Factors Influencing Organizational Ethics: A Case Study Of Nestle, An Essay.

Different Perspectives of Ethics

Every organization tends to have an ethical code and conduct that helps in guiding its decisions and activities leading to productivity and thereby enhancing its reputation. Ethical behaviour of management and the employees helps in ensuring honesty and integrity and encourages in meeting the goals and objectives of the organization (Tormo, Seguí and Oltra 2018). The primary aim of the paper is to evaluate the factors which influence organizational ethics including legal requirements and needs of stakeholders of Nestle. This will be followed by highlighting how the organizational ethics of Nestle has helped in influencing its corporate social responsibility CSR.

Nestle is considered to be one of the most successful and largest chains of food and drink processing with its headquarters in Switzerland. Nestle is a multinational company and has a unique ability to understand local customers and adapt to their needs and preferences (Nestle 2018). Nestle is known for its CSR, ethics, employee performance, and overall productivity.

Business ethics helps in enhancing the law by demarcating acceptable behaviours that are beyond the control of the government. Companies establish business ethics to promote integrity among employees and build a trustworthy relationships with stakeholders like investors, consumers, suppliers, and others (Ferrell et al 2019). Business ethics also helps in providing principles on the basis of which business operations are decided which leads to the development of quality products (Ferrell et al 2019).

There are several perspectives of ethics that are followed and implemented by organizations. Deontological ethics states that some acts are morally obligatory irrespective of their consequences to promote human welfare (Finker and Negreiros 2018). Ethics emphasizes the importance of following rules to accomplish duties and does not weigh the costs and benefits of a situation that might even promote wrong or unethical actions due to rules and regulations (Finker and Negreiros 2018).

Utilitarian ethics differentiates between right and wrong by focusing on the outcomes, the ethics are of the view that ethical choices should produce the greatest good for the greatest numbers (Vearrier and Henderson 2021). It states that actions are rights so far as they bring happiness and wrong if they bring unhappiness and gives importance to everyone’s happiness equally (Vearrier and Henderson 2021).

Virtue ethics focus on the person instead of action, where it believes that virtue and moral character of a person influences others instead of ethical duties and rules or the consequences of specific actions (Van 2018).

The ethics of Nestle is closely aligned with utilitarian ethics where the company believes in acting legal and honestly at all times, respecting people who work for them and with whom they work, and also promotes diversity where they offer products in different countries that are clearly aligned to their preferences and needs thereby promoting the happiness of greater number of people (Pryadko, Zyuban and Babayants 2020).

The products of Nestle are offered at affordable prices which can be accessed by both rich and poor, thereby considering the happiness of everyone equally. Furthermore, the company is committed to compliance with all the applicable laws (Pryadko, Zyuban and Babayants 2020).

Ethics of Nestle

There are several factors that influence organizational ethics and these factors have helped Nestle to come up with strong ethical practices within their organization. Legal requirements tend to strongly influence organizational ethics since it helps companies to follow equal pay for all, promote safety and health regulations, encourage companies to follow non-discriminatory policies through laws and others (Kuenzi, Mayer and Greenbaum 2020).

For instance, the Equal Pay Act 1970, prohibits less favourable treatment between men and women in terms of pay, growth opportunities, and conditions of employment. Similarly, Equality Act is a law established to protect employees and other individuals from discrimination or unfair treatment based on certain characteristics like ethnicity, culture, race, nationality, and others (Polachek 2019). Additionally, Health and Safety work Act 1974, sets out the general duties that employers need to follow for the health and safety of their employees by providing clear information and training, setting up emergency procedures, preventing workplace accidents and injuries, and others (Hughes and Ferrett 2020).

Thus, if all the above legal requirements are effectively incorporated by companies then it helps in aligning business operations to ethical practices. Thus, the above legal, health, and safety requirements have been incorporated by Nestle in all its divisions, where the company is accelerating pace towards equal pay for equal work and has successfully reached the 1:1 ratio of pay equity not only within its gender dimensions but also for underrepresented minorities (Zhongming et al 2018).

The company also supports employees and workers throughout its supply chain to get a living income and the company has made progress in key areas of gender balance, people with disabilities, LGBTQ, and race and ethnicity (Zhongming et al 2018). Thus, it can be said that Nestle supports and promotes a culture of diversity and inclusion that has helped in enhancing its productivity and performance and has also kept the business aligned to ethics. Health and safety regulations are also prioritized by Nestle where it has kept counsellors to assist employees experiencing emotional and mental distress due to work or personal issues (Press et al 2021).

