Starbucks Ethics - Research Proposal Example

Ethics in Organization Executive Summary Starbucks is one of the leading companies in the world in coffee making and the sale of coffee beverage. Thecompany has committed itself in creating an ethical environment and this has led to positive results. However, despite their attempts to enhance the ethical environment, there are some sections that need to be improved in order to make the ethical environment better. The paper will explore all the aspects of the company from its vision and mission to the organizational culture. More emphasis will be put on business ethics and the human resource ethics because they are very important in the success of the company. Introduction to the Company In 1971, Starbucks Coffee, Tea and Spice was founded by three atypical businessmen in Seattle, Washington. The three men responsible for the Starbucks launch were Jerry Baldwin, Gordon Bowker, and Zev Siegel; the three shared a number of interests but their major reason for starting the company was the love for tea and coffee and the yearning for Seattle to gain access to the best. The growth of the company was slow and by 1981, it had four retail stores and a roasting plant and they sold in Seattle whole bean coffee (Stanley 2002, p2). By 1982, Starbucks captivated Schultz and he convinced Baldwin to employ him in marketing. In 1983, Schultz was sent to Italy by Starbucks. While in Italy, he aspired to re-create the romance and magic behind the Italian coffee bar culture through serving espresso in a cup. It took a while (a year) before he convinced Starbucks to serve espresso drinks; he was permitted to test the ideology when a 6th store was opened by Starbucks in Seattle downtown. The idea sold within two months and they were serving close to 800 customers in a day – three times better than their previous sales (Stanley 2002, p2). The following years witnessed tremendous changes to Starbucks. Schultz promised the investors to open 125 Starbucks stores in a period of five years using the original II Giornale business plan. By 1987, the company had expanded into Portland, Chicago, and Vancouver. At this time, Schultz employed seasoned executives to assist in the growth of the company. By 1991, the company had ventured into licenced airport stores, mail-order catalogue business, and had stretched to California; the retail stores were over 100 and Starbucks went public in 1992. Within a period of 5 years, the company has stores in Japan, U.S. and Singapore. By 2002, the company had over $3.3 billion in yearly revenues and 5,800 locations in 30 countries that served around 20 million customers per week (Stanley 2002, p3). Vision and Mission The mission of Starbucks is “to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time” (StarbucksCorporation 2011, p1). The mission is built on the following principles: Our Coffee – quality coffee is the key thing. The company is fervent about ethically providing the finest coffee beans, roasting them under great care, and enhancing the lives of the individuals who grow them. Our Partners – it is a passion for the company to be called partners. Together with other partners, the company strives to embrace diversity in order to develop a place where each individual can be him/herself. Treating each other with dignity and respect is vital (StarbucksCorporation 2011, p1). Our Customers – the company aims at engaging and connecting fully, and uplifting the lives of their consumers even if it is for a short while. This is fulfilled by the promise to make a perfect beverage and the human connection. Our Stores – when the customers are satisfied with the services, the stores become a haven that is free of worries and it becomes a place where individuals can meet friends. It is all about enjoying the speed of life – sometimes faster and at other times savoured and slow and it is always full of humanity (StarbucksCorporation 2011, p1). Our Neighbourhood – every store is a part of the community and the company takes seriously the responsibility of becoming a good neighbour. The company yearns to be invited anywhere it does business. The company asserts that it can be a power for positive action that is bringing together customers, partners and the contribution of the community on a daily basis. Our Shareholders – as the company delivers in the mentioned areas, it enjoys the type of success that rewards its shareholders. The company is accountable to have each of the elements right so that the company and everyone it associates can thrive and endure (StarbucksCorporation 2011, p1). Objectives and Strategies The mission statement of Starbucks has the following guiding principles and objective. The objective of the company is to establish Starbucks as the premier source of the supreme coffee in the universe and at the same time maintaining uncompromising principles while the company grows. The following six principles assist in guiding the company on how to measure the appropriateness of the decisions it makes: Learning how to embrace diversity as one of the main essential component of Starbuck’s way of doing business. Treating each other with the appropriate respect and dignity as this helps in providing a great social working environment. Contributing positively to the development of the community and the environment at large. Discovering and applying the highest standards of excellence when purchasing, roasting and delivering Starbuck’s fresh coffee. Developing a friendly attitude towards the customer so as to get devoted and satisfied customers all of the time. Recognizing that getting more profit is the main aim of Starbuck’s future success (Lomax and Stokes 2008, p175). The company has adopted marketing strategies and tactics. Starbucks marketing strategy puts emphasis on the employee and customer satisfaction and it is very close to the corporate strategy of the