Starbucks Corporate social responsibility CSR

Introduction of Starbucks Corporate social responsibility CSR by HND Assignment Help

Corporate social responsibility, also known as CSR, is the commitment made by a business to act ethically and contribute towards economic development and improving the life quality of the workforce and their families, of the local community and society as a whole (Schwartz, M. (2011). Starbucks Corporate social responsibility (CSR) is the company’s obligation towards its shareholders and those groups or people interested in the company. We know that shareholders have various needs, which has to be fulfilled by the company. The customers desire safe products and valuable services from the company. Starbucks CSR is not only concerned with the shareholders; it also includes customers, suppliers, investors and employees, and the community surrounding the business (Anaejionu, R, 2016). An investor wants to enhance its profit by investing in the company. The district Starbucks expects that the industry limits its activities responsible for causing pollution. Starbucks Corporate social responsibility (CSR) aims to maximise good causes and reduce the harmful effects of business activities (Kotler, P and Lee, N, 2011). In contrast, an employee requires a fair wage policy, and working conditions should be safe.

Four measurements describe the Corporate social responsibility of Starbucks CSR.

1. Legal: A corporate should always ensure that their business practices are legal and are obeying regulations to protect the consumer needs because the customers rely on a business that is truthful regarding the products and services that they offer (Werther, W and Chandler, D, 2010). Suppose a company is penalised or ceases to perform its activities due to illegal practices. In that case, it will ultimately affect that company’s customers (Brennan, D, 2011). Starbucks CSR
2. Economic: The economic responsibility of a company is to make a profit and be capable of returning a good amount of interest to its investors. The creation of job opportunities to the community and the contribution of producing valuable products and services is also the responsibility that lies in the hand of a company—the corporate social responsibility of Starbucks.
3. Ethical: The ethical responsibility of an organisation is to manage waste, recycle and balance consumption. The government often regulates these areas. It is voluntary for a company to go beyond what the law requests to bring sustainability for the future generation. Starbucks corporate social responsibility
4. Philanthropic: It is the philanthropic responsibility of a company to promote human welfare and spread its goodwill (You, J, 2015). All these areas are covered under the scope of CSR (corporate social responsibility) of an organisation. CSR Starbucks

Starbucks Background Analysed by HND Assignment Help.

Starbucks was founded in 1971; it was the first retail store opened in Seattle’s Pike Place Market in the US. Moby Dick Novel inspires the company’s name written by Herman Melville. It evoked the romance of the high seas with the seafaring tradition of early traders who dealt in coffee. In 1981, Howard Schultz showed interest in Starbucks and wanted to be a part of it. He worked very hard, and his ideas could expand the enterprise outside Seattle. Currently, Starbucks has reached a new height of success in growing their business worldwide. It also aims to provide excellent customer services to maintain the company’s reputation.

Starbucks Business Ethics and Compliance

Starbucks believes in conducting business ethically and striving to do business suitably to succeed. Business Ethics and Compliance is a process that strongly supports Starbucks’ mission and helps protect the culture and reputation of the company. This program aims to develop and distribute awareness and facilitate legal compliance and ethical training. Starbucks takes the initiative to investigate the matter and issues that bring conflicts and disinterest of the partners. All the partners are requested to discuss the company’s problems and challenges by building good communication channels (Simpson, J and Taylor, J, 2013).

The enterprise can maintain its ethical code of conduct in its business activities. As a result of this program, it was developed that most of the issues were related to the company’s employees. After this, the company ensured that these resolved issues as soon as possible. This trend is the same in other companies as well. The middle of business conduct program helps accomplish the company’s mission and objectives by maintaining its core values. It sets standards to obtain a brief statement regarding the company’s expectations and how to match the desired criteria. To keep the norm of Business Conduct, the company has issued a booklet distributed to all its partners to become helpful at the time of decision making (Mullerat, R, 2010).

Starbucks’s Behaviour towards the corporate social responsibility CSR

Starbucks aims to commit good governance, ethical code of conduct and social responsibility in the way they perform their business. The employee satisfaction and retention of the company are high because of the good CSR practices (Fridell, G, 2007). Customers are attracted more to the company because they perform corporate social responsibility responsibly, which is the organisation’s driving force. The company invests in measures to strengthen its supply chain to ensure sustainable growth. The measures company take to reduce their impact on the environment are initially cost consuming. Still, in the longer run, they prove to be beneficial in reducing environmental damage and cost-saving. The company seeks approval and the necessary licenses to operate from the concerned authority.

