About Starbucks

Question:

Write an essay on Business Ethics and Social Responsibility.

Starbucks was founded in 1971 by three partners in Seattle’s renowned open-air Pike Place Market and was named after the first mate in Herman Melville’s Moby Dick. Howard Schultz joined Starbucks in 1982 as director of retail operations and marketing. Returning from a trip to Milan, Italy, with its 1,500 coffee bars, Schultz recognized an opportunity to develop a similar retail coffee-bar culture in Seattle. From the beginning till now, Starbucks has grown to be one of the largest coffee retail stores in the whole world. Slowly and steadily, Starbucks has grown and expanded over different countries of the world. There are several reasons behind the popularity and expansion of the company. The corporate strategies, employee benefits and growth policy have made Starbucks a successful business organization. From the start of the business, Starbucks authority has emphasized on maintaining a social reputation in order to expand their business. Their main policy of business is to gain a social status so that more and more customers are encouraged to come and buy their products. Starbucks have always designed their outlets so that people can gather and enjoy the coffee. In addition to these, Starbucks also established community stores where some programs or trainings can be held along with the service of Starbucks coffee. Starbucks have always targeted unemployed youths to work for the company. In this policy, Starbucks have opened up job opportunities for the deserving youths who are yet to be employed. Starbucks is not unique in the sense that it has always provided high level benefits to its employees. There are many business organizations and other sectors that have done that before. However, these business organizations have long working hours and strict guidelines regarding the employee policies (AOL.com 2016). This is where Starbucks is unique. Starbucks do not force the employees for working long hours continuously and within strict guidelines. Starbucks have opened a number of short and long term programs that will be used to benefit the society as whole. Starbucks opened to Starbucks Foundation for charity purposes and serving the community. The basic goal of Starbucks in this program is to go beyond their business and support the community. Community Service is another dedicated program for management and sharing of resources. Another point to be noted is that, Starbucks has not grown rapidly because of its ethical and socially responsible activities or because it provides products and an environment that customers want; Starbucks has grown due to proper balancing of both the aspects. For all these reasons, Starbucks have become one of the largest selling coffee product companies in the world.

Starbucks is a business organization that deals with the business of coffee and coffee products. It is one of the world’s most popular business organizations with the customer base spreading throughout the world. There are several reasons behind the popularity and expansion of the company (Chua and Banerjee 2013). The corporate strategies, employee benefits and growth policy have made Starbucks a successful business organization. From the start of the business, Starbucks authority has emphasized on maintaining a social reputation in order to expand their business. Their main policy of business is to gain a social status so that more and more customers are encouraged to come and buy their products. Starbucks have always designed their outlets so that people can gather and enjoy the coffee (Stinson 2014). In addition to these, Starbucks also established community stores where some programs or trainings can be held along with the service of Starbucks coffee. Starbucks have always targeted unemployed youths to work for the company. In this policy, Starbucks have opened up job opportunities for the deserving youths who are yet to be employed (Michelli 2013). In addition to these, Starbucks have opened a number of short and long term programs that will be used to benefit the society as whole. Starbucks opened to Starbucks Foundation for charity purposes and serving the community. The basic goal of Starbucks in this program is to go beyond their business and support the community. Community Service is another dedicated program for management and sharing of resources (Wu 2013). There are many business organizations that either try to attract customers with the product quality or the low price of products. However, in these cases, a slight dip in quality or hike in price leads to customer dissatisfaction and drop of the popularity value. On the other hand, Starbucks provide the best quality product at affordable prices and in addition provide a beautiful environment as well as community support (Bowen and Sisson 2013). The advantage of this strategy is that, due to the community support and other steps taken by the company, the customers are automatically attracted towards the company.

Reasons for Popularity

There are many other aspects of Starbuck’s business that are discussed in the report like, employee benefits, organization growth policy and others. All these factors have been discussed in due course in this report.

Starbucks is concerned with social responsibility in its overall corporate strategy due to the fact that their main business policy is to maintain the sociological aspect within their business. The main reasons are as follows:

Business Policy – From the beginning of the business, Starbucks authority has emphasized on maintaining a social reputation in order to expand their business. Their main policy of business is to gain a social status so that more and more customers are encouraged to come and buy their products (Aiello and Dickinson 2014). They believe that if they can serve the society well, their business will automatically expand.

Social Hub – Starbucks design their stores so that a large number of people, mainly in groups can gather together and enjoy the coffee in a free social environment. Starbucks have always designed their outlets so that people can gather and enjoy the coffee (Tu, Wang and Chang 2012). In addition to these, Starbucks also established community stores where some programs or trainings can be held along with the service of Starbucks coffee.

