Ethics and business practices at Starbucks

Ethics

With the Starbucks code of conduct, there are a few goods things. First, it touches on a wide range of subjects. There are actually several different reports such as human rights, social responsibility, health care, animal welfare and supplier code of conduct (Starbucks.com, 2014). Second, I like the fact that it addresses the farmers from whom the company buys its beans -- these are people doing manual labor in hot countries, band often do not receive a living wage. So that is good. Third, I like that the company has targets and tracks some of its social responsibility outcomes. This will help the company to improve its social responsibility performance, as well as its ethical performance.

As for the McDonalds statement the company also reflects social responsibility in its statement. This is something that McDonalds has been forced to address by protests and negative publicity and there isn't any real indication that the company has an underlying ethical philosophy, in contrast with Starbucks, which does seem to have an underlying ethical philosophy. McDonalds focuses, like Starbucks, on efficiency measures and things like that. They call it sustainability but it isn't so much sustainable as just wasting less. That's good for business, so for both companies one of the things that stands out is that the activities they are recording on talking about are not altruistic by any means. The third thing that stands out with McDonalds is that the company seems late to the game. I wouldn't necessarily say this is something I like, but I don't exactly admire the ethics of McDonalds, and would be hard pressed to give them heaps of credit for what little they do. They have a long ways to go to be a leader in ethical corporate behavior and self-serving attempts at sustainability aren't getting it done.

Having a code of ethics is a good starting point, but by no means do it ensure ethical behavior in an organization. While it is toxic to assume that people are inherently unethical and need arms twisted to behave ethically, a code is just a starting point. The code provides the baseline level and a frame of reference, but codes of ethics do not get into specifics, and so cannot provide anything more than general guidelines. And even just having a code isn't much if the code itself is weak, vague or incoherent. There are specific philosophies of ethics -- philosophes have long debated different ethical perspectives. The code of ethics should be consistent throughout in its underlying philosophy. It needs to make sense, and be specific to the company, not just something childish like "don't be evil" or "obey the law" -- the latter being the entirety of McDonalds' Standards of Business Conduct for Employees. So, don't violate the FCPA and get the company in trouble is the extent of their ethics (McDonalds, 2014).

There are other steps that need to be undertaken. First, find the right people. You have to have people who are generally ethical as a starting point. A gang of crooks isn't going to be swayed by any code or training. So you have to be able to identify and recruit people who have high ethical standards in the first place. Then, you need to provide some training or guidance with respect to what ethics are expected of them. This may not be extensive, but it is important that there is some framing of ethics within the context of the organization, and that is much easier to do that with training programs. These training programs will also help to make ethics a part of the organizational culture. Having a culture of ethics creates an environment where people are less likely to engage in unethical activity. Having a culture that doesn't care about ethics only invites trouble with respect to unethical behavior.

There also needs to be some ethical infrastructure. An ethics office, a whistleblower hotline and specific whistleblower protections are all things that should be in place as part of the ethics infrastructure. Also, the organization's leaders need to be ethical. That is rather important, because all cultural guidance in an organization relies on leadership.