Starbucks Corporate Social Responsibility

This assignment delves into Starbucks' corporate social responsibility (CSR) initiatives. It examines their ethical conduct, particularly regarding competition and labor practices, as well as their environmental sustainability efforts, focusing on cup usage and food safety. The analysis also considers how organizational culture and leadership influence ethical behavior within the company.

Running Head: Ethics 1
Ethics and Sustainability of Starbucks

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Contents
Ans. 1: overview of organization.....................................................................................................3
Ans. 2: Ethical business strategies...................................................................................................4
Ans. 3: Offensive or defensive strategy...........................................................................................5
Ans. 4: Effectiveness of TBL..........................................................................................................6
Ans. 5: Impact of foreign social norms and standards.....................................................................7
Ans. 6: Cradle to grave process.......................................................................................................8
Recommendations........................................................................................................................9
Ans. 7: Legal responsibilities..........................................................................................................9
Ethical issues................................................................................................................................9
Ans. 8: Business ethics strategy of organization...........................................................................10
Ans. 9: Improvement of organizations’ strategies.........................................................................10
References......................................................................................................................................11
List of Figures
Figure 1: Triple Bottom Line...........................................................................................................6

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Ans. 1: overview of organization
Company Starbucks started its operations in 1971 and now it is operating in more than 50
countries along with 16000 stores in all over the world. Main base of the business of Starbucks is
its retail stores. The description of the company in terms of structure, mission, vision, culture and
ethical practices are described below:
Mission-
Mission statement of Starbucks is to motivate and inspire the human spirit i.e. one
person, one cup and one neighborhood at a time.
Vision-
According to the company’s website, vision statement of Starbucks is to establish itself as
the market leader in terms of good quality coffee in all over the world along with managing the
principles to grow in the market.
Structure-
The most important characteristics of the organizational structure of Starbucks are that it
includes decentralized decision making process. There are three separate districts of the
organization so that various operations can be done effectively and keep the customers satisfied
in the market. Starbucks has matrix organizational structure including various channels of
communications. This type of structure is very effective to utilize all the communication
channels. The matrix organizational structure of the company is helpful in serving the customers
in better way. The matrix organizational structure focuses on the particular region and managers
to oversee each and every region. Along with this, the current organizational structure of
Starbucks is hybrid also. It includes horizontal structure, functional and geographical structure
(Leinward & Davidson, 2016).
Culture-
The organizational culture of Starbucks is based on the principles and values of the
business. It should be noted that the culture of Starbucks is powerful as it is basically connected

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with the distinctive capabilities of the company. The culture of the company includes value of
the employees and their contributions, establish strong bond with the employees, culture of
inclusion and diversity and exceptional customer service. Company is focused on providing staff
training to the employees so that customers can be served in the better way (Dudovskiy, 2017).
Ethical practices-
Starbucks Company is working directly with the farmers to make sure that there is full
supply of quality coffee in the market. The company ensures that various ethical principles are
followed in the coffee growing communities. The company is focused on implementing various
measures to ensure the welfare of the farmers, employees and customers. Along with this,
company has also established social, economic, environment and quality principles that are
considered as the foundation of ethical sourcing. There are four key ethical coffee sourcing
principles including product quality, environmental leadership, social responsibility and
economic accountability (Kaptein, 2008).
Ans. 2: Ethical business strategies
Starbucks is the leading coffee company in all over the company. The success of the
company depends upon the strong ethical corporate culture. Company has implemented business
ethics and compliance program in order to help the partners to make ethical decisions in the
business. Along with this, the program is also helpful in facilitating legal compliance, providing
ethical training and providing mechanism for the stakeholders. Further, Starbucks is also
maintaining an audit line for the third parties like investors, vendors and customers to deal with
the irregularities. In terms of ethical business strategies, Starbucks has implemented business
ethics and compliance. The Starbucks business ethics and compliance includes Starbucks policy
office is the program which support the mission of the company. This program is helpful in
protecting the culture and reputation of the company by providing resources to the stakeholders
so that they can make ethical decisions in the business operations. Starbucks developed Coffee
and Farmer Equity (CAFÉ) and COCOA practices to ensure the long-term supply of high quality
and ethically sourced coffee (Erwin, 2011).
Starbucks is considered as one of the most ethical company in all over the world. The
company makes efforts to become a responsible company and conducts the business in an ethical

