Friday, April 5, 2019

Reviewing Corporate Social Responsibility of Starbucks

Reviewing incorporate Social function of StarbucksThe purpose of this an nonated bibliography project is to research and review articles in spite of appearance the run low 10 years regarding the corporal companion fit responsibility of the Starbucks fraternity. All the articles I have chosen be relevant, recent, and address the following issues Starbucks committal to the surroundings, Starbucks cargo to the employees, Starbucks perpetration to consumers, discussions of ethical and unethical worry behavior, and Starbucks commitment and reception to shareh aged(prenominal)ers.After doing the necessary research, it is obvious that Starbucks and their chief operating strikeicer Howard Shultz are aware of the importance of corporate social responsibility. E precise company has problems they can work on and improve in and so does Starbucks. As of recent, Starbucks has d angiotensin converting enzyme with(p) a great job targeting their employees how important they are to the company. A rattling(a) with committing to every employee, they have deceased to great lengths to improve the environment for everyone. Ethical and unethical behavior is al government agencys a hot military issue for the media, and Starbucks has to be keepingful with the decisivenesss they influence and how they strickle their public mortala.Commitment to the EnvironmentThe setoff way Starbucks has shown corporate social responsibility is through their commitment to the environment. In order to improve the environment, with a little compact from the nongovernmental organization, Starbucks graduation main goal was to provide to a greater extent Fair pot cocoa. What this means is that Starbucks will find to all buy 100 percent responsibly bragging(a) and traded java. non only does responsibly giving umber armed service the environment, it benefits the farmers as well. Responsibly grown java means preserving nix and water at the farms. In turn, this make up s more for the company overall, but the environmental improvements are worth it. Starbucks and the environment benefits from this decision because it helps continue to portray a clean image.Another way to improve the environment directly through their stores is by going green. Their initial attempt to produce a green store was in Manhattan. Starbucks do that decision to renovate a 15 year old store. This renovation included replacing old equipment with more energy efficient ones. To educate the confederation, they bulge outd plaques end-to-end the store rationalizeing their sweet green elements and how they work. This come downting Manhattan store now conserves energy, water, materials, and uses recycled/recycl adapted products. Twelve stores total send off to be renovated and Starbucks has promised to make for each one pertly store LEED, meaning a Leader in Energy and Environmental Design. LEED improves performance regarding energy savings, water efficiency, and emissi on reduction. many throng dont look into environmentally fri residuely appliances because the upfront cost is always more. According to Starbucks, going green over time outweighs the upfront cost by a long shot. Hopefully, these sweet design elements will help the environment and get Starbucks a conduct of their commercialise.Commitment to ConsumersThe second way Starbucks has shown corporate social responsibility is through their commitment to consumers. The best way to get the customers what they regard is to read their demographic groups. By doing research on Starbucks consumer demographics, they effected that commonwealth with disabilities are very important. The company is arduous to turn stores into a more adequate environment for customers with disabilities. A few changes include leveling pr steadyt height to improve easy of ordering for people in wheelc piluss, adding at least one persevere accessible entrance, adding disability etiquette to employee handbooks, training employees to educate them on disabilities, and by joining the National Business balk Council. By joining the National Business Disability Council, Starbucks gains access to resumes of people with disabilities.Another way Starbucks has shown commitment to the consumers is by cutting costs and retaining loyal customers. For frequent, loyal customers, Starbucks decided to provide a loyalty card. erst a customer has obtained this card, they are dign incentives and promotions for continuing to frequent their stores. Promotions include discounted drinks and free flavor shots to parallel visitors. Also, with the economy being at an all time low, Starbucks realized that cheaper prices were a necessity. By simplifying their business practices, they were able to provide lower prices for their customers. For example, they use only one recipe for banana bread, rather than elevenIt doesnt end there either Starbucks recognized that wellness is map of social responsibility. To promot e healthier living, they introduced skinny versions of around drinks, while keeping the delicious flavor. For example, the skinny vanilla latte has 90 calories compared to the original with one hundred ninety calories. Since Starbucks doesnt sound sell beverages now, they introduced low calorie snacks. Along with the snacks and beverages, nutrition facts were available for each item.Also one