The Contribution of Nestle as MNCs in Malaysia

A. Introduction

In this globalization era, there are so many corporations that spread around the

world and dominating the economic business activity of a country. One of corporation

which is popular nowadays is Multinational Corporation (MNCs). Today, the country

around the world is having Multinational Corporation that play important role in those

countries. Usually, the Multinational Corporation is not only one. There are many

Multinational Corporation in one country that also having important role in the term of

economic and development. The Multinational Corporation can give the host country

some advantages such as creating job and it also contribute to the national income from

the tax that should be given to the host country (Sumantoro, 1987). To understand

more about Multinational Corporation, we need to know about what Multinational

Corporation is and what kind of role that they give to the host country and home

country.

A Multinational Corporation is a kind of business entities that operate in more than

one country in the world (Bonaventure I, 2011). The Multinational Corporation has its

own headquarter that become the centre of the business. While the others Multinational

Corporation is spread around the world and has its own role in the host country. The

Multinational Corporation in the host country usually gives some advantages such as in

technological, managerial of business, investment and also creates some jobs for the

citizen.

The idea of Multinational Corporation is not new. Some have traced the roots of

modern Multinational Corporation to Europe’s great trading companies beginning with

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the Dutch, east India trading company in 1689 (Carlos Ortiz, 2006). The level of

multinational enterprise expanded in the nineteenth century and into the corporation

had its first subsidiary in Europe (Jan Aart Scholte. 1997).

Between 1945 and 1968 direct private investment in international ventures are

increased 10 percent annually (Robert E. Lipsey). Today, as fast as trade and other

form of international commerce have grown, Multinational Corporation has expanded

even more rapidly. The Multinational Corporation is spreading around the world. They

are dominating the market in those countries. They can compete with the other

Multinational Corporation in those countries and compete with the domestic business.

Multinational Corporation is spreading around the world because they try to get

wider market and get more advantages. The Multinational Corporation has some

motives and objective when they are opening new Multinational Corporation in the

other country. They try to get cheap labor in the other country/ in a host country. The

Multinational Corporation is making and builds their business in other country

especially to get cheap labor. They like to expand their business especially in the

developing country. They like to expand their business in the developing country

because in the developing country, there are so many citizens that have no job. With

this condition, the Multinational Corporation tries to take this chance to get the labor.

The Multinational Corporation can use this labor in order to work for them with cheap

salary. The Multinational Corporation can give the labor cheap salary because they

only have limited capability to do their job. They only think to get job and get their

payment in order to fulfill their daily need. They do not need the other thing as long as

they can fulfill their daily needs. So the Multinational Corporation can maximize them

and giving them cheap salary.

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The other things that make the Multinational Corporation like to expand their

business in the developing country because of the raw material. The Multinational

Corporation can get raw material easily in the developing country because they have

more capital to influence the government policy. They can use their capital to influence

them. The raw material that the Multinational Corporation gets is cheaper than they get

in their own country. In the developing country, there are usually so many raw

materials and they cannot produce this raw material without the assistance from other

country. Sometime they are lack of capital, technology and capability to produce the

raw material become goods. These conditions become the chance for the Multinational

Corporation that has more capital to make cooperation and get raw material for their

business.

Besides getting cheap labor and cheap raw material for their business, the

Multinational Corporation is also trying to get some location that can give them

specific advantages. With this specific advantage, they can get more profits from their

business. They try to look for location of a host country that can give them specific

advantages such as tax holiday and free from other trade barriers. With these specific

advantages, the Multinational Corporation can expand their business in host country

without paying more for the tax and they do not need to feel worry about the trade

barrier that can impede their business. So with this kind of specialty, they can gain

more profit. Besides looking for specific location that can give then tax haven and free

from tax barriers, they also try to see and look for the place that is suitable for their

taste. The Multinational Corporation that wants to open and expand their business in

other country should know about their consumer taste. The Multinational Corporation

should be smart in order to gain the attention and get more consumers for their product.

