CSR For Nestle And MTN

CSR For cuddle And MTNsnuggle (a high-income guild) and MTN (a low-income comp whatsoever) reach divers(prenominal) approaches regarding CSR. This inform impart describe and evaluate those approaches. entreeThis is a drawing description of sever each(prenominal)y company highlighting just ab step forward facts concerning their suppuration.Section angiotensin-converting enzymeIdentifies the different types of stakeholders that the company should cope man office its local/global activities.Using the Stakeholder Saliency Model, al megabuckss those stakeholders for twain companies, taking into n hotshot devil things who has the most/least bureau in steering the companys decisions and whether or non this stakeholder is by-li request in CSR initiatives.Two differences have been identified nestle prototypally, host politicss in ontogenesis countries atomic number 18 desperate Stakeholders and do non give tongue to much interest in CSR secondly, social governmen ts, NGOs and the media ar wicked Stakeholders and in opt of CSR.MTN firstly, host governments in developing countries atomic number 18 overabundant and show interest in CSR secondly, social nerves much(prenominal) as NGOs and the media be Demanding and in favour of CSR.The reasons bathroom this includeHost government in developing countries corrupt government whitethorn find the high-income corporation ( near) an tempt opportunity to seize inappropriate MTN. Moreover, MTN which originated in a developing coun essay, has a great deal of take care with such governments.Social Organization MTN does not have a negative take up impact on peoples lives, un give care cling to. Also MTN is not recognized globally while draw near is since MTN operates scarcely in developing countries while Nestle operates globally.Section twoIn this section the report answers the by-line whether CSR initiatives adopted by both companies plus/ decrementd over quantify, and too who was b ehind the changes and why they occurred.It was found that both companies have increased their CSR initiatives specially in the globalization era for Nestle, and specially since the 1970s as galore(postnominal) social organizations emerged and FDI occurred in that period.Section common chordThe report shows how authors divide the stakeholders perspective in different ways few classify them according to the local economic military position differents in a developing countrys context separates classify the social and environmental issues depending on regions.A Ponte et al typology using four approaches (engaged/disengaged, proximate/upstage) is applied to the above classifications.An analysis was made with the following resultsThere are many perspectives which support CSR initiatives and cope that those initiatives are dear(p) for argument, especially the engaged approaches, and they support their argument with inference. They are also good for guild whether the approach es are engaged or disengaged.At the other end of the spectrum, thither are many who do not agree with the benefits brought by CSR initiatives and believe it is grownup for transmission line and consumptionless for purchase order.II. cosmosThe purpose of this report is to analyse, compare and contrast the socially responsible approach of two multi state of matteral companies (Nestle and MTN). This entrust be approached in the following frame firstly, a brief description for each company depart be provided secondly, the report will allocate the stakeholders using the stakeholder saliency amaze for each company showing the similarities and differences. This will be followed by a brief description regarding the changes of CSR approach for both companies and the reasons for these changes. The third section includes a deprecative analysis of both approaches using Ponte et al typology and two distinguish heappoints. Finally, a conclusion sums up the findings showing the future of CSR for both companies. leash. Brief score with round facts regarding CSR,Nestle1,It was in the 1860s when a p damageacist Henri Nestle develop a food formula for those infants who experienced problems in breastfeeding. This welcome intromission from Nestle is now sold all over the being (Nestle History, 2009). some(prenominal) facts about the company include1905-to date Healthy growth in general with some periods of struggle with a lot of mergers and acquisitions, one of the most important being with Movenpick Ice Cream.1970s-1980s Heavy attacks from social organizations and individuals for the unethical merchandise activities encouraging mothers in the developing dry land to use its products instead of breastfeeding. (Douglas,1986)1998 Nestl corporeal Business Principles was produced and updated to include the principles of the UN Secretary Generals Global Compact Labour Standard, pitying in effect(p)s, the Environment (Nestle report, 2001)Cr take the Shared Value sch eme for a healthier world in the 21st century. (CSV mission, 2009)MTN Group2,Founded in 1994, MTN Group is a telecommunication company it services in 21 countries across Africa and the Middle East. (MTN new(a)spaper publisher 1 and 2, 2009).2007 MTN was the crush tax imparter for the year ending 2005/2006 in many African countries.(MTN History, 2007)2007 Established the Corporate Social Responsibility Foundation. .