Starbucks Evaluation a Business Code Ethics the Essay

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STARBUCKS

Evaluation a Business Code Ethics the purpose assignment assist refining problem-solving capabilities organizations possesses business ethics applications. This paper a structured, objective format called a system inquiry.

Starbucks code of ethics

Starbucks' mission

The Starbucks Corporation has its origins in a small chain of coffee stores that was designed to replicate the European coffeehouse experience for American consumers. At the time of its birth in Seattle, most Americans' experience of coffee was confined to Folgers or Maxwell House. Starbucks was acquired by current CEO Howard Schultz who believed its "top-quality, fresh-roasted, whole-bean coffee was the company's differentiating feature and a bedrock value" (Thompson & Gamble 1997:1). Under Schultz's control, Starbucks expanded rapidly in both American cities and suburbs. Eventually, the company began to open stores abroad, in East Asia and Europe. Starbucks strove to super-saturate the market, going contrary to conventional business wisdom that it is unwise to let stores compete with one another. Each store was crafted to have an individualized character: every Starbucks was unique, and the Starbucks on one block of New York City was not the same as the one in a nearby neighborhood. Eventually, the company's presence became ubiquitous in American life. "Before Starbucks, people drank a generic beverage called coffee. Today, thanks to Starbucks, coffee is an experience" (Hawthorne 2012: 44).

Starbucks gained a reputation as an 'ethical' company because of the comprehensive health benefits it offered its workers and the fact that it stocked a selection of Fair Trade coffees (although Starbucks does not exclusively sell Fair Trade products). However, Starbucks has been the subject of much criticism in recent years because of the extent to which it has driven independent coffee competitors out of business. Starbucks' commitment to quality has also been questioned, forcing it to retrain its baristas to deal with problems with its flavor and freshness. Starbucks may be more subject to criticism than other firms because its mission statement is defined in such clearly ethical terms: "Our mission: to inspire and nurture the human spirit -- one person, one cup and one neighborhood at a time" (Mission statement, 2012, Starbucks). Starbucks defines its mission in as a spiritual one. It stresses how it cares for its customers and suppliers and is not simply interested in making a profit. It affirms that it adds to rather than detracts from the community of which it is a part.

Ethical system used by the firm

The classic rendition of the ethical obligations of a firm is that the firm's sole ethical obligation is to make a profit for its shareholders. In defining its company objectives in moral terms, Starbucks takes a different ethical approach, stressing the duty-bound nature of its ethical obligations. Starbucks presents itself as a principled company to the world, with strict standards for its staff, management, and overall governance. Selling coffee is not a means to a profitable end: Starbucks claims it is selling an 'experience' of coffee that can truly make the world better.

Of course, this virtuous image is an important part of Starbucks' marketing. Starbucks is not the most expensive luxury brand of coffee; nor is it the cheapest. It positions itself as an 'affordable luxury' that even middle-income consumers can purchase. High-minded people can 'feel good' about consuming Starbucks, ethically, as well enjoys its taste. Spending extra money on a macchiato is not an indulgence but rather a positive statement that enhances the lives of others. Without its sense of ethics, Starbucks would have more difficulty positioning itself in the coffee market.

How the code of ethics is used

Starbucks' Code of Ethics is used to govern the behavior of everyone from its CEO to its lowest-level employees. According to Starbucks' ethical guidelines for CEO and Finance Leaders, the leaders affirm they will avoid conflicts of interest, act in good faith, respect confidentiality of information, comply with government laws, be forthcoming and complete when offering information and "proactively promote ethical behavior as a responsible partner among others in my work environment" (Code of Ethics for CEO and Finance Leaders, 2012, Starbucks).

Starbucks' ethical policies are comprehensive and are not simply limited to individual employee behavior. Starbucks has ethical mission statements regarding virtually every facet of its behavior as a company. Regarding human rights: "Starbucks respects the inherent dignity of all persons, and seeks to enable all employees to do their best work by embracing and valuing the unique combination of talents, experiences and perspectives of each employee" (Global human rights, 2012, Starbucks). Starbucks' ethical statements reach every link of its supply chain, from the way it treats its workers, to the way it treats its customers, to the sourcing of products. It has a position statement affirming the need to offer its workers healthcare as well as its policies on sourcing cocoa.

Need for modifications

According to many, Starbucks rapid expansion has caused many locations to lose the personal touch on which the company's mission statement is founded. Starbucks was supposed to be about building community, amongst its baristas and amongst its customers. However, many customers have complained that going to a Starbucks today is a fairly generic experience. The notion of 'building community' in its mission statement has become threatened by the rapid expansion Starbucks experienced in the 1990s and early 2000s. Starbucks had to cut back on the numbers of its stores in America where its penetration was at its deepest, to ensure better quality control. "After hitting a rough patch, the company brought back Schultz as CEO in 2008 and embarked on massive restructuring that included closing 10% of its U.S. stores… the company hadn't been careful about its store openings. In the years leading up to the downturn, the company was opening well over 1,000 stores a year. That led to cafes in locations where signs or traffic might not be optimal" (Starbucks to open 1,500 more cafes in U.S., 2012, USA Today). The quality of Starbucks' beverages also became compromised with automatic brewing machines. These were also eliminated in 2008. The company went back to its old brewing method, retrained staff, introduced a loyalty card, and marketed instant coffee in supermarkets to answer customer demand for expanded at-home product lines (Hawthorne 2012: 53). All of these measures were ways to show customers that Starbucks was still a place that 'cared.' Thus, to avoid accusations about depersonalization in the future, the company must affirm that it must make an ethical commitment to its customers that every Starbucks will offer an optimal coffee experience, and quality, not simply quantity must be the focus of every Starbuck store.

Starbucks also tries to honor its ethical responsibilities by stocking some Fair Trade coffee. However, it is not the only company to do so. Starbucks needs to continue to market itself 'above and beyond' the average coffee company, if it is to give consumers a continuing reason to patronize the establishment. According to Starbucks: "Right now 10% of the coffee we sell is Fair Trade. We are working actively in identifying farms and co-ops that followed CAFE practices (Starbucks own sustainable criteria) but were not fair trade, and we are also looking at Fair Trade farms and co-ops that were not CAFE" (Alter 2009). But Starbucks critics contend that Fair Trade exchanges are still not fair to farmers "For one month's work -- one sack of Fair Trade beans -- a grower might get ten dollars (Hawthorne 2012:56). Starbucks must set new standards for itself to define exactly what a 'fair trade' means for the producers it deals with.

Perhaps most importantly, the ethical treatment of Starbucks workers is also under greater scrutiny. "For the most part, young workers consider Starbucks miles above McDonald's, Pizza Hut, or KFC" (Hawthorne 60). There are still many complaints that Starbucks' treatment of its workers is not as…[continue]

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