When the Multinational Corporation knows the consumer taste, they can produce the

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goods and sell it to the consumer. When the consumer taste is the same as the

Multinational Corporation products, the Multinational Corporation can get more profit

on it.

The last thing that also becomes important for the Multinational Corporation in

making and expanding their business in other country is about the market. Before

deciding the location to build their Multinational Corporation, they should observe the

location. They need to know about the market condition and market access in those

countries. Market condition and market access become important things for

Multinational Corporation in order to develop their business. If the market condition is

supporting to their business like there are so many demand about certain product and

the country cannot give enough supply for the consumer demand, so it is the chance for

Multinational Corporation to do the business. Not only have that, the market access in

the country also become one of important factor that should be recognizes by the

Multinational Corporation. Market access such as transportation and the area or

location of the business is far or not from the material and consumer. It needs to be

observed in order to get the best location and access for their business.

There are some advantages and disadvantages about the existing of Multinational

Corporation. Multinational Corporation can give some advantages for the host country,

but it also can give some bad impact to the host country.

a. Advantages

- Multinational Corporation has provides the host country with technological and

technical advantages. When there is Multinational Corporation in the country,

they can give the host country some advantage in the term of technology and

the managerial (Shyam Soni). The host country people can learn about their

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technology to do business and how they manage their business. Not only that,

some people argue that Multinational Corporation can best engage in the

“expensive business” of developing new productive knowledge. It can be

happen because the host country people that before is lack of ability in the term

of technology and managerial, using and working at the Multinational

Corporation can make them get more new knowledge. They can learn their

business system step by step.

- There are so many developing countries in the world that lack of capital. The

developing countries do not have enough capital to expand their business and

economic. Capital becomes important thing when the country wants to build

and develop their economic activity. To get the capital, the country tries to look

for cooperation with the other country in order to get more capital. One of way

to get more capital for the country is making some cooperation with

Multinational Corporation. The Multinational Corporation can provide capital

for the host country that wants to make cooperation with them. So, we can say

that Multinational Corporation is become one of way for the country especially

developing country to get the capital.

- Multinational Corporation creates job vacancies for the host country. It means

that Multinational Corporation can provide job for the citizen in the host

country. When the Multinational Corporation exists in the other country, it of

course needs more workers that can help them to operate their business. So, we

can say that the Multinational Corporation gives employment opportunities in

the developing country and less develop country (James C. W. Ahiakpor).

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b. Disadvantages

- Multinational Corporation drain host capital countries. The Multinational

Corporation is taking more capital out in profits than they put in through

investment (Carli Guyon, 2007). It usually happens in the business activity. The

people that have power in the Multinational Corporation are sometimes taking

more profits for their own and it will reduce the amount of money to be

invested in the business when the business is success.

- One of the Multinational Corporation objectives is to get cheaper raw material

from the host country. When the Multinational Corporation is having this kind

of raw material in the host country, it means that the Multinational Corporation

is reducing the host countries resources in order to get the material for

production. The material that they get is usually from the natural resources. In

the developing country there are many natural resources that has not be produce

become valuable goods because of their capability does not enough. So, the

developing country only sells it in the form of raw material to the Multinational

Corporation. They can get money while the Multinational Corporation can

produce it and make the things become more valuable and can be used by the

consumer.

- Some Multinational Corporation that has been success builds their business in

the host country; they can use their power to influence the government. They

can interfere the policy making of the government. The Multinational

Corporation can engage in the political manipulation and other unethical

activities (Don Mayer and Ruth Jebe, 2010). The Multinational Corporation

also has their own interest when they have enough power. They can do anything

to get their own interest. For example is the Multinational Corporation indicted

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for political meddling such as the involvement of international telephone and

telegraph in the 1973 overthrow of Chile’s president Allende.

- Multinational Corporation is engage in unethical activities that are not permitted

in their home country. There are many drug companies that sell many products

in other countries without prescription which is banned in the home country

(David Fuchs, 2011). This condition is giving effect to the host country. The

host country gets some drugs without prescription and it can affect the consumer

that consumes the drug for their health.

