Question

NOTE: PLAGIRISM IS PROHIBITED

BUSINESS ETHICS

CASE STUDY:

Starbucks’ Mission: Social Responsibility and Brand Strength

Before Starbucks came onto the scene, coffee was considered a stodgy product largely consumed by older people in the United States. It did not have the cool-factor or the cache that it does today. Starbucks’ entry in the market largely changed how Americans consumed coffee and what they thought about coffee shops. It all started in the cold, gray climate of Seattle—the perfect setting for launching a warm beverage with international appeal. The target market was upper-income, middle-class, white-collar, single or newly married men and women with no children. Many of Starbucks’ early target market had likely experienced the coffee shop cultures of Europe, and found U.S. equivalent appealing. Quality and service were excellent and location became a critical issue. Starbucks’ flagship store is in Pike Place Market—a destination for the worldly, young and hip in Seattle. With its small space requirements, low inventory, and fast turnover, Starbucks was able to leverage its local success to rapidly expand into new markets before competitors were able to catch up. Due to its ubiquity, many people have strong opinions on Starbucks. Some worry that the chain pushes out local competition and that they have led to the homogenization of the coffee market. However, the most recent economic recession and the closing of hundreds of Starbucks stores has, for the time being, quieted these complaints.

No matter what one thinks of Starbucks, it is more involved in social causes and the care of its workers than many comparable chains. Starbucks is committed to employee well-being, as one can see in their employee health care system. Founder Howard Schulz made employee healthcare a priority after watching his father struggle with injuries because he had no access to employee healthcare or worker’s compensation. In large part because of its commitment to providing good wages and healthcare, Starbucks ranked 24th on Fortune’s Best Companies to Work For list in 2009.

The company also has a history of giving to charities that affect its primary stakeholders. As part of its commitment to ethics and sustainability, the company launched its Shared Planet website, which communicates to interested stakeholders all of the company’s ethics and sustainability initiatives. The company is also a large buyer of Fair Trade Certified coffee (although no longer the largest by far) and has partnered with Project Red to raise money for HIV/AIDs research.

In spite of its professed commitment to caring for workers and for social causes, such a large company will always be subject to criticisms. From complaints that Starbucks pushes smaller competitors out of markets, to those that its coffee drinks are excessively fatty and caloric, Starbucks is seemingly always in the news for something. It has even become a target for several lawsuits regarding compensation and dispensation of tips. Also, Starbucks Corp. has agreed to settle allegations from the National Labor Relations Board that it improperly fired a Michigan employee for participating in union activities. Instructors may ask students whether large companies attract such litigation or if Starbucks is changing its values as it has grown larger.

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Discussion

1. Why do you think Starbucks has been so concerned with social responsibility in its overall corporate strategy? ( 150 words)

2. Is Starbucks unique in being able to provide a high level of benefits to its employees?              

3. Do you think that Starbucks has grown rapidly because of its ethical and socially responsible activities or because it provides products and an environment that customers want? (150 words)

Answer 1

Ans: 1

Starbucks has been so concerned with social responsibility in its overall corporate stratergy because of many reasons, some of them are mentiones below:

• For employees: several years ago all that company employees want was that company business do not harm the enviromnet but now things have changed, now employees wants to work for someone who do good to society.
• For consumers: In today's world consumers are ready to pay higher price if the company is doing something good for society.
• Better competitive immunity:  A business who is doing better in only production have less chance of survival against the one who is working on quality and social cause at the same time.
• For investers: Enven investers are a part of society and eventually they also want to invest in a company who can give back to the society in some way.

Ans: 2

Although providing good eployee benifits is one of the key to success and many big and successful businesses are doing very well in this area and Starbucks is one of them. But Starbucks do provide some unique benifits to its employees, they are;

• Free stuff: Starbucks employees are allowed to take some coffee beans and their favorite flavor of tea and ect, every week and they get 30 percent discount on starbucks products.
• Bean Stock: Employees are listed in Bean Stock program where they are given restricted comany stocks which become actual stcoks over time.
• "Partne rs": Company refers ther employees as partners which gives an morale boost that no other title can give them.
• "Your special blend": Starbucks provide customized benifit panls to their employees which is called "your special blend". This plan include things like bonuses, health/medical/dental plan, and even adoption assistance. This is given to both part-time and full-time employees.
• Education: At some extent starbucks pays for their employees college tuition.

Ans: 3

A business can not acheive the success that every business or businessman desires, without two things one the highest quality product possible and second is the good ethical and social responsibility.

Providing customers the good quality product and the environment that they are paying might have more to contribute to the overall success but it will be wrong to say that only providing good quality product and services is enough. In today's world one can not survive only on the quality their ethics and social work also palys a huge role in the success. Because in case customers are happy with the product or srevices only but the sharehlders and employees will not want to invest their oney and time to the comany who do nothing for society or even worse do harm to the society. And same thing is with poor quality product and services and high ethics, no customer will come or no invester will want to invest in a business where there s no scope for returns.

Therefore in conclusion we can say that Starbucks' has grown rapidly because of their good ethics and social respinsibility an d their high quality products and services.