The company has established local safety and health organizations that provide advice to managers and employees on how safety at work can be promoted and are committed to regularly performing audits to identify chances of hazards and risks that also help in protecting the interests of the stakeholders (Roberson and Lee 2021). Thus, it can be said that legal, health, and safety requirements and promoting stakeholder’s interests that influence organizational ethics have also influenced the ethics of Nestle that has helped the organization to sustain in the external and competitive market (Roberson and Lee 2021).

Organizational culture is another aspect that influences organizational ethics since it determines how people behave within the organization, shared beliefs and values of internal and external stakeholders, and communication strategies (Nestle et al 2019). Thus, if the above components are not met then it leads to unethical behaviour within the company.

Hence, Nestle tends to follow a culture of collectivism where the success of the group is promoted and appreciated, it follows both bottom-up and top-down approaches to communication depending on the situation that has helped in creating a strong culture where employees and external stakeholders feel motivated and valued which again highlights the ethical practice of the organization (Nestle et al 2019).

Factors Influencing Organizational Ethics

CSR is a concept used to determine how companies integrate social and environmental concerns in the operations of their business and interactions with stakeholders. By aligning company practices to address social and environmental issues, strong CSR helps in improving the brand image of a company and leads to enhanced employee and customer morale (Barnett, Henriques and Husted 2020).

The above definition of CSR is clearly linked to Carroll’s pyramid of CSR where there are four components- economic, legal, ethical, and philanthropic where making profit is at the lowest level of the pyramid followed by legal and ethical aspects (Lu et al 2020). Philanthropic means giving back to the community in positive ways, like engaging in reducing water and air pollution, contributing to positive climate change, coming up with reusable and recyclable items, and others (Lu et al 2020).

Some of the drivers of CSR include government legislation and regulations, expectations of employees and customers, human rights, organizational culture, social equity, labour standards, working conditions, and others (Barnett, Henriques and Husted 2020).

Some of the barriers of CSR include lack of stakeholder awareness, lack of training and information, lack of financial resources, unethical business practices, lack of customer awareness, lack of diversity and inclusion, and others (Zhang, Oo and Lim 2019).

Ethics play a significant role and has a strong influence on CSR since the former focuses on values, norms, and behaviours that are expected to be performed by internal and external stakeholders along with the organization leading to the establishment of effective organizational culture which thereby helps in encouraging responsible behaviour within the company (Zhang, Oo and Lim 2019).

For instance, Health and Safety, Equal Pay, Non-discrimination, and other legal requirements that help organizations to integrate ethics in their operations, assists organizations to show their social responsibility towards employees by prioritizing their health and expectations which thereby helps in meeting the CSR criteria and at the same time, also encourages employees to work for the welfare of the organization and its customers (Ruehle 2019).

Similarly, if ethical principles and guidelines are not followed by organizations then they are unable to promote an effective organizational culture which has a direct impact on the customer service of the organizations and also disrupts its relationships with external stakeholders (Ruehle 2019). Apart from this, unethical behaviour also does not encourage organizations and employees to come up with CSR ideas and plans that might contribute to organizational productivity.

Thus, it should be noted that the strong organizational ethics of Nestle has resulted in its involvement in positive CSR practices. For instance, having a strong organizational culture with committed internal and external stakeholders, Nestle, tries to enhance the quality of life for communities living in regions where it operates by investing in projects of clean drinking water that has helped in promoting the health of individuals especially living in remote areas (Galli and Vousvouras 2020).

They have also been successful in providing economic opportunities for individuals through their Nestle needs Youth initiatives that have helped in increasing employment opportunities in low-income and unemployed regions (Mackin 2020). They have also shown their initiative to reduce waste through packaging, better recycling infrastructure, and reusable packaging that helps in ensuring that plastic waste does not contaminate lands and oceans (Mackin 2020).

Conclusion

To conclude it should be noted that ethics play an essential role within every organization and it is influenced by several factors like legal requirements, safety and health requirements, organizational culture, stakeholder interest, and others which also influence their CSR strategy and practice.

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