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2014 | Buch

Executive Summary Kapitel lesen Erstes Kapitel lesen

Creating Shared Value

Impacts of Nestlé in Moga, India

verfasst von: Asit K. Biswas, Cecilia Tortajada, Andrea Biswas-Tortajada, Yugal K. Joshi, Aishvarya Gupta

Verlag: Springer International Publishing

Buchreihe : SpringerBriefs on Case Studies of Sustainable Development

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

Nestlé’s Moga factory was set up in 1961 and comprises of the primary milk collection area for Nestlé‘s operations. Since its inception in Moga, Nestlé has been working with its milk farmers and ancillary suppliers towards improving quality and productivity. The study presented in this book (carried out by the Third World Centre for Water Management, Mexico) highlights Nestlé’s way of doing business through its philosophy of Creating Shared Value (CSV) and how it contributed to the development of the region over the past 50 years through direct and indirect employment, steady income for milk and other suppliers, and technology transfer. The main objective of the study is to learn to what extent has Nestlé contributed to fulfilling the societal aspirations and expectations of the people working in and around its factory in terms of employment generation, poverty alleviation, general improvements in the community’s standards of living and environmental conservation. The study also tried to determine to what extent has the company created shared value for itself, milk farmers, ancillary firms, and the community at large. This effort aims at encouraging more research to be carried out to comprehensively and authoritatively look into the impacts private sector can have on and around the area where their factories are located and that way, contribute to our understanding of social-corporate-government interdependency. An important aspect of this pioneering monograph is the methodology that could be used to study how Corporate Social Responsibility (CSR) or Creating Shared Value (CSV) of a large multinational company can be properly monitored and objectively evaluated at a region-specific scale, especially as very few studies of this nature have been carried out anywhere in the world. This definitive book is further enriched by a foreword by Prof. Michael Porter of Harvard Business School and an epilogue by Peter Brabeck-Letmathe and Paul Bulcke, Chairman of the Board and CEO of Nestlé respectively.