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manner. At the national and international level, company is operating its business in the ethical
way by community, environment, sourcing, diversity and wellness. The company openly reveals
its commitment to being ethically responsible so that the customers know about the business
operations of the company. By analyzing the company and its commitment to ethical
responsibility, it is observed that company is able to achieve the profitable growth and improved
the stakeholders’ value by conducting the business in the ethical manner (Ruiz-Palomino, Martı
´nez-Canas & Fontrodona, 2013).
Importance of ethical practices-
Ethical practices are important for Starbucks to achieve the organizational goals and
objectives. The ethical behavior and corporate social responsibility brings significant benefits to
the business as well as stakeholders. The ethical practices of the Starbucks provide comfortable
environment for the employees and customers which is the key objective of the company. The
ethical services of the company are helpful in providing satisfaction to the customers. For the
employees, company does not cut their healthcare cost and various benefits at the time of
recession. Along with this, company has positive relationship with the customers and suppliers
and provides technical support to provide higher quality of coffee. So, business ethics practices
are important for Starbucks as company may lead more productive workplace and promote the
economy of the company (Segon & Booth, 2015).
Ans. 3: Offensive or defensive strategy
In the business operations, Starbucks is using defensive strategy to stay competitive in the
market. In current time, there are two strong competitors of Starbucks i.e. McDonalds’ and
Dunkin Donuts. The services of McDonald’s are very easy and fast. By the defensive strategy,
Starbucks is focusing on differentiating products and services. Along with this, company can
take advantage of the weak point of the competitors and can make up for its vanished spot.
Starbucks can maximize its efforts on surpassing the competitors. The defensive strategy is
helpful for the company to build up corporate image among the customers (Kapinos & Rollins,
2013).
Further, there is the cultural shift in Starbucks as the demands and needs of the customers
are continuously changing. So, company is focused on attracting the customers by understanding

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their cultures. In different countries, customers are different cultures and norms so, it is
important for the company to provide the products which suit to the culture of the customers. It
includes major commitment and strong leadership in the company (Giberson, Resick & Dickson,
2009).
Ans. 4: Effectiveness of TBL
It is difficult to talk about ethical practices without triple bottom line of the company.
This is an interactive thinking which takes into consideration environmental social and economic
factors. These three considerations are described in the figure.
Figure 1: Triple Bottom Line
(Source: Haglund, 2010)
Economic-
In the business, economics has impact in the positive and negative manner. Starbucks in
The business sector is focused on the profit and benefits. In order to sustain the economic
business, Starbucks is not only concerned about the benefits of the financial forms but also care
about people, society and environment as well. Along with this, company has involved in the
competitive business by providing good quality coffee products in order to make the customers

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satisfy. These processes try to reduce the impact of negative impact on the environment. To
develop the economic sustainability, company has to rely on the ethical business practices and
this can be done without the responsible stakeholder i.e. customers, staffs and societies to
enhance the profit and revenue.
Social-
The social accounting focuses on understanding people who have affected to the
company. This area includes training, community relations, employment, product safety,
donation and education. Starbucks is responsible for the communities both insides and outside by
providing good environmental workplace, welfare, human rights and training skills. Along with
this, company make good relationships with the community by various activities like donating
money to the society and improving the society to become better life etc (Novelskait &
Markunait, 2015).
Environment-
Starbucks is operating in various countries and in those countries; there are various rules
for the companies for their environmental performance. In order to protect the environment,
company is focused on reducing the use of natural resources as some resources can be renewed
again by the use of technological replacement. Along with this, company protects the
environment by treating waste process effectively. This shows that the environment is important
for Starbucks while operating business in various countries (Hough, Green & Plumle, 2016).
Ans. 5: Impact of foreign social norms and standards
There are different social norms and standards in every country which the companies
have to follow while doing the business. Starbucks has to follow those rules and regulations in
various countries for doing successful business. There are rights and laws related to labor in the
countries which are imposed by the governments. Those labor rights are described below:
Child labor-
Every country and government is focused on reducing the issue of child labor. Because of
the differences in the industry and various demands of the workers, there is similar but slightly