handsome way to cut costs was outsourcing payroll and Human Resources cheek. By creating a global platform for their administration system, Starbucks is able to provide more employees with benefits. Plus, they are able to spend more money on sweet customers, rather than on a benefits system.Commitment and Response to ShareholdersOne way Starbucks has demonstrated their commitment and response to shareholder needs is by giving them large portions. By large portions, Starbucks is implying that they plan pay dividends lucifer to 35% or higher of net income to. For the shareholders, paying hi gh dividends means certainty about the companys pecuniary well-being. Along with that, they plan to purchase 15 million more shares of personal credit line, and hopefully this will tie investors who center on stocks with soundly results.Starbucks make their commitment to shareholders obvious by speaking directly to the media about it. In 2004, Starbucks won a great tax break, but unfortunately the media saw them as money grubbing. Their CEO, Howard Shultz, made the decision to get into politics and speak to Washington about expanding health trouble and the importance of this to the company. Not only does he want his shareholders to see his commitment, but he wants all of America to be able to reap this benefits.In order to compete with McDonalds and keeping payout to their shareholders high, Starbucks needed a serious turnaround. They did decide to forget growth in North America but not in Japan. Shultz found that drinking coffee is becoming extremely popular for the Japanese . To show shareholders there is a silver lining, he inform they plan to open thousands of stores in Japan and Vietnamese markets.Commitment to EmployeesThe first and biggest way Starbucks shows their commitment to employees is by rightful(prenominal) taking care of their workers. For example, they jazz how important health care, stock options, and compensation are to people in this economy. The Starbucks policy states that as long as you work 20 hours a week you get benefits and stock options. These benefits include health insurance and contributions to employees 401k plan. Starbucks doesnt exclude part time workers, because they feel they are barely as valuable as full time workers. Since Starbucks doesnt have typical business hours like an office job, the part time workers help working the odd shifts.Another way Starbucks shows their commitment to employees is by treating them like individuals, not just number 500 out of 26,000 employees. Howard Shultz, CEO, always tries to kee p humanity and compassion in mind. When he first started at Starbucks, he remembered how much he liked it that people cared about him, so he decided to continue this consideration for employees. Shultz feels that a first impression is very important. On an employees first day, he lets each new employee know how happy he is to have them as part of their business, whether it is in person or through a video. His theory is that making a good first impression on a new hire is similar to teaching a child good values. Through their growth, he feels each employee will keep in mind that the company does care about them. Shultz wants people to know what he and the company stand for, and what they are trying to accomplish.Ethical/Unethical Business BehaviorThe last way Starbucks demonstrates corporate social responsibility is through ethical behavior and the occasional unethical behavior. The first ethically positive thing Starbucks involves them self in is the NGO and Fair Trade coffee. Even though purchasing secretive toly Fair Trade coffee seriously affected their profits, Starbucks knew it was the right thing to do. They overly knew that if they did it the right way, everyone would benefit, from farmers, to the environment, to their public image.In the fall of 2010, Starbucks chose to team up with Jumpstart, a program that gives children a leave start on their education. By donating to literacy organizations and volunteering with Jumpstart, Starbucks has made an impact on the children in America, in a very positive way.Of course there are negatives that come along with the positives. Starbucks isnt the perfect company like it may seem. In 2008, Starbucks made the decision to block 616 stores because they were not performing very well. In order for Starbucks to close this many stores in one year, they had to battle many landlords due to the image breaking lease agreements. Starbucks tested pushing for rent cuts but some stores did have to break their agreements . On top of breaching lease agreements, Starbucks was not able to grow as much as planned, resulting their future landlords were hurting as well. To fix these problems, tenants typically will offer a buyout or find a replacement tenant, but landlords are in no way forced to go with any of these options. These efforts became extremely time consuming and costly, causing Starbucks to give up on many lease agreements.As for Starbucks ethical behavior is a different explanation when forced into the media light. In 2008, a big media uproar arose due to them wanting to rerelease their old logo for their thirty-fifth anniversary. The old coffee cup logo was basically a topless mermaid, which in Starbucks opinion is just a mythological creature, not a sex symbol. Media critics fought that someone needed to protect