The Starbucks company’s board of directors firmly takes responsibility for following the ethical governance principles. The company’s board has always been classified. The criteria for the appointment of the board member always have personal integrity and ethics on the top of the list, along with considering professional and personal background. A solid and ethical corporate culture is essential for the organisation’s success. The company provides guidelines through a program called Starbucks Business Ethics and Compliance.
The way the company manages its corporate social responsibility shows that it is willing to identify and priorities the issues that have emerged and can address them in a systematic and integrated manner. Along with a dedicated team to take care of the corporate social responsibility initiatives, the company has also formed three cross-functional teams that take care of the specific responsibilities. The units are Emerging Issues Council and Starbucks CSR Executive Committee. The Emerging Issues Council was established in the year 2004 to identify and map the external vital trends and issues that may impact the company’s business. The council may involve external stakeholders to gain input once the problems are identified.

CSR (corporate social responsibility) Executive Committee was established to strengthen the overall CSR governance of the company. This committee aims to set strategies and policies, to monitor the progress the company has made against its objectives, to oversee the corporate social responsibility (CSR) structure of the organisation at the local, regional and global level, to ensure that the integration and implementation are done throughout the company and to approve and review the social investment activity (Wolf and Ruth, 2014).

Managing corporate social responsibility

Starbucks manages its CSR policies to evolve the emerging challenges quickly. It has shared accountability for CSR, so the company relies on a dedicated CSR group (Niahkaew, P, 2010). This group manages CSR at different levels; at the business level, department or division level. Besides this group, other groups ensure that the company successfully matches the legal formalities prescribed by the government in this regard. In Starbucks, the top executives are reported on a day-to-day basis if there are any corporate social responsibility related issues.

Starbucks ‘ social responsibility is considered the best CSR strategy, focusing on the three pillars: Community, Following Ethical Sourcing, and Taking Care of the Environment. It is observed that Starbucks is working for the development of society. Its prime focus is to give the organisation what they have utilised. It has developed many community stores associated with local nonprofit organisations to impact society positively. It has focused all its resources in developing the community resources by incorporating various social service schemes (Environmental 2016).

They have integrated social responsibility as a part of their corporate strategy. Howard Schultz has emphasised Corporate Social Responsibility while focusing on its structure. Their prime focus is the development of community and environment as they are the most essential for any country. Social responsibility is a pattern used by organisations to support natural resources worldwide. Starbucks is a pioneer leader in promoting social responsibility in its daily work (Wolf, Ruth, 2014).

Sustainability Initiatives by Starbucks

Starbucks has more than 24,464 stores which are operating in 34 countries and serving the best coffee to its customers. Their mission is to provide their customers the best coffee experience by supporting the environment and their farmers. They are focused on promoting their brand as the ethical brand throughout the world. There multiple programs for the society are considered one of the best schemes. Many organizations are focusing on developing their CSR plan as per the Starbucks. The employees are asked to promote the organizational interest in the favor of the company. For accomplishing the purpose Starbucks has developed various plans to accommodate the environmental balance in their daily practice (Ottman, 2011).

Energy conversation

Starbucks understands that most of the carbon emission is created through their stores; therefore they are focusing on developing eco-friendly projects. Starbucks is focusing on utilizing the renewable source of energy as this will cause a lesser harm to the society. Several investments are made in developing energy efficient plants. There store are striving hard on developing the plants which are creating an efficient energy (Goals & Progress: Energy Conservation,2016).

Water conversation and recycling

The stores are utilizing a lot of water in the daily routine job which is a matter of concern for the company. Starbucks is utilizing a technique which makes less water wastage. All their stores follow strong instructions which are helping in managing the renewable resources (Water Conservation, 2016).

Non-renewable resources are causing harm to the environment. Starbucks work with the local community for recycling the resources which it is putting into use. They have introduced various rewards points in reducing the garbage which is created by them.  It offers a ten cent reduction rewards to its customers which own a reusable cup (Recycling and Reducing Waste, 2016).

Green building

They are always finding new ways to design their stores which are putting lesser impact over environment. They are utilizing responsible business materials and energy efficient material to create a difference to the society. They are using LEED Certification programs to protect the environment which was created by United States Building Council. The materials they are using for the construction are energy efficient. The green Starbucks building signify environment friendly measures (Building Greener Stores, 2016).

Climate change

They advocate on utilizing the energy efficient resources. They have collaborated with various communities to improve the coffee production, and restoration of the natural habitat. They are promoting the interest of their farmers while implementing the energy friendly resources. Starbucks knows that they are utilizing a huge amount of resources from the environment which makes it necessary to focus on the eco-friendly use of resources (Tackling Climate Change, 2016)

Responsibility for Farmers

It has partnered with various organizations to promote the interest of their farmers. They have issued certain guidelines for managing the ethical sourcing of coffee. The project is called as CAFÉ (Coffee and Farmer Equity) practices. They emphasize on growing the coffee in a way which is beneficial for people as well as the environment. This program is focuses on managing the natural resources with the needs. The program is focused on sustainable utilization of environment by combining the goals in meeting the requirements (Starbucks C.A.F.E. Practices, 2016).

There initiatives are made on fair pricing, precision, responsible buying and an environmental friendly purchase. They have combined the efforts with the third party to monitor the interest of the farmers. They are working with the local government and ensuring that their farmers are not deprived of utility.

