramid of CSR. Which responsibilities does it live up to and where do you see space for improvement?
Carroll’s pyramid of CSR describes the following responsibilities for an organization:
Specifically, in terms of Nestle, we can analyze the situation as follows:
Economic Responsibilities: This is the foundation of the pyramid of corporate social responsibilities, to which Nestle does live up. It is a profitable company with net profit $15.4 in 2014 and $92.5 billion revenue in 2014. The company also makes decisions that are primarily driven by profitability, giving 2.5% dividend to shareholders in 2014
Legal responsibilities: The company is legally compliant and all decisions taken by the company are within the letter (if not spirit) of the law.
Ethical responsibilities: This is a grey area for Nestle, especially when it comes to marketing bottled water, since each liter of packaged drinking water uses 3 liters of drinking water in the manufacturing, transport packaging and marketing process. Nestle has also faced criticism for the exploitation of nonrenewable water resources and aquifers such as water from the Fiji islands. The hiring of lobbyists to campaign against the ban of packaged drinking water in municipal corporations and placing contentious ads that say that packaged water is the most environment friendly product that they advertise has also garnered a lot of criticism. Nestle has also been accused of spying on NGO called ATTAC that has targeted the company’s bottled water operations in Brazil – all pointing to the fact that Nestle does indeed need to work on its ethical responsibilities in its contribution of water resources towards the people .
Philanthropic Responsibilities: While Nestle has undertaken a range of water conservation initiatives across its global businesses with an aim to minimize the impact of their operations on natural water resources and the communities they support.by 2016.and they work with expert partners, including the WBCSD and the...