Starbucks' ethical business practices and corporate social responsibility

¶ … Pour Your Heart Into it," How STARBUCKS Built a Company One Cup a Time Howard Schultz Dori Jones Yang. ISBN: 978-0-7868-8356-1 Highlight positive (negative) aspects business interacts society environment.

Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time

Just about everyone knows the name Starbucks. The company has become one of the largest coffee chains in the United States, even though it was relatively unheard of just a few short years ago. The main thing that stands out when looking at Starbucks strictly from a business standpoint, though, is not the coffee or even the marketing of the beverages that are sold -- it is the ethical behavior that the company displays. Starbucks has always been committed to treating its customers and employees the right way, and it has not changed that policy as it has grown (Schultz & Yang, 1999). Determining what makes a company ethical really depends on the person who's asked the question and his or her morals and perceptions (Spears, 2004). What is ethical to one person might not really be ethical to another person, and ethics are, ultimately, a matter of opinion. A lot of people do have similar opinions regarding ethics, though, and that is something that should be considered -- and has been considered by Starbucks.

The company has outstanding ethical behaviors because it focuses on making the employees and the customers happy, as opposed to making money (Schultz & Yang, 1999). The money is secondary to the way that the business is operated, and changes have not been made to the company for the sole purpose of bringing in cash. Ethical firms are well-known because of the way that they do business, not because they have a high profit margin (Spears, 2004). It is very easy to have a high margin of profit and not be at all ethical, so the two things really do not need any specific correlation. What matters to a company that has high ethical standards is the treatment of employees and customers and the quality of ingredients that are used (Spears, 2004; Yukl, 2002). To understand what Starbucks does so well, and the areas in which the company can improve, it is very important to look at several aspects of the business.

Vision

The vision of Starbucks is to provide great coffee and other beverages in an atmosphere that people enjoy and with prices that they can feel good about (Schultz & Yang, 1999). The goal is to make Starbucks a friendly, warm place for people to congregate, instead of just a place where people run in, buy a cup of coffee, and run back out again. Of course, they want to make money -- but (unlike many companies today) they are not interested in making that money at the expense of harming others or at the cost of selling an inferior product. They care about people: those who serve the coffee and those who drink it. They are also very committed to keeping their employees happy, because their company vision does not just encompass one person or one group of people. It is a vision for everyone, and it is something that the Starbucks owners are very dedicated to (Schultz & Yang, 1999). When they hire people, they look for others who are dedicated to keeping their vision alive, too. They do not want just anyone who needs a job, because they look for people who are interested in what they do and committed to the plans and goals that the company has. Without that, the employees are not going to handle things with enough care and treat the customers the right way.

Culture

Starbucks' culture is not like the culture of many other companies, where people work and slave very hard for a paycheck that feels too small. Instead, even part-time employees have things like benefits and opportunities to get involved in the company through stock programs and other ownership plans (Schultz & Yang, 1999). That helps to promote happy employees, and that happiness and good attitude gets passed on to the people who buy from the company. They, in turn, take that attitude and good will, and spread it out into the world. The employees of Starbucks are not going to get rich working there, but they will be paid a fair wage and they will be treated properly and with dignity and decency, which is becoming increasingly hard to come by in today's business world. They know their jobs, and they take pride in working for a company that actually still cares about the people who help it succeed (Schultz & Yang, 1999).

Values

Starbucks was built on values and ethics (Schultz & Yang, 1999). There are plenty of dissenting opinions on what makes a company ethical or what constitutes a specific type of value (Bolman & Deal, 2003). However, the hard work that the founder put into the company still shows through today. Starbucks wants to provide a good experience for everyone who comes into contact with it, instead of just taking a person's money and shoving a cup of coffee at them. Yes, they charge more than some other places for their coffee, but they also offer a product that many think is superior -- and that gives anyone buying coffee from the company a lot of value for the money. Values are important to the company, and that is not something that people are able to say about a large number of companies in this day and age, which is unfortunate.

Relationships with Stakeholders

Starbucks has always had a good relationship with all of its stakeholders. It understands the significance of what it has, and it takes its stakeholders seriously. It listens to them and attempts to implement the things that they would really like to see done (Schultz & Yang, 1999). Of course, that does not mean that Starbucks will do anything and everything that stakeholders ask it to, because that would not be good business sense. However, the company focuses on what it can to do keep customers and employees happy, as well as investors, vendors, stockholders, and anyone who comes into contact with the company and its products. By treating people well, Starbucks has moved to the head of the line, and it did not have to push anyone out of the way to do it (Schultz & Yang, 1999). The company simply built good relationships, and people liked and remembered that.

Utilization of Knowledge

There are plenty of things that make Starbucks great, and the way it utilizes knowledge is one of the things that people like best about the company. It learns from its mistakes, and it pays attention to what it does right (Schultz & Yang, 1999). The local Starbucks managers are even authorized to make donations and help out local companies and charities, so it is clear that they are using the knowledge of the community to make things better instead of only being concerned about how much profit they are taking in (Schultz & Yang, 1999). If the company failed to use knowledge correctly, it would not have grown to the level it is at now, when so many other coffee companies were unable to achieve long-term, commercial success.

Decision-Making Practices

The ability of managers to make decisions regarding donations is a big part of the way Starbucks operates. In other words, the decision-making practices of the company are not only at the very top level, where everything is then passed down to others. Instead, everyone in the company is entrusted with something of value -- the chance to make a difference by making a choice (Schultz & Yang, 1999; Greenleaf, 1977).

Environmental Concerns

Starbucks remains committed to the environment, but not quite as much as some people would hope. The company is looking into ways to make their cups more biodegradable and to do other things to help the environment, but they have not made enough changes to satisfy some of the more hard-core environmentalists (Schultz & Yang, 1999).

Government Regulation/Involvement

Starbucks is far from large enough to be a monopoly, so that is not a concern. The company also really does not need to be regulated by the government any more than any other food or beverage business would. That means that Starbucks can continue to operate the same way that it always has, and it does not have to fear governmental sanctions or other problems of any kind, because it remains on an ethical course for good (Schultz & Yang, 1999).

Consumer Relations

One thing is clear: Starbucks is the kind of company that treats its customers right. The baristas are friendly and warm, the coffee and other offerings are always top-quality, and the prices are fair for what is purchased (Schultz & Yang, 1999). Mostly, though, it is the atmosphere that keeps people coming back. The stores are comfortable and enjoyable, and people feel good there. They feel like the company cares about them -- and they feel that way because it is true.