As the above advantages and disadvantages argument over the role of

Multinational Corporation indicate, these giant enterprise are of mixed value. On the

positive side, they do facilitate the transfer of capital, technology and management

techniques. They also play a role in economic integration that functionalist claim will

lead to higher world order.

Some of the critic points are also well taken. Global Corporation have caused

some economic dislocation in both home and host countries. Multinational Corporation

have also sometimes taken exercise profits, depleted resources and added little to the

development of host countries. Multinational Corporation also has pursued their

interest.

So, from the discussion above, I would like to make it specific about the role of

Multinational Corporation in Malaysia. What kind of role that the Multinational

Corporation gives in Malaysia. What their contribution to the Malaysia people,

government, economic development and other aspect of life. In this paper I would like

to focus about the role of Nestle in Malaysia.

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B. Content

Multinational Corporation as one of enterprise activity is operating in several

countries around the world. In one country, it is usually more than one Multinational

Corporation that doing their business. The Multinational Corporation also exists in

Malaysia. Since the Malaysian government is having an initiative for their country to

make a kind of business environment that can open the opportunities for their country

to increase their economic growth and profits, the condition of this country become one

of promising for the manufacture and export base region. Since the government open

more opportunities for the investor to invest their capital to Malaysia, Malaysia’s

economic condition become better. Malaysia is rank as among the world’s top 20

attractive countries for foreign direct investment (FDI), according to the World

Investment Prospect Survey 2007-2009 FDI by the Unites Nations Conference on

Trade and Development (UNCTAD, 2007).

The domestic conditions in Malaysia that support the development of the

industries make some foreigner invest their money in Malaysia. The foreign investors

that can see the business opportunity in Malaysia is quickly give their capital and make

their business in Malaysia. They like to compete each other in order to wider their

business and get more profit from it. Before they give their capital in Malaysia, they

should do observation first, for example about the market, consumer taste and other

aspect which is in the future will support and make their business become success.

One of Multinational Corporation that also tries to invest their capital and build

their company in Malaysia was Nestle. Nestle try to get the business opportunity in

Malaysia in the food supply aspect. Nestle try to give healthy food supply in Malaysia.

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Today, Nestle Company become one the successful company in Malaysia. They can

supply food for Malaysian people.

In 1912, Nestle are starting to open their company in Malaysia. At the first time,

they were in Penang as the Anglo-Swiss Condensed Milk Company. Later in 1939,

they expand their company business to Kuala Lumpur. They began to make their first

factory in Petaling Jaya and start to do manufacture for their product in the other

factories (nestle.com). They can operate their industry well. It become one of the big

companies in Malaysia and gives their contribution to Malaysia people and

government.

Nestle in Malaysia can give and open the opportunities for Malaysia people to

get job and the people can get money to fulfill their daily needs. All factories and

manufacture of Nestle companies can operate well and they give supply for the market

with the product such as MILO, Nescafe, Maggie, Kit Kat and other kind. This kind of

product can be trust by trust by the citizen and government, so this company can enjoy

their successful business in Malaysia generation to generation.

Before becoming a big and huge corporation that spread around the world, at the

first time, Nestle is only comes from the idea of Henry Nestle. Day by day, Nestle

company is develop become huge corporation that spread around the world. In the

beginning, Henry is developed a milk food formula for the infants who were unable to

tolerate their mother milk (castelarhost.com). The product that he made at that time

becomes a big success and there are more people that want his product. The demand of

his product was increase in the European people. Because of the demand was increase,

the Nestle popularity is become higher. The business done by Henry grew become

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more success and there are many other business that want to make cooperation with

Henry Nestlé’s business.

In the way of Henry Nestle business, there are so many changing in the

cooperation with other business. The partner of Henry Nestle business is change and it

also changes the name of the merger company. Although it was changing, the Nestle

companies are still in his success. Later, Nestle companies can expand their business in

new area and places around the world. After the spreading of companies is success in

some countries around the world, Nestle Company become the world biggest food and

Beverage Company (nestle-family.com).