Sourcing Cocoa

The cocoa farming is also given much priority same as the CAFÉ program. Starbucks ensures that the cocoa they are using is based on high standards. For this purpose they have teamed up with many organizations in the favor of promoting the interest of the farmers in the West Africa.

Support for the farmers

Howard Schultz believes in the theory of giving back to the society. The large amount of coffee is imported from the African and Asian countries. It is believed that long term success of an organization depends upon the farmers who are growing high standard coffee. They have launched various programs for supporting the interest of their farmers. A support center for farmers is introduced to teach them the techniques of farming. It will help Starbucks in managing the resources under the harsh circumstances.

Social change is a part of the competitive world as the world is growing at a rapid speed. Companies are utilizing the resources at the same time which is causing a burden over the environment. Profit and social responsibility are mutually important for the success of the organization. Both are valuable for estimating the brand value, which largely shows that both the concepts are correlated (Ethical Sourcing: Coffee, 2016).

Interest of Stakeholders

The interest of the stakeholders is important while managing the corporate social responsibility.  The company works under various circumstances where it needs to manage the interest of various people. Starbucks is focused on managing the interest of its stakeholders by focusing on them individually. The various stakeholders whose interest is allied with the interest of the organizations are as follows:

Environment

Globalization has led to cross-border transactions which has caused a burden over the environment.  The whole world is concerned over the growing environmental issues.  Various programs of Starbucks are focused on managing the interest of the stakeholders. They are regularly emphasizing on the policies which enables safeguarding the environmental issues.

Suppliers

The interests of the suppliers are given prior importance while managing the environment. Starbucks consider that the interest of the farmers is their utmost duty. They should be given equal importance by focusing on various initiatives. Starbucks is known for the best quality of coffee all over the world. Although the brand is quiet expensive but they have a large follower of coffee lovers around the world. A program related to improving farming techniques is introduced over the past decade to manage the quality level of coffee.

Customers

Strengthening the brand name and customer’s satisfaction is the priority of Starbucks. They are focused to serve the interest of their customers in developing the programs which provides utmost benefit to their customers. They have introduced different products as per the taste of their customers. Developing product as per the taste bud of the local customers is the USP of the brand.

Communities

Starbucks is a place for various community meetings. It is providing a major source to voluntary organization to procure the funds. They are focused on establishing 50 stores by 2018 to promote the community interest. It is the part of CSR to work in good faith for the under privelidge communities.

Employees

Starbucks understands that the employees are the biggest asset in an organization. Schultz has focused on creating a friendly environment for the employees where they can grow. For providing the best culture to its employees they have introduced the health care programs. To achieve the safety of the employees they closed 10% of their stores in 2006 to provide health benefit schemes. Their policy focuses on benefiting the interest of the employees. They have introduced Bean stock scheme which promotes the interest of the employees and creates a sense of belongingness. It is essential for an organization to focus on the physical and intellectual well-being. Starbucks has realized that it will help them to achieve the result on a long run.  Nowadays many organizations understand the importance of CSR and they know that it will benefit them in a long run (Peng, 2009) (Scott,2016).

Starbucks: Reasons for Success

In the present world Starbucks is the leading retailer of coffee, it produces and sells a wide variety of beverages, and pastries and confections all over the world (Gilbert, S, 2008). It also sells their beans to airlines, businesses and hotels, restaurants, and produces a premium line of teas long with a line of small disc packs in their company related stores. The company has made a huge success in the global world because of an excellent approach shown by their employees. Starbucks try to relate their activities keeping in view the culture and values of their valuable customers. They invest and create a unique relationship with their employees and try to develop an understanding to meet the expectations of their employees. Starbucks is an innovator by following all the guidelines related to discipline and good management. They try to bring innovation and new ideas in the business to cope up with the emerging changes in the needs and wants of their potential customers.

Challenges faced by Starbucks

The significant challenges faced by Starbucks are competitors and their increased interference in their product line, as the rivals started to deal in the same products that Starbucks has been trading in. Starbuck has an issue of lack of experience in conducting business activities in a price-sensitive market. Due to this, it sometimes becomes challenging to maintain its position against its business rivals. Starbucks is now trying to plan its marketing mix strategy so effective that it becomes impossible for its competitors to sustain such techniques in their conduct. The ultimate upscale in their retail mix builds loyalty towards their customers and brings growth to the economy.

Conclusion

Starbucks is an enterprise that takes its CSR very serious about developing and maintaining a healthy relationship with its customers, suppliers, investors and shareholders. Starbucks has successfully maintained its position in the global market by maintaining an ethical code of conduct as per the market standard and values. The employees take the initiative in bringing a feeling of satisfaction in the minds of their customers and dealers so that they can achieve strong trust and loyalty from them. By fulfilling all the requirements that a practical corporate social responsibility policy demands, Starbucks is one of the leading retailers that deal in coffee and various other products worldwide.