What Ethical Consumerism means for Starbucks - Essay Example

Executive Summary This paper will present a critical review of ethical consumerism and its application at Starbucks. The writer will define ethical consumerism, discuss its benefits and explain how Starbucks has dealt with it. The paper will also include results of an opinion survey conducted among 14 students at GSM London. These results will inform the writer’s position regarding ethical consumerism and the effects of ethical consumerism on organisations and customers. The writer will also provide a comprehensive conclusion that reaffirms the arguments made regarding the subject of the paper. The conclusion will include a critical assessment of ethical consumerism in lieu of the evidence collected from primary and secondary research. The assessment will be limited to Starbucks. Finally, the paper will present recommendations as to how Starbucks can become more ethical. Introduction Consumers always want to be associated with products or services that are “clean,” meaning they do not bear any mark of malpractice. This orientation is influenced by many things, but it forms part of consumers’ personal philosophy. With natural resources becoming increasingly limited, and the degradation of human principles becoming increasingly blatant, governments and consumers have shifted attention to sustainable business practices. The sustainability message has been spread widely since the advent of the 21st century, and its core lies ethical consumerism (Binkley & Littler, 2014:29). Globalisation has made society more interconnected, so much so that negative situations at one end of the globe are felt another end. A century ago, consumers did not care much about the methods used to deliver products and services provided they satisfied their needs. However, globalisation has ensured that unethical and immoral business practices affect consumers around the world in one way or the other. This explains the increasing popularity of ethical consumerism. This paper will discuss the various dynamics surrounding the concept. What is Ethical Consumerism? Ethical consumerism, also known as positive buying, can be defined, first, as a variant of consumer activism. Its basis lies in the belief that consumers should have a say in the products and services they pay for, and that they should be recognised and respected as valuable members of the supply chain. Ethical consumerism is guided by the notion that all purchases are motivated by moral choices (Lekakis, 2013:36). Consumers pay for goods and services to satisfy a need or because their moral instincts are triggered by a certain product or service. In addition, consumers are naturally inclined to associate with positive aspects and will avoid, if possible, anything that compromises their moral values. As such, ethical consumerism leads customers to gravitate towards businesses with good ethical and moral images. It also encourages consumers to dissociate from business that disregard social, environmental, and ethical responsibility (Lekakis, 2013:38). Ethical consumerism is a wide concept that stretches from rights to moral obligations. For example, respect for animals is seen by some consumers as a major indication of adherence to ethical obligations. As a result, such consumers will avoid paying for, or being associated with, businesses whose operations involve, in any way, violation of animal rights. Benefits of Ethical Consumerism This section warrants an introduction using a quote from the Rio Declaration. Principle 8 of the Declaration states that,” To achieve sustainable development and a higher quality of life for all people, states should reduce and eliminate unsustainable patterns of production and consumption….” This quote summarises not just the logic but also the benefits of ethical consumerism. It is also important to state that although these benefits cut across the board, customers are the biggest winners (Mruthyunjaya, 2013:15). Ethical consumerism encourages sustainable production and consumption and, in turn, supports a higher quality of life for all people. For consumers, ethical consumerism gives them voice and power. For as long as business has been practiced, companies have always been reluctant to safeguard the welfares of the customers and ensure that they develop mutually beneficial and sustainable relationships. Most businesses, especially large companies, tend to deny consumers the audience they need to voice their opinions about businesses. Some big businesses are so insensitive to consumers that they do not pay attention to any views expressed by consumers. Ethical consumerism solves this problem by giving consumers the power to check businesses. It protects them from the excesses common in the business world and cushions them against the aftershocks of ethical malpractices (Rocklinsberg, 2014:53). For businesses, ethical consumerism helps to ensure that they can operate sustainably, especially in terms of access to raw materials, new markets, and long-term growth. The greed typified by the modern business world leads to an unnecessary scramble for resources and the denial of business opportunities to worthier companies (Wetherly & Otter, 2014:71). For example, ethical consumerism compels businesses to heed the social and environmental implications of their operations so that future organisations and current and future generations of consumers can exist in a benevolent world supports growth. Environmental conservation, social responsibility, business ethical obligations, and mutual benefit are some of the benefits companies can enjoy from ethical consumerism. Ethical Consumerism at Starbucks Starbucks exhibits one of the most innovative variants of ethical consumerism. It not only upholds ethics, but also promotes a philosophy of ethical consumerism that has made it a favourite among positive buyers (Stolle & Micheletti, 2013:24). However, the company did not always support ethical consumerism this vehemently. Prior to the demonstrations accompanying the World Trade Organisation (WTO) conferences in Seattle in 1999, Starbucks did not sell Fair Trade certified coffee (Stolle & Micheletti, 2013:26). Many customers and non-consumers had complained that the company violated several Fair Trade requirements in selling coffee and, consequently, negatively affected (directly and indirectly) consumers and non-consumers. Loss of jobs and corruptive practices were cited as some of the problems encouraged by Starbucks’ flaunting of Fair Trade rules. The 1999 protests proved to be a defining episode for consumer awareness of their own liability in the adverse social and environmental effects of multinational corporations (MNCs). However, it had a lasting impact on Starbucks’ ethical orientation. After facing enormous pressure from consumers and activists, the company started sourcing a substantial amount of Fair Trade coffee to advertise its support for ethical consumerism (Pellandini-Simanyi, 2014:48). The company also started publishing its annual corporate social responsibility (CSR) reports which, unsurprisingly, is now the norm for big businesses. This was followed by extensive corporate dedication to socially conscious sourcing and holistic production, as well as an increase in ethical certifications and designations. These developments