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MBA 4645

Unit III: Ethics, Governance and CSR

Group Assignment
Management Perspectives & Economics
MBA 4645

Submitted on 20th January 2011


Submitted to and prepared under guidance of
Dr. Alaa Garad

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Note: Appendix is not counted towards the total word count

Total no. of words: 1198

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Component of items:

1- Component of items
……………………………………………………………………………….. 2

2- Premise
……………………………………………………………………………………………
……… 3

3- Starbucks structure and its effect on forming ethics


policies………………….. 3

4- Starbucks ethical contribution


…………………………………………………………….….. 3

5- Framing business ethics


………………………………………………………………………….. 4

6- An ethical dilemma and values ‘balance


…………………………………………………. 5

7- Ethical theories and Starbucks approach for a solution


………………………….. 5

8- Conclusion: Managing business ethics


………………………………………………..….. 5

9- References
……………………………………………………………………………………………
…6

10-Appendix1: A collaborative team group work


………………………………………. 6

11-Appendix2:Starbucks’ corporate social governance ………………………..


……. 7

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2. Premise:

Admittedly, Starbucks coffee had reached far and possessed a leading


position in its contribution to the field of business ethics, which concerned
about addressing issues of right and wrong to business actions. Where,
sustainability, which is the maintenance of the triple bottom line:
environmental, economic and social, widely became the concern of the whole
global community. And that, through its successful approach to the
communities in which it operate via recognizing and addressing its corporate
social responsibilities, which addresses the sustainability target by
encompassing the economic, legal , ethical and philanthropic factors required
by the society addressed by Carroll’s Four -Part Model of Corporate Social
Responsibility (Crane and Matten,2007).

3. Starbucks structure and its effect on forming ethics policies:

However, Starbucks is a multinational corporation based in USA. Therefore,


it approaches business in the Anglo-American capitalist way where the
corporation is accountable mainly to shareholders and target the short-term
benefit, the individual is responsible for ethical conduct rather than the
constitutions, corporation is the key actor in business ethics to set the ethical
rules and guidelines in the form of code of ethics rather than the state.
Furthermore, it became a fact that a corporation is morally responsible as an
independent individual and is accountable to the community in which it
operates through its corporate internal decision structure and its
organizational culture. Also, Starbucks ‘common stock trade on the NASDAQ
and is subject to the open global market (Starbucks corporation, 2009). On
the other hand, since Starbucks is a multinational corporation operates in the
global market, where continue eroding of territorial bases of social, economic
and political activities and norms, which contributed in the resulted
assimilation among societies that left the ethical issues beyond the

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governmental control and rely on the contribution of empowered corporations
(Crane and Matten,2007).Therefore, and due to the above mentioned,
influenced by Sarbanes-Oxley act and self enlightenment, for strategic
marketing regime and expanded stakeholders ‘effect through Non
Governmental Organizations NGOs and increased number of ethical investors
and activist shareholders, Starbucks sets its Shared Planet report and other
codes of ethics in which states Starbucks ‘corporate governance accountable
to its massive stakeholders in the whole global market where transparency is
not an option anymore.

4. Starbucks ethical contribution:

Therefore, Starbucks had maximized efforts to cover and balance all the
social issues involved in its business. However, environmentally, in which we
are concerned to discuss the cup recycling dilemma, Starbucks puts
measures in place to manage waste, protect water quality, conserve water
and energy, preserve biodiversity and reduce agrochemical use. Moreover,
Starbucks responsiveness, the capacity to respond to social Pressures, was
either

accommodating or proactive when possible; this was obvious in their


initiative to pursue their target of enabling 100% cup recycling over more
than 30 years until moment (Starbucks Corporation, 2009).

5. Framing business ethics:

Interestingly, Starbucks set in place the proper outcomes of CSR the


processes of social responsiveness and outcomes of corporate behavior. So,
it set its wide range of social policies in a way that covers not only the health
of its business but also the employees and stakeholders. Therefore, its
policies range covers multiple issues, to name some: global human right,
C.A.F.E. practices, corporate political contribution and UN Global Compact.
While, recognizing the importance of follow-through to get the desired result
from such policies, it set in place its social programs to implement them.
Therefore, it initiated Starbucks Shared Planet to do business responsibly in
the best way to people and community by producing an annual report defines
its social goals and targets. Furthermore, it put the norms to measure its
social impacts, to trace the achievement of the programs. Where, shared
planet annual report comprises figures of past, present and future goals and
targets (Starbucks Corporation, 2009). Accordingly, considering the above
mentioned, it became clear that Starbucks has an extended view to corporate
citizenship in which believes, enables and avails social, civil and political right
to each individual on earth.

