Is Starbucks an ethical company with good leadership values?

1
Is Starbucks an ethical company with good
leadership values?

• Presented by Sarah Stine, Marc Arvantis-Arvon,
  Kendra Smith, Ana Gonzales, Meredith Forbes

2
About Starbucks

• Does anyone know how many retail locations
  Starbucks has?
• What city is Starbucks based in?

Image from http//upload.wikimedia.org/wikipedia/
commons/4/4a/NewStarbucks.png
3
Mission

• To inspire and nurture the human spirit-one
  person, one cup, and one neighborhood at a time.
  (From website)
• To establish Starbucks as the premier purveyor
  of the finest coffee in the world while
  maintaining our uncompromising principles as we
  grow. (From company fact sheet)

4
Vision

• Want to make the world a better place by setting
  a good example and following good ethics
• Offer customers the best coffee and the finest
  experience
• Want to benefit the communities that they do
  business in

5
How they live out their mission in Coffee

• Always has been and always will be about quality.
  
• Claim they are ethically sourcing the finest
  coffee beans, roasting them with great care, and
  improving the lives of people who grow them.

6
How they live out their mission to Partners

• Called partners because it is their passion
• Embrace diversity where each person can be
  themselves
• Treat each other with dignity and respect
• Hold each other to these standards

7
How they live out their mission to Customers

• Claim to connect with, laugh with, and uplift
  the lives of our customers-even if for a few
  moments.
• Starts with promising a beverage made perfectly.
• Overall want to make sure they establish a human
  connection

8
How they live out their mission in Stores

• Want customers to feel they belong
• Want to make it a place where they can relax and
  break from the worries outside
• A place to meet with friends
• About enjoying life at the speed you want slow or
  fast their environment provides both
• Provide a great coffee experience for every
  customer

9
How they live out their mission to Neighborhoods

• Take responsibility to be good neighbors.
• Want to be invited in to do business wherever
• Bring together partners, customers, and their
  community
• Will lead others and show good business ethics
  for them to follow

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Values or Guiding Principles

• Respect and dignity
• Embrace Diversity
• Satisfied customers
• Make a profit
• Will not discriminate on anyone applying for a
  job due to gender, martial status, gender, family
  status, sexual orientation, religion, age,
  disability, race or membership of the traveling
  community or for any other reason
• In 1999 began to value the Environment

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Value Social Responsibility

• Work with partners, suppliers, farmers, and
  others to help create a more sustainable approach
  to high quality coffee production.
• Want to help build stronger local communities,
  minimize their environmental footprint, create a
  great workplace, and to promote diversity and
  want to be responsive to their customers health
  and wellness needs

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Activities

• National Literacy trust
• Care International UK

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Starbucks Employees

• Black aprons labeled "Coffee Master" are worn by
  employees who have completed the Coffee Master
  course
• Starbucks is 7 on Fortune Magazine's "100 Best
  Companies To Work For" for 2008.
• Partners Apple, ATT

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Careers at Starbucks

• Claim their success depends on your success
• Partners are their focus and biggest assets
• As a member of the team a person can develop
  their skills, further their career, and plan and
  achieve their goals.
• Foster a commitment to excellence and emphasis
  respect for customers as well as a social
  responsibility.
• Want individuals driven to succeed, bring
  passion, integrity, and above all love working
  with people.

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Executive commitment to business ethics
Ethical Practices, Behaviors, and Documents

• Starbucks Standards of Business Conduct
• Opens with A Message from Howard Schultz
• The Starbucks Board of Directors, senior
  management team and I, are all bound by the
  Standards and the Standards have our full
  support. ..At all times, please remember, do the
  right thing.
• -Howard Schultz, president, chairman and chief
  global strategist

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Executive commitment to business ethics
Ethical Practices, Behaviors, and Documents

• Fiscal 2007 Corporate Social Responsibility
  Annual Report
• Opens with Letter to Stakeholders
• One thing that will never change is our
  long-standing commitment to conducting business
  in a responsible and ethical manner... we will
  only deepen our approach by continuing to
  integrate social and environmental responsibility
  into every aspect of our business.
• -Schultz

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Corporate Code of Ethics
Ethical Practices, Behaviors, and Documents

• Starbucks Standards of Business Conduct
• Practical overviews of legal and ethical
  standards
• Communicates the companys requirements for
• Integrity
• Compliance with the law
• Ethical conduct

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However, in a complex and dynamic world, whats
right may not always be obvious.
Ethical Practices, Behaviors, and Documents
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Ethical problem/conflict resolution procedures
Ethical Practices, Behaviors, and Documents

• Ethical Decision-Making Framework
• Identify the ethical problem.
• List all possible solutions.
• Seek input from others, if appropriate.
• Determine the best approach.
• Is it consistent with our Guiding Principles/laws
  or regulations?
• Front-page test
• Would you be comfortable with the example it
  sends for future decisions?
• 5. If the path isnt clear, ask for
  guidance.
• 6. Follow through on your decision.