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different standard related to child labor in the beverage industry as compared to other bus8iness
industry. There are codes of condemn for the use of child labor and they defined that the
acceptable age anywhere for working between 14 and 18 year of age. Although there is no
particular statement about child labor but countries are imposing rules and laws to reduce child
labor. In UK, the set minimum age for the labor is 15 and this is legal minimum age. Starbucks
also specifies that minors between the ages of 14 and 16 may only be employed at that time
when they are not required to attend the school. Along with this, policy of Starbucks is that
children should not be unlawfully employed as labors. The company also sells Fair Trade
Certified coffee which is certified by licensing organization under the Fair Trade Labeling
Organization based on their standards. FLO has established the minimum age of 15 for most of
the work but higher age of 18 for the work (The World Bank Group, 2003).
Wages, benefits, and terms of employment-
There are some codes in every country related to wages of salaries of the employees and
the level of compensation for minimum and overtime depends upon the country of manufacture.
There are some monitory guidelines and local laws in every country which has to follow by
Starbucks. All the codes in some country state that minimum wages must be at least equal to the
local minimum wages. On the other hand, most of the countries state that it must be greater of
local minimum wage or industry standard. Starbucks follows The Fair Trade Standards i.e.
salaries should be in line with regional average and official minimum wages for the similar
works but level of salary can be increased. Along with this, Fair Trade Standards is also focused
on reducing the wages differences and employment conditions among the permanent, seasonal
and casual workers. Starbucks has confirmed with local laws and applicable international
conventions regarding the rights and benefits of the workers for the continual improvement over
the time (Forbes, 2016).
Ans. 6: Cradle to grave process
The Cradle to grave Life Cycle analysis is used for the Starbucks product disposable
coffee cups. The cradle-to-grave life cycle analysis includes various steps of product’s arbitrary
‘life cycle; from the initial stage to end of the life of product. This includes various life stages but
is basically involved in the material processing and manufacturing, extraction of raw material,

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usage, distribution, maintenance and disposal. In the life cycle analysis of disposable coffee
cups, there are various processes including material choice, material extraction, material
processing and manufacturing and then disposal. The reusable cups are environmental friendly as
they are 100% recyclable. So, three key life stages for disposable coffee cups are raw material
extraction, processing and manufacturing and disposal (Hocking & Martin, 2012).
Recommendations
For the sustainability of the disposable coffee cups, there are some recommendations which
must be used by Starbucks.
 Company should focus on the implementation of an environmental fee or tax on the cups
as that fee can be used to properly recycle the cups. This tax should be used to raise the
awareness among the people to use paper and cups when they are not in use.
 Company should focus on reducing the waste not to provide sleeves for heat. Customers
should be provided the opportunity to purchase the reusable sleeves while purchasing the
products.
 Company should focus on motivating the customers by providing at-the-till repayment.
By this, company will be able to encourage the customers for saving money that easily
adds up over their daily coffees (Reisch, Eberle & Lorek, 2013).
Ans. 7: Legal responsibilities
Starbucks is not only selling coffee, it also sells hot food and beverage products. It means
there are various regulations and laws related to health and safety standards. Company has to
insure that the food products are safe and fit for the purpose. Further, it is important for all the
Starbucks coffee houses to apply for the permit from the health board to remain in the business.
Starbucks uses compliance with the regulations to ensure that coffee house ahs high standard of
cleanliness, employees are using appropriate tools and do their job safely quality of coffee and
food reach at the set guidelines. Starbucks has responsibility towards product quality, social
accountability, economic sustainability and environmental leadership (Enquist and Edvardsson,
2009).

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Ethical issues
Starbucks is operating globally and there can be some issues for the company in terms of
ethical compliance. Some of those issues are as follows:
 One of the major issues is that Starbucks had a lawsuit filed against the company for
using anti-competitive tactics to deal with the competitors. The workers of the Starbucks
went outside the local coffee shops and provided the sample of Starbucks coffee. So,
Starbucks was sued as this tactic was illegal (Iqbal & Selamat, 2016).
 According to the Kantianism theory, the actions of Starbucks are unethical as the
company is disregarding small businesses to gain more customers and profits. Along with
this, the expansion techniques of the company are not coming from the goodwill and
employees are not rightfully motivated (Pimentel, 2004).
Ans. 8: Business ethics strategy of organization
From the above discussion, it can be summarized that Starbucks is operating at the global
level and to achieve the success in each country, company has to follow the environmental and
legal rules and regulations imposed by various governments. Based on the analysis, it is observed
that Company has implemented business ethics and compliance program in order to help the
partners to make ethical decisions in the business. Along with this, the ethical practices of the
Starbucks provide comfortable environment for the employees and customers which is the key
objective of the company. In terms of TBL, it is analyzed that Starbucks is focusing on the three
key factors i.e. social, economic and environmental factors. Starbucks is not only concerned
about the benefits of the financial forms but also care about people, society and environment as
well. Starbucks is responsible for the communities both insides and outside by providing good
environmental workplace, welfare, human rights and training skills. In terms of product life
assessment, Starbucks is using reusable coffee cups which are big initiative of the company to
sustain the environment. So, it can be said that the ethical business strategies of Starbucks are
very effective for the company to operate the business in the ethical manner (Schwartz, 2007).
Ans. 9: Improvement of organizations’ strategies
There are some ways by which Starbucks can improve its organizational strategies in the
business. Those strategies are as follows:

