Ethical Consumerism at Starbucks - Case Study Example

Executive summary The issue of ethical consumerism has increasingly become popular of late with consumers demanding that companies engage in ethical practices in the processes that bring their offerings in the market. This is the reason behind many organizations increasingly engaging in ethical practices in their bid to survive in the modern market. As such, companies nowadays do their best to avoid practices that are harmful to the society and the environment. Starbucks Company is an example of a company that has embraced ethical practices in its normal operations in a bid to ensure it survives in the market. This is seen in the various strategies it has put in place to ensure that its practices are ethical. A survey conducted on consumers has also revealed the importance of ethical consumerism. Table of Contents Executive summary 1 Table of Contents 2 Introduction 3 Overview of ethical consumerism 3 Ethical consumerism at Starbucks 5 The results of a short opinion survey 6 Conclusion 7 Recommendations 8 References: 9 Ethical consumerism: A case study of Starbucks coffee firm Introduction Owing to increased activism as well as increased consumer awareness, companies have increasingly embraced ethical practices in support of ethical consumerism. Companies now increasingly ensure that their practices, products and services are not harmful to the society as well as the environment. The emergence of global warming owing to environmental degradation has also been a necessitating factor for companies to engage in ethical practices. For companies to attract and retain customers, it has almost become mandatory for them to engage in ethical practices. Consumers on the other hand have increasingly adopted ethical consumerism and it is now common for them to boycott products from companies that fail to engage in ethical consumerism (James, 2008). This shows the importance of ethical consumerism. This paper examines the issue of ethical consumerism and why companies ought to embrace it. In so doing, the paper briefly examines the concept detailing why companies ought to embrace it. The paper then conducts an analysis of Starbucks as a company claiming to engage in ethical practices before detailing the results of a survey conducted on 15 students on factors that influence their buying behavior as consumers. The paper concludes by stating that companies ought to embrace ethical practices if they are to remain relevant in today’s market and also gives recommendations on what Starbucks ought to do as a company that embraces ethical consumerism. Overview of ethical consumerism Ethical consumerism is concerned with the avoidance of such evils as abuses of workers and consumers by organizations as well as environmental degradation. It is worth noting that buying from any organization and hence being a consumer cannot be separable from a tacit endorsement of the evils carried out by the organization in the name of making profits. Thus, ethical consumerism calls for one to purchase goods and services that are produced and manufactured in a way which minimizes environmental as well as social damage and boycotting/avoiding products or services believed to be harmful to the society or the environment (Tim, 2015). In this regard, ethical consumerism calls on the consumers to purchase healthy products unable to harm their health or the health of the society at large and also unable to harm the environment. In this regard, consumers would avoid such products as junk foods likely to lead to obesity. Ethical consumerism would also involve boycotting products or services offered by organizations engaging in such unethical practices as child labour. Ethical consumerism is mainly concerned about products falling into the ethical category. Such products include fair trade goods, organic produce such food and fabric products, energy efficient light bulbs, production of electricity from renewable sources, recycled paper as well as wood products that are produced with permission from environmental management agencies (Hilton, 2003). It also includes services such as tourism and travel as well as engaging in ethical financing. As such, companies that are involved in the production of such products ought to comply with the ethical standards that apply to their industries. For example, a beverage production company such as Starbucks ought to ensure that the products it offers its customers are devoid of harmful effects to their health. The electricity providers on the other hand ought to ensure minimum pollution to the environment by endeavoring to provide clean energy to the consumers. Ethical consumerism is a good strategy for business to adopt since it will ensure that the rate of resources consumption never exceeds their replenishment for the sake of continued supply to the companies themselves (Co-operative.coop, 2015). The business will also earn good reputation from its ethical practices as they care about the environment and stakeholders thus attracting and retaining customers easily. Ethical consumerism will also ensure businesses avoid problems with the law since its activities don’t impact negatively on the society. For