Opportunity for Youths – Starbucks have always targeted unemployed youths to work for the company. In this policy, Starbucks have opened up job opportunities for the deserving youths who are yet to be employed (Pierce 2015). With this policy, Starbucks have appointed thousands of youths throughout the world. Overall, Starbucks has promoted the growth of the society in their retails’ locality.

In addition to these, Starbucks have opened a number of short and long term programs that will be used to benefit the society as whole. Some of these programs are as follows:

Starbucks Foundation – Starbucks opened to this program for charity purposes and serving the community. The basic goal of Starbucks in this program is to go beyond their business and support the community (Brown 2014). Through this program, Starbucks support the youth as well as the older generation.

Community Service – The main objective of Starbucks in this program is to support the community for development and growth (Sebhatu and Enquist 2014). This also involves a dedicated program for management and sharing of resources.

Farming Communities – Starbucks have always emphasized on the production of best quality of coffee and has offered support to the farmers of the coffee and tea plantations so they are able to provide the best quality coffee buds (Keenan and Evans 2014). Moreover, Starbucks have provided them support for their normal livelihood as well.

All these discussed programs managed by Starbucks have had significant impact on the local community where Starbucks opened their stores. In addition to a good atmosphere for gathering together and having the best quality coffee, the community support provided by Starbucks has attracted a large number of customers and leads to the increasing popularity of the company. This is actually the corporate strategy of the company (Gerhardt, Hazen, Lewis and Hall 2015). There are many business organizations that either try to attract customers with the product quality or the low price of products. However, in these cases, a slight dip in quality or hike in price leads to customer dissatisfaction and drop of the popularity value. On the other hand, Starbucks provide the best quality product at affordable prices and in addition provide a beautiful environment as well as community support (Di Giuli and Kostovetsky 2014). The advantage of this strategy is that, due to the community support and other steps taken by the company, the customers are automatically attracted towards the company. Further, when the quality of the products are always the best, the customers are attracted to come back over and over and this causes massive rise in popularity of the company. However, this popularity does not drop due to price hike or other similar issues (Busch and Moreno 2014). For this reason, Starbucks have gained massive popularity wherever they opened their store. With the increasing popularity, Starbucks ventured into the international market with branches abroad. With time, Starbucks have spread their business over 40 countries of the world. In every country, Starbucks have provided community support that has led to massive growth of the company (Smith Maguire and Hu 2013). Along with growth, the company has earned huge amount of revenue from every store, which in turn allowed the company to maintain a share of profit as well as provide community and social support. All these factors have led to the expansion of business of the company.

Corporate Strategy

Starbuck’s mission statement says that “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time” (Starbucks Coffee Company 2016). They have stuck to their mission statement throughout their business span and used the community and social support as a method for the expansion of business and gaining more revenue.

Starbucks is not unique in the sense that it has always provided high level benefits to its employees. There are many business organizations and other sectors that have done that before. However, these business organizations have long working hours and strict guidelines regarding the employee policies (AOL.com 2016). This is where Starbucks is unique. Starbucks do not force the employees for working long hours continuously and within strict guidelines. The benefits that the employees of Starbucks receive are as follows (as stated by the Starbucks Company):

“Free Stuffs – Each week, employees are allowed to choose either a pound of coffee beans (whatever blend they prefer), a box of K-Cup® Pods or a box of their favorite flavor of Tazo tea, to take home. Employees are also entitled to a 30 percent discount on all Starbucks food and drink.

Share of Restricted Stocks – Employees are entered in to the company’s “Bean Stock” program, which offers them shares of the company through Restricted Stock Units (which become actual company shares over time). So long as employees stay employed for one full year (fully, without breaks or prolonged absences), they’re eligible to receive the first 50 percent of the stock grant after that first year, followed by the second half after their second year working for Starbucks. Once the employee owns the full share, they are permitted to do whatever they want with them.

“Employees” or “Partners”? – Partially having to do with the stock ownership and partially in an effort to make everyone in the company feel more united and equally as valued, Starbucks management refers to their employees as “partners”.

Benefits Package – Starbucks offers extensive benefits packages that are customized for each employee, called “Your Special Blend.” Options include things like bonuses, 401 (k) matching plans, health/medical/dental plans, and even adoption assistance. The best part about the packages? Both part-time and full-time employees are eligible.