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Be a good Global

Corporate citizen Philanthropic

Responsibility

Be ethical Ethical

Responsibility

Legal
Obey the law
Responsibility

Be profitable Economic

Responsibility

The Pyramid of Corporate Social Responsibility

6. An ethical dilemma and values ‘balance:

Although, with all the above mentioned measures and norms, Starbucks still
face ethical dilemma where it failed to balance among the ethics values,
where Starbucks adopts the wider concept of stakeholders based on principle
of corporate right and effect, making it accountable to each individual or
group which is harmed or benefits from the corporation or whose right can be
violated or respected by the corporation (Starbucks Corporation,
2009).However, waste management and cup recycling, in which we elaborate
bellow, is one of the most ethical dilemma faced by Starbucks where
environmental and the other values are collided.

7. Ethical theories and Starbucks approach for a solution:

However, bringing the issue under the study, stakeholders are: shareholders,
employees, customers, governments, suppliers and manufacturers of paper
cups, NGOs, recycling plans, environmental organizations, competitors,
chemicals labs and future generations. Hence, since finding a solution to the
problem developed over 30 years along the development of modern ethical
theories. So, we find different approaches, initiatives and techniques in
accordance to the available theories, technologies and ruling systems

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.Therefore, using the prism of ethical theories trying to find the best solution
to the problem. Obviously, since alternative sources are not rational or
available, finding a solution to the cup recycling problem requires joint efforts
of the whole stakeholders to creatively develop the technology and process in
which will find Solutions those would please all stakeholders. However, while
traditional ethical theories, virtue and feminist ethics were not helpful since
they work with available options. Discourse ethics provide the mechanism
which looks at the contextual of the issue and holds an open discussion with
all the stakeholders to find the suitable solution in which Starbucks as a
corporate citizenship, by taking the initiative globally, was able to make a
progressive solutions, at the same time, broaden its experience through
organizational learning which open the way to the solution when constrained
effort resulted in disclosing 100% recyclability of the paper cups to a new
cups. On the other hand, postmodern ethics questioned the practices and
believed of the conduct of the stakeholders (Crane and Matten,2007), which
became affordable through the successive interacted summits, and
suggested locating recycling boxes on spots to avail economic and easy
resources to the recycling plans ( Kamenetez, 2010).

8.Conclusion: Managing business ethics:

Finally, finding a solution to the above mentioned dilemma was a result of


successful managed business ethics where standards of ethical behavior
address all components of business ethics management in which assured
covering all ethical issues. Plus, proper management of stakeholder relation
in which comprises mutual support to farmers, endorsement by NGOs, project
and strategy dialogue with stakeholders through the summits and task force
and alliance with NGOs to accomplish its targets. Moreover, Starbucks
possesses its social accounting report as a mechanism to assess ethical
performance in which is inclusive, comparable, covers all departments,
discloses the essential data, verified externally through accredited third party
and most importantly shows steadily improvement. On the other hand, we
find Starbucks adopts formal values ethics orientation programs as well
informal by cultural learning supported by its CEO’s active leadership
initiatives (Starbucks Corporation, 2009). Keeping a small space to suggest
Starbucks franchised stores to obey these standards.

9. References:

-Baron, D. (2003). Business and its Environment. Prentice Hall 4th edition.

-Crane, A. and Matten, D. (2007). Business ethics.( 3nd edition)

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-Hawken, P. (1993). The ecology of commerce. New York: Harper Business.

-Heal, G., & Garret, P. (2004). Corporate Social Responsibility. 2004 annual
conference of the Monte Paschi Vita: Columbia Business School.

-Kamenetz, A. (2010). The Starbucks Cup Dilemma, Fast Company. Available:


http://www.fastcompany.com/magazine/150/a-story-of-starbucks-and-the-
limits-of-corporate-sustainability.html [Accessed 04January 2011]

-Starbucks Coffee Company. (2009). Being a Responsible Company.


Available: http://www.starbucks.com/responsibility [Accessed 02 January
2011]

-Starbucks coffee company. (2009). FY2008 Global Responsibility Report.


Available: http://www.corporateregister.com/a10723/25917-09Su-
5235234N11718838056K-Gl.pdf [Accessed 05 January 2011]

-Starbucks Coffee Company. (2009). Year in Review: Fiscal 2009, Available:


http://assets.starbucks.com/assets/ssp-g-p-full-report.pdf [Accessed 05 January
2011]

10. Appendix1:

A collaborative team group work:

This report was a joint effort of the group members, where every member has
contributed in a sound way in the process of developing the report through
consecutive meetings. Therefore, the first meeting resulted in addressing the
discussed report and requested each member to search for a potential
company where enough disclosed information to build our assignment on.
Also, the most important to assure an effective progressive process, we
assigned a team leader to make organized decisions about the time to meet
and a progressive development. However, the second meeting resulted in
choosing Starbucks for our assignment and requested the team members to
search for a certain ethical dilemma about it. Whereby, another meeting
resulted in choosing the cup recycling dilemma and requested every member
to develop his draft report that covers the issue in accordance with the
materials. Moreover, another meeting resulted with combining the best of
members ‘point of views and ideas and giving the team leader the combined
draft ideas to combine. Finally, the final meeting resulted in checking the
final report where some ideas were subjected to be reorganized to give us
the final report.

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11. Appendix2:

Corporate Social Responsibility Governance:

Source: Starbucks Report