company. Marketing tactics that Starbucks has adopted include the installation of automatic espresso machines in order to speed up the services and it provides prepaid cards to reduce the transactions costs by half. The company has launched Starbucks Express which permits the consumers to pay and order through the website. Starbucks outlets have high-speed internet connections in order to attract the young consumers (Lomax and Stokes 2008, p175). Company Present Situation Business Ethics Starbucks believes that the success of the company is basically achieved by conducting business justly and the motivation to do things in the right manner. Business ethics and compliance is considered and taken to be a very important program that helps to support and uphold Starbucks’ mission. This program mainly supports the Starbucks culture and reputation by providing resources that are of great help to partners when making ethical choices at work (StarbucksCorporation 2011, p1). The program also helps in the development and distribution of awareness materials, standards of business conduct; it aids legal agreement and ethics training, provides possible ways for partners to voice their main concerns and it also helps when investigating sensitive (responsive) matters such as potential conflicts of interest. Partners in the company are encouraged to bring forth any kind (and all types) of issues and concerns that concern the program through their own choice of the various communication channels offered (StarbucksCorporation 2011, p1). Majority of the reports that are received through Business Ethics and Compliance normally entail employee’s related issues and concerns. The style of this program is common in other companies (that trade or otherwise provide other ways of reporting mechanisms that are part of the comprehensive ethics and compliance program) (StarbucksCorporation 2011, p1). Social Responsibility of the Business Since the inception of the company in 1971, the company has dedicated itself to gaining respect and trust of the consumers, neighbours and partners. This can only be achieved by doing good things to others and the planet and by being responsible. The social responsibility is dispersed into the following areas; community, environment, ethical sourcing, wellness, and diversity. Community – as good neighbours, the company is involved with the local efforts to get people together and develop a positive change as much as they can. In order to serve the community better, Starbucks is involved in Community Service, Youth Action, (STARBUCKS) RED, Starbucks Foundation, and Ethos® Water Fund (StarbucksCorporation 2011, p1). Environment – the company is looking for ways to reduce its environmental footprint, tackle climate and inspire the rest to do the same thing. The company shares its consumers’ commitment to the environment. The company relies on the agricultural products and this makes some good sense in business. The company is involved in recycling, energy, water, green building, and climate change. Ethical Sourcing – Starbucks is committed to serving and buying responsibly grown, ethically traded, and highest-quality coffee in order to assist in the creation of a better future for the farmers. The goal of the company is to make sure the coffee is grown under standards that are of high quality using responsible growing practices and ethical trading (StarbucksCorporation 2011, p1). Wellness – Starbucks dedication to wellness means that it supports policies and efforts that are meant to enhance the health of the community. This is done in addition to providing beverage and balanced food options to its consumers. Starbucks provides a variety of delicious food and beverage options to the desires of its customers. Diversity – the company welcomes a diversity of ideas and people to its business. It creates more opportunities for success and learning and this benefits the suppliers, partners (employees), and consumers. Starbucks is committed to adopting a culture in which diversity id respected and valued (StarbucksCorporation 2011, p1). Corporate Governance The board of directors of Starbucks has adopted committee charters and governance principles in order to lead the company. The Starbucks Corporate Governance Principles and Practices for the Board of Directors state that the vital responsibility of the board of directors of the company is to uphold the company’s best interests and those of the shareholders through controlling the management of the business affairs of the company (Bussing-Burks 2009, p79). Human Resource Ethics Starbucks came to the realization the success of the retail business was based on a committed and motivated human resources. The company’s human resource gives a reflection of its obligation to its employees. Starbucks relied on the frontline staff and baristas extensively in the creation of Starbucks Experience and this differentiated it from its competitors. Therefore, Starbucks pays much attention to the type of people it employs. Starbucks recruitment motto states “To have the right people hiring the right people” (IBS Center for Management Research 2005, p1). Starbucks hires people based on qualities such as dependability, capability of working as a team, and adaptability. The company frequently states the qualities it looks for in the recruitment of its employees when it posts the jobs and this permits the prospective employee to assess themselves to a particular extent. After the selection of the desired employees, Starbucks invests in training these individuals in the skills they would need to conduct their jobs successfully. Starbucks is one of the few retail companies that has invested significantly in employee training and offer comprehensive training to all the classes of employees (IBS Center for Management Research 2005, p1). The mission statement indicates the type of belief it has on its employees “Provide a great working environment and treat each other with respect and dignity” (Hawks et al. 2002, p1). The management of the company understands that the growth of the company is based on the employees. Starbucks employees are identified as partners despite the job position they hold. The cultural values of the company offer the employees a sense of meaning in their work. Each partner is eligible to get healthcare, receive a free pound of coffee weekly, and take part in the Bean Stock program. The Starbucks employees also take part in the 401(k) profit sharing plan (Hawks et al. 2002, p1). Organizational Culture The Starbuck’s organizational culture has helped it a lot by promoting its main set of values. The mentioned principles have helped Starbucks to assess the appropriateness of its decision and how the decisions might help in the organizations success (Dunne 2004, p3). The organizational culture of Starbucks is based on creativity and innovation. This can be ascertained by the continuous creation of exciting and new products. Starbucks is setting the trend in the coffee market when it comes to new ideas and products, for example, the introduction of new 4-cup thermal coffeemaker and Starbucks ‘DoubleShot’ Espresso beverage. The creativity and innovation make contribution to the overall improvement of the consumer experience (Hawks et al. 2002, p1). Research Methodology There are two approaches in research methodology: qualitative and quantitative research methodologies. Qualitative research methodology is the suitable method in this case because it concerned with the understanding of the behaviour of people; that is their beliefs, attitudes, fears, and knowledge. In other words, it is a subjective approach which entails reflecting and examining an individual’s perception in order to have an understanding of the human and social activities (Ni and Santamaria 2008, p3). There are a number of research instruments used in qualitative research; interviews, e-mail interviews, pre-code interviews, open interviews, documentary research, and information sources on the internet. Interviews can be utilized to interview the managers of the company because they can be resourceful in offering information unknown and new information that cannot be found on the internet (Ni and Santamaria 2008, p3). Documentary research involves getting information from the documents and texts that come from videos, reports, journals and other research sources. This method is advantageous because there are many sources available to get information and they offer a variety of perspectives from different people (Ni and Santamaria 2008, p4). The internet is also a source of information because there are numerous sources for research that can be found in the databases, libraries, company homepages, and e-journals (Ni and Santamaria 2008, p5). Limitation in Research Documentary research and information sources on the internet have their own limitations. The data obtained from documentary research may be unreliable and finding credible sources is quite difficult. Finding relevant information about a particular company is not easy (Ni and Santamaria 2008, p4). Though internet is rich in information, one has to be careful when selecting documents because there are useful documents and others which are not useful. There are other internet sources that are not reliable (Ni and Santamaria 2008, p5). Recommendations The Human Resources can enhance the ethical environment of Starbucks by expanding its incentives in the provision of services to both the partners and the consumers. The company can expand its organizational culture – by creating more room for creativity and innovation in each of its retail regions worldwide. Corporate governance rests only within the realms of the managers – offering the partners a chance to making key decisions in corporate governance can enhance the ethical environment of Starbucks. Conclusion Since the inception of the company, there have been attempts to enhance the ethical environment of Starbucks. The ethical environment touches on all the key stakeholders of the company such as the partners, the consumers, suppliers, and the community. Each plays a vital role in the enhancement of the ethical environment of Starbucks. The mission statement of the company also captures the ideology of creating an ethical working environment. Starbucks believes that the company’s effectiveness can be achieved by conducting business justly and motivating the stakeholders to do things in the right manner. The six principles and the objective also show the kind of commitment Starbucks is putting on its partners, community and the consumers. References Bussing-Burks, M. (2009) Starbucks. Santa Barbara, CA: ABC-CLIO. Dunne, D. (2004) The Starbucks brand. University of Toronto: Joseph L. Rotman School of Management. Hawks, M., Kembell, B., Kembell, S., Olsen, L. & Perry, L. (2002) Catching the Starbucks fever [Online], Academic Mind. Available from: [Accessed on 9 June 2011]. IBS Center for Management Research. (2005) Starbucks’ human resource management policies and the growth challenge [Online], ICMR. Available from: [Accessed on 8 June 2011]. Lomax, W. & Stokes, D. (2008) Marketing: A brief introduction. London, UK: Cengage Learning EMEA. Ni, S. & Santamaria, B. (2008) Entry modes of Starbucks, Thesis (Masters), Malardalen University. Stanley, A. (2002) Starbucks coffee company. Dartmouth: Tuck School of Business at Dartmouth. StarbucksCorporation. (2011) Being a responsible company [Online], Starbucks. Available from: < http://www.starbucks.com/responsibility> [Accessed on 8 June 2011]. StarbucksCorporation. (2011) Business Ethics and Compliance [Online], Starbucks. Available from: [Accessed on 8 June 2011]. StarbucksCorporation. (2011) Our Starbucks mission statement [Online], Starbucks. Available from: [Accessed on 8 June 2011]. Read More