the creatures modesty. Starbucks found this outrageous. In order to end the drama and please the critics, they chose to make the image more modest by protr implement her hair to cover her body and soften her facial expression. Rather than ignoring the media concerns, Starbucks met in the middle to celebrate their thirty-fifth anniversary.Subject land 1 Commitment to the EnvironmentNon-government organizations are concerned with the concept of Fair Trade. NGO hoped Starbucks would buy into Fair Trade Coffee. This posed problems for Starbucks. Knowing that NGO has quite a bit of media pull, they knew they had to do something to please the NGO. In order to keep their clean image, Starbucks had to compromise with the NGO and introduce Fair Trade Coffee for a period of time. Since it wasnt going to be forever, this benefited Starbucks and helped out the farmers.Starbucks has made several goals to improve the community and the environment. They have attempted to double the purchases of Fair Trade and conserve water in the last 2 years. While they are still continuing these goals, Starbucks is hoping to reach a long-term goal of only purchasing 100 percent respo nsibly grown and traded coffee. Also in 2009, the progressed towards more energy efficient farming to reduce energy use by 25 percent. By 2015, all of their paper products will be reusable or recyclable. Collaboration with the NGO and recyclers will make this possible.To help draw in new customers and to please the already loyal ones, Starbucks completely renovated their 15 year old store in Manhattan. A more intimate, modern feel was created to draw in on their rich heritage. This Manhattan store is just one of the twelve stores worldwide that are going green. Each of the twelve stores conserves energy, water, materials, and recycles. To show customers and employees how it works, they have places plaques that explain green elements throughout the store. Starbucks has done this in hopes that people will see what they have done for the environment and follow their lead. Many people think going green is expensive, but Starbucks claims over time the enormous savings outweigh the upfro nt costs.Starbucks has realized its unique market position. They recently pledged that each new store built will be Leadership in Energy and Environmental Design (LEED) and are expanding into ready brew coffee, which is essentially instant. LEED uses recycled and reused materials to build and create each store. They hope to get ahead of the market with their innovative products and environmentally friendly designed stores. To continue to grow and become even more successful, commitment to consumers and the environment has shown to be important to the Starbucks Corporation.Subject Area 2 Commitment to ConsumersStarbucks has been struggling to keep their accost and theatre imagine, yet compete with the worlds largest fast-food chain McDonalds. In the last 2 years, Starbucks has had trouble keeping their share-price up. Many analysts feel this is due to too much expansion in America and all-time high prices. Resulting from this, customers are choosing quicker coffee stops such as McDo nalds and Dunkin Donuts. Just when Starbucks thought it couldnt get worse, McDonalds introduced Starbucks-style coffee interdict to many restaurants. Starbucks has had to water down their image in order to compete with this type of market. To loyal customers, this appeared as if Starbucks was losing their passion for coffee.Starbucks has grown between 1995 and 2005 faster than any McDonalds growth period in history. regrettably, with the downturn in the economy, Starbucks has been facing many challenges. Sales have been at a low and they will have to make some improvements to get back to where they were 5 years ago. Starbucks plans to increase marketing and sell packaged coffee at a more competitive price. Even with the tough competition from McDonalds and other fast-food businesses, Starbucks is give tongue to to top good as new in a few years.In 2008, Starbucks decided to place an wildness on cutting costs and retaining a customer base. In order to retain customers, Starbucks chose to implement a loyalty card that provided customers with promotions that lead to cheaper drinks and keeps customers from frequenting other coffee sellers. To cut costs, they did decide to close several stores. Simplifying the business in like manner helped cut costs. For example, Starbucks is now using one recipe for their banana bread, rather than eleven. Fortunately, they have realized that McDonalds isnt cutting into their sales as much as predicted, which is a good sign for the company.Starbucks is aiming to understand demographic groups better. They have realized that people with disabilities have become an important group. Starbucks is attempting to enhance ethical leadership throughout the company by making Michelle Penman, a 36 year old woman with cerebral palsy, a literal model employee. The company is trying to make stores more adequate for customers and employees with disabilities. Counter height has been bring down at many stores for an easy reach by customers an d workers in wheelchairs. Each store has also added at least one handicap accessible entrance. Shortly after, disability etiquette had been added into employee training. This training mostly consists of day-to-day matters people