Question

Serving the community

Known to be more than just a coffee brand, Starbucks Malaysia’s philanthropic project, Connecting Communities in Malaysia, has helped drive the economy in small villages by supporting local produce and craft. Established back in 2013, the project encourages ethical sourcing while opening up a gateway of opportunities to elevate the lives of farmers and their entire community at the same time. Kampung Lubuk Jaya, a rural village in the outskirts of Kuala Selangor, was among the first to benefit from this project. The village folk were approached to sell fresh homegrown bananas to Starbucks Malaysia. The bananas were then processed, made into delectable pastries and sold at Starbucks Malaysia outlets across the country. Today, Starbucks has enlisted two additional villages in Kuala Selangor, namely Kampung Sungai Gulang Gulang and Kampung Parit Serong, as its banana suppliers As part of its objective to support fair trade and ethical sourcing, the coffeehouse chain purchases bananas directly from local farmers at an agreeable rate, helping them earn slightly more by buying direct. Aside from boosting the economy within Kampung Lubuk Jaya, Starbucks Malaysia also managed to raise over RM118,000 to build a Community Computer Centre for the children in the village. Contributions were acquired from the 15% of sales made from retail of the banana-based products sold at Starbucks Malaysia outlets. In 2015, the coffee powerhouse adopted Felda Chini Timur 01, a village in Pahang, as its second project recipient. The project involved producing mengkuang-based products, aimed at supporting and cultivating local talent and handicraft. Carefully woven mengkuang leaves were turned into cup sleeves, coasters and placemats, and sold across 50 outlets in the country. In both endeavours, Starbucks Malaysia’s effort more than preserved local heritage, it ultimately boosted the income of the villagers as well. “Here at Starbucks, we always believe in contributing back to the communities wherever we do business in. To celebrate our 15th anniversary in 2013, we launched Connecting Communities in Malaysia, a community project that contributes to small villages in support of local and ethical sourcing to make an impact to the lives of families and local communities,” shared Starbucks Malaysia and Brunei managing director Sydney Quays.

1). Determine the approach taken by Starbucks in its corporate social responsibility. Justify your reasoning.

2). What are the pros and cons of the involvement of businesses in corporate social responsibility (CSR) activities?

Answer 1

1). Determine the approach taken by Starbucks in its corporate social responsibility. Justify your reasoning.

The approach taken by Strabucks can be condensed in one phrase "Prosper with all". Their CSR activity has not only contributed to the villages and community they helped by procuring their products and services but also their own sales (thus helping them grow too among masses by changing their perception of MNC) increased as they started to sell indigeneous products. This gave sense of pride and satisfaction to consumers, increase income level to communities and increased sales and profit to Starbucks, thus ensuring growth with all

2). What are the pros and cons of the involvement of businesses in corporate social responsibility (CSR) activities?

Pros:

• It helps company to improve their public image
• It helps government as they have partner in development
• It helps communities untouched by government programmes

Cons:

• It distracts company from its goal to increase stakeholders value as the key employees sometimes spend more time than required in CSR activities which may affect regular work
• It may contradict with government programmes in operational ways
• It may lead to favouring one community leading to circumstances not favourable for some other community.

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