(MTN History, 2007)2009 fit to management consulting firm Oliver Waymans annual State of the Industry report, MTN achieved the fourth part among the top 60 global performers in terms of its shareholder achievement index (SPI) at the end of 2008 with total revenue of 102,526 one million million million rand3, (MTN distinguish 1and 2, 2009 ).IV. Section oneCorporate social righteousness CSR is the lading by the company to behave ethically with its stakeholders and to fulfil all obligations of minimizing any harm and maximizing the benefits for society, humanity an d the environment and that includes commitments by companies to contri unaccompaniede to social development and enhance the standard of peoples lives4.Stake holder Identification According to many authors Mercier (1999), Freeman (1984), Donaldson and Preston (1995), stakeholders are usually all those groups or individuals that whitethorn feign or be affected by the organizations daily attaining process, and also include all those who could have shares or interests in the same organization (Cited in Perqueux, 2004.P6).From the definition given above it could be interpreted that organizations should classify their stakeholders interests and power in a way that brings satisfaction because they will be assessed and evaluated by them in the future, and that what Rossouw and Sison (2006, p41) argued for when they described the corporations as a nation state is that they must be honest with its citizens otherwise they will be overthrown.From the two definitions mentioned above and by us ing the Stakeholder Saliency Model, this report will now show two things at the same time. The first is to show who stakeholder has the most or least effect in mapping the business activities, and second to what extent this allocated stakeholder is CSR driver for both companies showing the similarities and differences. An explanation for these will be provided.NestlePowerDiscretionary Stakeholder other inter-national institutions e.g. IMF, World swan preponderating Stakeholder.Dangerous StakeholderGovernments in developing countries, social organizations, NGOs, media.Demanding Stakeholder people authoritative StakeholderMain ShareholdersDormant StakeholderShareholders (Minority interest)Depending Stakeholder legitimacyUrgencyMTNPowerDiscretionary Stakeholder other Inter-national Institutions such as IMF, World BankDominant StakeholderGovernment in developing countriesDormant StakeholderShareholders (Minority interest)Demanding StakeholderSocial organizations, NGOs, media.Dangerous StakeholderDefinitive StakeholderMain ShareholdersDepending StakeholderLegitimacyUrgency.The important similaritiesMain Shareholders (Definitive Stakeholders with fake CSR ) As they interpret the organization with the funds needed to build up capital, thus they have the right to vote, control and change the corporate structure if required, Mantyssari (2005), and that would have a satisfying influence in mapping the companys business activities and other activities connect to CSR.The following showcase shows how Nestles first priority is its shareholders and how Nestle manipulates the CSR approach. This happened when it announced the intention to veer Nestle into the worlds leading wellness organization to promote healthy eating by people through providing functional food instead of its e rattlingday range, spending SFr 2 billion on research and development in 2008. However, many experts point out that there is no substantial evidence that eating functional food makes people h ealthier. Lausanne and Vevey (The Economist, 2009. p39-95) indicate also to the reasons behind that by showing that in America the growth of functional foods surrounded by 2002-2007 was 15.8% a year while ordinary foods was save 2.9% suggesting profit was the main driver nothing else.The same is applicable in MTN regarding definitive shareholders, especially when looking closely at their annual report (2008 p172), showing the piece of share capital, equal to 25%, was owned save by 8 shareholders, so this group of 8 has the majority portion of power to count on the company activities in the way they prefer, which is making profits.Minority interest Shareholders (Dormant Stakeholders with no effects on CSR) they do not have the enough power to steer the company in the responsible direction nether on its policyIMF, World Bank, WTO (Discretionary Stakeholders with a neutral position regarding CSR) through their jurisprudence and requirements and conditionality they open new routes for investing. However, that does not oblige the MNCs to invest nor to participate in social responsibility initiatives.The main differencesHost governments in developing countries are Dangerous Stakeholders and do not show too much interest in CSR for Nestle, while they are Dominant and show interest in CSR for MTN)Jones (2005, p9) pointed out that host governments use a lot of subsidies to pluck foreign organizations, such as low custom tariffs or shrive capital movement in order to overcome difficulties (poverty, diseases, death)Applying this to the selected companiesNestle this type of stakeholder should be allocated under Dangerous for many reasons. Nestle lacks experience in dealing with developing governments policies. Another reason is that kleptocratic government may find the high-income corporation (Nestle) an enticing opportunity to seize. For example the BBC announced in December 2002 that Nestle was