UNIVERSITI TUNkU

ADUL RAHMAN

FACULTY OF CREATIVE INDUSTRIES
FUNDAMENTALS OF PULIC RELATIONS
UJMC 1003
ASSISNMENT


NAME: Lim Siow Ying {09UJ0401}
Tun Li Leng {09UJ04300}
COURSE: ucheIor of Corporute Communicution {Hons}
YEAR/SEMESTER: Yeur 1 Semester 1
TITLE: NestIe

Murks
Introduction Z0%


Theories Z%


MethodoIogy Z0%


AnuIysis und discussion Z%


Referencing {APA} 10%


TotuI 30%

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Content List
Content Page
1 ntroduction 2-3
2 Theories
2.1 Systems theory
2.2 Grunig's model
4-8
3 Literature Review 9
4 Methodology 10-11
5 Analysis and Discussion
5.1 Print Media
5.2 Concern Public
5.3 General Public
5.4 Corporate Organisation
5.5 Government
12-15
6 Conclusion 16
7 References 17-18
8 Appendix 19-21









2

Introduction
Corporate Social Responsibility (CSR) means continuing commitment by business to
behave ethically and contribute to economic development while improving the quality of life of
the workforce and their families as well as of the local community and society at large. Nestl is
the world's leading Nutrition, Health and Wellness largest food manufacturer. t was founded in
1866 by Henri Nestl, and is headquartered in Vevey, Switzerland. NESTL started the
business operations in 1912 and as responsible company listed on Bursa Malaysia, NESTL
are pleased to be involved in the nation's development over the last 95 years. The mission of
NESTL is to provide healthy products so that people can live a better life and they strive to
bring consumers foods that are healthy, safe, high quality and provide optimal nutrition to meet
physiological needs. Bring consumers Good Food for Good Life as the vision and slogan of
NESTL. Corporate Philosophy of Nestle is to be a responsible corporate citizen, fulfilling all
responsibility to Government, shareholders, customers, communities and consumers. Over the
past two years, Nestle has been working with other stakeholders to better define how business
can serve the needs of society, and particularly Nestl's role in global development.
Corporate Social Responsibility (CSR) is considered as a part of NESTL's DNA. t is
inherent in NESTL's Management and Leadership Principles and embedded in long-term
business strategy to create long-term value for society. These areas offer suppliers the
opportunity to demonstrate capability and substantiate their claims through credible external
parties. CSR projects show NESTL's on-going efforts to Nourish Malaysians through Nutrition,
Health and Wellness initiatives toward long-term business growth as well as building
sustainable communities, in line with the United Nations Millennium Development Goals
(MDGs). Peter Brabeck-Letmathe, the Chairman and CEO, NESTL said that they believe that
the true test of a business is whether it creates value for society over the long term. Thus, they
evolved from the concept of Corporate Social Responsibility (CSR) to that of Creating Shared
Value (CSV). Creating Shared Value is a very different approach to CSR, because it is not
focused on meeting a set of standard external criteria, or on philanthropy.
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To NESTL, CSR is about creating social and environmental benefit as a part of making a
company competitive over the long term to create value for society and shareholders, helps to
meet U.N Millennium Development Goals. n Malaysia, NESTL have several on-going
programmes with the theme of Shared Value Creation which helps ensure that can achieve one
or more of the U.N. Millennium Development Goals, which are
(a) Eradicate extreme poverty and hunger- Nestl Malaysia provides monthly food aid to
28 organisations including orphanages, old folks homes, schools for special children, health
bodies and other charitable organisations.
(b) Achieve universal primary education - The Children of Kampung Liu in Sabah rejoicing
over a new kindergarten presented by Nestl in cooperation with Raleigh nternational.
(c) Promote gender equality and empower women - Working with a woman's NGO, Nestl
has helped improve the economic status of single mothers by providing them with the
necessary skills to weave baskets from used newspapers and magazines. The women are able
to sell these environmentally friendly baskets to be used as gift hampers to corporations such
as Nestl for a reasonable profit.
(d) Ensure environmental sustainability - NESTL have undertaken extensive innovation
and renovation and introduced new packaging tat reduce waste and allow easier recycling. n
2005, source reduction reduced materials usage by 850 tonnes
We would like to study the corporate social responsibility (CSR) of Nestle from years 1996
until 2010. The objectives of this research are to identify what Nestle contributes to the society
by involve in Corporate Social Responsibility including health, agriculture, environment and
education. We will also analyse how the print media as well as the publics reflect upon the
Nestle in terms of its CSR initiatives.