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Asking for guidance and voicing concerns
Ethical Practices, Behaviors, and Documents

• Business Conduct Helpline
• Toll-free
• Confidential
• 24 hours a day, 7 days a week

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Starbucks Employee Questionnaire George Mason
University NCLC 375 Leadership and Ethics
1. How long have you worked at
Starbucks? 2. What kind of training have you
participated in? 3. Are you familiar with
Starbucks Standards of Business Conduct and/or
do you understand Starbucks ethical standards?
4. How often do you refer to Starbucks
Standards of Business Conduct? 5. Have you ever
called the Business Conduct Helpline? 6. Have
you attended any of the classes offered by The
Starbucks Support Center? 7. Regarding
healthcare, stock options, and savings benefits,
are you satisfied with Starbucks Total Pay
Package (also known as Your Special Blend)?
8. From your experience, would you say
Starbucks is ethical in its behavior and business
practices?
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Demonstrated corporate commitment to a safe work
environment

• Starbucks is committed to providing all partners
  with a clean, safe and healthy work environment.
• safety rules and practices
• required safety training
• report immediately all accidents, injuries and
  unsafe practices or conditions
• No discrimination
• Treat each other with respect and dignity
• all partners are entitled to work in an
  environment that is free of harassment.

23
Quality is the hallmark of Starbucks coffee
Ethical Practices, Behaviors, and Documents

• Our Coffee?It has always been, and will always
  be, about quality. Were passionate about
  ethically sourcing the finest coffee beans,
  roasting them with great care, and improving the
  lives of people who grow them. We care deeply
  about all of this our work is never done. -
  Ethical Sourcing

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Customer service/satisfaction
Ethical Practices, Behaviors, and Documents
We recognized early on that the equity of the
Starbucks brand was going to be the retail
experience that the customers had in our stores,
says Schultz (president)
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Demonstrated awareness of environmental impact
Ethical Practices, Behaviors, and Documents

• Starbucks is committed to a role of
  environmental leadership in all facets of our
  business.
• Understanding of environmental issues.
• Developing solutions.
• Striving to buy, sell and use environmentally
  friendly products.
• Environmental responsibility as a corporate
  value.
• Measuring and monitoring our progress for each
  project.

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Demonstrated awareness of environmental impact
Ethical Practices, Behaviors, and Documents

• Starbucks focuses on three areas
• Sourcing coffee, tea and paper
• Transportation people and product and
• Store design and operations energy and water
  conservation, recycling, and waste reduction.

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Demonstrated community involvement and
responsibility
Ethical Practices, Behaviors, and Documents

• Every store is part of a community, and we take
  our responsibility to be good neighbors
  seriously.
• Local Level
• International Level
• http//www.youtube.com/watch?vWHP-7lE9mpY

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Whats the meaning of the Starbucks logo?
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Whats the meaning of the Starbucks logo?
The original logo ?
?Somewhat censored logo
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Todays Logo
Even more censored but GREEN!
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Internal Strengths

• Transparent
• Improvement
• All ears
• Beginning with employees
• Customer Loyalty
• Maintaining a good reputation

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External Opportunity

• United Nations
• Diversity
• Compliance with law
• Advertising
• International Business
• Environmental Commitment
• Public Relations

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Internal weaknesses that impact the
organizations approach   

• The sheer size of the Starbucks corporation can
  pose a challenge
• Labor unions

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Challenges related to creating and maintaining an
effective ethical organizational climate

• Growing coffee can have a harmful effect on the
  environment
• Convincing local farmers to grow organic coffee
  is a challenge
• Negative publicity
• You cant teach ethics

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What external opportunities and challenges affect
their processes?

• Its hard to convince local farmers in central
  America to grow organic coffee
• Challenges in overseas markets
• Increase in competition
• Continuing global financial crisis
• Expansion plan
• Starbucks faces challenges over seas, countries
  like Germany in France are still warming up to
  the Starbucks franchise

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What would success look like for Starbucks?

• Sustainable coffee!
• All employees knowledgeable of Starbucks values
  and business ethics principles
• Growth
• Maintaining reputation
• No second guessing
• Good relations with partners and communities

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Additional Steps and Suggestions
Starbucks is already implementing many of the
ethical practices it claims to use in their
mission statement. However, there is room for
improvement.
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Fair Trade Coffee

• As of 2006, Starbucks claims to have purchased
  about 12 million pounds of Fair Trade coffee
  beans.
• This amounts to about 10 of the global Fair
  Trade Certified coffee.
• We believe that Starbucks should continue to
  increase the amount of FT coffee beans that it
  buys per year in order to continue helping the
  producers of the coffee beans.
• While this has the potential to increase the cost
  of the product, the probability that consumers
  will stop buying from Starbucks is very small.

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Corporate Social Responsibility

• Starbucks takes great pride in following its plan
  for Corporate Social Responsibility (CSR).
• Annual reports.
• They audit their suppliers based on the CSR
  standards.
• Violation of the CSR plan, supposed to be dropped
  from the company.
• In 2007, 41 out of 78 suppliers failed to comply
  with CSR policy, but only 14 were dropped from
  the company.
• We believe that Starbucks should take the time to
  ensure that their suppliers are following the
  regulations throughout the year before the audits
  occur.
• They should also attempt to find suppliers that
  are already in compliance with the CSR policies
  before hiring them.

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How does this apply to ethics and leadership?

• Ethical frames
• Starbucks leading the way
• Community
• Culture