Corporate Governance, Ethics, and Business Performance

Ethical responsibility is considered to be integrative elements in terms of social responsibility, which have been destained in order to have provision of satisfaction of consumer demands. The company has been in headlines a frequent time, not because of the existence of ethical practices. Nestle has been accused in terms of busting, false level of advertising, tricking poor disenfranchised mothers into buying their baby formula, and contaminating drinking water in areas in which they have factories for their numerous bottled water brands. Nestle has a major level of appearances of ethical problems in business, which is impacting level of profitability along with lowering the existing ethical rating of Nestle, which ultimately has a reduction in popularity among there loyal and potential customers.  The company is embroiled in major level of controversy by getting highly criticized for using ethical marketing practices, which is actually endangering consumer health in developing nation.

Nestle is also criticized for using unfair labour practices that include unfavorable working conditions and exploitation of people. The company have been proven to be the one multinational company which is actually lacking standard along with disrespecting human legal rights along with levels of regulation which are actually developed to have a minimal level of satisfactions to demand on consumer and workers. This report has the inclusion of soberer approaches in order to have representation of nestle ethical principles along with development of company-visible aspects related to corporate culture. There will also be the development of hidden aspects that are influencing company ethical behaviour as the questionable way of doing appropriate business. In this report, the corporate social responsibility along with the cooperation level of practices of the brand Nestle will be appropriately reviewed and analysed. Consumer is one of the unwritten ethical duties for all companies in order to have maintenance standards that satisfy the needs of consumers and make them happy.For further insights and academic support, our Corporate Finance Assignment Help service provides comprehensive guidance on navigating corporate governance and strategy in your assignments.

In contrast, Anginer et al. (2018)  stated that various organizations have high level of corporate governance. Many shareholders are engaged in company’s business. Merely beingprofitable is not their aim. They had several other expectations towards organizations, like for example, they can expect company to increase environmental awareness among employees and motivate workers to use more sustainable way to achieve business objectives. Good corporate governance can only be implemented with ethical behaviour and sound corporate governance practices and policies. It must have transparent rules and regulations that are being known by each and every shareholder. Sound policies will also make working environment better.

Determining the relationship between ethical values and profitability or productivity of organization.

In accordance with Aguilera, Judge and Terjesen (2018), ethical values have an impact on organizations productivity. Corporate governance basically keeps a balance on economic and social goals of the corporation's values and practices. When ethical values are being followed in organization, it builds trust of employees. firm can increase employee engagement and belongingness when rules and procedures are not being violated. It ultimately enhances organizations profitability and productivity. It is beneficial for growth of various organizations. Board members must be engaged in working ethically, as this will assist them in gaining future success for firm. While implementing rules and regulations, they need to link company’s objectives with goals of consumers, suppliers and employees, and too ethically. Only this way can they enhance the firm’s productivity and operational efficiency.

On the other hand Hong, Li and Minor (2016) argued that if bad corporate governance and ethical values are not being followed in organization, then it doubts company’s reliability, integrity, and transparency. Bad corporate governance can affect the financial health of organization. If board of directors do not comply and provide support to auditors, then this can lead to non-compliant financial documents. It can negatively affect enterprise profitability and revenue aspects. Poorly structured boards make it too difficult for shareholders to oust ineffective incumbents. This situation can also reduce shareholder’s engagement with company and can result as an increase in employee turnover. This reduces productivity of organization and they can also face a situation where goals and objectives of firm is not being met.

As per the view of Admati (2017), ethical governance has an effect on development of team and performance level of every department working in organization. Ethical climate and culture in organizations make the outcome of decision-making more productive. It can also lead to sustainable development of organization. The issue faced by organization in this is to remain ethical to stakeholders throughout the process. Only this can make their corporate governance good. They need to make sure that sustainable government not only provide benefit to board of directors but also serves society and stakeholders which are engaged with them. This will enhance the organization's goodwill and employee will become more loyal to firm. It enhances operational productivity of firm. By this way, the company will stay motivated and try to achieve objectives in more sustainable and ethical mode. Working ethically also reduces conflict which is being arising in organization. It makes work environment better and more adjustable.

In the opinion of Anginer et al. (2018), unethical ways if followed by organizations, can bring the whole organization in trouble. It can also hamper the image of company in front of public, that directly reduces their profitability. Legal actions can be filed against firm if they are engaged in violating rules and regulations and are not involved in performing ethically. This firm will also not be able to achieve their goals and objectives. Employees might feel betrayed if board of directors are not being transparent or honest. It increases worker’s turnover and also enhances liability of the organization. It decreases the productivity.

