Business and Society: Stakeholders, Ethics, Public Policy

The assignment provided is related to the topic of business and society, which covers the relationships between businesses and their stakeholders, including employees, customers, investors, suppliers, and communities. The document also touches on ethical considerations in business and public policy issues affecting companies. It appears to be a coursework or research paper that requires students to analyze and discuss these concepts based on various sources.

RISK AND LEGAL ISSUES

TABLE OF CONTENTS
PART 1: EXECUTIVE STATEMENT/SUMMARY.....................................................................1
PART 2: COMPANY OVERVIEW................................................................................................1
PART 3: KEY STAKEHOLDERS.................................................................................................2
PART 4: FINDING/ RESULTS SECTION....................................................................................4
PART 5: REPORT CONCLUSION................................................................................................7
REFERENCES................................................................................................................................9

PART 1: EXECUTIVE STATEMENT/SUMMARY
Starbucks is the leading coffee house that operates its business across the world. Study
describes that social, supplier and operational risk impact on business to great extent. It is
essential for the company to address needs of consumers and offer them products accordingly.
Starbucks has to build strong relationship with suppliers so that it can minimise procurement
issue. It can be summarized from the report that stakeholders mapping provides assistance in
identifying needs of customers, employees etc. Hence, by meeting the needs of stakeholders’
company gain competitive edge over others.
PART 2: COMPANY OVERVIEW
Starbucks is the American coffee company, it was founded in Seattle, Washington in the
year 1971 (Sullivan and Robinson, 2017). Recently entity has approx. 28218 branches across the
world. It has 47 years’ experience in the industry and business entity offer satisfactory goods and
services to consumers globally. Starbucks provides wide range of coffee products, smoothies,
tea, sandwiches etc. to clients as per their requirements. In the year 2017, entity has generated
revenue of 22.387 billion. Operating income of firm in the same year was 4.135 billion. Its sales
are continuously increasing and it has wide scope to become a leading successful brand in coffee
industry (Acs, Autio and Szerb, 2014). In the year 2002, Starbucks has opened new branches in
Latin America. In the year 2002 trading company was established by Lausanne. McDonald’s,
Costa coffee, Cafe coffee day are major competitor of this brand.
Starbucks is the public limited firm; it has to follow the government guidelines in order to
run its business legally without any consequences. Customers, suppliers, investors, government,
employees are the major stakeholder of business (Sahinoglu and et.al, 2016). Currently entity
has 238000 employees those who are working globally. Market share price of Starbucks is 54.89.
Starbucks is engaged in coffee industry but it also offers beverages to consumers. It has online
stores and retail shops that attract people towards the brand. Starbucks has approx 24000 retail
shops in more than 70 countries (Daniels DeLaurell and Spade, 2016).
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Figure 1: financial of Starbucks
Source: (Starbucks Corporation. 2018)
PART 3: KEY STAKEHOLDERS
Key Stakeholders of Starbucks
Stakeholders plays a very important role in any organisation as it can affect their overall
performance in a huge context. Starbucks has variety of stakeholder which can affect their
function in many ways (Höglund, Mårtensson and Safari, 2018). Starbucks Coffee Company’s
stakeholder management approaches are based on different programs for corporate social
responsibility (CSR). In the context of corporate social responsibility, Starbucks needs to account
demands or interests of stakeholders, because the company is viewed not just as an organization
for profit, but also as a citizen of society (Ghosh and Mondal, 2014). Starbucks has already
incorporated various programs for their stakeholders. Their stakeholders list includes, employees
(Barista, partners), customers, suppliers (supply firms, coffee farmers), environment, investors,
governments, etc. which is explained below (Campbell and Helleloid, 2016):
Internal stakeholders
Employees: Starbucks gives priority to their employees as they play an important part in
their organization. As a stakeholder, these employees can demand for high salary, good
working condition, job security, etc. (Lawrence and Weber, 2014). Company can
improve their performance by keeping their employees motivated.
External stakeholders
 Customers: Starbucks considers customers as among its top stakeholders. These are most
important factors which has to be managed effectively in order to increase their sales and
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revenue as well. These can be tackled by applying various strategies, for example, warm
and friendly relations are emphasized within the company and in how Barista interact
with their customers (Starbucks Coffee’s Stakeholders: A CSR Analysis, 2017).
 Suppliers: These are basically helpful for them in providing them the raw material for
their production. It also has a huge impact on their business activity. If Starbucks is
unable to get good supplier for their raw materials, then it can have a huge impact on
their productivity. (Gualandris and et.al., 2015).
 Investors: For any business organization investors has important role. Investors basically
have an interest in their high financial performance because they have invested their
money in the firm. It becomes crucial for Starbucks to have strategic planning which can
help them in increasing their performance and sales as well in industry (Luntungan,
Pangemanan and Rumokoy, 2018).
 Government: This stakeholder is considered very important for Starbucks. Government
helps in making different rules and regulation for the firm which is mandatory for them to
follow properly (Nambalirwa Kawuma and Marcovecchio, 2017).
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Illustration 1: Internal and External Stakeholders
Source: (Types of Stakeholder, 2017)

