Business Ethics of Starbucks: Challenges and Stakeholders

Business EthicsINTRODUCTION
Ethical practises refers to those process of the organisation under which the company act with honesty and
conduct fair trade practises in the market. Business ethics refers to the study of different practises and policies of
the company which is conducted with ethics and honesty. There are different types of factor are present which ruin
the aspect of ethics in business such as Bribery, discrimination, insider trading and many more. If these types of
practises are conducted in the organisation then it becomes negative for the establishment of ethics in business.
Ethics helps the business to satisfy the needs of different stakeholders in effective manner. It enables the
company to conduct only those practises in the organisation which is beneficial for the society and for their
stakeholders. The organisation which is provided here to demonstrate this report is Starbucks which is chain of
coffee houses. This report is based on ethical aspect of the organisation and reflects ethical philosophy of the
company and their approach towards the business. This report also contains number of challenges faced by
company in regards to ethics. It reflects the number of stakeholders of company and their contribution towards the
establishment of ethical practises in the organisation.
.REASON FOR SELECTION
Starbucks is one of American Multinational organisation which maintains huge chain
of coffee houses in different countries of world. It is one of the biggest organisation of
the world which serves their services to huge number of customers. The management
of the organisation requires to maintain large number of employees so the requirement
of business ethics are increase by the huge number. It is essential for the company to
establish number of ethical practises in the organisation which helps them to maintain
the number of employees and also for their customers in the market. There are
number of stakeholders are present in the organisation such suppliers, employees
customers and many more which are having different expectation from the
company. . It is essential for the management to develop effective practises in
the organisation which helps to achieve their expectation in the market. The
management of Starbucks operates their business in different countries of the
world. Under which number of rules and regulations are present which they
have to follow so it becomes compulsory for the organisation to maintain ethical
practises in the organisation which helps to maintain healthy relations with the
government of these countries.
Ethical philosophy of Starbucks
Starbucks is one of those organisation of the world which is named the most ethical organisation of the world for the
12th consecutive time and it is only possible due to the strong approach of the company towards the business ethics.
The management of company develops the culture of the organisation in such a way to promote business ethics. The
management of company promotes ethical leadership which helps to promote effective management of employees
and to provide number of resources to their partners which helps them to take multiple decisions. The management of
company have strong believe on promoting the innovation in their business which helps to keep them updates but not
the single unethical practise are applied by the company to achieve the goals of innovation. Child labour is one of the
most biggest unethical practise which is done by many company directly or indirectly. The management of Starbucks
strictly restricts this practise in their organisation. All the external stakeholders of the company are also ordered ton not
employees any single child for work so that the aspect of ethical practise can be achieve by the organisation. All the
farmers which are working for the company for the growing of coffee are ordered to not involve their child in their work
and to provide them proper education with the helps of their different schemes. There are number of team are
developed by the organisation which continuously verify the performance of different rules made by company in regards
to ethics in the organisation. Starbucks is one of the biggest stakeholder of the world which contributes towards the
concept of international development projects. Under this type of projects, the management of the organisation
provides training and support to the workers and develops number of skills in their personality and makes them self
sufficient and productive. The management of Starbucks has developed number of Farmer support centres under
which they trained number of farmers. In the year 2019, the management of Starbucks trained more than 85000
farmers from their training centres. It is one of biggest ethical practise of the organisation which reflects the positive
ideology of the company towards the aspect. The management of the company has developed effective and attractive
employee policies which helps to attract the talented employees towards the organisation. Employee is one of the most
important resource of the organisation which the company need to maintain and manages in effective manner. All the
employees of the organisation are having different needs and expectation from the company. One of the important
need of employees is need of effective compensation. It is analysed from the company that 60% of employees believed
that the compensation they have receive from company is fair, 80% of employees are satisfied with the benefits
provided by the company and 75 % are happy with the stock and equity of the company.