Education Support – Starbucks will pay their employees’ college tuitions. Yes, you read that correctly. Through 40 different online programs at Arizona State University, employees who are juniors and seniors in college can earn their Bachelor’s degree on the company’s dime, while freshmen and sophomores are eligible for their tuition to be partially paid for.” (Starbucks Coffee Company 2016)

There really isn’t a catch, as employees are not required to stay with Starbucks after they earn their degree. In addition, employees that are already in pursuit of a degree at another online institution can apply to transfer their credits to Arizona State and be eligible for Starbucks’ program.

All these benefits are unique to Starbucks only and attract a large amount of youths to join their business as an employee. Unlike other business organizations, Starbucks provide extensive support to their employees in addition to the huge number of benefits they receive.

Community Involvement

There is a general misconception of people regarding whether Starbucks has grown rapidly because of its ethical and socially responsible activities or because it provides products and an environment that customers want (Homburg, Stierl and Bornemann 2013). The thing is, neither one is solely responsible for the growth of the company. On the other hand, the company has grown because both the factors are used effectively with proper balancing. Starbucks have had significant impact on the local community where they opened their stores. In addition to a good atmosphere for gathering together and having the best quality coffee, the community support provided by Starbucks has attracted a large number of customers and leads to the increasing popularity of the company (Kang 2015). This can be defined as the corporate strategy of the company. The advantage of this strategy is that, due to the community support and other steps taken by the company, the customers are automatically attracted towards the company. Further, when the quality of the products are always the best, the customers are attracted to come back over and over and this causes massive rise in popularity of the company (Hopkins 2012). However, this popularity does not drop due to price hike or other similar issues. Along with growth, the company has earned huge amount of revenue from every store, which in turn allowed the company to maintain a share of profit as well as provide community and social support. Again, Starbucks has employee management programs and benefits that attract the youth to join the company. These benefits include free stuffs, share of restricted stock, education supports and other benefits no other business organization provide (McWilliams 2014). This has enabled the company to expand and gain huge amount of profit from the sales. Now, the company has started a number of programs with the help of a share of the profit in order to benefit the company. Starbucks opened Starbucks Foundation for charity purposes and serving the community (Idowu 2013). The basic goal of Starbucks in this program is to go beyond their business and support the community. Through this program, Starbucks support the youth as well as the older generation. Then they started Community Service. The main objective of Starbucks in this program is to support the community for development and growth. This also involves a dedicated program for management and sharing of resources. Finally, they started Farming Community Support (Cheng, Ioannou and Serafeim 2014). The company have always emphasized on the production of best quality of coffee and has offered support to the farmers of the coffee and tea plantations so they are able to provide the best quality coffee buds. Moreover, Starbucks have provided them support for their normal livelihood as well.

Analyzing all these factors, it can be seen that Starbucks has always maintained a balance between commerce and social service. The basic idea of their policy is to serve the community and people will help them grow their business in return (Walker-Said and Kelly 2015). They have always identified the specific social factors that must be supported that will benefit the company in the long run. Moreover, they supported the social factors as well as used them as a mean to expand their business over global market. However, the benefits provided by Starbucks as so huge that the customers have readily accepted the company’s actions and helped in the expansion of the business of company.

Employee Benefits

Conclusion

In the report, the business operations of Starbucks have been discussed and analyzed. From the report, it is clear that Starbucks have taken up a unique business strategy for the expansion of their business. Starbucks have designed community support to support the people. Starbucks authority has emphasized on maintaining a social reputation in order to expand their business. Their main policy of business is to gain a social status so that more and more customers are encouraged to come and buy their products and they believe that if they can serve the society well, their business will automatically expand. Starbucks have always targeted unemployed youths to work for the company. With this policy, Starbucks have appointed thousands of youths throughout the world. Overall, Starbucks has promoted the growth of the society in their retails’ locality. Starbucks opened to Starbucks Foundation for charity purposes and serving the community. The basic goal of Starbucks in this program is to go beyond their business and support the community. Community Service is another dedicated program for management and sharing of resources. Starbucks is not unique in the sense that it has always provided high level benefits to its employees. There are many business organizations and other sectors that have done that before. However, these business organizations have long working hours and strict guidelines regarding the employee policies. This is where Starbucks is unique. Starbucks do not force the employees for working long hours continuously and within strict guidelines. Starbucks employee benefits include free stuffs, share of restricted stock, education supports and other benefits no other business organization provide. All these factors have led to the rapid growth of the company worldwide. Further, the company has achieved massive success wherever they opened their retail stores. Another point to be noted is that, Starbucks has not grown rapidly because of its ethical and socially responsible activities or because it provides products and an environment that customers want; Starbucks has grown due to proper balancing of both the aspects. For all these reasons, Starbucks have become one of the largest selling coffee product companies in the world.