instance, a company that has a child labour avoidance policy will obviously be in the right side of the law as far as child labour is concerned. Ethical consumerism at Starbucks This is an American international coffee firm chain with its headquarters in Seattle, Washington and it has operations in the UK also. The company claims to be operating ethically through its application of differing approaches aimed at remaining ethical at all times. In this regard, the company ensures it actively complies with the rules and regulations that govern the industry. Although the company has in the past been blamed for exploiting its suppliers mainly based in the third world thus earning itself a bad reputation. However, the company has successfully dealt with this challenge by employing measures that are aimed at complying with fair trading standards (Michael, 2013). This includes the company paying the right price for the coffee in a bid to afford farmers good returns so that they can live comfortably. The company has also been able to comply with food and drugs administration (FDA) regulations thus enabling the company offer products that are healthy and not harmful to consumer’s health. The company has also been able to establish its own ethical principles that aimed at determining and guiding staff conduct and behaviors and hence ensures that its product are produced in an ethically correct manner. For example, members of staff are expected to deal with each other respectfully. They are also expected to offer the best quality of customer service thus ensuring high degree of customer satisfaction. Starbuck management has also been charged with the responsibility of ensuring that the workers are treated with utmost respect and in a manner that makes them partners in achieving the Starbucks vision (Nri.org, 2015). In this regard, cases of employee discrimination, unequal treatment as well as mistreatment are avoided at all costs. This ensures that employees remain motivated at all times. The company also ensures that employees’ freedoms and rights are respected at all time. Another notable ethical principle adopted by the company is that it does not entertain any form of child labour neither does it entertain forced labour in any of its establishment. The company also has a policy of ensuring that its suppliers produce their products in a child labour free environment. The company also has a policy of sourcing the best coffee beans for use in its products. The same principles apply to all other ingredients or items that the company uses in its products. The use of high quality law materials is believed to result in high quality products in turn. As such, the company avoids using any substandard materials at all costs so that the quality of its products is not compromised in an attempt to cut on costs (starbucks.co.uk, 2015). This in turn ensures that its products are not harmful to consumers’ health. Other aspects of ethical principles adopted by Starbucks include its engagement in corporate social responsibility activities. In this regard, the company has a principle of always avoiding engagement in practices likely to have a negative impact on the environment. For example, the company ensures that it has treated all its wastes before their disposal in a bid to ensure their safety to the environment (Slavoj, 2015). This ensures that its activities do not contribute to environmental degradation. The company’s engagement in corporate philanthropy is another ethical practice that Starbucks uses with an aim of benefiting the society. For instance, the company is known to support coffee farmers in the third world countries where it sources its coffee beans with an aim of improving their coffee bean quality. Furthermore, farmers are aided with information on how to maximize their returns from coffee. All these activities portray the company as an organization that engages in ethical practices. The results of a short opinion survey The survey was aimed at examining the factors that influence consumer buying behavior as well as the role of ethical consumerism in consumer buying behavior. Based on the results, ethical consumerism has a great role to play in influencing consumer behavior as well as corporate practices. It is worth noting that of the 15 students’ interviewed, 10 students stated that ethical behavior by companies has a great role to play in influencing their decision to buy and hence consume their products (Harrison, 2005). The remaining five students were of the view that it is the consumer who should compel companies to engage in ethical practices by only buying products from companies that engage in ethical practices while shunning those companies that do not. The survey also revealed that consumers are mostly influenced by personal and social factors in making their buying decisions. Five of the students interviewed stated that they make their purchase decisions on the basis of the advice they get from their friends and families. Thus, this shows the need for corporates to engage in ethical practices owing to the fact that people can advise one another to boycott goods produced through unethical practices. The vice versa is true. On the other hand, seven of