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Ethical Issues at Starbucks

Feb 26, 2017 | 0 comments

Feb 26, 2017 | Essays | 0 comments

5/5 - (4 votes)

Ethical Issues at Starbucks

Starbucks is a leading and well-known coffee company in the world. It started as one store but has developed with time to over1700 branches of stores in many countries (Ferrell et al 2008). Furthermore, the company is expected to rapidly grow in the coming years. Starbucks Company recent has created the worst image due to its political activities and her stance on the rights of workers. Starbucks created an impressive image as one of the coffee shops by being friendly to the environment. However, recent discoveries show an otherwise picture (Cross et al 2009).

According to the Rhetoric Society of America et al (2004), Starbucks has been covering up many things such as serving milk with GM growth hormones in the US. Besides, it has been running relentless campaigns of bursting unions. According to Schultz et al (2011), the company is also accused of attempting to block the attempts of Ethiopia to improve the coffee grower’s livelihoods. Furthermore, it has also petitioned a federal judge to accept in past sexual history evidence of a former employee aged 16 years when she took sexual harassment case to court.

Even though the company has sold as standard Fair-trade Coffee since 2009 in all its stores in the UK, the rest of the operation globally on the uptake has been slower. The firm has been criticized even for its operations in the US by Organic Consumers Association also dragging its feet in the Fair-trade launch (Michelli 2007).

Also, Gilbert (2008) points out the order by the US court on Starbucks to pay low wage staff more than $100million in California in a ruling that the workers improperly shared with their bosses some tips although was overturned subsequently after a successful appeal. The lawsuit against Starbucks was for using tactics that are anti-competitive to eliminate their competitors. The employees of Starbucks would give out their coffee rights as free samples outside the small shops of coffee in their neighborhoods, thereby gaining more profit and business for themselves. Furthermore, Bussing-Burks (2009) add that they sometimes even tried to buy out other shops of coffee near them. They would sometimes sign leases for almost 3 times the market price to make the landlords not rent it out to other sellers of coffee.

Marie et al (2009) add that Howard Schultz the chief executive officer earned a pay rise of 25% after a cost of $580 million slashed from the company in the year 2009.

By analyzing the actions of Starbucks, it is unethical because the stores of small coffee give much to the people in the towns they are located compared to what Starbucks does. The majority of people love small coffee shops with reasonable coffee prices in their surrounding towns. On the other hand, other people would be contented with Starbucks. However, Kachra (1997) explains that although you might love Starbucks, you would not like a coffee shop that has been in existence in your town for long being faced out of business.

According to Schultz et al (2007), the small coffee shops found in most towns give happiness to more people, unlike Starbucks which overcharges their coffee. It is very unethical for a firm like Starbucks to overprice its products since they know they are alone in the market after displacing other businesses therefore people will lack other options.

Moreover, they disregarded other small businesses by being selfish and negatively facing them off gaining all the clients and profits. Fellner (2008) observes that the company did not value people but considered them as sources of profits. Their technique of expansion does not have goodwill and they are also not motivated rightfully.

Simon (2009) observes that the company does not also comply with their set legislations. This is because Starbucks ‘ motto clearly elaborates they will treat their client’s dignity and respect. However, no dignity or respect is shown to their clients or even the communities. According to Olsen (1994), Starbucks rapidly expanded and opened many chains of stores and facing off other small businesses in the process, this was unethical.

Report on how Starbucks can improve ethics in its operations

Starbucks should establish codes of ethics. Furthermore, they should always aim to protect the brand and image of the company. Ferrell et al (2008) suggest that the firm should establish a program where the business and its partners comply with the business ethics that will support the firm’s mission and help in protecting their reputation by providing relevant resources to their partners to help them in making right decisions at their subsidiary outlets.

Cross et al (2009) further echo that such a program will assist in developing and distributing materials including the business conduct, facilitate ethics training and legal compliance, do investigations on sensitive issues such as the conflicting of interest, and provide more channels for her customers to report their concerns. Furthermore, Rhetoric Society of America et al (2004) suggests that their clients should also be encouraged to report all kinds of concerns and issues to the established program through their preferred communication channels that are provided by the company.