with disabilities deal with. In addition, when recruiting new workers, Starbucks as joined the National Business Disability Council to access resumes of people with disabilities. Since by law employees are not required to record disability information on an application, it is to a great extent to measure the progress. Starbucks wants the best talent, no matter who it is.Part of social responsibility is keeping people healthy. rock-loving food and drink, plus dieting are at an all time high. Starbucks chose to introduce skinny versions of their most popular drink choices. For example, the skinny vanilla latte has only 90 calories compared to the regular version with 190 calories. Along with the skinny beverages, they introduced low calorie Panini sandwiches and snacks for their health conscious customers. In order to education consumers, they also distributed brochures with all the nutrition facts for their products.A recent study found that Starbucks customers would favour lower prices over new menu items. 65% of customers said if prices were lower, they would return to frequenting Starbucks stores. Along with lower prices, customers would like to see more pay programs, so Starbucks launched a program that offered free flavor shots to repeat visitors. Fortunately for Starbucks, even though McDonalds offers lower prices the quality of coffee doesnt compare to Starbucks. The survey revealed that Starbucks customers arent going to McDonalds instead, meaning they do have loyal customers.For Starbucks, incorporated Social Responsibility serves two roles. They first make sure that social responsibility awareness is at the top of their list when decision making. The second role was to make sure they carry out what they said they were goi ng to do. An annual report follows up with results and progress. Starbucks runs their system as an important supporting action.Subject Area 3 Commitment and Response to ShareholdersIn 2004, the Starbucks Corporation won a tax break. Unfortunately, the media saw this as a money-grubbing move. Starbucks then decided to hire a lobbying firm. The CEO chose to speak to Washington about expanding health insurance coverage to more workers. He explained his commitment to shareholders and value of employees and how important providing decent health care is to the company. He described how he hoped that this commitment should extend to all of America.Starbucks realized that customers and shareholders like big portions, whether it is of coffee or dividends. This giant serving went to the shareholders. The corporation announced its planning to pay dividends equal to 35% or higher of net income. On top of that, Starbucks plans to purchase 15 million more shares. They plan to attract investors wh o focus on stocks with a good yield.According to hem in Street, Starbucks was forecasted to have shares at 70 cents each. By the end of 2009, they proved him wrong with shares at 75 cents each. Starbucks began benefitting from their advertisements, becoming the most popular brand on Facebook. With the serious competition fast food handcuffs have imposed, this national marketing campaign had no room for failure.Starbucks is in need of a serious turnaround like McDonalds pulled off in the past. Unfortunately for Starbucks, it is going to be a bit more difficult because it is less in the control of the Starbucks Corporation this is because they have expanded their customer base further than upper-income customers. Since they are closing 600 locations, Starbucks CEO hopes customers will migrate to other locations, not competitors. This will be tough to avoid since McDonalds and other fast food chains are beginning to offer similar products.Sanchanta, M. (2010,April14). Starbucks plans big expansion in mainland China Chiefexecutive says coffee giant has moody its fortunes around, is eager to crackmarkets in India and Vietnam.Wall Street Journal (Eastern Edition), p.B.10.Starbucks CEO Howard Shultz announced that the corporation plans to expand into Japan. This large expansion would make Japan the country with the second most Starbucks stores, first being North America. According to Shultz, they plan to open thousands of stores in Japan and possibly more into Indian and Vietnamese markets. Drinking coffee has become popular for the Japanese making this an easier area to grown into. As for growth in China, Shultz claims a more tactical growth strategy. Over time, he sees China with thousands of stores as well. A good method may be to target the younger generation who are consumed by the internet.Subject Area 4 Commitment to EmployeesStarbucks aims to constantly be mindful of the publics view on them. In order to do this, Howard Schultz must keep a sense of humani ty and compassion in mind. He knows how important health care, stock options, and compensation are for many employees. As long as employees work 20 hours a week, they are given benefits and stock options. Schultz does not ignore health care reform either instead, he speaks publically about it. He explains to his customers and employees that he wishes to remain small even as it gets big, meaning that he will continue to treat his employees as individuals. Corporate Social Responsibility has always been near the top of his list. Shultz hopes to continue keeping Starbucks as the perfect place between the consumers inhabitancy and