References

Aiello, G. and Dickinson, G., 2014. Beyond authenticity: a visual-material analysis of locality in the global redesign of Starbucks stores. Visual Communication, 13(3), pp.303-321.

AOL.com. (2016). Company of the week: 5 killer perks of working at Starbucks. [online] Available at: https://www.aol.com/article/2016/03/02/company-of-the-week-5-killer-perks-of-working-at-starbucks/21321716/ [Accessed 4 Jun. 2016].

Bowen, S.A. and Sisson, D.C., 2013, March. Starbucks, Reputation Management, and Authenticity: A Case Study of Starbucks’ United Kingdom Tax Crisis & “# SpreadTheCheer” Campaign. In 16TH INTERNATIONAL PUBLIC RELATIONS RESEARCH CONFERENCE (p. 110).

Brown, S., 2014. Starbucks Rolling Out Wireless Charging Mats To All US Stores. Science.

Busch, W. and Moreno, J.P., 2014. Banks’ New Competitors: Starbucks, Google, and Alibaba. Harvard Business Review.

Cheng, B., Ioannou, I. and Serafeim, G., 2014. Corporate social responsibility and access to finance. Strategic Management Journal, 35(1), pp.1-23.

Chua, A.Y. and Banerjee, S., 2013. Customer knowledge management via social media: the case of Starbucks. Journal of Knowledge Management,17(2), pp.237-249.

Di Giuli, A. and Kostovetsky, L., 2014. Are red or blue companies more likely to go green? Politics and corporate social responsibility. Journal of Financial Economics, 111(1), pp.158-180.

Gerhardt, S., Hazen, S., Lewis, S. and Hall, R., 2015. Entrepreneur Options:” Franchising” vs.” Licensing”(Mcdonald’s vs. Starbucks and Chick-Fil-A). ASBBS E-Journal, 11(1), p.80.

Homburg, C., Stierl, M. and Bornemann, T., 2013. Corporate social responsibility in business-to-business markets: how organizational customers account for supplier corporate social responsibility engagement.Journal of Marketing, 77(6), pp.54-72.

Hopkins, M., 2012. Corporate social responsibility and international development: is business the solution?. Earthscan.

Idowu, S.O., 2013. Encyclopedia of corporate social responsibility. Berlin: Springer.

Kang, J., 2015. Effectiveness of the KLD Social Ratings as a Measure of Workforce Diversity and Corporate GovernanceReactions to diversity in recruitment advertising—Are differences black and white? Executive compensation as an agency problemThe predictive validity of multiple-item versus single-item measures of the same constructsDoes stakeholder orientation matter? The relationship between stakeholder management models and firm financial performanceWomen corporate directors: Current research and future ….

Keenan, J. and Evans, A., 2014. ‘I am a Starbucks worker… my life no longer belongs to me’: the performance of estrangement as a learning tool.Teaching in Higher Education, 19(2), pp.101-112.

McWilliams, A., 2014. Economics of Corporate Social Responsibility. Edward Elgar.

Michelli, J., 2013. Leading the Starbucks Way: 5 Principles for Connecting with Your Customers, Your Products and Your People. McGraw Hill Professional.

Pierce, D., 2015. Spotify Is Turning Starbucks Baristas Into Coffee Shop DJs.

Sebhatu, S.P. and Enquist, B., 2014. Are Corporate Governance and Corporate Social Responsibility having a role for sustainable Service Business?: An explorative study of IKEA, Starbucks and H& M. In The 17th QMOD conference, September 3-5, Prague Tjeckien.

Smith Maguire, J. and Hu, D., 2013. Not a simple coffee shop: local, global and glocal dimensions of the consumption of Starbucks in China. Social Identities, 19(5), pp.670-684.

Starbucks Coffee Company. (2016). Mission Statement. [online] Available at: https://www.starbucks.in/about-us/company-information/mission-statement [Accessed 4 Jun. 2016].

Stinson, L., 2014. With Stunning New Stores, Starbucks Has a New Design Strategy: Act Local. Wired, January, 8.

Tu, Y.T., Wang, C.M. and Chang, H.C., 2012. Corporate brand image and customer satisfaction on loyalty: An empirical study of Starbucks Coffee in Taiwan. Journal of Social and Development Sciences, 3(1), pp.24-32.

Walker-Said, C. and Kelly, J.D. eds., 2015. Corporate Social Responsibility?: Human Rights in the New Global Economy. University of Chicago Press.

Wu, C.L., 2013. The Research of Brand Image, Experiential Marketing, Customer Satisfaction and Customer Loyalty-Example of Starbucks Coffee.