Starbucks Problems in Organizing - Case Study Example

Starbucks is facing criticism for unethical as well as controversial activities like not compulsorily providing Fair Trade Coffee in all its stores and because of the use of Bovine Growth Hormone milk in its coffees and ice-creams. Fair Trade Coffee is the term given to the coffee beans, which are purchased by Starbucks or other coffee makers through ethical means like providing fair and industry-standard prices to the coffee growers in the Home country as well as in the Third World countries.

Also, Fair Trade activities including Fair Trade Coffee support and intersect with other community development efforts, grounding and enhancing the resulting benefits (Raynolds, Murray and Taylor 1116). However, Starbucks is accused of not selling these Fair Trade coffees in all its stores compulsorily, instead of selling only to the clients, who ask for it or demand it. This way, they still selling non-Fair Trade coffees and because of this unethical practice, they are giving very low prices to the farmers, forcing them into a cycle of poverty and debt, and also not doing enough community services for them.

Although Starbucks’ chairman, Howard Schultz mandated that coffee farmers from its major sources in the African countries of Ethiopia, Rwanda, etc, should be paid premium prices, its practice of providing Fair Trade coffees only on-demand leaves the other suppliers with low prices. According to a report issued by Starbucks itself, Fair Trade Certified coffee “can be brewed by the coffee press during store hours upon customer request.” (Zee). So, with many Starbucks cafes brewing a pot of Fair Trade only if specifically asked, it is clear that Starbucks is not able to organize properly in the changing environment.

Bovine Growth Hormone or BGH or rBGH for short is normally injected into cows to produce high quantities of milk. The milk from rBGH-injected cows has much higher levels of a powerful growth hormone factor called IGF-1, which is a potent cancer tumor promoter..rBGH milk contains higher levels of pus and bacteria (Cummins, Lilliston and Lappe 42). So, although, this milk has harmful effects on humans as well as on the animals’ health, Starbucks is still using it for its coffee and ice-cream preparations and is not able to take steps to organize this problem aptly.

As Starbucks needs a high quantity of milk for all its stores and with the non-BGH milk not able to meet its demands, it is going for BGH milk. With many dairy farmers providing milk in high quantities by using BGH, Starbucks favors them without thinking about its negative effects on its clients. Thus, it is clear that the high demand in the changing environment has pushed Starbucks to practice unethical practices. In the mid-2000s, after heavy protests and criticisms, Starbucks decided to stop using the BGH treated milk and went for organic milk.

“Our entire core dairy supply – fluid milk, half and half, and whipping cream –is sourced from suppliers that do not use rBGH, a synthetic growth hormone (starbucks.com). But, it could not implement this decision in all its stores and in a foolproof manner. That is, Starbucks is able to provide non-BGH treated products- coffees or ice-creams only in 37% of its stores, with the clients of the remaining stores still being exposed to the harmful effects of BGH. This hormone is banned in Canada, Australia, Japan, and all 25 countries of the European Union, but it is not yet banned in the U.S., thus allowing Starbucks to use it detrimentally.

So, in this changing environment, where ethics is given utmost importance, Starbucks, because of the increasing demand, is adopting unethical practices like using BGH treated milk.