Starbucks: Social and Environmental Impact

This assignment examines the influence of various external factors on Starbucks' organizational performance. It specifically analyzes the impact of social, technological, legal, and environmental aspects, such as government policies, health regulations, economic conditions, and employee wages. The document also touches upon leadership styles and their effectiveness in navigating these challenges.

Understanding Organization
Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
1.1 Analysis Starbucks by using PESTLE analysis.....................................................................3
1.2 Evaluate the strengths and limitations of using PESTLE as a strategic diagnostic too.........5
2.1 The impact on the organisation with change in taxation policy and price stability..............6
2.2 The impact on the organisation of laws regarding the industry and employments political
factors..........................................................................................................................................7
3.1One legal factor that impact on PESTEL analysis..................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Essay on Understanding of organisational environment of Starbucks suggest that some of
the major factors should consider for implementing the polices of the organisation. As such
economic factor soluble be consider before change in products development decision as the new
products will include better raw material and the economic condition bring the rise in prices of
other goods and serves (Griffin and Moorhead, 2009). Political factor will bring the adverse sit-
in on the organisation environment as the competitor may take advantage of in such situation.
Legal and technological changes may influence on the performance of the Starbucks as they have
to deal with labour laws. It is important for the organisation to frame the policy with
consideration of these factors.
1.1 Analysis Starbucks by using PESTLE analysis
PESTLE analysis is an effective tool that analysis the impacts of external factors that
described on the basis of PESTLE analysis and they are considered as political, economic ,
social , technological , environmental and legal factors and these factors directly affects the
performance of Starbucks.
Impacts of Political factors on Starbucks
The political factors affected the sales of Starbucks is regarding the raw material and its
purchase. In, such case company is willing to apply down the sourcing strategies and adhere
down all the laws, framework and policies to purchase down the raw materials, conduct his
activity and increasing political awareness among public (Jelinek, 2010). Developing nations and
the regulatory pressures are also had to be faced by the company during conduct its activity such
as pressure from government in form of tax policies, laws regarding the industry and
employments.
Recommended actions prepared
The recommended action would be taken by the government by giving competitive
advantage to the Starbucks and providing some relief under the tax policies and procedure to the
Starbucks and government should move to the open market and creates opportunity for business
development and growth (Buchanan and Huczynski, 2010).
Impact of Economic factors on Starbucks

The economic factors also affected its sales such as price stability, changes in currency,
inflations arise during course of business, change in taxation policy and other economic
conditions. Due, to this the company has to deal with operational, labour and capital expenses
and this causing a pressure in this work situation (Lussier and Achua, 2009).
Recommended actions
The recommended action would be taken to solve the issues under this that government
should bring stability under monetary policies, taxation policies and changes and made
improvement under interest rates, unemployment rates and supply should be done according to
the demand and improvement made under that for the rapid growth and development.
Impact of social factors on Starbucks
The social factors also made impact in form of changing under the demographic
conditions, change in taste fashion and preferences, literacy level of the people and it depends
upon the mentality of the buyer and individuals in the market (Pardey, 2016).
Recommended actions
The recommended actions would be prepared under this is that company should produce
and able to meet the needs of customers and produced according to that only and also monitored
the situation and take care the changes which takes place due to demographic transitions.
Impact of technological factors on Starbucks
The technological factors affect its sales are increasing online order placing facility by
use of mobile phones, increasing coffee makers machines.
Recommended actions
The recommended actions would bring under this is that Starbucks should improve its
mobile applications and services to generate more revenues and also using advance technology
under that so it can work more productive and better and beat the competitors (Allio, 2013).
Impact of environmental factors on Starbucks
The environmental conditions and changes in business such as depend and growing
popularity on environmental friendly products by customers, changes in sustainability.
Recommended actions
In, such case company should improve the performance and emphasizes CSR and made
contribution under this and made improvement under sustainability procedure by providing eco-
friendly product which come out during recycling process.

