Describe about the Business Ethics for Starbucks.
Starbucks was established in the year 1971 as a partnership in the Seattle. Five years later, Howard Schultz enjoined the company as the overall director of the retail and marketing department and in 1985, Starbucks began opening one of its first stores in the downtown Seattle. In the recent times, Starbucks has gained its ranks in the international arena and is currently the third largest company chain known to offer quality services in its many convenient stores in over 55 countries.
Starbucks Coffee Company ranks as the best Corporation in the world taking pride as the torch bearer in roasting and distribution of coffee. The company now boasts of over 150000 coffee outlets all over the world. The company is located in North America, Europe, Asia, Latin America and Middle Asia. The company offers a wealth of diversity as well as the depth of its services which has allowed it to stay in the international exposure making it enjoy a strong presence in the radar.
Facts about the case analysis
The major facts about this case analysis include social responsibility, reputation, and environmental consciousness in Starbucks. Starbucks is known to involve in social responsibility actions for two notable reasons, one, the impact the company has on its finances and the non-monetary rewards it offers its employees plus other investments. As documented, Starbucks has had active involvement in social responsibility actions since its inceptions. One Schultz, a notable figure in championing for the for an increase in the awareness of business ethics as well as the belief of the general public on the company, has had his dreams fulfilled, at least till now. Schultz has shown his commitment to helping to improve the lives of many, the farmers, majority of whom are poor by way of purchasing their beans on their behalf and saving them the burden of looking for their buyers. The director bases his assumption on the provision that; it is a lesser burden for a company to bear short-term losses compared to losing sight of some of the fundamental values of the company in the long run.
Through offering help to the poor farmers, Starbucks through its director helps the farmers in making a living. As a result of this initiative, the income among farmers have assumed a positive inclination and as such, have doubled in the recent times. Through this, it is worth the assumption that Starbuck’s image has also been improved as a company that means well to not only its farmers but also its employees. This has been motivated by the company’s spirit of commitment to both ethics and sustainability. Starbucks is known to be part of the non-profit making organizations on an engagement capacity and as such, has done tremendous contributions in the way of donations to some of the known charity organizations. For instance, Starbucks has generously contributed to one Charity referred to as Check In Charity.
It should also be noted that Starbucks not only believes in giving back to the society but also in the spirit of taking care of the welfare of its workers. In this view, the company has put in place one of the best healthcare services to its employees as part of the welfare program. From its production approach, Starbucks rewards all those employees who work for more than 20 hours a week and also have at their disposal, a wide option of stocks to choose from. Starbucks has responded to its employee and staff needs by coming up with ways of ensuring that the employees have the feeling of being part of something bigger. The company has demonstrated some consistency on the issue of healthcare provision and as such, has made it a priority to spend more on the health insurance programs for the employees under its care more than it spends on the raw materials that it needs to process the products.
In the year 1992, Starbucks was seen to have implemented the Environmental Coffee Company Affairs team. The main mandate of this team was to ensure that environmentally conscious and responsible policies were put in place to guide the company in its production. One of the major undertakings the company realized through the team was the development of a new sleeve that was aimed at creating 100,000 trees as well as the creation of recyclable plastic cups that would prove useful in allowing the customers to save ten units on their refills.
As a company, the key drivers ensuring that there is a change in the environmental factors are most notably to the high impact it has on the success of the strategy or its failure. One of the key drivers in this respect is the green tech. Many companies are known to be under pressure by their governments to comply with issues of the environment so as to limit on the emission of pollutants in their fight to reduce global warming. Starbucks must ensure that it does everything to see to it that it complies with the regulations.
Starbucks has considered the fact that majority of its customers are young and as such, are obliged to using such things as computers. As such, the company uses its powers to offer flawless services to its customers at all times. Since there are such challenges as global aging, individuals with higher buying power as well as the desire to keep at a pace with the ever dynamic trends in changing consumer behavior.
In every production company, there are notable ethical challenges that the company needs to address. In this case, the main ethical issue that the company faces lies within its strategy which is mainly concerned with the expansion of the company popularly known as the clustering strategy. Starbucks tries to see open its branches in various locations globally, and this idea has already led to the cluster of such branches on a single street. This attempt has many ethical concerns and barriers, and this mainly concerns the smaller coffee shops that have so far been witnessed from various points. The move has seen many coffee shop owners going out of business and have since gone bankrupt since many of the Starbucks outlets have been dispersed all over the place. Starbucks should take it upon itself to rethink its decision to adopt this expansion strategy as they might be forced to look for a way of minimizing the amount of coffee shops to leave out.