Although Nestle has open their business operation and factories in other country

around the world, Nestle still have headquarter of the company. The headquarters is in

Switzerland (tripadvisor.com). Because Nestle that has more and more company that

spread around the world, Nestle can accommodate and help people to get job. In the

development, Nestle can get more sales of their product. Besides increasing the number

of company and sale, Nestle also try to improve their product become various kind of

product that can help people gets their need. At the first time, the product is only milk

that can help infants that cannot accept their mother milk, then the product is develop

into several kinds of product such as breakfast cereal, chocolates, ice creams, mineral

water, baby foods and other (wikipedia.org).

How Nestle Company Play Important Role in Malaysia Development

Every Multinational Corporation that spread around the world is giving some

advantages for the development of the country that become host country. Like what

have state before in the introduction, every Multinational Company can create job

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opportunities for the citizen in the host country, making technology transfer and

managerial. Not only that, Multinational Corporation also giving some support in the

term of education, health and economic aspect in the host country. Nestle that open

their factory and do businesses in Malaysia also give their contribution toward the

Malaysia citizen and other aspect of life.

Nestle try to make the product in the best quality in order for the people of

Malaysia can consume it. Their motto is Good Food, Good Life. Its means that Nestle

try to do their best in giving food supply especially for Malaysian people. In order to

make healthy food, Nestle try to do some research in their laboratory. They have Nestle

research center (the world largest food and nutrition research organization) that focused

on the developing of nutrition and health. This kind of action is done by Nestle in

order to get the trust from the Malaysia citizen and can provide them with the healthy

supply of food. They try to gain their attention and get more consumers with their good

quality. When they can attract people attention with their quality and some branding of

their product, they can get more profit. They can dominate the market, competes other

company that also provides food supply in Malaysia. When Nestle cannot do their best,

they can be lost by the other company in Malaysia.

The role and contribution of Nestle in Malaysia

There are so many role and contribution that are given by Nestle for Malaysia

people. The role and contribution of Nestle in Malaysia is on many aspect of life.

Nestle contribution in Malaysia people for example in the term of social, economic and

environmental development of the nation. They can give this contribution because they

have makes their company in Malaysia for many years. Since the first time, they have

built their business for 100 years. During that time, Nestle has known about the

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consumer taste and the market. They only need to maintain their quality of their

product. It means that they can keep their product and market. They have more

experiences in doing business. They have known the consumer and market taste. So we

can say that it is as an evidence of the successfulness of Nestle Company in doing their

business in Malaysia. They can hold and maintain their business.

Nestle Company in Malaysia has some program to support the society and other

aspect of live.

a. Education

Education becomes important aspect in every country in the world. With

education, the quality of citizen in the country can be better and they can do any

kind of activity and job smartly. When the country is full of an educate people, they

can contribute to the development of the country in all aspect of life. They can

contribute in the development of economic, social and other that can make good

image in the international relation. When there are more educated people in the

country, it means that the country are having a good future and development

because of the contribution that will be get by the country from the educate people.

Because of education become important things for all country, the country need to

educate their citizen since they are in the young age.

Those conditions are also become important things in Malaysia. The future of

all the country in the world including Malaysia is determined by the children and the

young generation. The children and youth need to be educated and teach about

something that in the future can help themselves and their country to better and

become develop country. Nestle is actively involve to bring educational

opportunities for all children in Malaysia especially for the underprivileged and

disabled people (announcements.bursamalaysia.com). Nestle company are focusing

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on them because these children need help by the other because they do not have

capability to go to formal school that need money and other recruitment that they

cannot fulfill it.

Nestle cooperating with ministry of education are making a program such as

Click into English Program (community.nestle.com)

Click into English program is a program that done by Nestle. In this

program, Nestle are cooperating with the government in order to promote

English learning in the school. Nestle and the British Council and the cooperation

of the Ministry of Education is launched the ICT English program. This program

is having an objective to bring English language in rural schools. They bring this

program in a fun and interesting because they want the children like to learn

about English language. This program that run by Nestle, British council and

cooperation with the Ministry of Education to bring English in school in order to

make the children can speak English because it will help them in the future.

