Starbucks Handout #2

BUSA 2005  – Starbucks: Starbucks: The continuing case handout #2 Topic: Corporate Social Responsibility (CSR) and Ethnics

1. Go to the company website (www.starbucks.com www.starbucks.com)) and find the latest corporate social responsibility report. Choose one of the key areas in the report and describe and evaluate ev aluate what Starbucks has done in this area.

One of the key areas in the corporate social responsibility report is ethnical sourcing. Starbucks is committed to take a holistic approach to ethnically source their products, which range from coffee to green aprons. They Th ey achieve this by implementing responsible  purchasing practices, social responsibility standards for suppliers, environmental programs and providing farmer support. The Starbucks business revolves around coffee; coffee; therefore their main goal is to ensure a 100% of their coffee is ethnically sourced by b y 2015. Starbucks recognize that they have enough purchasing power to foster a coffee industry that is highquality, responsibly grown and ethnically traded. They collaborated with Conservation International a decade ago and created the Coffee and Farmer Equity (C.A.F.E) Practices. Starbucks now purchase coffee that is third party evaluated based on the comprehensive c omprehensive scoreboard of more than 200 indicators. indicators. Starbucks commitment to implement sustainable management practices not only includes coffee, but their tea, cocoa, and store merchandise as well. Starbucks recognize that their success as a company is linked to the success of the thousands of farmers who grow their coffee. They provide farmer support through investment and loans.

2. Is the organization showing organizational effectiveness or ineffectiveness? Give at least 2 specific examples to support your answer from the case or CSR report.

Organizational effectiveness is a measure of how appropriate organizational goals are and how well an organization is achieving those goals. Starbucks is showing organizational effectiveness through its corporate social responsibility. Starbucks recognize that their customers expect their company to be socially responsible. Howard Schultz sets the goal “Starbucks is refusing to be a bystander b ystander as the world around all of us changes. Only by doing business through the lens of humanity can an organization establish a crucial reservoir of trust with its people and its customers.” customers.” It is because of Howard’s visions that lead the cultural tone of their practices. Their mission is to use their scale of the business for good, by b y “catalyzing change across entire industries so that Starbucks and everyone we touch can endure and thrive.” thrive.” They  They continuously show their commitment by purchasing ethnical source products and reducing their environmental impact.

The corporate social responsibility report is to stress the importance of doing business in a responsible way and to hold employees emplo yees and managers accountable for their actions. The y

have a many resources, such as the Code of Ethnics, Standards of Business Conduct, Partner guide etc. , that allows managers and employee to adhere to. Howard is the ethical leader and serves as the role model for the whole organization. The strong organizational culture that Howard has established exerts a strong influence on its employees (partners) and in turn their actions will reflect their commitment to ethnical behaviours.

3. Course concepts: Review Chapter 5 and name and briefly describe how at least 3 course concepts relate to examples of CSR form the case of CSR report.

Social responsibility vs social responsiveness Starbucks is a social responsible organization rather than a so cial responsive one. Starbucks goes beyond what it’s obligated to do or choose to do because of some popular social needs. The CSR report shows that Starbucks is committed in do ing the right thing for the society and improving the environment. Starbucks sets long term goals: 100% of their coffee  purchased is from ethnically sourced by 2015, implement front-of-store recycling in all company-owned locations by 2015. 021 Sustainable Management Sustainable Management is the recognition by business of the close link between its decisions and activities and their impact on the n atural environment. Starbucks is addressing more serious global environmental problems. They are “ building more energy-efficient stores and facilities, conserving the energy and wa ter we use and purchasing renewable energy credits”. Their goal is to reduce environmental footprint and ensure the long-term sustainability of our business and the health of the communities we touch. Starbucks pursues an activist (dark green) approach to sustainable management. It is proactive and the CSR illustrates its deep commitment to preserve the environment through: ethnical sourcing, greener stores (LEED certification), innovating recycling and food packaging, investing in renewable energy, forest conservation and engaging communities.

Value Based Management It is an approach to managing in which managers establish and uphold an organization’s shared values. Howard sets the values for Starbucks and communicates his values through his personal involvement with his employees. Howard states “We’ve been building a company with a conscience for more than four decades, intent on the fair and humane treatment of our people as well as the communities where we do business, and the global environment we all share.” This shared organizational value help guides managers’ decisions and actions, shape employee behaviour, influence marketing efforts and build team spirit.