According to Schultz et al (2011), the firm should write a booklet on business conduct that should be distributed to all the subsidiary firms to help them during their work in the making of the appropriate decisions. These codes should just be brief statements on how the company conducts its businesses and of the company’s expectations that are consistent with the core values and the mission of the company.

Proposed ethical code for Starbucks

Starbucks Company needs to take a position on some ethical issues to support its business. This forms the basis of this proposed ethical code because of the belief that it is the responsibility of the company to advocate public and internal policies that support the business’ health, their employees or partners, and the communities the business serves.

These proposed ethical codes if applied can demonstrate the commitment of the company to being one of the responsible businesses. These proposed codes range from global ethical standards to the internal guidelines for conducting business. Furthermore, the codes are consistent with the Starbucks mission of inspiring and nurturing the human spirit.

  • The guiding principle of Starbucks should be to provide a great working environment and respect others with dignity and respect. Furthermore, Michelli (2007) suggests that the company should embrace diversity in doing business and always strive to develop enthusiastic and satisfied customers at all times. Starbuck should positively contribute to the environment and communities in which it is situated in.
  • Corporate social responsibility should also be further enhanced.
  • They should also establish stringent codes measures to ensure the good conduct of their suppliers. Clear procurement decisions should be enacted to make their suppliers align themselves with their established values (Gilbert 2008).
  • Ethical practices should be laid down in collaboration with the suppliers to ensure farmers protect the environment and produce quality seeds.
  • Should allow its operations to be conducted and also employ the minority and women.
  • Starbucks should also build strong relationships with the community by supporting educational programs
  • Starbucks should ensure they keep it green in its operations.
  • The company can also embrace giving health insurance to its employees, provide equal employment opportunities, and support human rights.

 

Bibliography

Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2008), Business ethics: ethical decision making and cases, Boston, Houghton Mifflin Co.

Cross, F. B., Miller, R. L., & Cross, F. B. (2009), The legal environment of business: text and cases: ethical, regulatory, global, and e-commerce issues, Mason, OH, South-Western    Cengage Learning.

Rhetoric Society Of America, Hauser, G. A., & Grim, A. (2004), Rhetorical democracy discursive practices of civic engagement: selected papers from the 2002 conference of the Rhetoric Society of America, Mahwah, N.J., Lawrence Erlbaum. Retrieved on 14th   June 2013 from           http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&A    N=109906.

Schultz, H., & Gordon, J. (2011), Onward: How Starbucks fought for its life without losing its soul, New York, NY, Rodale.

Michelli, J. A. (2007), The Starbucks experience: 5 principles for turning ordinary into extraordinary, New York, McGraw-Hill.

Gilbert, S. (2008), The story of Starbucks, Mankato, MN, Creative Education.

Bussing-Burks, M. (2009), Starbucks. Santa Barbara, Calif, Greenwood Press. Retrieved on 14th June 2013 from

http://public.eblib.com/EBLPublic/PublicView.do?ptiID=494958.

Kachra, A. (1997), Starbucks. London, Ont, Richard Ivey School of Business, University of         Western Ontario.

Marie, Bussing-Burks. (2009), Starbucks. ABC-CLIO. Retrieved on 14th    June 2013 from

http://www.myilibrary.com?id=233755.

Schultz, H., & Yang, D. J. (1997), Pour your heart into it: how Starbucks built a company one cup at a time, New York, NY, Hyperion.

Fellner, K. (2008), Wrestling with Starbucks conscience, capital, cappuccino, New Brunswick,    NJ, Rutgers University Press. Retrieved on 14th June 2013 from

http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&A            N=243103.

Simon, B. (2009), Everything but the coffee: learning about America from Starbucks, Berkeley,   University of California Press.

Olsen, D., Carroll, J. P., & Brody, L. (1994), Starbucks passion for coffee: a Starbucks coffee cookbook, Menlo Park, Calif, Sunset Books.

 

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