the interviewed students cited personal factors including their economic circumstances, status, lifestyle and occupation as greatly influencing their buying behavior. However, it was clear from all the respondents that the quality of the product being bought as well as the brand plays a great role in influencing their buying decisions. Regarding the role of ethical practices in influencing their consumer behavior, 9 of the students interviewed in the survey stated that ethical practices are so important to them that they would discontinue buying from companies found guilty of engaging in unethical practices. Though the remaining 6 students also consider ethical practices to be important, they stated that they would still continue sourcing from the company especially where there are no alternatives. With alternatives however, they would consider buying from the alternative. This is an indication of how much influence ethical consumerism could have on the company’s decisions to engage in ethical practices. The fifteen students also cited past experience with the company’s product as influencing their purchase behavior. This is an indication of the importance of the company in engaging in ethical behaviors while satisfying the customers’ needs in a bid to encourage repeat purchases. Thus from the survey, it can be revealed that ethical consumerism is a vital factor in influencing consumer buying behavior and hence companies that fail to engage in ethical practices stand to become irrelevant in the market. Conclusion As can be seen from the above analysis, Starbucks provides an example of companies that have realized the extent to which ethical consumerism influences consumer behavior as far as purchasing a company’s products is concerned. It has been revealed that the company endeavors to comply with all rules and regulations that govern the industry in a bid to ensure that consumers are provided with healthy products. The company has also put in place and internal code of principles and standards aimed at ensuring ethical practices in the company. Furthermore, the company does not condone child labour while it invests a lot into improving the quality of produce from its source markets. All these efforts are aimed at ensuring that the company engages in ethical corporate practices. These efforts are aimed at ensuring the company’s reputation remains good and its products are of high quality in a bid to ensure high revenue levels and hence profits. The paper has also revealed some of the factors that influence consumer behavior through a survey conducted on 15 students in the school. Though different students have given different factors as influencing their buying behavior, it has been clear that ethical consumerism plays a vital role in influencing consumer behavior. As such, it is paramount that companies like Starbuck continue to do their best in ensuring that they engage in ethical practices at all times in a bid to ensure that they remain ahead of the competition. Recommendations Starbucks needs to improve on some areas as far as ethical consumerism is concerned. The company needs to ensure that it engages in clean and fair dealings with its suppliers to ensure maximum benefits for the farmers. Starbucks also needs to do more to promote the rights of its workers (business-humanrights.org, 2015). It is also to be noted that the company needs to avoid any practices of tax avoidance as an ethical corporate citizen. On embracing the above recommendations, Starbucks will be indeed be right in claiming to be engaged in ethical practices and will better its position in the global market. References: James, G2008, The Bridge at the end of the world: Capitalism, environment and crossing from crisis to sustainability, London, Rutledge. Tim, B2015, Looking behind the label, Global industries and the conscientious consumer, Indiana, Indiana University Press. Co-operative.coop, 2015, Ethical consumerism report, Retrieved on 13th November 2015, from; http://www.co-operative.coop/PageFiles/416561607/Ethical-Consumerism-Report- 2011.pdf Hilton, M2003, Consumerism in twentieth century Britain, The search for a historic movement, Cambridge, Cambridge University Press. Harrison, B2005, The ethical consumer, SAGE publications limited. Michael, R2013, Consumer behavior, A European perspective, London, Pearson. Nri.org, 2015, Ethical consumers and ethical trade, A review of current literature, Retrieved on 13th November 2015, from; http://www.nri.org/projects/publications/policyseries/PolicySeriesNo12.pdf starbucks.co.uk, 2015, Responsible grown coffee, Retrieved on 13th November 2015, from; http://www.starbucks.co.uk/responsibility/sourcing/coffee Slavoj, Z2015, Starbucks coffee and the ideology of ethical consumption, Retrieved on 13th November 2015, from; https://awestruckwanderer.wordpress.com/2014/08/16/starbucks-coffee-and-the-ideology-of- ethical-consumption-by-slavoj-zizek/ business-humanrights.org, 2015, Response to Starbucks coffee company comments of 4th March 2011, Retrieved on 13th November 2015, from; http://business-humanrights.org/en/uk-ethical-consumer-report-puts-starbucks-at-bottom- of-ethical-rating-of-coffee-chains-citing-workers-rights-concerns Read More