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Ethics & Social Responsibility Of Starbucks

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Question:

Discuss about the Comparative Business Ethics And Social Responsibility.
 
 

Answer:

The concept of corporate social responsibility (CSR) has been employed globally by the corporations. Continuous debates about CSR take place amongst business, academia and society. Corporations have to align with societal needs while generating financial returns (Smith 2011). Many corporations have included citizenship in their mission statements, by putting into their policies their commitment through their efforts to minimize their environmental footprint as well as promoting a fair trade policy (Al Halbusia 2017). The ethical issues gain a big concern by organizations, following the social and business ethics is highly appreciated by customers. With this regard, this essay discusses the ethical case concerning the CSR of Starbucks.

The world is moving towards uncertainty, where ethics play a highly important role. The morality of the executives that enact these changes will determine the future of their organizations. The unethical behavior could be described according to Francis and Murfey (2016), as the unsafe working conditions, bribery, environmental waste and legal loopholes. In the ethical values paradigm, the ethical consumption must be autonomous from the market (Holt 2012; Laczniak & Murphy 2006).

Starbucks has started its business in 1971 as a small business, then it has grown as a coffee house. It became public in 1982 with 120 branches. Today, it operates over 8000 stores in 34 countries (Tabberer 2010). The company goes beyond the product, its business pattern is different it seeks to create a balance between making a profit, shareholder value and social sustainability through involvement in health care and employment. It was challenging as the company started to grow. Creating value for people will create value for shareholders (genConnect U 2013). From my point of view, Starbucks is a world leader that could achieve a competitive advantage in showing its ethical behavior to me as a customer and to the society as well.

 


Starbucks core values assure compliance with the laws and regulations, as well as an ethical code of conduct. Its values are also consistent with the Global Human Rights Standard that promotes for equal opportunity in hiring new employees in its global branches. The recruitment decision is based mainly on the job-related criteria. Hiring people under the age of 18 requires the managers to comply with the Starbucks-established limitations on minimum hiring age and the working hours. The company treats everyone with respect and dignity, which means that the workplace is free of bullying, harassment and discrimination. These negative activities can take the form of physical contact, unwelcomed remark or gestures. Also, it could be in the form of physical or verbal abuse or threat. The legendary customer service is considered as the top priority at Starbucks. The customer service strives to make every customer’s experience fulfilling. They treat the customers as they treat the one of the staff with respect (Starbucks Coffee Company 2018a). This is what I feel when I am at one of their shops, the serving staff shows hospitality and provides the most help. Also, the staff members never ask me to buy any of the available products, they leave me at ease and I can stay as long as I can.

The company values prevent the discrimination against the customers. The work environment is diverse and inclusive of all people and their abilities, differences and strengths and it promotes diversity as a strategic competitive advantage. As a global company, standards of business conduct of Starbucks help in making decisions on the daily activities. The Standards demonstrate that the company has to take its legal and ethical responsibilities seriously. These standards are applicable to all of the officers, partners, and the board of directors in addition to the independent contractors and temporary service workers. Also, the third parties are expected to follow the company high ethical standards (Starbucks Coffee Company 2018a). I fully respect Starbucks for applying the same standards of conduct in all of its business activities. This means that the company acts in the same manner all over the countries it operates in.

 


Diversity is involved in all of the aspects of its business and considered vital to its long-term success. Diversity is expected to take place within the staff, the customers and suppliers. The partners of the company are expected to follow the company safety rules. They are expected to report all incidents, unsafe practices and injuries. The customer care department is committed to quality means that ensures customer's health and safety. It ensures that the customer experience takes place in a clean, safe and sanitary conditions in all of its facilities. The company adopts the process of continuous improvement to maintain quality standards and practices. Also, the company has strict standards towards abuse and weapons. The company partners are not allowed to use alcoholic beverages in any of the company facilities except in social event sponsored by Starbucks. The drug is also prevented while employees are engaged in the work activities. Weapons are prohibited while Starbucks plants or stores its products or introduces its services (Starbucks Coffee Company 2011). As a loyal customer to Starbucks, have never seen any discrimination among the customers, also I have never noticed any symptom of violence or usage of weapons. That is why I find it the best place for gathering with family and friends.

Starbucks is committed to buying and serving high quality, ethically traded and responsibly grown coffee to help in creating a better future for the farmers and maintain a more stable climate for the planet. The company has related its success to the success of the farmers who grow the coffee. They represent hundreds of thousands of farmers, which the company work with to improve the quality of the coffee and ensure the best practices to the environment. Also, it invests in loan programs for the communities of coffee growing. Sustaining the coffee farmers and strengthen their communities, ensures a constant supply of high-quality coffee for the business future. The Coffee and Farmer Equity (C.A.F.E.) Practices initiative is a comprehensive set of guidelines of economic, social, environmental, and quality developed by Starbucks with the assistance of Conservation International. It helps the company to evaluate the high quality products sustainable and socially responsible grown coffee. C.A.F.E. practices aim to enhance the farmer well-being and ensure the environmental health. It offers greater stability of farm habitats, decreases the use of herbicides, chemical fertilizers and pesticides. It could maintain the soil fertility and ensure that all coffee sold to Starbucks is planted according to the highest quality standards. The C.A.F.E. Practices include coffee farms in 20 countries worldwide. All of the coffee producing countries are developing countries that represent the world's most threatened locations. Over 20% of their population fall under the low-income category. The C.A.F.E. Practices ensure fair wages and allows access to health care and education. Starbucks works to improve and sustain the wellbeing conditions of the coffee producer farms all over the world. Also, it offers the technical support to the farmers through its support centers. The Starbucks quality experts and agronomists collaborate directly with the farmers. The farmer support centers are located in Costa Rica and Guatemala to serve the coffee farms in Central America and East Africa. The office in Tanzania supports farmers in Rwanda (Starbucks Coffee Company 2018b). I highly appreciate the C.A.F.E. Practices initiative as it assures sustainability, encourages socially responsible growing practices while improving the quality and the size of the harvest.