The other notable challenge among the Starbucks stakeholders is their ability to uphold the beliefs and values they practice today. It will prove challenging to keep up with the good relationship the company has had with its employees in the past and even assuming better relations with its suppliers and the community as a whole.
1: Why do you think Starbucks has been so concerned with social responsibility in its overall corporate strategy?
Many companies are built on the spirit of social responsibility and ethical production procedures, and so is Starbucks. Being that the corporation has a direct link and by extension, impact on its consumers, it is important that it takes social responsibility at heart. In the contemporary world, consumers are very keen on observing what their companies do with their accrued profits. They demand to be informed of the ways companies are administered, what the money obtained from the company as a profit is invested in among other imperative issues. To have these problems addressed, it calls for the companies, Starbucks included, to come up with strategic plans that would ensure the accounting phase is carried out.
Starbucks could have resorted to adopting the social responsibility philosophy as a way of developing respect for its brand. This can be argued from the perspective that a product with greater respect has more prospects of profitability, and this is a sure benefit to the company. This eventually bears great benefits regarding public relations and product image as the company demonstrates its quest to preserve the environment and safeguard the community.
Social responsibility is of importance to Starbucks since it helps the company to take its strategy of customer expectations and experience to the next best level since the experience is attached to the notion of making the company achieve its corporate goals and mission. This can best be illustrated by the following example; in case Starbucks happens to donate some of its profits to a known institution like an orphanage that houses kids with cancer through supplying them with food, then the company will be deemed to be of good will to the community and offers personality to the company.
The other possible reason as to why Starbucks should take it upon itself to demonstrate some sense of corporate social responsibility is to make the company make adequate use of its surplus gains which could be in terms of money donations, organizing the events for its clients, helping their employees among other economically conscious projects which display good results to the economic profile of the company. It is also possible that the company, being run by competitive managers, have the feeling of doing good things as it is the norm among humans and as such, feels the good in helping others and in investing in other productive undertakings.
Starbucks is concerned with the social responsibility since it aims at reducing the eco-friendly mark as well as being able to become tangled with the community. This is also important to the corporate world since its corporate ethical responsibility should be to improve over a stretched period. Consumers have the feeling of worthiness when the company conveys its business to the socially responsible companies such as Starbucks, and the organization’s impression is good concerning the work as well as the company’s impression being good. This makes Starbucks provide much better services to the consumers as a whole.
2: Is Starbucks unique in being able to provide high-level benefits to its employees?
It is worth noting that Starbucks is one of the irreplaceable companies a country can ever have. It offers a series of high-level benefits to its employees and the organization as a whole. It is not in doubt that many organizations or companies do not provide benefits to either its employees or the organization itself. Starbucks strives to instill some sense of understanding and upholds the importance of delivering on its mission as well as acknowledging its role in the face of other corporate organizations.
It could be argued that Starbucks has also been unique in providing remunerations to its employees. The company has certainly laid the bar high in comparison to other fast moving restaurants or companies. The company not only provides health, vision, and dental services but also make it possible for the employees to invest in such things as stock. Starbucks as a company also believes in the philosophy of taking care of its employees and staff as this directly resonates with success. As documented in the case, the company strives to deliver more on the provision of healthcare compared to coffee beans.
Starbucks is making the difference since as a company, it prides in giving its employees various benefits. It is noted that in the year 2005, Starbucks spent exceedingly on the health insurance than it did on the raw materials to prepare its coffee. It is documented that if a company acknowledges its employees and rewards them well, then the staff will deliver on their best capacity and ensure a good turn around as a way of showing their gratitude to the organization for acknowledging their efforts. The company, through the provision of such high-level benefits to the employees, it gets the privilege of creating some good working culture and environment, a fact that every company strives to get in years.
3: Do you think Starbucks has grown rapidly because of its ethical and socially responsible activities or because it provides products and an environment customers want?
