Carefully read the example below (borrowed from Nadica Figar and Biljana orevi, Managing an ethical Dilemma, in Economic Themes (2016) 54(3): 345-362). Then answer the questions below on this document.

Companies doing their businesses with different segments of customers (from different geographical areas, with different ages, purchasing power, etc.). Diversity may cause that some kind of business practices could be ethical for some customer segments and for the other segments to be an unethical.

For example, Nestle in the USA and Europe was selling the milk powder as a supplement or replacement for the breast milk. This company expanded its market in the countries of Africa.

As in the USA and Europe, in Africa, too, this company for advertising purposes was giving free samples in hospitals. However, in Africa this kind of advertising campaign was proclaimed as unethical, because Nestle put their business interests above the common good.

Namely, a large number of mothers were poor, and when they came out of the hospital, they could not buy milk powder, and their milk withered. Those who were able to buy, but not in sufficient quantities, were giving to their children less than required quantity, which caused the rise of the malnourished infants. In addition, for the powder dissolution it was necessary to use the distilled water. Yet, many mothers used local non-distilled water, which dissolved the powder, which caused infant mortality.

The group, which called itself INFAKT, proclaimed that this Nestles action unethical and called on consumers to boycott their products until they change their practices. The boycott lasted for seven years (Personal vs. Professional Ethics, 2012).

The example points to the fact that the same business practice view from the aspect of ethics should be judged in accordance with the circumstances in which it is applied, because what was ethical in the US and Europe was unethical in Africa, and it cost Nestle a reduction in sales and financial results, and it also damaged its reputation.

Question 1: Indicate all the ethical issues at stake in this example, and explain them. (15 lines, not less)

Question 2: What strategy, in your own opinion, could have prevented the company from suffering financial losses through the negative impact this affair had on their image? (10 lines, not less)