work.Since the economy has been at an all time low in the last few years, companies have had to cut costs anywhere and everywhere possible. In 2008, Starbucks had to inform their employees that they have the right to decide whether they want to generate to their 401k plan. With this extra cash, Starbucks feels they are able to provide more employees with ben efits. Using the utilitarian method, they plan to provide superior good for the greatest number of employees. Fortunately for Starbucks employees, this cut back was as a last recede to cut costs. Many companies cut benefits altogether.Starbucks aims to make a lasting first impression on an employees first day of work, in a good way of course. Howard Shultz remembers how important it was to him that people cared. He know show new hires how much he cares, by telling employees how happy he is to have them aboard, even if it is by video. Shultz doesnt discriminate based on full time or part time workers, even though part time workers are notorious for high turnover. The theory at Starbucks is making a good impression to a new worker is like teaching a child good values. They want people to know what they stand for and what they are trying to accomplish, and there is no better time than an employees first day.Starbucks plans to outsource payroll and Human Resources administration for U S and Canadian employee benefits. In turn, this outsourcing deal will help create a global platform for their HR. Administrative HR systems are extremely costly and companies prefer to spend their money on customers not a benefits system. This type of outsourcing will not only lay aside them money but it will help avoid future increasing costs. Fortunately for HR employees, the ones that stay behind will still have a job and can focus on the large picture.Subject Area 5 Ethical/Unethical Business BehaviorJohnson Johnson, The Timberland Company, Michael Mayo, Maiden Mills, SC Johnson, and Starbucks all devote a significant amount of effort to ensure corporate social responsibility. In order for Starbucks to keep their turnover rate low, they have realized that awareness of social responsibility is a big help. They give part time and full time employees or partners benefits and stock options. Not only does Starbucks help out their employees, but they do volunteering as well. They p rovide grants for nonprofit organizations when employees volunteer. Literacy is very important to their CEO, so he donated to nonprofit literacy organizations across America. In addition, he teamed up with Jumpstart, which is a program that gives preschool children an educational head start.To please nongovernment organizations, Starbucks had to implement Fair Trade coffee. To give small famers an income sufficient enough to live off of, Starbucks chose to work off the standards they set for themselves and sell Fair Trade Coffee as much as possible. The NGO still wasnt satisfied because they wanted ALL coffee to be Fair Trade. Starbucks knew that this would seriously affect their profit. In this economy, it wasnt possible for them to do right away this lead to confrontation between Starbucks and the NGO.In 2008, Starbucks announced that they planned to close 616 stores that werent performing up to par. Starbucks was then forced to battle many landlords due to the chain looking to br eak leases. Many tenants similar to Starbucks have found offering a buyout or finding replacement tenants as a settlement offering. Unfortunately, these efforts can become costly and time consuming, which Starbucks didnt have. Since they have to close so many current stores, Starbucks will also have to hold off on schedule new store openings.Starbucks, like many other coffee shops, provides books and magazines to buy and read while you respect your favorite cup of coffee. The William Morris Agency (WMA) scouts books for Starbucks to put on their shelves. One of their most popular sellers is For One to a greater extent Day by Mitch Albom. William Morris represents Starbucks and authors simultaneously and many agents feel this is a conflict of interest for the Starbucks Corporation. Starbucks admits asking for a peculiar(a) two-week exclusive but no special discounts and everything William Morris does for them has had approval from the coffeeStarbucks 35th anniversary took place in 2008, and the corporation planned to use their old logo for the cups to celebrate. Unfortunately, the media went crazy over their topless mermaid, which is a mythological creature. Critics claim that they need to protect sirens modesty. The mermaid was not depicted nude, but it was obvious that she was topless with hair covering her breasts. To make the image more modest, they chose to lengthen her hair and soften her expression, which make it a more appropriate design. Instead of ignoring peoples concerns, Starbucks met in the middle for their 35th anniversary.ReferencesCorporate behavior and strategy.(2005). Strategic Direction,21(8),26-29. Retrieved family line 30, 2010, from ABI/ propound Global. (Document ID877321751).Starbucks tracks its global responsibilities.(2010,May). Beverage Industry,101(5),14.Retrieved folk 30, 2010, from ABI/ swear Global.(Document ID2041497141).Wilson,M.(2010,June). Starbucks redesign puts emphasis on sustainability.Chain StoreAge,86(5),54-55. 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