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Theories
2.1 System theory
System theory holds an organization and all of its publics. The idea is that all parts of a
system are interrelated and function as an organized whole that is greater than sum of its part.
By comparing an organisation to a living organism, which exists both within the system and an
environment, a framework can be developed through which to describe and analyse a variety of
situations and behaviours, which typically confront PR practitioners. Based on the notion of
interdependency, the systems approach can also be used by practitioners to highlight the role of
PR in positioning an organisation vis--vis its stakeholders and its environment, and in
managing the various interfaces which arise: by focusing on underlying principles, the approach
also allows comparisons to be made across a variety of organisations and organisational types.
Systems theory summarises the structure and operation of an organisation, and how it
interacts with its environment, breaking the organisation itself into subsystems impacting on
each other and the organisations environment (Gregory 2006b).Organisation typically present in
five subsystems:1) Production, producing the products and services of an organisation, 2)
Maintenance, spanning the organisation and encouraging unity and co-operation e.g. Human
Resources, 3) Adaptive, covering research, development and strategic planning, helping the
organisation to adjust to environmental changes, 4) Management, the dominant subsystem,
directs and controls all other subsystems, managing conflicting demands between them, and
conflict between the whole organisation and its environment, 5) Marketing, part of the Disposal
subsystem, focusing on the marketing and distribution of products and services.
Human Resource department of Nestle taking a brave and bold move with the online HR
Satisfaction Survey, which welcomes feedback on HR support and services that could help the
HR department improve in the delivery of services and "Making the Difference for Excellence.
Nestle has Group Corporate Affairs & Wellness Department which involve in sending out press
release to media. Besides that, the public affairs department is in charge in strengthening the
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company's Creating Shared Value (CSV) initiatives in all Nestl markets. They always interact
with the publics and resolve the conflict.
For a systems perspective, public relations functions as both system component and
boundary spanner (e.g. Vasquez,1996), whether the practitioner's role is that of technician or
manager (Broom & Dozier, 1986; Dozier, 1984, 1992) or a combination of both (e.g. Newsom,
Turk, & Kruckeberg, 1996; Toth, Serini, Wright, & Emig, 1998). Environmental scanning brings
information into the organization, and external communications send information into the
organizational environment (see Dozier,1990, for a comprehensive overview of research in this
area). Therefore, public relations activities serve a feedback function that helps the client
systems interpret their environments in order to maintain homeostasis.
For example, PR practitioners of Nestle scan the environment and bring information that
one of the government U.N. Millennium Development Goals is Poverty reduction. Nestle
establish Contract Farming and Sourcing of Raw Materials in the East Coast state of Kelantan.
This initiative is to help boost income levels of farmers and promote Good Agricultural Practices
(GAP). The project, which first commenced in 1995, strives to improve the standard of living and
livelihood of the farmers in a sustainable manner, create jobs and boost income levels. t
exposes the farmers to Good Agricultural Practices and helps them be self sufficient and
independent. Nestl's objective for this project is to improve the yield and quality of the crops
through maximum utilisation of agricultural resources by gearing the farming activities towards a
commercial approach, with emphasis on more systematic and professional farm management
systems that meet globally-acknowledged standards.
The project has brought upon significant changes to the income levels and livelihoods of
the participants and their families, where they have been able to generate a sustained income,
improve their standard of living, purchase new land, invest in and upgrade their machinery and
educate their children, a previously unattainable achievement. On average, the farmers earn a
net income of US$2,200 per season (6 months), which works out toUS$365 per month; double
their original income.
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Systems theory can offer further guidance on the potential importance of the PR
department by differentiating closed and open systems. An organisation described as a closed
system resists change, reacting only when it must. Because it ignores the environment, it
usually has a limited life span. PR practitioners in closed systems have a reactive role and are
excluded from the management subsystem and decision-making. Open systems are different,
responding to change and monitoring the environment. Here PR is proactive and part of the
management subsystem, anticipating issues before they arise and contributing to the decisions
being made (Gregory, 2006b). Nestle adopt open system which PR practitioner is proactive to
interact with the environment. They take initiative involve in corporate social responsibility. For
example, over the years Nestle held a lot of forums to send out information to consumer. The
Nestl Wellness Forums are aimed at bringing awareness and information about health trends
such as obesity, diabetes and cardiovascular diseases.
2.2 Grunig's model
Based on a systems approach, the Grunig models have introduced the notions of one or
two way symmetrical communication into the everyday language of public relations: beyond that
they have stimulated a lively debate, which raises key issues for academies and practitioners
alike. One way communication divides into Public nformation Model and Press agentry. The
aim of press agentry is to publicize the organization, its products, and its services in any way
possible. Where Public nformation Model is the second stage of public relations seeks to
disseminate information to the public as truthfully and accurately as possible. t is used primarily
by government agencies, nonprofits and associations.
Nestle sometimes adopt Press agentry model as it involve in Promotion of sports and
theatrical events which help the organization control the publics that affect it. For instance, since
Milo launch in Malaysia in the 1950s, it has steadily played a crucial role in the development of
Malaysian sports; from nurturing juniors at grassroots level right up to supporting Malaysians at
international events. MLO works with many Government bodies and NGOs to contribute to
Malaysian sports. These partnerships have been developed over many years based on a

