Three Concepts of Social Responsibility of Starbucks

Social responsibility means that organizations are part of a larger society and are accountable to that society for their actions. Like ethics, agreement on the nature and cope of social responsibility is often difficult to come by, given the diversity of values present in different societal, business, and corporate cultures. There are three concepts of social responsibility which are profit responsibility, stakeholder responsibility, and societal responsibility.

Profit responsibility holds that companies have a simple duty that is to maximize profits for their owners or stockholders. Nonetheless, there are concerns about profiteering. Profiteering occurs when a company makes excessive profits usually by taking advantage of a shortage of supply to charge extremely high prices. In addition to sales through company-operated retail stores, Starbucks sells whole bean coffees through supermarkets and it has leveraged its brands by expanding beyond its coffee kiosks and stores to bring the Starbucks’ coffee experience directly to workers at their employer’s offices. Through its business alliance programs, corporate cafeterias and other businesses are able to serve Starbucks coffee and its related products.

Starbucks reinforces its brand through multiple channels ranging from the relatively low profit grocery market segment to the high profit margin, experience-based, retail business cafes and kiosks.

However, Starbucks viewed the profitability as essential to it future success. When Starbucks’ guiding principles were conceived, profitability was included but intentionally placed last on the list as it was least important. It was believed that adherence to the five other principles would ultimately lead to good financial performance.

Stakeholder responsibility focuses on the obligations an organization has to those who can affect achievement of its objectives. These constituencies include consumers, employee, suppliers, and distributors. Stakeholder responsibility is already an implicit part of how many companies must win over the minds and hearts of key stakeholders to keep their best employees, generate high-quality products, maintain customer loyalty, and build efficient and productive relationships with suppliers.

Starbucks encourages its employees, who are called partners, to keep in mind its mission statement, monitor management decisions, and submit comments and questions if they encounter anything that runs counter to any of the six points. Also, the company believes that giving eligible full- and part-time employees an ownership in the company and sharing the rewards of Starbucks’ financial success has made the sense of partnership real.

In addition, the company provides part-time employees with healthcare benefits, on-the-job training, career advancement opportunities, partner recognition programs, and diligent efforts to ensure a healthy and safe work environment and this has leads to higher than usual levels of satisfaction and engagement. This is especially valuable and crucial in quick-serve restaurants typically characterized by high turnover. The company partners’ (employees’) satisfaction and engagement translates into lower turnover rates. Thus, Starbucks is ranked as one of the “Ten Most Admired Companies in America” and one of the “100 Best Companies to Work For” by Fortune magazine.

Starbucks and its partners (employees)