Professionalism/The Nestlé Infant Formula Scandal
In 1974, a report entitled The Baby Killer accused Nestlé for causing illness and infant deaths in poor communities in third world countries by promoting their infant formula products at the expense of breastfeeding . The report sparked an outrage that led to an international boycott in 1977, which continues today. The persistence of Nestlé’s aggressive marketing practices illustrate several issues in professionalism, including diffusion of responsibility, conformity bias, lack of accountability, and unintended consequences.
Nestlé Infant Formula Marketing
The Baby Killer report was published by the British NGO War on Want in 1974 . The report delineated Nestlé’s aggressive advertising practices promoting the sale of infant formula in developing nations, at the expense of infant health and safety.
Nestlé’s advertisements insinuated that drinking infant formula instead of breast milk will make children healthier, happier, and stronger . Advertisements also offered free feeding bottles, samples, and other supplies to mothers in order to encourage purchases. To promote their product, Nestlé developed close relationships with local hospitals and healthcare professionals in order to deliver products directly to new mothers when they are discharged from the hospital. Further, Nestlé sales representatives dressed up as nurses when giving out free samples, falsely presenting that their product is endorsed by health professionals .
Nestlé carried out these misleading advertising practices despite knowing that breast milk is, in fact, almost always the healthier option . Dissuading mothers from breastfeeding in favor of bottle feeding can lead to numerous health problems, especially in developing nations. Mothers become reliant on infant formula when they stop naturally producing breast milk through continued use, which is problematic because many families cannot consistently afford infant formula. To make the formula supply last, mothers often diluted formula, causing malnutrition in infants. Further, due to a lack of access to clean water, mothers would mix powdered infant formula with unsanitary water, which caused disease in the infants  . Although instructions on Nestlé’s infant formula warned against these practices, the products were sold in areas of high illiteracy and many mothers were never aware of the consequences .
Nestlé sued Third World Action Group - the organization who published a German translation of the report - for libel, and won the suit because Nestle's actions could not be directly linked to the deaths of infants as per criminal law . The judges reasoned that other factors, such as the unclean water and the actions of the mothers, also contributed to infant malnutrition and death. However, Nestle's misleading advertising practices cannot be separated from the rise in bottle feeding, which contributed to the illnesses and deaths of many infants.
Many organizations, individuals, and companies competed to advance their interests in the infant formula scandal. Non-governmental organizations like the International Baby Food Action Network (IBFAN) and Save the Children opposed Nestlé’s actions, and worked against them through reports like the Baby Killer and organizing an international boycott of Nestlé products since 1977. The World Health Organization (WHO) has played an impartial role in this conflict, but published informational literature recommending against the use of Nestlé's infant formula products in order to improve public health . Local health workers maintained a close relationship with Nestlé salespeople and allowed Nestlé to provide samples of infant formula to mothers . However, these health workers served their community and attempted to improve their health as much as possible. These health workers had a conflict between using a resource given to them in the short-term versus its long-term consequences. Members of the communities where Nestle promoted their products consist of unorganized participants. Their goals were to make the best decision for improving the health of the mothers and infants using available resources.
Professionalism and Conduct
Diffusion of Responsibility
To investigate the scandal surrounding Nestlé’s marketing practices, the United States Senate held a hearing in 1978 led by Senator Edward Kennedy. During the hearing, Nestlé spokesperson Oswald Ballerin was interviewed to gauge Nestlé's responsibility in the deaths and illnesses of infants. Instead of acknowledging any mistakes or flaws in their marketing strategy, Ballerin proclaimed that they were not responsible in any way since they had no control over the water supply: “We cannot have that responsibility sir… How can I be responsible for the water supply?... I cannot help it” .
Another Nestlé spokesperson interviewed in the Baby Killer Report  also evaded responsibility for their marketing practices. The spokesperson emphasized that “the onus cannot be on [Nestlé] to stop mothers” from using this formula regardless of the water supply or whether they can afford it as the mother comes to her own decision not to breastfeed. Nestlé also admits that while it is “good business” to control a products consumption to only those who can afford it, they haven’t found a way to “stop that product from getting to people who shouldn’t be using it.”
The interviews with Nestlé representatives reveal that Nestlé evades their responsibility in the controversy by attributing the deaths and illnesses of the infants to other factors, such as the poor water supply and product misuse by the mothers. However, they neglect to consider how their own actions still contributed to a potentially dangerous rise in bottle feeding. Nestlé's misleading advertisements failed to accept their responsibility to properly educate their consumers on both the health benefits and risks of their infant formula products, which contributed to the misuse of the product that led to health problems for infants. The presence of other factors does not exculpate Nestlé's actions.
Nestlé’s advertising practices are aggressive, but they may not seem quite so egregious in the context of the advertising practices of the infant formula industry in general at the time. Radio advertisements for infant formula were common for big infant formula manufacturers. In one month in 1974 in Sierra Leone, Nestlé Lactogen aired 135 thirty-second radio advertisements, Abbott similac aired 66 commercials, and Unigate Cow and Gate infant formula aired 45 commercials . As World Health Organization nutrition specialist Dr. J. Kreysler expressed, “The massive propaganda of the milk companies [is] particularly effective in poor sectors of the population. The milk companies are creating a magic belief in the white man's milk powder."  These companies are also heavily networking with doctors and other medical professionals in order to push their products to the client: by providing free samples, donating medical equipment, sponsoring professional symposia, and more.