Importance of Ethical challenges faced by Starbucks
Starbucks is one of the important and valuable organisation of the world which operates their business in effective
manner. All the practises of the organisation are developed in such a manner to promote ethics and satisfy the needs of
different stakeholders of the organisation. Starbucks is one of the biggest organisation which operates their business in
many companies of world so there are some cases are happened where the company faced different allegations of
unethical practises of business. These allegations negatively impacts the business of the organisation which needs to
understand the number of problems in the organisation. The management of Starbucks has faced number of issues
and the brief discussion related to the same are given below:
The management of Starbucks hold dominant position in the market due to their hard work and strong financial
resource. The management of the organisation used effective competitive strategies in the market which helps them to
achieve competitive advantage. Many critics of the market charges allegation of unfair strategies to deal with the
competition in the market. It is required by the organisation to operate their business in ethical way which helps them to
deal with these obligations in the market.
There are number of employee disputes are present in the organisation where the number of employees provides their
opposition towards the policies and practises of company. In the year 2005, the management of the company has
settled the lawsuit against the six workers of company. These workers of the company claims that management of
organization retaliates them due to their support to the union. In the year 2005, more than 2000 employees of
Starbucks went on strike against the company. These employees of the organisation need changes in youth rates of
the company. It is important for the management of company to provide number of benefits to the organisation which
helps to achieve their loyalty and confidence.
In the year 2006, One of the NGO of Britain claim that the management of Starbucks are
involved in the exploitation of farmers ion Ethiopia. It is claimed by the NGO that the organisation does not follow their
rules and regulations in the country which they agree with the farmers. It is analysed from one of the analyses which is
conducted by the risk management agency which provides that the demand of coffee provided by company becomes
more than supply and it charges higher rates of the coffee from their market value.
There are many cases are present in the market where is found that the company is
involved in different unfair business practises which negatively impacts the business of the organisation. Tax avoidance
is one of the biggest allegations which is faced by the company in their working. Tax avoidance is when businesses try
to find legal loopholes to reduce the amount of taxes they pay. Tax evasion is when a business/person simply doesn’t
pay taxes or doesn’t pay the correct amount on purpose.REFERENCES
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CONCLUSION
It is concluded from this report that it is very important for the
management of the organisation to established effective
control over their stakeholders so that ethics can be achieved
in the organisation. This report concludes various aspect of
ethics and issues faced by the company and the description of
different stakeholders. It is concluded from this report that
it is very important for the management of the
organisation to established effective control over their
stakeholders so that ethics can be achieved in the
organisation. This report concludes various aspect of
ethics and issues faced by the company and the
description of different stakeholders
Key stakeholders of Starbucks
Key stakeholders of Starbucks
Stakeholder refers to those persons of the organisation which are having direct or indirect relation with the company. It refers to those
parties which are having considerable engagement with the organisation. The importance of these stakeholders are very high in
development of ethical practises of the organisation and the brief discussion related to the same are given below:
Employees:- Employees are the most valuable stakeholders of the organisation which provides many benefits to the company. The
management of Starbucks operates their business in different countries of world so the management of these employees are very
difficult. It is very important for the management of the organisation to provide effective compensation to the these employees which
restricts them to conduct unfair practise for personal benefits.
Government :- It is the external stakeholder of the company which impacts the working of organisation. All the rules and regulations
related to the business are developed by this stakeholder of the organisation. It is important for the government to develop those rules
and guidelines which enables the company to apply fair trade practises in their working. The management of Starbucks has operates
their business in different countries of the world so that they have to focus on diverse rules and regulations.
Customers :- It refers to those stakeholders of the company which purchases the product and services of the organisation. All the
policies and strategies of the organisation are developed in such a way to promote the satisfaction of employees. The management of
Starbucks targeted the customers of high income due to their premium product range.
Suppliers :- It is related to those stakeholders of the organisation which supply the number of raw materials to the company for the
production of products. The management of Starbucks operates a business of coffee so they have number of farmers which supplies
raw material to the company.
Investors :- As in any business, Starbucks must address investors as stakeholders. Investors have interests in high financial
performance of the company. Starbucks’ global expansion and continued dominance in the coffee house industry indicates high
financial performance. Even though it suffered considerable decline in 2007, Starbucks has recovered and is on a growth path once
more.