inspired debate over the importance of ethical capitalism and ethical consumerism. Scholars started questioning whether the two concepts represented shifts towards sound egalitarian reform for the world’s poor (Lewis & Potter, 2013:27). Did they imply optimism for a sustainable planet? Or are they just ceremonial adjustments to please opponents of an extremely problematic mechanism of global production and consumption? Currently, ethical consumerism is so entrenched at Starbucks that when consumers purchase coffee they also buy a philosophy. This is the philosophy of social and ethical responsibility. When a consumer enters one of the company’s outlets, there are often posters on which a message is displayed that explains that although the company’s cappuccino is more costly than others, Starbucks donates 1 percent of all its revenues to disadvantaged people around the world to support development projects involving clean water, health, environmental conservation, organic cultivation of coffee, etc (Kaufmann, 2014:19). This is a very admirable and ingenious approach to ethical consumerism and ethical responsibility, which have quickly become part of Starbucks’ image. Thirty years ago, a customer could make a purchase at Starbucks and feel guilty about buying the company’s expensive products while people suffer across the world. The company has ensured that customers can spend money without feeling guilty; by using part of its income to sponsor just causes. Starbucks has helped consumers, and itself, to fight pure, regressive consumerism. Both parties can support charitable and socially conscious causes and still enjoy the freedoms they deserve. Starbucks is helping its high-end consumers to spend without feeling guilty about their status. It is also forcing them, indirectly, to support ethical consumerism. Currently, any consumer who goes to one of its outlets and sees the messages on its posters will be drawn towards the company (Agle, Hart, Hendricks, & Thompson, 2014:42). In fact, most consumers think that they are justified in buying the company’s products because they are, ultimately, supporting worthy causes somewhere. The business has already included the cost of countering consumerism (and promoting ethical consumerism) in the prices of its products. Pay a little more, and you will be fulfilling your duty towards the society and the environment. Results of Opinion Survey The survey interviewed 14 students at GSM London. All students stated that they would not like to be associated with any business that tolerates or engages in the violation of animal rights. All students also agreed that sustainability in business depends on a conscious use of natural resources and environmental conservation. 10 out of 14 students stated that they supported the notion that businesses have an obligation to support the society, since their existence and success depends on the society. 3 students rejected this notion while 1 student did not answer the question. 12 out of 14 students stated that they did not pay for or associate with unethical companies. The remaining 2 students answered that so long as they met their needs they did not care about the ethical dynamics of products or services. Conclusion Ethical consumerism should be embraced by all stakeholders in the global business environment. It is becoming increasingly obvious that everybody has something to gain or lose from ethical consumerism, and that is why it needs to be managed better. The results of the survey show that the average consumer has high regard for ethical companies, but sometimes they are given limited freedom to choose. In the current business climate, businesses are pushing consumers to believe that they cannot choose freely and influence their operations. However, the discussion on Starbucks shows that smart businesses understand and are ready to embrace ethical consumerism. In spite of this, some businesses also practice false ethical consumerism. This involves conducting their activities in a seemingly ethical manner while engaging in malpractices. This is common in big businesses where secrecy is encouraged to support profitability via ulterior actions. Recommendations First, Starbucks should not rely on government regulations alone; this should be the preserve of companies that are only after conformity. For a business as renowned as Starbucks, more responsibility and ambition should be exhibited. This might involve developing its own ethical standards that compliment those stipulated by authorities. The company should observe market trends and patterns and design its code of ethics to be as flexible as possible so that it can adapt to industry changes. Secondly, Starbucks should collaborate with its customers and stakeholders in improving its ethical standards. These entities can contribute to the enhancement of the company’s code of ethics so that it builds and sustains a culture of ethical responsibility that is commensurate with its differentiation strategy. The company can also engage suppliers and government agencies in efforts to promote ethical consumerism and remain in customers’ good books. Thirdly, Starbucks should develop partnerships with businesses and organisations that believe in and encourage ethical consumerism. The company can collaborate with non-governmental organisations as well as other players in the industry to develop sustainable, ethical standards that ensure that the environment, the society, and the business coexist in perfect harmony. References Agle, B., Hart, D., Hendricks, H. & Thompson, J. (Eds.). (2014) Research companion to ethical behaviour in organisations constructs and measures, London, Edward Elgar Publishing. Binkley, S. & Littler, J. (Eds.). (2014) Cultural Studies and anti-consumerism, Hoboken, Routledge. Kaufmann, H. (Ed.). (2014) Handbook of research on consumerism in business and marketing: concepts and practices, New York, IGI Global. Lekakis, E. (2013) Coffee activism and the politics of fair trade and ethical consumption in the global North political consumerism and cultural citizenship (Illustrated ed.), Basingstoke, Palgrave Macmillan. Lewis, T. & Potter, E. (Eds.). (2013) Ethical consumption: a critical introduction, Milton Park, Abingdon, Oxon, Routledge. Mruthyunjaya, H. (2013) Business ethics and value systems, Chicago, PHI Learning Pvt. Pellandini-Simanyi, L. (2014) Consumption norms and everyday ethics, New York, Palgrave Macmillan. Rocklinsberg, H. (Ed.). (2014) The ethics of consumption: the citizen, the market and the law, EurSafe 2013, Uppsala, Sweden, 11-14 September 2013, London, Springer. Stolle, D. & Micheletti, M. (2013) Political consumerism global responsibility in action, New York, Cambridge University Press. Wetherly, P. & Otter, D. (Eds.). (2014) The business environment: themes and issues in a globalising world (Illustrated ed.), Oxford, Oxford University Press. Appendix 1. Do you pay for products or services associated with unethical companies? Yes No 2. Do you support the notion that businesses have an obligation to support the society? Yes No 3. Do you think that business sustainability is linked to environmental and resource conservation? Yes No 4. Would you associate with any business that tolerates or engages in the violation of rights (employee, animal, human rights, etc.)? Yes No Read More