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shared vision to shape a strong sporting culture in Malaysia, supporting the Government's
vision of a healthy, active and united Malaysian society. MLO has collaborated with the
National Fitness Council (NFC) through a variety of initiatives over the past two years. The
corporate objectives of MLO are closely aligned with the NFC's inspirational slogan "Get Fit,
Get Healthy, Get United.
Two-way Asymmetric model tilted in favor of the organization. t uses public relations to
persuade the public to agree with the organization's point of view. This allows an organization to
put out its information and to receive feedback from its publics about that information. Feedback
is used for manipulative purposes. An organization wouldn't necessarily change decisions as a
result of feedback but rather would alter its responses to more effectively persuade publics to
accept its position.
For example, to achieve their target of being the world's first Nutrition, Health and
Wellness Company and provide healthier options and meet the evolving needs of consumers,
Nestle took a lot of initiatives. One of these is constantly improving their communication efforts
by providing Nestl Nutritional Compass to help consumers understand the labelling and
nutritional benefits of food products. Nestle Malaysia has had successful launches of new
products with value added nutritional benefits using traditional Asian ingredient such as ginger,
ginseng and Chinese red dates. Nestle is the only food company that features a nutritional
compass on its packages, which is a convenient tool for consumers to better understand the
benefits of the product. Nestle also collaborated with the Ministry of Education to launch the
Healthy Schools Campaign working together with relevant academia (UKM) and NGOs
(Nutrition Society of Malaysia and Malaysian Association for the Study of Obesity) to share
knowledge and create awareness on the importance of nutrition to all relevant parties including
schoolchildren, teachers, parents and canteen operators.
Two-way symmetric model is advocates free and equal information flow between an
organization and its publics, based on mutual understanding. This approach is more "balanced-
symmetrical with the public relations communicator serving as a mediator between the
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organization and the publics. The purpose of public relations is to develop mutual understanding
between the management of the organization and publics the organization affects. nstead of
thinking of the organization as the source of communication and the publics as the receiver,
both are conceived as groups engaged in a transaction. For instances, through the publication
of this annual report and Corporate Social Responsibility review, Nestle want to give the publics
a better understanding of the way they operate and what corporate social responsibility means
to them. Nestle provide email to get feedback from the publics. They want to understand publics
views better and hear publics comment on their CSR initiatives so that they know what they
should be doing more of. Nestle is opened to accept comments on their products and also to
get suggestions and recipes from the public by providing free phone call.

















