Starbucks: Internal and External Ethics

Abstract

Business ethics is based on broad principles of integrity and fairness and focuses on internal stakeholder issues such as product quality, customer satisfaction, employee wages and benefits, and external local community and environmental responsibilities issues that a company can actually influence. This study discusses the internal and external business ethics practiced at Starbucks Corporation. One of the Starbucks guiding principles is “to contribute positively to communities and environment.”

Introduction

Starbucks purchases and roasts high-quality whole bean coffees and sells them along with fresh, rich brewed, Italian style espresso beverages, a variety of pastries and confections, and coffee-related accessories and equipment. The Starbucks Company established in 1971 in Seattle’s Pike Place market. The company’s short-term goal is to open 1,500 locations and long-term goal is to open 30,000 locations within the next decade. Coffee is the second most traded commodity in the world next to Oil. The North America revenue accounted for 84.4% of the total revenue and International revenue accounted for 15.6%. Starbucks has more than 100,000 partners (employees). All eligible employees part and full-time qualify for a comprehensive benefit package that includes healthcare benefits and stock option grants through Bean Stock, Starbucks company-wide stock option plan.

According to Howard Schultz Starbucks Chairman, “We have the most knowledgeable work force in our industry”. Starbucks believes that people are the cornerstone of their success and ideas, commitment, and connection with customers are the essential elements. Starbucks invests in social programs in coffee-growing communities by contributing$1.8 million for social projects addressing local needs fro housing, health clinics, schools, good roads, and fresh drinking water.

Starbucks is the largest purchaser of Fair Trade Coffee in North America and is licensed to sell Fair trade certified coffees to 23 countries. Starbucks provides affordable credit to coffee farmers through various loan funds so that farmers can invest in their farms and help them through cash shortages during crop cycles.

According to Anne & James “If dishonesty is considered to be unethical and immoral, then anyone in business who is dishonest with stakeholders – employee, customers, stockholders, or competitors – is acting unethically and immorally.”

The Starbucks takes integrated approach to ensure long-term sustainability of quality of coffee while building mutually beneficial relationships with coffee farmers and communities. Example: Starbucks pays premium prices to help farmers support their families by paying $1.20 per pound on average 299 million pounds of green coffee. This helps coffee farmers cover their production costs and earn a profit. The Starbucks Company encourages farmers to participate in C.A.F.E. practices (coffee and farmer Equity Practices), which a set of socially responsible coffee buying guidelines and offers preferential buying status.

The Starbucks corporation is Equal Employment Opportunity employer and all applicants receives consideration for employment without regard to race, national origin, gender, age, religion, disability, sexual orientation, veteran status or marital status. Starbucks Corporation invests in supporting and engaging our partners (employees/Farmers) in the constant reinvention of the company. Starbucks mission statement is to “provide a great work environment and treat each other with respect and dignity.”

Starbucks provides extensive orientation and fundamental training program to provide a solid foundation for career advancement.

Examples: Coffee Education is a course focusing on the Starbucks passion for coffee and understanding core products. Learning to lead is three level programs for baristas to develop leadership skills, which includes store operation and effective management practice training.

Business and communication offers employees with basic computer skills, conflict resolution, and management training.

Supplier Code of conduct: Starbucks is committed to treating all individuals with respect and dignity, and protecting the environment. According to companies’ policies and ethics, suppliers are required to sign an acknowledgement that they agree to comply with code and standards.

In a glittering ceremony in New York recently, the Council on Economic Priorities (CEP) awarded the International Human Rights Award to Starbucks Corporation at its annual "Corporate Conscience" awards ceremony.