Identifying the extent to which ethical violation influences business activities and performance of Nestle

In accordance with Hong, Li and Minor (2016), ethical violation had a great impact on Nestlé’s day-to-day business activities. Nestle got embroiled in a controversy when it was criticized for using unethical marketing practices endangering consumer health to promote its infant formula in developing nation. It was found that Nestle uses unethical ways to produce one of their famous and popular products, that is Maggie Noodles. It has been analysed that this product contains a chemical which can have a severe impact on health aspects of consumers. So people in developing nation violated against it and Nestle got engaged in this controversy. It reduces goodwill of organization and also the product was banned and banished from emerging nations. It affected profitability aspects of company and reduced their generation of revenue. Lots of consumer’s loss hope from organization.

On the other hand, Hussain, Rigoni, and Orij (2018) also stated that Nestle was engaged in exploitation of labour. Unfair labour practices were being followed by them. It was analysed that they were engaged in giving low prices to their hard-working employees and also discriminated among them. This affected their day-to-day business activities as so many people left the organization. It gave company’s reputation serious harm. company was also involved in appointing child labour and provided workers with unfavourable working conditions. It proved that company has no responsibility towards following of basic human rights. This made company’s reputation negative in front of public and they started violation against. Nestle productivity was also being reduced as lots of employees left the firm because of this concern. Many suits and charges were also being filed against company that had negative impact on their day-to-day business activities. This also reduces employee’s engagement in firm. It affects their operational efficiency negatively. They were not able to achieve their goals.

As per the opinion of Aguilera, Judge, and Terjesen (2018), research shows that Nestle has low category ethical criteria. Nestle is one of the most hated company in world, as they were also involved in child labour, abuse and trafficking. Cocoa beans taken out of ivory plantations uses child slave labour. Children who have been trafficked are between the age of 12 and 15 years. company was being held liable for the violations of international law. Nestle had full knowledge about from where Cocoa beans were produced from but took no action against it. This hampered company’s position in market and lots of consumers stopped buying their products. It negatively affected the day-to-day business activities of company. Also, Nestle faced criticism in Chinese food Scandal where firm’s Milk powder contains low-level traces of Melamine. This had done severe harm to company’s position and also affected their day-to-day business activities. Nestle is advised to make their business practices more ethical and integrative. They need to have proper understanding about the industry landscape so that their business activities do not get hampered. They must be engaged in following a code of conduct so that no such cases can be filed against them in future.

Investigate the ways to manage issue of ethical violation

As per the view of McCahery, Sautner and Starks (2016), ethical violation can be minimized in organization by building a culture of integrity. company needs to build up various ethical and compliance program and weave it into day-to-day activities of business. Research proves that strong compliance program assists organization in building up a culture of integrity. This program can assist organization in making working environment favorable and also enhance engagement of employees in the organization, which is essential for growth of firm. In a strong ethical culture, workers are more committed towards work and they also bring up more innovative ways to solve problem that can increase operational efficiency of enterprise.On the other hand, Samra (2016) stated that to reduce the incidents of ethical violations of company, they must keep environment value focused. Corporate values must be at mundane when formulating HR policies, hiring and retention policies, and optional policies. organization must make sure that all employees and workers are aware about their rights and responsibilities and company Policies. They must review all policies made by Board of directors and if any issue arises, they should discuss it freely with chief executives. They must be engaged in finding solution to all problems. Thus, it can assist them in making working environment better and this will also increase commitment of employees towards firm. They will work with more enthusiasm and will also integrate their values with organizational values. Also, support must be provided by top management to staff members so that they can be engaged in completing task in an ethical way. This will assist firm in developing goodwill.

In the opinion of Yermack (2017), Board of Directors of company must be engaged in creating long-term sustainable values that fully rely upon the principle of corporate governance. They must be transparent and honest. Also, all the decisions which are being made by them must be kept in knowledge of stakeholders. Framework based on corporate governance must be continuously evaluated and revised by chief executives. This will assist them in reducing ethical violations which are taking place in firm. It will also help them in increasing goodwill of organization. It will also promote accountability and be beneficial for long-term sustainable growth of stakeholders. It will also promote integrity in firm. Also, they must make sure that while preparing framework, they also create value for employees and society. This will also assist them in enhancing goodwill of organization. audit committee can also be appointed by organization so that they can check if firm is involved in doing ethical misconduct. committee can also guide firm to overcome the gaps which company is facing. They must also focus not only on the profitable aspect but also on increasing awareness among employees about sustainability. They can provide training to workers about effective utilization of resources in an ethical way. This will assist them in creating sustainability.

Research methodology

Research types are having references in terms of form in which data is considered to be relevant in the respective topic, which can be in terms of numbers or non-numerical. The research type is been divided into two types: qualitative and quantitative research. In this research, the researcher will have the implication of qualitative research, which is referred to as the non-numerical and descriptive form in collecting information by having proper level of observation. On the other hand, quantitative research will be referred as numerical and exists in non-descriptive form in which data is been collected by having proper statistics or mathematical techniques' implication.