English become important language in the world in order to make

communication with the other country when they want to make cooperation and

relation because as we know, English become first language that connecting

people among countries in the world. In the future, the children that have the

capability to speak English can help them to make relation and cooperation with

the other people around the world and it can help them to improve their standard

of life. When their standard of life is increasing, it means that the country

development also will be better.

Education for special children

In this world, there are so many people that do not have capability to pay for

their education. They do not enough money to pay their school. The children and

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people that cannot learn in school are often become a marginalized community

and they also often become disregarded by the society around them that have

higher education. Seeing this phenomenon, Nestle Company pay more attention

to them. Nestle belief that there should be same opportunity for the marginalized

people that cannot pay their education in the formal school to get better education

in order to make their social life is better. In order to create this condition real,

Nestle Company are successfully set-up Learning Center for the physically and

mentally that can challenged the children at special school such as Wisma

Harapan (announcements.bursamalaysia.com). The children that need this kind

of special school can learn something new like the other children with the

helping of Nestle Company.

To help these children that need a special treatment, through the

commitment with the National Child Friendly Healthcare Association, Nestle has

been assist around a hundreds of special children who are need some kind of

special educational toys. Nestle can get the toys from the donation of a Toy

Library for the Occupational Therapy Unit at the Pediatric Institute, Kuala

Lumpur Hospital. So this program is really helping the children that need special

treatment and education.

Besides doing those kinds of things, Nestle Company is also provides and

giving an educational scholarship program.

Our employees’ children are also given the opportunity to pursue their tertiary education through a scholarship scheme awarded to those who qualify, with “no strings attached” after graduation (announcements.bursamalaysia.com).

So, the employee’s children can get their chance to get education with a

scholarship system. They can study and learn new things with this scholarship.

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Before they get this scholarship, the children need to fulfill the requirement. The

children that want to get this scholarship need to have a good quality and a good

achievement in their education. If they have they have fulfill the requirement,

they can get the scholarship which is given by the Nestle Company.

b. Health

The other program done by Nestle Company is on the health aspect. Nestle are

cooperating with the ministry of education healthy school campaign do certain

program for students. The campaign was launched in 2002 in order to make the

children are having good habit in the eating (announcements.bursamalaysia.com).

This program has the objective to make the children having habit to eat a healthy

lifestyle and eating food with high nutrition. This program is focusing on the

primary schoolchildren and caregivers. Their select primary schoolchildren and

caregivers in order to make good habits since in the young age in order to make the

children can grow become a health adult. When their body is in health condition, it

means that in the future they can work by their selves and fulfilling their daily need

without any other people that should take care of them. They can life in the health

condition.

For long time, this campaign that done by Nestle Company cooperating with

the ministry of education healthy school are carry out in 50 primary schools in the

Klang Valley (nutriweb.org.my). In this program, the healthy schools campaign is

trying to encourage the children to have healthy condition and become active in

their life. The program done by both parties are trying do some activities that can

support this program such as making a competition to make healthy sandwich and

beverage. This competition will give the children some knowledge to make healthy

food for their life. When they can make it, they can know how to maintain their

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health with a healthy food. This condition shows that the program done by both

parties are being success to help the children become better child with healthy

condition.

Besides doing campaign in the school, Nestle also promotes a well balanced

diet and an active healthy lifestyle as a way of life. For Nestle employees, they

provides facilities for sports and games to encourage physical activity and holds

regular talks on nutrition and overall wellness. This kind of action can make the

employee become in good health. When they have a good condition, the employee

can work effectively and they can maximize their production. So we can say that

Nestle Company also giving their attention with their employee. They are giving

some facilities to them in order to make them become healthy person.