trying to persuade the Ethiopian government to pay USD 6 million in stead of 1.5 million as compensation for nationalizing one of its subsidiaries in Ethiopia. This example shows how the Ethiopian government took possession of Nestls subsidiary without any previous(prenominal) notice or consultation.MTN originally from SA, and all of its investments are located in Africa and the ME (developing countries). It has a great deal of experience with such governments so do not need to project it under Dangerous stakeholders unlike Nestle. But even though MTN has put governments under the Dominant category MTN has to comply with the King codes in sec Africa5which include very strict rules regarding CSR initiatives in order be listed in JSE securities exchange and to be accepted by the government and society. (Institute of Directors in South Africa, 2009)Social organizations, NGOs, Media are Dangerous Stakeholders and in favour of CSR for Nestle, while Demanding and in favour of CSR for MTNNestle Because of the nature of the business of Nestle (covering world-wide and working in the field of nutrition), it may be found that a lot of social organizations a coherent with the media ever so attack it aggressively, especially if they discover the unethical approach of its social responsibility, force it to make much and more effort in the field of CSR. For example the General Synod of the church of England called for a ban on Nestle and asked Church commissioners to disinvest their GBP 1.1 million in it. Moreover in 1974 the British kind-heartedness War on Want released a leaflet The Baby slayer criticising Nestle for the bad effects of its marketing strategies in Africa. (Kotler et al. 2009)MTN However, there are many examples showing MTN has a good reputation among those organizations who evaluate its efforts to table service the people and bring prosperity to society. For example, South Africa media (South Africa info, 2008) praised MTN when it declared its intention, along with other operators, to establish a fibre network a cross the Sub Saharan centres in an effort to meet the soaring unavoidably of their subscribers and connect the African continent with the rest of the world. The reason for this approval is because MTN does not have a negative direct impact on peoples lives, unlike Nestle. Also MTN is not recognized globally as Nestle is since it operates only in developing countries.V. Section twoThis report will now answer the following inquire which way is the CSR changing and what are the main causes for this?In 1869 Henri Nestle said During the first few months, the mothers milk will always be the most natural nutriment, put promoted Nestle products as a substitute. However, in 2007 Nestle stated that Nothing is a substitute for or kindred or superior to breast milk Kotler et al. (2009). These two statements raise two questions the first one is Did Nestle admit the guiltiness about its previous promotion? secondly, If yes, then who was behind it?Actually to answer these questions, we have t o consider that through Nestle growth, a lot of pressure and outside forces have pushed the company to change its attitude towards satisfying its stakeholders and make responsible efforts sort of than only profit. Blowfield and Murray (2008, p41-66) claim that the relationship amid business and society changed through three eras the industrial revolution, the mid-twentieth-century welfare state and globalization. Furthermore, through these eras there was a shift in corporate social responsibility, from a metaphysical concerned with normative behaviour of the organization, to CSR as management practice, especially in the 1970s. Ackerman and Bauers (1976 cited in Blowfield et al, 2008) argue also that what a company can do to respond to social expectation rather than theoretical ideas of what it should do is what matters. This is reflected in public self-assurance over the years (see Appendix 1) which suggests public confidence began to increase in the late 1970s with a slight dec rease in 1991. (Source Frederick 2006)In relation to the two companies in this study, it may be that Nestle actually took into consideration social responsibility after the pugnacious boycott in the 1970s when it learnt a lot from that lesson and started to increase its commitment to society and allocated social organizations and media as dangerous stakeholders. MTN is a relatively new company established only in the 1990s, which could be viewed as the globalization era so has a high standard of CSR knowledge (King I, II, III code). Thus, it could be concluded that there was an increase in CSR initiatives owing to greater awareness among stakeholders, especially over the last three decades, and that increase was related directly to globalization and its characteristics such as free trade, rises in FDI in developing countries, soaring demands of the media and the NGOs.VI. Section ThreeThis section will be divided into three partsAnalysis of the different stakeholders perspective app roaches,Depending on the outcome of the first part, the report will use Ponte et al typology to allocate the approach of both companies.A further analysis of these approaches will be conducted using two contrasting viewpoints.Many authors classify the stakeholders perspective in different ways. Some classify them according to the local economic situation such as Cannon (1994) by giving five types of societies which need different reactions from the business to help the economic system out of the crisis the high-stress environment (suffering from long time economic downturn), structurally disadvantaged areas (business in remote areas), the crisis zone, the transitional zone (change of the importance of pains in same area), and the powerhouse industry that used to drive the main local growth and now lining high competition from others.Other authors such as Hamann et al (2005) research the stakeholders perspective in a developing countrys context when they pointed out some realitie s to be considered in achieving a successful CSR in South Africa first, a long history of poverty and inequality second, the need for effective CSR to stamp out the bad image of exploitation and racism created by companies over a long period in those countries third, the suppression of black economic potency which mostly comes from corruption fourth, the need to enhance social settings such as human rights and democracy.Others classify the social and environmental issues depending on the regions, showing the different CSR requirements among countries and they emphasise thateach region needs its own CSR initiatives. For example, the USA needs to address renewed calls for nu percipient power and to deal with air pollution, while some African countries need more concentration in meliorate the infrastructure and solving the conflicts between tribes and governments (PWC, 2006 Ethical Corporation, 2006 cited in Blowfield Murray,2008) (see appendix 2 for more details).Using the above m entioned methods, now Ponte et al typology can be used to allocate initiative approaches used by Nestle and MTN partnership intermeshed CSR activities the factory and farmer scheme in China which has direct impact on company operations since it eliminates the suppliers and at the same time gives the farmers technical support. (Nestle China, 2009) Disengaged CSR initiatives Nestle Nigeria along with the Red Cross started an initiative, an educational course of instruction in 2003 to increase the awareness of HIV among people in Nigeria (Nestle Nigeria, 2009) removed CSR activities the factory and farmer example in China, because the farmers are not one of Nestls workforces they are a separate entity and might be paid low prices for their milk supply. (Nestle China, 2009) Proximate CSR activities Nestle creates job opportunities. It has now more than 265,000 employees worldwide from 100 different countries. (Nestle, 2009) Engaged and Proximate the EcoShape bottle produced by Ne stle North America in 2007. This example could be regarded as an engaged activity since it cut backs the bad effects on the environment (will reduce the CO2 emission by 356,000 tons within three years) and at the same time it is proximate because it is closely related to the company operations (since it impacts on the environment in the same location as its operations). (Nestle America, 2009)-Engaged CSR activities the environmental Management System is one of MTNs policies to reduce the production waste by recycling and encouraging the employees to act socially responsible. (MTN Environmental Policy, 2009) Disengaged CSR initiatives Arts and back up awareness educational program for communities, conducted by the MTN foundation and regarded as a totally disengaged scheme carried out by MTN. (MTN SA foundation, 2009) Distant CSR activities No far-flung CSR initiatives found.-Proximate CSR activities the Arts and Aids awareness educational program could be regarded as a proximate C SR scheme since MTN originally operated in Africa and the Middle East. (MTN SA foundation, 2009) Engaged and Proximate the 21 days of Yello care started in 2007. This scheme of 21 days gives the opportunity for MTNs employees to directly engage with the CSR initiatives programme with a dough as a reward at the end of this scheme for the best team. One team was rewarded for building a small pedestrian bridge. (MTN Yello, 2009)Now, the report will analyse the Ponte et al typology mentioned above showing two contrasting viewpointsIn favour of CSRGood for business when (Engaged whether Proximate or Distant) doorman and Kramer (2006, p83) indicate that working in a healthy society will keep the company healthy (health care for the workforce) and also supply it with a matched advantage (efficient use of resources water, land) and all of these will be achieved by Integrating Business and Society through CSR activities. Other authors praise the role of CSR in marketing and this could be applied in delivery a bright image to the company and to some extent increase its sales Hardeep and Sharma (2006). For example, Ogrizek (2002) saidThere are clear and concrete market-driven benefits and competitive advantages for companies, which integrate their business policies with CSR.In respect of the two companies in question there are a lot of initiative approaches for both companies from their websites which all could be regarded as marketing tools and green sheen attempts (the new check off of Nestle Nescafe Green blend).Good for society when (Engaged whether Proximate or Distant) advocators of this model argue that governments in the developing countries on their own cannot meet the change magnitude demands of the society and development requirements and this is actually what Samuel et