Csr: Sustainability Practices- Walmart Vs. Starbucks

"Sustainability: Actions Speak Louder Than Words"

SUSTAINABILITY: ACTIONS SPEAK LOUDER THAN WORDS

Introduction

The purpose of this work is to analyze the mission, values, and core competencies relating to sustainability and the Triple Bottom Line of the corporations Wal-Mart and Starbucks. By analyzing the key differences not only in their values, but the application of their stated values, they can then be judged as to the superiority of their systemic approaches to sustainability. In the case of these two companies, ethics are the most notable difference, which causes Wal-Mart to experience a myriad of dilemmas that Starbucks doesn't. This key difference is important because "nearly any dilemma an organization faces can be distilled down to simple ethical questions" (Eckmann and Frauenzimmer).

Analysis

After analyzing both Starbucks' and Wal-Mart's mission, values, and core competencies relating to sustainability and the Triple Bottom Line, key differences are noted, not just in their stated values, but with their real-world adherence to their values. Wal-Mart for example repeatedly mentions the cost of their products in their mission statement and values, whereas Starbucks' primary goals are a positive experience for their customers. There is also a large degree of dissonance between what Wal-Mart claims is important to them, versus what they do. Starbucks however adheres to their stated values. These differences warrant a closer look.

First and foremost, Wal-Mart and Starbucks' mission statements are entirely at odds. Wal-Mart champions "We save people money so they can live better" (WalMart.com), while Starbucks believes their ultimate mission is "to inspire and nurture the human spirit - one person, one cup and one neighborhood at a time" (Starbucks.com). It is clear that Wal-Mart's main concern is on the low price of their products, whereas Starbucks' primary goal is to provide a positive experience, not just for their customers, but for their employees and community as well. This key difference can be seen when their core competencies are examined. Wal-Mart's core competency is getting products onto store shelves as cheaply as possible and passing those savings onto their customers. Starbucks' core competencies are nearly a polar opposite as Wal-Mart's, as they focus on providing a consistently high-quality product in an atmosphere that is friendly and inviting. It's interesting to note however that despite operating in vastly different markets, and with vastly different business practices; both companies have similar stated values when it comes to the ethical treatment of employees and sustainable environmental practices.

Despite having similar values related to green environmental policies and fair treatment of employees, there is a large gulf between what Wal-Mart claims is important to them, verses their actions. Wal-Mart for example claims to want to achieve 100% renewable energy use (WalMart.com). They haven't however set so much as a timeline for how long this goal might take. In reality, they use less than 2% renewable energy, despite the fact that there are other industry leaders in the grocery market that have already achieved this goal, so it is entirely possible for Wal-Mart to have already done so as well (Mitchell 2011). Starbucks on the other hand sets concrete reduction targets and updates the public on their progress. They have even gone so far as to voluntarily conduct and then publicly release a report on the inventory of its greenhouse gas emissions (Timm 2005). They too seek to operate with 100% renewable energy, and currently over 50% of Starbucks' energy consumption is derived from renewable energy sources (McDermott 2012). Primarily however, Wal-Mart is most noted for neglecting the "people" portion of the Triple Bottom Line concept, as they are notorious for maltreatment of workers. In opposition to these practices, Starbucks adheres to their values of respecting their employees, and is consistently voted by Fortune magazine as one of the top-100 best places to work for (Fortune Magazine 2012).

Perhaps the most telling of the core differences between Wal-Mart and Starbucks' sustainability agendas relates to their motivation for sustainability measures to begin with. Wal-Mart seems to pursue sustainability measures for purely selfish reasons, utilizing sustainability measures more as a tool for their Public Relations department than out of any real attempt at social responsibility. Starbucks however shows by the company's actions that they are in fact genuinely concerned with operating sustainably. Starbucks makes realistic sustainability goals, then actively strives to meet them, publicly reporting on their progress annually (Timm 2005).

After analyzing both Wal-Mart and Starbucks' sustainability strategies, it's clear that Starbucks' business model is superior to Wal-Mart's for several key reasons. First and foremost, because Starbucks adheres to their policies relating to sustainability, they are infused with Goodwill. Though an intangible asset, this Goodwill was estimated at valuing close to half a billion dollars in 2011 alone (YahooFinance 2012). This public perception is important. The Harris Interactive survey for example found that shoppers consider a company's labor practices above all other social responsibility issues (Temple 2008). It should be no surprise then, given Wal-Mart's spotty record relating to the treatment of their workforce, that the Reputation Institute ranked Wal-Mart as being one of the least trusted and esteemed companies in the U.S., ranking 136th out of 150 of the U.S.'s largest companies, being overshadowed primarily by oil companies and defense contractors (Temple 2008). According to the same article, "Wal-Mart's reputation remains the biggest obstacle to the company's long-term growth potential" (Temple 2008).

In addition to having a much higher overall perception, Starbucks' sustainability, specifically to the "people" portion of the Triple Bottom Line equation, is greatly more effective than Wal-Mart's.