Not only for their employee, Nestle Company also supporting and giving

sponsor to the public activities such as public forum, free nutritional counseling,

dissemination of relevant educational materials on nutrition, health and wellness and

more. It means that Nestle Company are also taking care with the public activities

that related to the health. Nestle are giving some public forum, nutritional

counseling and many other activities that can help the people know about how to

keep their body in health condition. In these kind of action, Nestle also doing their

market promotion. In these activity, Nestle also promote their own brands and

product to the people. They can promote their product together with the activity

because their product is a kind of product that supports the healthy lifestyle.

In 1999, Nestle also introduce a public forums call The Nestle Wellness

Forum. The Nestle Wellness Forum is a kind of forum that tries to bring awareness

and information about health trends such as obesity, diabetes and other. The Nestle

Wellness Forum tries to encourage people to be aware about this kind of disease that

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can disturb people daily activity. To encourage people in having awareness, Nestle

are offering to the people about a healthy cooking demonstration and direct sales of

Nestle product. Besides doing healthy cooking demonstration to the people, Nestle

is also making an activity such as aerobics competition among primary school

children. They make this activity become a fun activity. This activity is start in

2003. This activity tries to encourage and engage the student with a fun activity that

they like.

The Nestle Heart Health Awareness Campaign (community.nestle.com)

Working with The Hearth Foundation of Malaysia, one of Nestle product like

Nestle Omega Plus is making the Malaysia people to be aware with their heart. They

wants to make the people are care with hearts. To make it become success, Nestle with

The Heart Foundation of Malaysia are making a certain program for the people to walk

a mile. This program is for the public. They want to do walking activity because

walking is one of way to keep our heart in a health condition. With walking, the heart

can be more in health condition. So, this activity is having a purpose to make the

society want to walk for their hearth health.

c. In social life

In social life, Nestle has been involving in the several kind of program that

helping the people that need assistance. The people that get the assistance from

Nestle are a people that are less unfortunate such as they are becoming disaster

victims. With this kind of people, Nestle are doing a program such as making a

charity program that can help them to continue their life after getting a disaster. The

charity program that they make is trying to provide the means that is needed for the

people with providing them a kind of tool and skill that can give advantages toward

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people in their life. Nestle are trying to give some tool and teach a skill to the people

because they want to make people can continue their life with their own skill

without the helping from the other people.

Reaching out to rural communities

In the social life activity, Nestle together with Raleigh Malaysia (an international

Non Governmental Organization/ NGO) that based in Sabah are doing some

assistance for people in there. Nestle with Raleigh Malaysia try to provide basic

infrastructure for education in the remote villages in Sabah. This action done by

Nestle is only to help people in the remote area to get some facilities in the

educational aspect such as in the other places. Nestle are helping the remote

people to get better in education in order to make become a better person in the

future and have a good standard of living.

Lending a hand to single mother

This kind of activity is to help the single mother in the underprivileged condition.

Nestle cooperating with women based NGO are giving help to their member that

is in the underprivileged single mother condition. To this end, we have provided

income-generating opportunities such as basket weaving and cookie baking,

which we purchase as our corporate gifts to clients. It means that Nestle are

giving some price to their member such as cookie baking in order to make them

getting a reward or anything else that help them.

Food aid to charitable organization

This program is done by Nestle in order to give a food aid to the organization

that has lack capability to provide enough food for their people. This

organization is need some help by the other organization or company to fulfilling

the daily need of its member. This organization is like an orphanage, school for

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special children, aid organization and many other that need help. This kind of

organization is having some child that need to get assistance from the other

people in order to continue their life. Nestle are trying to help them and provide

assistance to the organization. Nestle has giving assistance to more than 20

organization.