The conformity effect can be dangerous in concealing the negative consequences of one’s actions when they seem to fit a social norm. Nestlé could justify their marketing practices by similar practices by Abbott, Unigate, and other companies. After the infant formula controversy was brought to light by the Baby Killer report, international organizations and companies took advantage of the conformity effect by establishing a norm of best practices to regulate infant formula companies. The World Health Organization instituted the International Code for Marketing of Breast-Milk Substitutes, infant formula companies formed the International Council of Infant Food Industries , and Nestlé itself established the Infant Formula Audit Commission .
Institutional culture plays a significant impact on decision making in the organization. Nestlé has a “Swiss” institutional structure with a cohesive world headquarters located in Switzerland, and very decentralized management for local offices  Nestlé owns hundreds of companies throughout the world, and local offices act like independent profit centers, and Nestlé headquarters rely entirely on local officers to market and sell their products based on their knowledge of the local culture . This decentralized management system fails to establish accountability at the headquarters for the actions of the local offices. The lack of accountability would motivate Nestlé headquarters to want to detach themselves from the infant formula scandal, as seen in their evasive answers in the Kennedy hearing.
The unintended consequences of an action must be evaluated and taken into consideration before making a decision. Negative unintended consequences should not be rationalized by good intentions.
First, Nestlé provided free samples of infant formula to health centers and to mothers . In a way, Nestlé is simply offering new mothers an alternative to breastfeeding, which they may voluntary accept or deny. However, by providing these free samples in the context of clinics, Nestlé preys on the mothers' conceivable concerns over the health of their children by presenting their product as the way to healthier and happier children.
Secondly, Nestlé wrote instructions on the proper use of their product in the local language of the area they served. However, they do not fulfill their responsibility to educate their consumers because most of these mothers are illiterate and cannot understand these directions . Further, Nestlé ignored the realities of product use. In areas without clean water, where cooking is done on open stoves, they cannot realistically expect mothers to boil water for a certain number of minutes before mixing it with infant formula to feed their children. As Senator Kennedy asked in the Kennedy Hearings: “Is it enough to establish a code for product use and disown or turn away from the realities of product use?” . Even though Nestlé may rationalize that their promotion of infant formula and bottle feeding still left mothers with a choice, their actions irresponsibly skews the benefits of bottle feeding. These actions led to mothers unnecessary and improper use of the baby formula products, which led to the deaths and illnesses of many infants.
Infant Formula Marketing Today
Despite the establishment of international codes regulating infant formula marketing practices, the issue persists today. In 2011, NGOs in Laos wrote an open letter to Nestlé protesting its marketing practices, including general public advertising and promotion of infant formula in hospitals, and labeling infant formulas with infants from birth, and not providing adequate education regarding the benefits of breastfeeding as compared to infant formula feeding. 
One could argue that as a company, Nestlé needs to adequately advertise their products for good business. However, managing business profits and ethical marketing can be a fine balance. These decisions in marketing practices can be influenced by numerous outside participants and other factors, such as these NGOs in Laos, as well as the institutional culture of the company. Being aware of the decisions traps of the diffusion of responsibility, conformity bias, and lack of accountability can help people make professional decisions when the “right” answer is unclear.
- Muller, M. (March, 1974). The Baby Killer. War on Want. 
- Sethi, S. Prakash (1994). "Multinational Corporations and the Impact of Public Advocacy on Corporate Strategy: Nestlé and the Infant Formula Controversy". Journal of International Business Studies 25 (3): 658–660. doi:10.1057/jibs.1994.41. JSTOR 155364.
- Gausti, C. (2012). "From Breastfeeding to Bottles". The Journal of Global Health. 
- Baby Milk Action. (accessed May 3, 2015). Senate hearings into Nestlé 
- Solomon, S. (December 6, 1981). "The Controversy Over Infant Formula". The New York Times. 
- World Health Organization (2003). Global strategy for infant and young child feeding. 
- The Deranged Housewife - Pregnancy and Childbirth Advocacy - Parenting - Breastfeeding. (August 2, 2012). Subversive marketing tactics: Nestlé "milk nurses". 
- The Multinational Monitor (April 1987). Infant Formula Hawking Disaster in the Third World. 
- International Council of Infant Food Industries. (April 1981) Summary Position Statement Re Proposed WHO International Code for the Marketing of Breast Milk Substitutes. 
- Edmund S. Muskie, Daniel J. Greenwald III, (1986) "THE NESTLE INFANT FORMULA AUDIT COMMISSION AS A MODEL", Journal of Business Strategy, Vol. 6 Iss: 4, pp.19 - 23
- Aid agencies working in Laos. (May 2011). An Open Letter to Nestlé.