al (2009.p394) found when they conducted research in Nigeria showing how CSR initiatives being carried out by 22 organizations complement government efforts to build up a stable economy. Furthermore, this perspective is also support by the neo-liberalism theory in which many authors stress that only business and free markets can sustain the individual rights, society and the environment (Burchell, 1996, Barry et al 1996, Peter and Olssen 2002 cited in Zajda, 2009 p15). No one could deny that Nestle creates job opportunities for 265,000 employees worldwide from 100 different countries and also that MTN donated about 1.5 Rand million to buy clothes with the help of the Red Cross in South Africa in response to attacks by foreign nationals in 2008 (MTN SA foundation, 2009). At the economy take aim, The Economist (1999) punctuate the contribution of MTN as a mobile company in bringing the poor and isolated into the global economy.Opposed to CSR evil for business when (Disengaged) advocators for this approach are usually those who argue in favour of shareholder interests and indicate that the main objective of any company is only to maximize the shareholders value and m inimize any kind of expense. That becomes very clear when Lawrence (1999) describes how the company should create a value management system in five steps in order to achieve the shareholder value, neglecting any component related to non-profit activities because it just an expense. Also, as mentioned earlier in this report, Mantyssari (2005) describes the shareholders as the heart of the business who supply it with the funds needed for the daily operations, so managers have to keep them convenient by a high level of yield.Furthermore, some say that CSR is not only waste of money but also it distracts the managers from focusing on their real duties since effective CSR, which is not only a charity cheque, needs special talent and efforts, and that is also emphasized by Porter and Kramer (2006, p91) when they argue that organizational adjustment that matches good CSR initiatives is what matters more than kind intentions.Useless for society and development (Criticizing all Ponte et al approaches) many protestors criticise the effects caused by MNCs activities all over the world since their negative effects outweigh their CSR initiatives. They think whatever the companies do for the societies is only a green sheen. For instance, Nestle is proud of itself, saying it always provides work opportunities for people, indicated that 97% of their workforces are distributed all over the world The Economist (1997.p153). However, for Corpwatch (2005) the fair play is it exploits the workers in an awful manner and Corpwatch complained that 286,000 children work as slaves in the os Coasts cocoa farms (90 hours a week with very low wages) and point out that Nestle is the third largest importer of cocoa from the Ivory Coast. Also it could be argued from bad for business angle as there is general agreement that if CSR is not focused and organized it will often come to nothing or may sometimes have harmful results.VII. ConclusionFrom this report, a lot of findings can be drawn b y analysing the corporate social responsibility approaches for Nestle and MTN. This report started by showing the importance of the different types of stakeholders that try to steer the companys activities in the way they desire, whether in a business or CSR approach. Using the Stakeholders Saliency Model these stakeholders have been allocated and two major differences were found. The first one is, Governments in developing countries where Nestle operate should be put under Dangerous stakeholder since they lack experience in dealing with such governments and the high-income corporation could also be seen an enticing opportunity to be seized. However, MTN (a low-income company) is the glacial case since it originated in such an environment. The other main difference between them is the danger of social organizations for Nestle such as NGOs and the media since it works globally and works in the field of nutrition, hiring people from poor countries, so may be targeted by such institut ions. In contrast, MTN does not have a direct impact on peoples lives and is not recognized globally like Nestle since it operates only in developing countries.The report then analysed and evaluated the CSR approaches for both companies using Ponte et al typology to allocate them in four dimensions, engaged/disengaged, distant/proximate. It was found Nestle and MTN use all of them except for MTN which did not use distant CSR initiatives. The report attempted to answer the question which stakeholders were satisfied and which were not, no matter what type of approach was adopted, by contrasting two points of view (with and against CSR) and arguing them in four different aspects. Through the analysis of the aspect Useless for society, it was found some organizations and institutions are still not satisfied by the CSR initiatives and need deeper indicators, going beyond the basics and taking into neb the real influences on the surroundings. Regarding the future of CSR, some authors suc h as Murray and Blowfield (2008, p365-369) emphasised that the context analysis such as the mega trends (climate change, demographic change, poverty) will be no less important than simply examining the CSR approaches taken by the company.