Honestly, the result could be analyzed from two perspectives. The argument could blend into the mixture of both. Starbucks has pumped money back into the society and is one of the chief stakeholders to defend the image as well as the creation of a happy working environment through the provision of benefits to employees that perform their duties for over 20 hours weekly. The company is offering their staff what many employees would wish to have to other companies, something they wished made them feel part of the company.
Starbucks has also put in place a laid back work environment to their clients through the provision of Wi-Fi which can be accessed free of charge as well as offering a place for them to undertake their adventure or work on their projects at will. At Starbucks, every position is conveniently situated in the office buildings, the college campuses, and the book store. This case points to the various success ladders of the company and how the company strives to maintain its good reputation for purposes of social responsibility and business ethics in the entire global community among the coffee growers through offering positive relations with the small coffee providers and other bigger ones.
Starbucks, known for its expression of growth based on its strategic plan and mission, strives to demonstrate socially and ethically accountable activities and in the same spirit tries to deliver on quality products that are not only consumer friendly but also environmental friendly. The corporate word should at all times be in a position to deliver on the socially responsible and ethically conscious guidelines. It not in doubt that the socially conscious productions appeal to the very image of the public and earns a company its desired reputation. Every consumer would wish to offer the best available support, there be any, to such companies that provide a good impression to the public eye and as such, can attract many employees to work on the firm.
It is possible that Starbucks sees a remarkable growth which in its self, is rapid. This growth is deemed to have come from Starbuck’s innovative and efficient production. The company is known to exploit myriad avenues including new opportunities and working on the identified areas. Nonetheless, the company’s ethical and social responsibility works in a way to help the company relate well with the environment, the employees, the clients, and the entire community. The company has achieved its growth through two main tools, that is, humility and ambition. Humility has opened the company’s eyes to have the glimpse as many tasks they can undertake in the right manner like charity, worker’s benefits and ecology among other respects. The other factor that has been of importance in elevating the prospects of the company is its ability to acquire the level of comprehension among clients who are endowed with myriad demands concerning good customer services ranging from good installations to production of highly valuable products.
From the problems that the company is facing, few recommended branding strategies can help take it recover and realize a turnaround. Of key note is the viral marketing. In the contemporary world, the usual techniques of marketing done by the media are not as much effective. People have become tech-savvy. Starbucks has in its endeavor to realize a good marketing approach to its customers, relied on the word of mouth coupled with a few marketing and advertising mix. The traditional ways of marketing have long been outdated and as such, been overtaken by the like of Facebook and Twitter.
The company should also make use of adjustments to its brand portfolio. In the most recent years, many changes have taken shape in the portfolio of the company concerning its production. The company started by including hot meals, ice-creams and cold beverages to its menus. With this view, the company is even contemplating venturing into some wine and beer sales in some of its stores. This move can be viewed as a dangerous move that requires keen steps for the company as it might find itself straying from the key roots it initially derived its operations from.
Conclusion
As a production company that believes in improving its services and overcoming its challenges, it is important for the company to seek out for other best available alternatives. It is common knowledge that the provision of health services to employees is one of the best priorities a company such as Starbucks can have. However, there are other alternatives that the company can resort to. In actuality, it makes little sense from an economics perspective that a company spends more on the provision of health insurance at the expense of production. The main focus of Starbucks should mainly be on their customers and products. It is also important for Starbucks to reevaluate its marketing plan. Honestly, having many Starbucks outlets in one place is in itself a tricky move. The company should exhaust from a list of many opportunities available out there and be able to make the best out of them rather than putting pressure on the other smaller coffee shops in the streets.
The other challenge that the company should address is how to address their environmental challenges. It is in the best interest of the company to try and remain consistent with its environmentally friendly campaigns and processes. Allowing the clients to buy refillable cups in a bid to save on the ten units is a brilliant idea, but then it becomes a challenge when the company offers its coffee in plastic cups and paper coffee cups which customers throw away on a daily basis without minding the environment. To this end, it becomes imperative for the company to coin a process that will help in recycling the cups used by the customers as a way of protecting the environment.
There is a great potential in the coffee market for Starbucks as its opportunity for coffee consumption has seen a remarkable increase on an annual basis. The company, therefore, requires some understanding of the pros and cons as well as the similarities and differences in the landscape of global branding. They should also strive to enter into co-branding strategy as per the environment policies laid down for its adoption. It is important that the company adopts any of the recommended strategies that can surely help bring a comeback for the company in the coffee market.
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