9

Literature Review
The notion of companies looking beyond profits to their role in society is generally termed
corporate social responsibility (CSR). t refers to a company linking itself with ethical values,
transparency, employee relations, compliance with legal requirements and overall respect for
the communities in which they operate. t goes beyond the occasional community service action,
however, as CSR is a corporate philosophy that drives strategic decision-making, partner
selection, hiring practices and, ultimately, brand development (Michael McComb, 'Profit to be
found in companies that care,' South China Morning Post, April 14, 2002).
CSR is like an umbrella term to cover company's impact on society and the environment.
They believe that having strong CSR credentials can help to attract and retain the best people,
maintain a positive image and create the awareness of consumer. This is the way to continued
success as a business (CSR: Making a difference around world, 2008). The social responsibility
of business encompasses the economic, legal, ethical, and discretionary expectations that
society has of organizations at a given point in time (Archie B. Carroll, 'A Three-Dimensional
Conceptual Model of Corporate Performance,' Academy of Management Review, 1979).
While there is no universal definition of CSR, it generally refers to transparent business
practices that are based on ethical values, compliance with legal requirements, and respect for
people, communities, and the environment. Thus, beyond making profits, companies are
responsible for the totality of their impact on people and the planet. (Sir Geoffrey Chandler,
"Defining Corporate Social Responsibility, Ethical Performance Best Practice, Fall 2001.)
CSR is about businesses and other organizations going beyond the legal obligations to
manage the impact they have on the environment and society. n particular, this could include
how organizations interact with their employees, suppliers, customers and the communities in
which they operate, as well as the extent they attempt to protect the environment. (Ruth Lea,
'Corporate Social Responsibility: oD Member Opinion Survey,' The nstitute of Directors, UK,
November, 2002)

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MethodoIogy
Secondary data is the most of important for our research. We effectively utilized the
periodical articles which can be a great source of Corporate Social Responsibility and Nestle
Company information. (Periodicals refer to press release, journals and newspapers).
The following is an account of the methodology used for the research for this report. The
information for this report was gathered through online research, journal, and interview. The aim
of the research is to study the corporate social responsibility of Nestle and analyze the public
relations and mass communication theories that the company has applied.
We review many newspapers in past few year in order to find the coverage of media to
Nestle CSR. However, as we are analyse from year 1997 until 2010, some of the media report
source cannot found in library. Therefore, we utilise the technology advance by searching
information from internet.
According to the research through internet, we found that the benefits of CSR is to improve
a company's reputation and branding, besides that can attract new customers and increase
market share. CSR as a concept that help a company to position itself in the marketplace as a
company that is more responsible and more sustainable when compare to its competitors. n
our opinion, CSR is not only help to build company's image but also contribute to society and
public. There is a new concept of CSR based on "Creating Shared Value was adopted by
Nestle, it is to create wealth and benefit society through long-term value creation, the
development of its products are to help consumers meet their nutritional needs, contributing to
their health.
Through the review the interview section with Mr Brabeck-Letmathe, Chairman and CEO
of Nestle S.A, he said that CSR is not something that is imposed from the outside, but it is an
inherent part of the company business strategy and principles which guide the way they operate.
Nestle is not only provide quality brands and products but also committed to its social
responsibilities to benefit the community. Nestle providing economic and educational
opportunities as well as improving the health and well-being of those in need.
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n addition, we not only rely on secondary source as things might change when time past.
Therefore, in order to obtain updated information, we conduct interview with general public. The
subjects we interview including student from Utar, parents and consumer of Nestle.
Nestle put effort to fulfill their obligations from social, economic and environmental. Nestle
will keep bringing consumer their promise of Good Food, Good Life and continue to strengthen
that bond.





