Response to the natural disasters

When there is a natural disaster happen in Malaysia country such as floods,

landslides and others, Nestle are trying to give their responds faster to this

situation. Nestle try to provide some basic necessities that is needed by the

people that affect by the natural disaster. Nestle also giving some of their

volunteer to help people in the disaster area. This kind of help will creates some

cheerfulness for the people. A little help will be worth for them that get the

natural disaster impact.

d. In the sports activity

One of the product/ brand from nestle i.e. Milo is giving some contribution

in the term of sport in Malaysia. For more than 50 years, Milo has done some

involvement in the various kinds of sport activities in Malaysia. The product from

Nestle “Milo” has honored by the Ministry of Youth and Sport with the “Sports for

All” Award in 2000. Milo is working hand-in-hand with the National Fitness

Council under the leadership of the Ministry of Youth and Sports to help the nation

get fit through grassroots involvement. It shown to us that one of the product from

Nestle can give their contribution to Malaysia sports. It proves that Nestle has been

successful to develop their business in Malaysia and they can give some reward to

Malaysia people with giving some assistance in any kind aspect of life like sports.

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It also show to us that Nestle is having the Malaysia people and government trust to

make some cooperation with them.

Besides helping in the sport activity and program, Nestle also give some

sponsorship to the sport activity done in Malaysia. They are giving their sponsorship

such in the Le Tour de Langkawi, SEA Games, Sukan Malaysia, Azlan Shah Hockey

Tournament, ASEAN School Sports Council Championships, National level Junior

Championship organized by National Sports Association, 25 National level Sports

Championships in the Malaysian Schools Sports Council’s calendar as well as the

Olympic Council of Malaysia and National Sports Council’s junior development

programmes, are just some of the local sporting events which are sponsored by Milo.

These kinds of sponsorship are done by Nestle in order to promote and show that

their product also can give some contribution toward Malaysia people. It also shows

that their product can support the Malaysia people’s program. Their product is also

can unite with the people. This kind of sponsorship is actually become one of Nestle

strategy to do promotion and get more attention from the people of Malaysia. Not

only that, it also one of way to show to the other company that Nestle is having trust

from Malaysia people and government to give their sponsorship and helping them to

make the activity become success.

Milo is also giving certain contribution to the successfulness of the Malaysian

athletes. Milo is trying to help the government/ ministry to take care of the

Malaysian athlete.

Using their product “Milo”, Nestle is also working together with MSSM (Majlis Sukan Sekolah-Sekolah Malaysia). Milo help to taking care of more than thousand athletes that later are recognized as champions in the sport arena (announcements.bursamalaysia.com).

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In the environmental aspect

Nestle has been committed to the environment through the world. They are

continued to make substantial environmental investments. Nestle make some

development in the term of making a meeting that related to the environment. In

this meeting, they try to preserve the natural resources and minimizing waste.

This kind of action like doing some preservation in the natural resources and

minimizing the waste from the industries is becomes their daily operation. They

do this kind of things because they also want to protect the environment. They do

not want their industries are making the environment is in danger condition. So

they need to discuss and try to keep the environment.

Through the NEMS (Nestle Environment Management System), Nestle strives for continuous improvement of its environmental performance throughout the supply chain, from the sourcing of raw materials to distribution (nestle.com.my).

From the discussion above, we can say that Nestle are having Nestle

Environment Management System in order to make the environment keep in

safe. They do not want their industry that done in Malaysia and other country is

causing environmental damage. Although they are a big and successful company

in the world that can help the host country in the term of development, they still

need to taking care the environment.

Besides doing those kinds of things, Nestle also try to re-use and re-cycle

of their product waste. In order to make a better awareness among the consumers,

Nestle are trying to do all kind of possibilities that can re-use and re-cycle their

packaging material. To do this kind of actions, Nestle are also creating some

cooperation with the other organization in Malaysia to help them. One of the

organizations that make cooperation with Nestle is women’s NGO. Both parties

Malaysia Political Economy| 21

are trying to encourage the people to make or create useful and unique items

from the recycled packaging material. The items that made from the recycled

packaging material can be use by the people. So the recycled packaging material

is not been thrown in the garbage. It can be use and recycle become new item.

Maybe it also can be sold and it makes new additional income for the people that

make the goods from waste things. Besides that, it also can encourage people to

think creative in making new kind of things from waste material.

e. In the agricultural activity

Nestle are giving some assistance to the farmer in order to make them become better

farmer. Nestle try to give education for the farmer in the terms of farming system.