Impact of legal factors on Starbucks
The legal factors such as various environmental laws, governmental laws and
unnecessary governmental intervention that directly affects its sales (Iqbal, 2011).
Recommended actions
Thus, the government should not unnecessary intervene and not implementing
unnecessary laws and policies so business would run flexible.
1.2 Evaluate the strengths and limitations of using PESTLE as a strategic diagnostic too
Strengths of Starbucks
 The main strength of Starbucks is its financial performance which could be rising
strongly i.e., year after year and gives a compatible mark on the product sales.
 It’s expanded his food offerings all over the world and build up the strong network a
crossed the nations.
 Treating and would give priority to their management and employees firstly, and that
would directly made increasing its growth rate higher and provide numerous
opportunities.
 The company value is generated more than $4 billion which would be his key strength
and that makes him forward as compared to the competitors.
 It is the largest coffee producing company in the world due to its size, capacity, volume
and customer can easily be attracted due to a wide variety and affordable prices.
 It diversified his business all over with the help of sister concerns.
 Loyalty and quality directly build up its reputation and that directly made impact on
Starbucks sales (Randeree and Chaudhry, 2012).
Limitations of Starbucks
 The first one is that company have followed and too adhered down all the policies, rules
regarding purchased down the raw materials and have to face down the political pressures
from government during working conditions.
 The company has to deal with the economic pressure and situation which arising in form
of labour and capital expenses and that directly affected its sales.
 The sales also affect due to mentality of people and due to change in demographic
conditions such as change in attitude of customers and they directly not meet its needs.

 The one more limitation is that due to increase in technology and machines and due to
online placing of customers order cause a huge impact on sales.
 Due to change in environmental conditions and sustainability factors and people
dependency more on environmental and user friendly also affect the working condition of
Starbucks and affects its sale activity.
 The everyday new policies and new laws prepared, unnecessary intervention by the
government during regulations done, and certain environmental its related factors which
would kept difficult for the business to survive and due to wide changing in laws and
policies, it made difficult the business for the Starbucks and that also costs in there sales.
2.1 The impact on the organisation with change in taxation policy and price stability.
For the Starbucks it major impact of the economic factor as the change in taxation policy
and price stability will make higher price of Starbucks products and services. If the taxation
policy have been changed by then government the impact on Starbucks revue will be decrease as
the higher tax influence the financial system of organisation. If the supplier will enhance the
price of raw material than it will directly impact on the price of Starbucks products and service.
As the customer can be shifted to the competitor for the lower price serve as well they need to
pay the less tax if organisation will reduce the prices (Griffin and Moorhead, 2009). As the tax
will also burden on the salary and other cost which are important for Starbucks. So the
employees will also no satisfied if they don’t get the salary on time with lower return of
organisation. But the lower taxation will brings the better profits for organisation as they can get
the more respect from the customer. The services can be better if prices will decrease. Sometime
the taxation policy impact on the extra befits given to the customers. But Starbucks have to make
the better policies to focus on their services so that customer get the same response before
changing such policy. As the customer need more discount have to reduce with the change in
prices? These are the economic impact as the Starbucks have to think about better opportunity
can be made with plan and practice during low economic response.
As the Starbucks is also planning to change in tax policy to avoid the corporate tax. The
corporate tax is paid by the foreign organisation who are running their business at other countries
from the part of total return they've to pay small portion of tax. Starbucks ism paying the 400
million worth good in the UK previous year and the result was commendable (Jelinek, 2010).
Starbucks is paying 4.7% of tax from the total sales made. Also the price stability from the

government made try to push on the prices of other goods and raw material will burden on the
performance of the Starbucks. As they need more focus on economic condition of the nation.
2.2 The impact on the organisation of laws regarding the industry and employments political
factors.
The impact of laws regarding the industry and employments will bring the politics
pressure on Starbucks. As the Starbucks have to manage their employee according requirement
they hire and fire employee as per the polices of organisation. But when any political pressure
have been made they've to focus on external rules and regulation made by the govern and other
super bodies. As the laws regarding the industry have been impact on then organisation functions
and other operational work. The norms have top follow by Starbucks otherwise licensed may be
cancelled. The labour law will have influence on the Starbucks to give better faculty to the
employees in organisation. It is resulted to the safety of the employees or give extra befits to
them as they feel secure at the organisation (Buchanan and Huczynski, 2010). If they are not bale
give the better salary to employees than they have to pay according the laws made by the
legislation body. The minimum wage should get to the employees for their set of working hours.
It is the Starbucks responsibility to stop we to employees in organisation.
If employees have made any issue resulted to the legislation then the Starbucks goodwill
also be down. Industry will set the separate policy for the improvement in the industry have to be
consider in Starbucks rules and regulation. If the Starbucks is not manage the industry rules and
regulation between the competitors might be oppose on their practices. Sometime employees
requirement have to be fulfilled for the organisation. If the industry had set some rules and
regulation for the employees befits than Starbucks also give such befits to the employees.
Starbucks set the criteria for recruitment made for organisation (Lussier and Achua, 2009). Top
management of Starbucks bring the key decision which will impact on the performance of
organisation as well the conflicts situation may arise in front of the management. For better
outcome the Starbucks have to consider the industry and employee laws while making their
business planning and objectives. As they need to change in the policy for the employees befits.
If they follows the industry rules and regulation than the customer may be find the difference of
their products and services.