Inhaltsverzeichnis

Frontmatter
Chapter 1. Executive Summary
Abstract
Can business and society work together to foster each other’s prosperity? No company works in a vacuum. Invariably, interdependent interrelationships develop between a business and the community within which it operates. The main consideration should be to maximize the nature and extent of mutually beneficial interrelationships. Henri Nestlé, after whom the company is named, was a German pharmacist. In 1867, he formulated Farine lactee, a combination of cow’s milk, wheat flour and sugar, to save the life of a neighbour’s child. Ever since then, nutrition has been the cornerstone of Nestlé business. More than 145 years later, as Nestlé gradually became a major Fortune 500 multinational company, it has continued to evolve, but always with a deep understanding and appreciation of its roles within the societies in which it operates.
Asit K. Biswas, Cecilia Tortajada, Andrea Biswas-Tortajada, Yugal K. Joshi, Aishvarya Gupta
Chapter 2. Introduction
Abstract
Nestlé has just completed one centenary of its involvement in India, where it started its trading activities in 1912. During this long 100 year partnership, both the company and the country have evolved very significantly. Some 50 years ago, very few people, if any, could have predicted that India would jettison its image of ‘Licence Raj’ and become an emerging economic world power. Neither would have they been able to foresee that Nestlé would be the world’s biggest company in the food, beverages and nutrition sectors and a trailblazer in fostering the interdependence between commercial activities and social goals, now widely embraced by the corporate sector as Creating Shared Value.
Asit K. Biswas, Cecilia Tortajada, Andrea Biswas-Tortajada, Yugal K. Joshi, Aishvarya Gupta
Chapter 3. Moga Factory: The Beginning
Abstract
After some background fact-finding and analysis of the situation, Nestlé decided to take the risk and submitted a plan for the construction of a milk factory in Moga, some 160 km northwest of Chandigarh, the capital of the state of Punjab, for approval by the Government of India. The formalities pertaining to the incorporation of an Indian company were successfully completed in 1959, in which Nestlé owned 90 % of the capital. Accordingly, in 1961, in a non-descript and a very little known area of Punjab, with no culture of sustained milk production and a virtually non-existent milk economy, Nestlé constructed a factory with a processing capacity of 9,000 t of fresh milk per year.
Asit K. Biswas, Cecilia Tortajada, Andrea Biswas-Tortajada, Yugal K. Joshi, Aishvarya Gupta
Chapter 4. India’s Revolutions: Seizing Local Potential and Harnessing National Opportunities
Abstract
In retrospect, the construction of the factory at Moga could not have been any timelier. The Green Revolution reached this region of Punjab around 1965–1966, shortly after its opening, when the farmers were encouraged by the Government to grow hybrid wheat and corn, which produced much higher yields. This intensification of agricultural production resulted into higher output even when land area cultivated augmented only marginally, and more importantly, it brought about higher earnings and many socio-economic advantages for many rural communities. Encouraged by such positive developments, they were more willing to experiment with new ideas which could further improve their standards of living.
Asit K. Biswas, Cecilia Tortajada, Andrea Biswas-Tortajada, Yugal K. Joshi, Aishvarya Gupta
Chapter 5. Milk Production
Abstract
Only 10 years after the factory was built, Moga’s story became significantly different to that of the national dairy sector. Up until 1970, India’s annual milk production grew at a very conservative rate of about 1 % per annum (Delgado et al. 2003; Sharma et al. 2002). In contrast, it can be inferred that the rate must have been considerably higher in the new Moga milk district judging by the almost thirteen fold increase in milk procurements that Nestlé witnessed between 1962 and 1972.
Asit K. Biswas, Cecilia Tortajada, Andrea Biswas-Tortajada, Yugal K. Joshi, Aishvarya Gupta
Chapter 6. The Key to Success: Agricultural Extension Services
Abstract
Driven by the need to increase the quantity and quality of milk, and motivated by the importance that attaining greater social objectives has in securing the company’s supply base and in increasing productivity in the value chain, Nestlé and its supplying farmers have established a ‘community of interests’. The company encourages, supports and facilitates those factors necessary for its own successful operation. Nestlé’s Agricultural Extension Services (AES) have been a defining factor in securing adequate and regular inputs and raw materials. As such, the company has made sizeable investments in staff and farmers’ training and capacity building as part of its efforts to attain factory success and further rural development. These efforts to address skill and knowledge gaps among milk producers were extensively addressed from the very onset of the factory’s operations.
Asit K. Biswas, Cecilia Tortajada, Andrea Biswas-Tortajada, Yugal K. Joshi, Aishvarya Gupta
Chapter 7. Contributions to the Local Economy
Abstract
Nestlé’s work to make of Moga a thriving milk district is perhaps one of the best examples of how the goals, success, needs and demands of different community of interests are closely interlinked. Without claiming to be a development agency, Nestlé nevertheless consciously made crucial contributions to the community of Moga on issues that were fundamental for the socio-economic development of the region as a whole, and also to its farmers at the household and individual levels.
Asit K. Biswas, Cecilia Tortajada, Andrea Biswas-Tortajada, Yugal K. Joshi, Aishvarya Gupta
Chapter 8. A Test to the Moga Community of Interests
Abstract
Over the years, the consistent transparent, predictable and reliable business case Nestlé has followed in Moga has made the villagers trust the company. It has also made many of them loyal suppliers. As one farmer who was interviewed for this study said, “loyalty and trust have to be a two ways street”. Trust lies at the core of the community of interests Nestlé has established with Moga’s farmers. This trust and staunchness in the company can be best indicated by considering what transpired during the decade-long period of terrorism in Punjab, from 1982 to 1993. During those years, the separatist group Khalistan Commando Force proclaimed the independence of Punjab and engaged in a series of terrorist activities to attain its goal.
Asit K. Biswas, Cecilia Tortajada, Andrea Biswas-Tortajada, Yugal K. Joshi, Aishvarya Gupta
Chapter 9. Evolution of the Dairy Industry in Moga
Abstract
In retrospect, Nestlé’s activities in Moga initiated the beginning of the dairy revolution in Punjab in 1961. It was the only milk procurer in the Moga milkshed area for years. It developed, prepared and nurtured the growth of the dairy industry in the entire region. This was accomplished despite the fact that for the first two decades, pricing was Government-controlled and depended on cooperatives. In fact, because of Nestlé’s hard work over the past five decades, Punjab in 2012 contributed to about 10.5 % of total dairy production at the national level despite having approximately 3 % of the Indian dairy population. This is an important nutritional contribution to the country, especially as milk tends to be the only acceptable source of animal protein for vegetarians and many times the only intake landless, small and marginal farmers can afford.
Asit K. Biswas, Cecilia Tortajada, Andrea Biswas-Tortajada, Yugal K. Joshi, Aishvarya Gupta
Chapter 10. Moga as a Catalyst for Development
Abstract
During the 1960s, 1970s and 1980s, considerable benefits that accrued to the region can be for the most part traced back to the presence and activities of Nestlé. However, as the Indian economy expanded during the post-1990 period, the levels and extent of its impacts, though still significant, are not of similar orders of magnitudes as the changes that were observed during the first 30 years of the Moga factory. By then, national and state-level macroeconomic growth led to an overall improvement in the communities’ physical capital and available infrastructure. Villagers began to be connected to the electricity grid; the use and ownership of landline and mobile phones exploded; accessibility by land to the region improved and market access to and from Moga was facilitated as the transportation system was modernized, the number of paved roads grew and the number of motorized vehicles increased steadily; and irrigation systems and fodder-chopping activities were mechanized.
Asit K. Biswas, Cecilia Tortajada, Andrea Biswas-Tortajada, Yugal K. Joshi, Aishvarya Gupta
Chapter 11. Sharing the Future: Concluding Thoughts
Abstract
Nestlé and India have a one hundred year old story to tell about how it was, it is and it will continue to be possible to Create Shared Value opportunities for the myriads of people who have taken part in this continuing journey.
Asit K. Biswas, Cecilia Tortajada, Andrea Biswas-Tortajada, Yugal K. Joshi, Aishvarya Gupta
Backmatter
Metadaten
Titel
Creating Shared Value
verfasst von
Asit K. Biswas
Cecilia Tortajada
Andrea Biswas-Tortajada
Yugal K. Joshi
Aishvarya Gupta
Copyright-Jahr
2014
Electronic ISBN
978-3-319-01463-0
Print ISBN
978-3-319-01462-3
DOI
https://doi.org/10.1007/978-3-319-01463-0