Data collection: This process is considered the systematic way of collecting information, which will help the researcher develop research in a more effective manner. There is the existence of two approaches through which the researcher can have a proper level of collection of information to have an accurate level of interpretation and analysis of data. Primary and secondary research are methods of data collection which are chosen by researcher in order to have proper implementation towards achieving aims and objectives of research. The primary data is the method of collecting data, which is the effective use of survey or questionnaire along with observation. The aim of primary data collection is to have the authentication towards related development. On the other hand, with the secondary research method, the researcher will have proper analysis of informativeness, which is actually been collected for any other purpose having relevance to present required data information. The sources which have major inclusion in secondary research are such as the existence of book, journals and articles. This method is considered to be cost- and time-effective as compared to the former.

In this research, the researcher will have the implementation of both primary and secondary ones to have a major level of authentication and accuracy in developing research in a significant way. The former have the implementation of well-structured questionnaire which has involvement in gathering fresh data with discussing in person and getting maximum level of data as one of the most effective result. This considered to be consistent in gathering information in order to get maximum level of information from the respondent. The questionnaire is good mix of both open and closed ended to collect authenticate and accurate data, On the other hand, the researcher will have along secondary research by having proper level of receipts of various journals and articles to have proper analysis of research gaps.

Sampling Techniques is considered the process of identifying the individual group to the sample on behalf of the existing large level of population, which has an equal level of probability, in order to have the participation in research to make it more effective and efficient. In order to get relevant level of information, there are two type of sampling techniques: random and non-random, in which latter have collection of  sampling based basis factors such as people's working experience, age, gender and knowledge. The former will have the selection of the target group at random level, which have major aim of increasing level of morale of selected employees and reducing the existing level of basslines. In this research, the researcher have implemented the use of probability random sampling, which will provide procedure which have the assurances of the different unit having an equal level of probability of being chosen to be parts of research in more accurate and effective way. The researcher have chosen 30 employees from organization nestle to be the part of survey, which is done with well-developed questionnaire to have proper collection of data in more accurate way. There will be the use of probability random sampling so that each and every member have a clear chance to have participation in research.

Data analysis: Research methodology have the following of several steps in order to make researchers more effective in sequential manner.  The parts of data analysis are considered to be important part that need to be followed after having proper data collection. The selection of data analysis is based on the research type and data collection method. This research project is qualitative research with implementation of both primary and secondary. Secondary research along will structure questionnaire. type of this research project is qualitative so qualitative data analysis will be used. In qualitative type, thematic analysis will be used; in quantitative data analysis, numerical data are being analysed with the help of quantitative tools. The goal of implementation is the thematic analysis in order to have the identification of theme in systematic patterns, which is considered to be important and intersectionalism. These themes have major addressing of the research along with identification of issues. This is considered to much more than the simple way of summarizing the data, which can be done throughout good level of thematic analysis and interpretability, along with which it is aiming actual sense.

Ethical considerateness is the major conduct and important element which is used to keep in mind in order to have the presence of major worth art developing at every stage in more effective manner.  In order to have generation of effective research. It is important for scholar to have the note down to the several revels of code of conduct  which can be related to ethics, such as the

•  To not have foundation in order to take the respective level of participation in the accurate level of data collection process.
•  To keep the data secure and safe level of participation.
•  To not disclosing in any type of information.
• To follow all steps with integrity and honesty. So, from the above discussed codes of ethics, it can be said that by following all these, researcher can make its project qualitative as well as successful.                                                                                                                                                                                                                                                                             

Data interpretation

Data Interpretation.

As per the above data, it can be interpreted that most of the consumer have a clear level of clarification relating to the importance of a brand's image as the decision-making aspects and developmental. The existence of the brand image along with logo have the major level of establishment of business to make the customer more level of satisfied development of the product. On the other hand, the same of customer have refused for variety of reasons . They don't have major level of revalorization as per the management of brand; they ensure the level of quality as per the requirements of their project.

Data Interpretation

As per the above data, it can be interpreted that many of the consumers have the rating of Nestle being the poor brand, along with the level of degradation in quality at rise in ethical issues. Nestle has been identified to be accused in terms of busting, false level of advertising, tricking poor disenfranchised mothers into buying their baby formula, and contaminating drinking water in areas in which they have factories for their numerous bottled water brands.  On the other hand, few have any idea regarding the nestle as the brand but have considered it to be in headline due to its ethical practices. Nestle has been identified as the world's largest food company with the tagline of enhancing quality of life and contributing towards a healthier future at respect