Starbucks Corporate Social Responsibility Practices

Organizational Behaviour - MGTP31101

STARBUCKS CORPORATE SOCIAL RESPONSIBILITY PRACTICES

Robert F. Kennedy once said : "The future is not completely beyond our control. It is the work of our own hands." That is probably out of such a statement that emerged the idea of sustainable development in the late eighties: the development can be done in another way, through social, environmental and economic sustainability. And guess what ? Companies have a role to play in making a better world.

A lot of studies even found out that companies with "sustainable practices" outperformed the S&P500 Index for the last 5 years (ethisphere.com). But is there a real causal effect here ? Often if not always, the top leading companies are the only ones to have cash to invest in leading practices such as sustainable development. By the way, it may not be the sustainability that makes the leader but the leader that makes the sustainability. What is very interesting with a company like Starbucks is that social responsibility as well as environment and social care is rooted in their DNA. Starbucks is one of the few companies that has a real Corporate Social Responsibility Report, and also one of the few companies that does not use sustainable development as a code for cost-cutting or as a tool to buy back a wasted image. Starbucks takes easy because the very essence of the product they sell -coffee- is meant to be served in a mug of values with a muffin of responsibilities. What for ? Being part of the Most Ethicals Companies 2010. Starbucks makes money being responsible because people agrees to pay a little more to have it brewed sustainably.

Let us analyze in a first part the actions taken by Starbucks and how the companies manage to cover the whole topic of corporate responsibility : environment, society and economy.

Then, let us draw conclusions about these actions. How CSR can be economically justified in the case of Starbucks ? Should the shareholders be happy ? Why CSR can be much more than marketing and cost-cutting ?

I/ Starbucks CSR management and practices:

First, a word about how CSR is managed:Starbucks have dedicated structures to ensure that emerging issues are identified, prioritized, addressed throughout the company, and that company policies and procedures are upheld and followed: The Emerging Issues Council, CSR Executive Committee and Policy Governance Council serve these functions.

The organizational approach of CSR management is both centralized and decentralized.The Seattle global headquarters sets the new CSR programs, provides broad oversight, but they are mostly managed and implemented at the business unit or department level.

The second point to be highlighted in Starbucks CSR management is its practical implementation. Starbucks is using a system of figured goals to achieve, with annual control and check-up of these objectives. The CSR annual report is thereby clearly stating how it went and each goal is self-rated.

As for Starbucks' CSR practices, they cover a very large range of issues, which are revolved around five major axis. Here are the main lever Starbucks is using in its CSR policy:

1/ Products:Starbucks is aiming to eventually buy only responsibly grown coffee, according to the Coffee and Farmer Equity (C.A.F.E.) Practices. In 2009, it represented 81% of their total coffee purchases.

2/ Society:Starbucks is promoting voluntarism and community services within its employees. As an example, in 2009, 9000 employees contributed more than 36,000 hours of service to help rebuild the city of New Orleans.

3/ Environment:The paper issue is a real concern, as the coffee cups are Starbucks main products with coffee. Thereby, Starbucks is aiming to ensure that 25% of its cups are reusable or recyclable by 2015. As for electricity and water, they are settling goals to reduce energy and consumption by 25% by 2015.

4/ Employees: Diversity and workplace satisfaction:In 2009, no particular effort was made on that particular matter, probably because economic conditions needed difficult business decisions regarding the work force. Yet, until 2009, Starbucks was promoting a strong diversity policy, for the representation of women and ethnical minorities within the executives and the workforce populations. We can also note a particularity of the Starbucks culture: the employees are "partners" of the firm: the focus is set on the collaborative aspect of Starbucks workplace, where the employees are participating to a common global project.

5/Ethical relationships