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ETHIC IS IMPORTANT FOR EVERY COMPANY TO RUN THE BUSINESS

Case: STARBUCKS
M Gilang Prakasa / 29115651
Abstract
Starbucks is considered one of the worlds most ethical companies. Starbucks makes
conscious efforts to be a responsible company and conduct business in an ethical
manner. It prides itself in the ethical way it does business, through community,
sourcing, environment, diversity and wellness. It strives to live out its mission
statement and values everyday. Starbucks openly displays its commitment to being
socially responsible and wants its customers to know exactly how Starbucks is doing
so. It plasters its mission statement and values on the walls of many of the stores, it
prints facts onto its coffee cups, it dedicates countless pages on the company website
to its responsibility, and Starbucks even compiles an annual report dedicated to its
corporate social responsibility.
Keyword : Ethics , Global Company
I. The importance of Ethic in Business
Ethical behaviour and corporate social responsibility can bring significant benefits to a
business. For example, they may:
o attract customers to the firm's products, thereby boosting sales and profits
o make employees want to stay with the business, reduce labour turnover and
therefore increase productivity
o attract more employees wanting to work for the business, reduce recruitment
costs and enable the company to get the most talented employees
o attract investors and keep the company's share price high, thereby protecting
the business from takeover.
Unethical behaviour or a lack of corporate social responsibility, by comparison, may
damage a firm's reputation and make it less appealing to stakeholders. Profits could
fall as a result.
II . Business Ethic of STARBUCKS
On its website, Starbucks professes to fulfill its environmental mission statement as
well by understanding environmental issues and sharing information with its partners;
developing innovative and flexible solutions to bring about change; striving to buy, sell
and use environmentally friendly products; recognizing that financial responsibility is
essential to the environmental future; instilling environmental responsibility as a
corporate value; measuring and monitoring progress for each project; and
encouraging all partners to share in the mission. This is a very ambitious mission,
which in large part, Starbucks appears to be achieving. In addition, the companys
values are highly publicized, and adorn the walls of stores across the globe, as well

as in press releases and annual reports. Below are the company values:
1. Community
2. Ethical Sourcing
3. Environment
4. Diversity
5. Customer Wellness
Starbucks demonstrates its values in a number of ways. For example, Starbucks is
the only major food and beverage chain to provide health benefits for both full-time
and part-time employees. Many employers in the fast food industry do not provide
health benefits to part-time employees. Also, each stores employees are allowed to
select which local charities they wish to promote through volunteer hours, products,
and cash contributions. For example, in April of 2012, Starbucks contributed 230,000
hours of community service. The company also supports literacy programs and
international relief efforts. Partners are even eligible for company stock
options. Concerned about rising unemployment in the United States, Starbucks
opened up a factory in Georgia, which created 200 manufacturing jobs. Starbucks
helps sustain coffee communities around the globe through its loan program. In 2011,
Starbucks loaned a total of $14 million to 45,000 farmers in seven countries around
the globe. On a larger scale, Starbucks not only helps the communities where the
stores are located, but also helps to improve the lives of its suppliers. Starbucks
Supplier Diversity Program actively seeks out and contracts with suppliers that are
either female or minority-owned. Starbucks contributes to the health of the
environment in a number of ways, including using recycled paper and plastic, and in
2011 Starbucks achieved a 50% reduction of wastewater in 1000 of its stores by
installing a new filtration system. Also, Starbucks provides wellness for its customers
through quality products that contain no more than 500 calories and are free from
unnecessary ingredients like high fructose corn syrup, artificial flavors, dyes, and
artificial trans fats.
Starbucks is unique in that it produces an annual Global Responsibility Goals and
Progress Report. The report tracts the companys progress towards achieving its
social responsibility goals. According to the 2011 report, Starbucks is doing an
excellent job at achieving its goals (See reports below).
All large global corporations face a whirlwind of criticisms from many
directions. Although I believe Starbucks to be an ethical company, I know there are
others who have a contrary view. During my research I came across blogs and articles
critical of Starbucks because it is so dominant in the market place and because of its
adverse impact on smaller competitors. While Starbucks phenomenal growth may
pose an economic threat to its competitors, it doesnt make Starbucks
unethical. According to business ethicist Thomas Donaldson, a corporation has the
following corporate duties:
1. The duty to avoid depriving people of their rights
2. The duty to help protect people from such deprivation
3. The duty to aid those who are deprived

III .The Benefits of Ethical Behavior


Starbucks Corporation is the worlds largest coffeehouse chain, and is
considered one of the worlds best-liked and best-known consumer brands- with
19,972 stores in 60 countries. There are 12,937 stores in the United States, 1,273 in
Canada, 971 in Japan, 790 in Great Britain, 657 in China, 453 in South Korea, 356 in
Mexico, 276 in Taiwan, 200 in the Philippines, 158 in Thailand and 1 in India. Twenty
five million people patronize Starbucks everyday, and customers who consider
themselves loyal customers visit an average of 18 times a month. Over the past 10
years, Starbucks stock (SBUX) has increased in price by 2,200%. Starbucks has
made the list of Most Admired Companies in the U.S., the list of 100 Best Companies
to Work For, the list of 100 Best Corporate Citizens, the list of the Worlds 50 Most
Innovative Companies, and the list of the Worlds Most Ethical Companies. According
to CEO Howard Schultz, Starbucks commitment to social responsibility has played a
significant role in producing this phenomenal growth.
IV . REFERENCES
1) Gertner, J. For infusing a steady stream of new ideas to revive its business.
Retrieved
from
http://www.fastcompany.com/most-inn
ovativecompanies/2012/starbucks http://www.starbucks.com
2) STARBUCKS company business ethics. http://www.starbucks.com/aboutus/company-information/business-ethics-and-compliance

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