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AnaIysis and discussion
5.1 Print media
We are analysing three main print media in Malaysia which report on CSR initiatives of
Nestle including The Star, The Sun and New Strait Times (NST). Three of the print media carry
news regarding the Nestle CSR. However, each carries different style of the reporting.
5.1.1 The Star
After reviewing so many newspapers, we notice that The Star more report on variety of
Nestle CSR activities especially the sponsorship on sport and CSR award. For example in 2009,
MLO launched their programme themed "Play More Learn More as part of their community
service campaign. The Star always will follow up the latest update information by giving in very
detail such as the result of sport competition, the public view on this event and so on.
n our opinion, The Star always covers news StarBiz-CR Malaysia Corporate
Responsibility Awards 2009 is because this awards is a partnership between The Star and
nstitute of Corporate Responsibility Malaysia. This can be proven through reporting on
September 10, 2009 which is regarding Star Publications (M) Bhd and nstitute of Corporate
Responsibility (CR) Malaysia are jointly organising a forum on the importance of corporate
responsibility (CR) despite the economic downturn in conjunction with the StarBiz-CR Malaysia
Corporate Responsibility Awards 2009.
5.1.2 The Sun
The Sun clearly report on the purpose of nestle CSR. For example, when The Sun reports
on "Mentoring programme to help SMEs, it obviously report that the purpose of Nestle having
The SME food industry mentoring programme is to seek opportunities for Nestle to work
together with organisations or individuals, to improve businesses and enhance livelihood in a
long-term and sustainable manner.
From the coverage of The Sun public able understand more on Nestle CSR activities as
well as its philanthropy. This is because while reporting the Nestle CSR initiatives, The Sun
13

always includes company view on that particular event through interview of the Company
representative.
5.1.3 New Strait Times(NST)
n NST, it more focus on CSR event. The information in the news is focus on the process
of that particular event and it just list out the sponsor normally in the last paragraph. n one
report on 21 May 2010, NST cover an event about the parents' choice of diet and lifestyle.
Throughout the whole report, the name of Nestle only appear once although nestle is the largest
sponsor for that event.
NST always give fair report on CSR activities. Even though some of the activities are
jointly organised by Nestle and the New Straits Times, NST still carry same style of reporting.
For example in reporting Koko's Smart Start Camp which is jointly organised by Nestle, NST
and Education Ministry, NST only focus on public view towards this camp.
5.2 Concern public
5.2.1 Education
KOKO Smart Start Camp with the New Straits Times aimed at improving the level of
English language proficiency and stimulates interest in English, while enhancing public
speaking skills amongst primary school students. t also served as a platform to educate the
students on the importance of having breakfast. The concern public which is the students from
35 primary schools have positive comment on this camp. Eleven year old Mohd Muizzuddin
Mukhtar said he had learned a lot at the camp, including a better way to write in English and
eager to participate in the this kind of camp. English teacher Saripah Abdul Rahman said the
camp was a beneficial programme which could help the students to have a better command of
the English language. According to her, school are will give fully support of the programme.
5.2.2 Nutrition, Health and Wellness
As an extension of the Healthy Schools Campaign, Nestl initiated PAL a "play & learn
campaign targeted at children to encourage them to engage more in safe outdoor activities.
Working with local communities and volunteers, Nestl hopes the campaign will create
14

awareness amongst parents, caregivers and children that play is also an essential part of the
learning process while keeping the children actively fit. n one of the activity of PAL, students
from SK Taman Gembira, Klang, SJK(T) Bestari Jaya, Batang Berjuntai and SJK(C) Puay Chai
2, Petaling Jaya are the recipients. One of the student say that sports is very important his life
and he learnt many things. t has taught him never to give up. BJSS principal Marina Chin
appreciate initiative of Milo to encourage students involve in sport. She said that participation in
sports accelerates the learning process, leading to better academic performance.
5.3 General public
Through interview with general public, we found out that majority of the public do not
aware of Nestle involve in variety of CSR initiatives. Most of them just realise that Nestle
provide sponsor in many sport related events. n our opinion, this scenario maybe due to lack of
publicity and there are problem when send out the information.
5.4 Corporate organisation
5.4.1 Nutrition, Health and Wellness
Since its launch in Malaysia in the 1950s, MLO has steadily played a crucial role in the
development of Malaysian sports; from nurturing juniors at grassroots level right up to
supporting Malaysians at international events. According to Don Howat, Business Executive
Manager for Beverages, Nestl Products Sdn Bhd, playing sports can convey important life
values such as teamwork, confidence, discipline, respect and perseverance. Sports not only
developing these important life skills, but also make children learn. They will understand and
accept the concept of winning and losing. MLO start sponsor the SEA Games since 1993. "n
this year's sponsorship, Milo is gathering all Malaysians, young and old, to stand together as
1Malaysia to support our SEA Games contingent in their quest to bring honour and glory to the
country," Milo group brand manager Philomena Tan said.