PART 4: FINDING/ RESULTS SECTION
There are many risks that are faced by business and all these issues impact on business
unit to great extent (McLellan, Sherer and Fedeles, 2014).
 Political risk: geopolitical tensions, Unstable government, changing rules and regulations
create risk for Starbucks because it has to make changes in its entire planning accordingly
(Shim, Lee and Kim, 2018).
 Credit Risk: Lack of availability of credit can impact various functions at Starbucks,
which can cause lack of materials for selling.
 Economic risk: Inflation in the economy can impact Starbucks as they will have to
increase their prices and customers might stop visiting them. While deflation can create
challenges for the firm (Jones, 2015).
 Slow recovery risk: The recession can heavily impact Starbucks, which can lead to a slow
recovery and generation of revenue (Giat, 2018).
 Social risk: The changes in preferences of customers can impact sales of Starbucks and
different cultures may not like their products and services. Changes in attitude of buying
behaviour can impact revenue of firm as well (Becker and Smidt, 2015).
 Operational risk: Inadequate supply chain and improper quality of products can impact
operations of Starbucks (Gamero-Garrido and et.al., 2017).
 Supplier Risk: Suppliers can lead to delay in delivery of products which will impact
business functions of Starbucks.
 Environmental risk: extreme weather conditions (Shaw and Barry, 2015)
 Technological risk: cybersecurity breaches, Rapid changes in technology can negatively
impact Starbucks as they may not be able to adapt to new innovations.
 Emerging market risk: New coffee shops are emerging in the market which can impact
revenue of Starbucks to a great extent (McGarvey Hidy, 2018).
 Cost Risk: The inability to manage costs of the business functions can negatively impact
Starbucks as they might not be able to generate enough profits.
 Procurement Risk: Suppliers can impact Starbucks as they might not always have
available raw materials and resources for them which will lead to lack of procurement.
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 Legal Risk: Changes in legal policies can impact Starbucks because they will have to
make changes it their business accordingly which will waste time and money (Standards
Australia International limited, 2009).
 Environmental risk: Starbucks uses plastic cups that can cause a negative impact towards
the environment and may not be appreciated by customers, which can lead to a bad
reputation.
 Data confidentiality: Breach of data can cause problems for Starbucks as all confidential
information will be out in the public and it can negatively impact the business (World
economic forum, 2018).
 Human resource risk: Lack of competent staff can create human resource risk for
Starbucks as they will not be able to provide proper services to their customers.
 Branding risk: Marketing strategies of Starbucks can impact their brand image if not
planned properly.
 Competitor risk: There are many similar companies which create a high risk of
competitors for Starbucks and it can lose customers if other coffee shops are better.
 Strategic risk: Strategies created by managers may not be appropriate for Starbucks and
can cause delay in achievement of goals (Starbucks Corp, 2018).
 Safety Risk: Production done in unhygienic conditions can impact the safety of
Starbucks' customers.
 Networking risk: Improper communication with suppliers and buyers can impact
networking of Starbucks as they might not receive correct products which will delay their
sales.
Top 10 risk
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Starbucks performance can get influenced by these risks to great extent. It is found that if
rules and regulations get changed then entity may have to make changes in its strategies and will
have to redesign work. This will increase its cost and that will impact on financial position of the
firm. On other hand Technological risk can increase cost but if entity implement latest
technologies then it can be beneficial for the brand in improving its operational efficiency.
Radar diagram
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Impact 1: profitability
Impact 2: Sustanability
The main risks of business are operational, social, supplier. If suppliers don’t deliver the
items on time, then entity will not be able to offer immediate products. Apart from this changes
in needs and preference of the people create emergency for the enterprise to make changes in its
products and provide new coffee products to consumers. This in turn helps in meeting their
expectation of consumers of Starbucks.
PART 5: REPORT CONCLUSION
From the above study it can be concluded that Starbucks is facing huge issues and it is
essential for the firm to make risk management plan for mitigating these issues.
Risk Scale (out of 100)
Political (geopolitical tensions) 20/100
Legal (changes in regulation) 30/100
Operational (Quality risk) 90/ 100
Technical (cyber security breaches) 30/100
Strategic (inappropriate strategies of business) 55/100
economic (inflation) 70/100
Social emerging market (development of new
firms)
45/100
Supplier risk (Delivery of poor quality material 75/100
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and delay in delivery )
Slow recovery 25/100
Social risk (perception changes) 85/100
It is found that social and operational risk impact on Starbuck to great extent. But company
always concentrates on needs of consumers and provide them products as per their requirements
that are why sales of the firm is increasing rapidly. Investors defiantly invest in the firm because
by this way they will be able to get more return over their investments.
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REFERENCES
Books and Journals
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Becker, K. and Smidt, M., 2015. Workforce-related risks in projects with a contingent
workforce. International Journal of Project Management. 33(4). pp.889-900.
Campbell, K. and Helleloid, D., 2016. Starbucks: Social responsibility and tax avoidance.
Journal of Accounting Education, 37, pp.38-60.
Daniels, R.B., DeLaurell, R. and Spade, T.M., 2016. IRS Schedule UTP and the Legal Privileges
of Tax Accrual Workpapers: Understanding the Risks for Auditors. The CPA Journal.
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Gamero-Garrido, A. andet.al., 2017, October. Quantifying the Pressure of Legal Risks on Third-
party Vulnerability Research. In Proceedings of the 2017 ACM SIGSAC Conference on
Computer and Communications Security (pp. 1501-1513). ACM.
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Corporate Social Performance: A Study on the Selected Asian Companies.
Giat, Y., 2018. Principal-Agent Analysis on How Legal Risks Affect Audit Fees and Quality.
International Journal of Strategic Decision Sciences (IJSDS). 9(3). pp.113-126.
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Höglund, L., Mårtensson, M. and Safari, A., 2018. Expectations and the performance of
governance functions between a board, management and other stakeholders: the case of
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Jones, S., 2015. Mapping Coastal Risks and Social Vulnerability: Principles and Considerations.
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COMMITMENT OF STARBUCKS IN MANADO BETWEEN MALE AND FEMALE.
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McLellan, M.L., Sherer, J.A. and Fedeles, E.R., 2014. Wherever You Go, There You Are (with
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We present a model of organizational open platform adoption that integrates six different
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