3.1One legal factor that impact on PESTEL analysis
The one legal factors that made impact on Starbucks analysis are as change in industrial and
governmental laws factors. During, analysis been done the certain change regarding changes
industrial and developmental laws, labour laws and governmental laws affect the business
performance directly and indirectly and also affects its sales. During, been conducting down the
operations the Starbucks have to follow the certain laws requirements and fulfilled those
requirements and essentially have to meet those factors ,otherwise it would difficult for the
Starbucks to carry down their work. The, Starbucks have to analyse down the legal factors and
also time to time being updated regarding the developmental and governmental laws and
sometime it would also affect their business and that directly led to decrease its efficiency and
productivity (Pardey, 2016).
The company have to follow various legal requirements relating and have to conduct down its
operations and have to conduct its activity and have to follow down the different laws which
would be different according to the different nations. Every, country have its own policies and
laws and if Starbucks have to conduct its operations have to follow down the different laws and
keep themselves aware regarding such policies and procedure, otherwise it would difficult for the
business to conduct their operations crossed all the parts of the world. Time to time unnecessary
changes bring by the government under the policies is essentially makes the companies difficult
to survive. With, the governmental the change in interest and tax related factors which would
been different under different countries and company have to follow such aspect during
conducting its activities and have to pay the taxes, interest, duties which been different under
different countries and to conduct down operations (Allio, 2013).
Starbucks have to follow such. The, various labour laws requirement are also need to satisfy and
essentially changes under that factors, which also effected the business performance. These,
certain things effect the Starbucks business and performance and time to time unnecessary
changes under various factors and laws effect the business marketability and sales. It, is due to
because of uncertainty which would arise under the business and its related factors and its
changing the work culture of Starbucks, which keeps on changing differently as per the
situations and conditions that arise and affect the course of business and also made a huge impact
on its sales and affect its brand image. The various environmental factors should also been
improved by the government and maintain the proper, policies and plans so that work been

carried out in a right manner (Randeree and Chaudhry, 2012). The prices regarding the product
would not been inconsistent because it is different and according to the conditions which arise in
the market and due to certain laws and policies, the business causing profit in an unestablished
manner and due to because of the various laws, policies and regulations which disturbed its sales
and product growth rate and company have to complied down various formalities, licensing
requirement before operates down its activities in country and go through various operations
which might be difficult for the business to remain stable in the market and it is because of the
reason behind due to flexibility under the governmental ,taxation and industrial development
laws
CONCLUSION
The essay on understanding of organisation environment is concluded from the analysis of
the Starbucks politics, economic Social, technological, legal and environment factored have been
major influence on the organisation. As the policies such as intervention of the government for
changes effect on the Starbucks. If any products is injurious to health will damage the society
and to safe such damage government can stop. The economic factor also infuse the performance
of the Starbucks as the change in tax policy or the price stability will make the other burden on
the organisation. 4.7% tax has been paid by the Starbucks last year and now it will be more
burden on them. The legal factor also induce on the Starbucks as the proper rules and regulation
for the wages for the employees bring the adverse situation in organisation enviorewmnt.

REFERENCES
Books and Journals
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Buchanan, A. D. and Huczynski, A. A., 2010. Organizational Behaviour. 7th ed. Pearson
Education, Limited.
Lussier, R.N. and Achua, C.F., 2009. Leadership:- theory,application and skill development. 4th
ed. Cengage learning.
Pardey, D., 2016. Leadership in turbulent times: Effective leadership during times of
organizational change. Strategic HR Review. 6(5). pp.16 – 19.
Allio, J. R., 2013. Leaders and leadership – many theories, but what advice is reliable. Strategy
& Leadership. 41 (1). pp.4 – 14.
Adeniyi, M. A., 2007. Effective Leadership Management: An Integration of Styles, Skills &
Character for Today's CEOs. AuthorHouse.
Iqbal, T., 2011. The Impact of Leadership Styles on Organizational Effectiveness. GRIN Verlag.
Mills, J. C. H., Bratton, J. and Forshaw, C., 2006. Organizational Behaviour in a Global
Context. University of Toronto Press.
Randeree, K. and Chaudhry, A. G., 2012. Leadership – style, satisfaction and commitment: An
exploration in the United Arab Emirates' construction sector. Engineering, Construction and
Architectural Management. 19(1). pp. 61–85.
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