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5.5 Government
5.5.1 Overall performance
Government always appreciate the CSR effort done by corporate. n one speech during
public forum, "The United Nations Global Compact: Corporate Citizenship in the World
Economy, YBhg Dato' Johan Raslan, Chairman, CSR Malaysia: " am pleased to share Nestle
Malaysia is one of the founding members is part of solution towards sustainable development.
Nestle CSR effort. Besides that, Nestle also received honoured for its outstanding corporate
responsibility practices at the StarBiz-CR Malaysia Corporate Responsibility Awards 2009.
Nestl won the award in the marketplace category (companies with market capitalisation of
RM1 billion).
5.5.2 Training and Mentoring
n 1996, Nestl Malaysia has launched an Employee Volunteer Programme to promote
volunteerism and encourage employee involvement in the communities. Nestl R.O.C.K.s, short
form for "Reaching Out to Community and Kids was launched to bring employees together to
volunteer for worthy causes which the company supports. Volunteers are given 16 hours "time-
off for voluntary work in the 28 homes, orphanages and charitable organisations that Nestl is
currently supporting in a year. Nestle Reaching Out to Communities and Kids (ROCKS)
employee volunteer programme aimed at internalising Nestl's CSR commitments. n 2007,
Nestl's 4,000 employees are able to take 16 hours off work a year to assist at any of the 30
homes Nestl helps out annually. Women, Family and Community Development Ministry are
also recognising organisations like Nestle who provide "time off for their employees to carry out
community work.
This Employee Volunteer Programme shown that Nestle are trying to maintain good
relationship with people both within and outside. Employees and community are the publics that
PR practitioners need to take care of. By having this programme, employees and community
have a chance to interact and build goodwill of Nestle.

16

ConcIusion
Nestle is the largest food and beverage company in the world which promote nutrition,
health and wellness, their CSR focus on creating social and environment benefit. There are 200
events were held at both the local and international level, included: 2008 Le Tour de Langkawi,
2008 SEA Junior Table Tennis Championship and so on. Nestle company want their consumers
to understand the positive impact that they will contribute in the process of one of their CSR
which is shared value creation, which enables them to provide safer food, better nutrition and
better quality of life. The main purpose they want their consumers to understand is the social
benefits that company is creating and they want their consumers feel satisfy when they
purchase a product from Nestle.
The Sun, New Strait Times and The Stars help to report and follow up the updated news
regarding to the Nestle CSR with different styles to disseminate the programmes that Nestle is
holding. The CSR of Nestle gets positive feedback from public since they provide beneficial
programme to public for example like "Koko Smart Start Camp to enhance the level of students'
English language, "Play and Learn Campaign to motivate students involve in sports, "10
Reasons Milo Does More for Your Child to emphasize the nutritional benefits of Milo chocolate
malt powder and build a healthier society through sports. Besides public, Nestle also launched
"R.O.C.K.s to promote volunteerism and encourage their employee to involve in communities.
Due to Nestle CSR effort, they successful to won the Malaysia Corporate Responsibility Awards
2009 and award in the marketplace category.
n a nutshell, CSR programmes of Nestle show their efforts to nourish Malaysians
through 3 main components which are nutrition, health and wellness and bring long term value
for society, environment and economic perspectives. Nestle do have keep their promise to bring
consumer of Good Food, Good Life.



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8. Appendix

Nestle Organisation Management Chart