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 Company can make the customers educated regarding the ethical extraction of the coffee
by the seminars. There is no enough time for coffee education and most of the customers
never experience a tasting inside the stores. Company can focus on spreading enthusiasm
for the whole bean coffee with the customers.
 Along with this, company can follow the salary and wages standards to reduce the
differences between the employees. Company can follow local laws and applicable
international conventions regarding the rights and benefits of the workers for the
continual improvement over the time.
There are various companies in the world that are operating the business ethically. Two of
the companies among those companies are Dell Inc. and Pepsico. Starbucks can learn by the
ethical practices of Pepsico. Both of the companies believe in acting ethically and responsibly
including respect for employees in the workplace, integrity in the marketplace, ethics in the
business activities and performing responsibly with the shareholders.

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References
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from http://thecoffeeteam.blogspot.co.uk/2012/02/3-more-ps.html
Dudovskiy, J., (2017), Starbucks Organizational Culture: Focus on employees as the source of
core competency, accessed on 17th November 2017 from
https://research-methodology.net/starbucks-organizational-culture-focus-on-employees-as-the-source-
of-core-competency/
Enquist, B., and Edvardsson, B., (2009), Values-based Service for Sustainable business, UK:
Rutledge
Erwin, P.M., (2011), Corporate codes of conduct: The effects of code content and quality on
ethical performance: Journal of Business Ethics, 99, pp. 535-548
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strategy/#7c1724f33d71
Giberson, T. R., Resick, C. J., & Dickson, M. W., (2009), Leadership and organizational
culture: Linking CEO characteristics to cultural values: Journal of Business & Psychology, vol.
24 (2), 123–137
Hocking & Martin, B. (2012), Reusable and Disposable Cups: An Energy-Based Evaluation:
Environmental Management, 18 (6), 889-99
Hough, C., Green, K., & Plumle, G., (2016), Impact of ethics environment and organizational
trust on employee engagement: Journal of Legal, Ethical and Regulatory Issues, 18
Iqbal, S. Z. & Selamat, J., (2016), Food Safety: Basic Concepts, Recent Issues, and Future
Challenges, Springer
Kapinos, B., & Rollins, J., (2013), Starbucks Scolded for Stifling Competition, accessed on 17th
November 2017 from http://businessethicscases.blogspot.in/2013/02/exchange-inc-v_3188.html

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Kaptein, M., (2008), Developing and Testing a Measure for the Ethical Culture of
Organizations: The Corporate Ethical Virtues Model: Journal of Organizational Behavior,
29(7), pp. 923-947
Leinward P. & Davidson, V., (2016), How Starbucks’s Culture Brings Its Strategy to Life,
accessed on 17th November 2017 from https://hbr.org/2016/12/how-starbuckss-culture-brings-its-
strategy-to-life
Novelskait, A., & Markunait, L., (2015), The mediating role of leadership relationship in
building organizational trust on ethical culture of an organization: Economics & Sociology,
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Pimentel, D., (2004), Ethical Issues of Global Corporatization: Agriculture and Beyond: Poultry
Science, 83, 321–329
Reisch, L., Eberle, U., & Lorek, S., (2013), Sustainable food consumption: an overview of
contemporary issues and policies: SSPP Journal, 9(2)
Ruiz-Palomino, P., Martı´nez-Canas, R., & Fontrodona, J., (2013), Ethical culture and employee
outcomes: The mediating role of person–organization fit: Journal of Business Ethics, 116(1),
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History, 13(1), pp. 43 –54
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STANDARDS: AN ANALYTICAL COMPARISON, accessed on 17th November 2017 from
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