They educate the farmer about how to make benefits and efficient of farming system

that also environmental friendly. They are using an effort in this area include regular

Pesticide Application Technology courses and the practice of zero burning in rice

farming (community.nestle.com). Using this kind of system, Nestle hope that the

farmer is also can contribute to the safety of environment.

Critics and Opinion

From the discussion above we know that as Multinational Corporation, Nestle are

giving some advantages in Malaysia government and society. Nestle are giving some

contribution is some aspect of life such as in education, health, sports, social life and

environment. In the education, they are giving their assistance and giving some facilities for

the children that have lack capabilities to go to school in the formal school. In the sports

aspect, they can give their assistance in making the children become a good athlete and they

also give some donation to the sports activities that done in Malaysia. In the health aspect,

they try to make a good habit for the children to eat healthy food and do some healthy

Malaysia Political Economy| 22

cooking demonstration. In the term of social life, they also giving some donation to certain

organization that need help from the other such as orphanages. While in the environmental

aspect, they try to make cooperation with Malaysia NGO in order to encourage people to do

re-use and re-cycle of waste product become new item that is more useful.

I think the contribution of the Multinational Corporation such as Nestle in Malaysia

is not only in that kind of aspect. Nestle as Multinational Company also giving contribution

to the national income of the country and also making some opportunities for the people to

be employee. Because of the market activity done by the Nestle is having some profits; they

should pay some tax to the government of Malaysia. This tax is helping the country to

increase their national income. Not only is that, the company and factories which is build in

Malaysia also contribute to the creating of opportunities job for the people. The people of

Malaysia can get job in these industries and get payment from it. Using this payment, they

can fulfill their daily need and they can improve their standard of life.

Beside this Multinational Companies are giving some good contribution toward

Malaysia people and government, this Multinational Corporation is also giving some bad

impact to the Malaysia people and government because not all the Multinational

Companies in this world are good. They have their own interest in making and expanding

their business around the world. Behind their good contribution, they also want to get more

profit and get maximize result from their industries. They usually maximize the people

power to work in their factory and market with low payment. The labor that does not have

enough capability to manage the company, they only pay low.

The multinational company also tries to make some cooperation with the

government and other organization in order to get their attention. After getting their

attention, they can influence the government in the term of policy making in that related to

Malaysia Political Economy| 23

the people. The government action that can be influence by this Multinational Corporation

such as in the education and health are only to make a good name for the corporation.

When the government does the action, the Multinational Corporation that also joins into the

action will directly promote their selves. They will show if they can join and give

contribution to this government action. Using the advertisement, all people in Malaysia can

know about it. People will like this Multinational Corporation.

Not only is that, according to Walter Goldstein, the impact of Multinational

Corporation on the country making dependency of the host country towards the

Multinational Corporation (Sumantoro, 1987). Dependency here means that the host

country Malaysia in some aspect is depends on the help from the Multinational

Corporation. For example in the term of education for children that need more attention and

in remote are, the government hope that there is Multinational Corporation that can help

them to accommodate them the government will give their authority to the Multinational

Corporation to educate them with their own system. So the government in this condition is

cannot work by their selves but it depends on the Multinational Corporation that wants to

help them.

Malaysia Political Economy| 24

C. Conclusion

Nestle as one of the big Multinational Corporation in Malaysia has some

contributions to the Malaysia people and government. There are more contribution of

Nestle Company in Malaysia such as in education, health, social life and other. They are

helping the government to develop the country and make the people become healthier and

become educate people. When the people of Malaysia can be like that, it means that the

future of Malaysia is good and the development of the country will be increased.

Beside Nestle giving contribution to the people and government, Nestle can

accommodate their business well. It is shown in that they can maintain their business in

Malaysia around 100 years. They can compete with the other company in winning the

market and people attention. They can get more profit from their business and they also can

dominate the consumer taste in the term of food that will be consumed every day.

Malaysia Political Economy| 25

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