 


Starbucks has implemented the Race Together Initiative, it is a multifaceted public relations campaign. This initiative was launched by Howard Schultz, Starbucks CEO. It mainly concerned with the racial tension. This campaign has placed the Starbucks brand in harm’s way, as the race is a complex issue in the USA, including politics, religion and abortion. The company faced a lot of criticism for initiating such race campaign in the social media and the news. Despite the intense criticism, Starbucks remained committed to the race initiative and retreated its activities towards creating a social dialogue on race issues to enable positive social change. (Logan 2016). Starbucks succeeded in gathering the public opinion on its ethicality through the introduction of various niche products certified by the NGOs (Neilson & Pritchard 2010). In my opinion, Starbucks succeeded in offering a great learning opportunity to different layers of the society to deal with the race issue, including scholars, students and practitioners.

In order to confirm its social responsibility, Starbucks has recently introduced an example of anti-racism. The company has conducted a backlash over the arrest of two black men at one of its shops in Philadelphia. As the two men were waiting for a friend in the Philadelphia and did not buy anything, the shop manager called the police to them. The chain decided to shut down its US company-owned outlets for an afternoon to show its opposition to racial-bias education. This reaction cost Starbucks $20 million in lost latte sales. The company has a history of adopting social responsibility and it promises to power all of its worldwide stores with renewable energy by 2020, hire 10 thousand refugees and offer 25 thousand employees to graduate college by 2025 (Buerkle 2018). I highly appreciate this anti-racism action of Starbucks assures that it is not only a business oriented but also a social-oriented that really applies the CSR rules.

 


Starbucks depends on a number of objective measures to evaluate its corporate social responsibility performance. These measures include its fair trade certified coffee, the amount of green gas emissions, water and electricity used, the percentage of recycled paper used, its contribution to charity and the level of its employees' satisfaction and diversity (Al Halbusia 2017). I find that performance measures are very important to enable the company to monitor its level of performance.

Despite the efforts of Starbucks to assure its commitment to social responsibility, it has been accused by the Los Angeles judge of producing coffee that might result in cancer. Also, it was obligated to put a warning on the coffee sold in California. Moreover, the company might be obligated to pay millions of dollars in fines. Accordingly, Starbucks has been accused of violating a California law that requires companies to warn consumers of chemicals added to their products that could cause diseases as cancer. Starbucks failed to prove that there was no significant risk in its products, particularly for the level of acrylamide used in roasting in coffee (Raymond 2018). This issue is shocking to me as a loyal customer who believes that Starbucks assures a healthy and safe environment that offers chemical-free coffee. I have to wait till the investigations finish to make sure that I consume healthy products from Starbucks.

 

References

Al Halbusia, H 2017, 'Corporate social responsibility (CSR): A literature review', Malaysian Journal of Business and Economics, vol 4, no. 2, pp. 30 – 48.

Buerkle, T 2018, Breakingviews - Starbucks’ anti-racism coffee break sets example, viewed 23 April 2018, <https://www.reuters.com/article/us-philadelphia-starbucks-breakingviews/breakingviews-starbucks-anti-racism-coffee-break-sets-example-idUSKBN1HO37X>.

Francis, D & Murfey, G 2016, 'Global business ethics: Responsible decision making in an international context', Journal of General Management, vol 41, no. 4, pp. 92-95.

genConnect U 2013, Starbucks CEO Howard Schultz on social responsibility, viewed 23 April 2018, <https://www.youtube.com/watch?v=uHIoK4LviCc>.

Holt, D 2012, 'Constructing sustainable consumption: From ethical values to the cultural transformation of unsustainable markets', The ANNALS of the American Academy of Political and Social Science, vol 644, no. 1, pp. 236-255.

Laczniak, G & Murphy, P 2006, 'Normative perspectives for ethical and socially responsible marketing', Journal of Macromarketing, vol 26, no. 2, pp. 154-177.

Logan, N 2016, 'The Starbucks race together Initiative: Analyzing a public relations campaign with critical race theory', Public Relations Inquiry, vol 5, no. 1, pp. 93-113.

Neilson, J & Pritchard, B 2010, 'Fairness and ethicality in their place: the regional dynamics of fair trade and ethical sourcing agendas in the plantation districts of South India', Environment and Planning, vol 42, pp. 1833 - 1851.

Raymond, N 2018, Starbucks coffee in California must have cancer warning, judge says, viewed 23 April 2018, <https://www.reuters.com/article/us-california-lawsuit-coffee/starbucks-coffee-in-california-must-have-cancer-warning-judge-says-idUSKBN1H5399>.

Smith, R 2011, 'Defining corporate social responsibility: A systems approach for socially responsible capitalism', University of Pennsylvania, USA.

Starbucks Coffee Company 2011, 'Starbucks business ethics and compliance', Starbucks Coffee Company Management, USA.

Starbucks Coffee Company 2018a, Starbucks standards of business conduct, viewed 27 May 2018, <https://livingourvalues.starbucks.com/living-our-values>.

Starbucks Coffee Company 2018b, Starbucks ethical coffee sourcing and farmer support, viewed 27 May 2018, <https://assets.starbucks.com/assets/6e52b26a7602471dbff32c9e66e685e3.pdf>.

Tabberer, C 2010, Starbucks Social Responsibility Video, viewed 23 April 2018, <https://www.youtube.com/watch?v=Nly_OdvORQY>.

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