Starbucks a time.” According to the company’s

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Starbucks is an American coffee
company that first opened in 1971. The company first started with one store in
Seattle selling the world’s finest fresh-roasted whole bean coffees. Howard
Schultz, the current Starbucks chairman and chief executive officer, first
walked into a Starbucks in 1983 and joined the following year. After a trip to
Italy, Schultz wanted to bring the foreign coffeehouse tradition back to the
United States. When Schultz left Starbucks, he returned in 1987 to purchase it
with the help of local investors. Now, Starbucks has grown to sell more than
just freshly brewed coffee and blended frappuccinos. The company sells coffee
grounds, coffee makers, tea, food, and mugs.

an avid coffee drinker, Starbucks coffee is one of the top choices. However, it
is on the more expensive side. Many people wonder if it is worth spending a
little extra money on their coffee. Their mission statement states they “inspire
and nurture the human spirit – one person, one cup and one neighborhood at a
time.” According to the company’s website, Starbucks ethically sources their
coffee, offers many employee benefits, and socially impacts the community.
Because Starbucks understands the importance of social responsibility to its
stakeholders, and is dedicated to the environment as well, these factors
contribute to Starbucks charging a few extra dollars for higher quality coffee
and coffeehouse experience.

coffee beans come from Latin America, Africa, and Asia. The company ethically
sources their products from those three coffee growing regions. This means that
the coffee is produced and purchased in a way that respects the people and the environment
that produce it. According to USA Today, over $70 million has been invested for
supporting the farms and ethical sourcing. With the development of Coffee and
Farmer Equity (C.A.F.E) practices, Starbucks ensures to improve the quality of
life for the suppliers. Today, 99% of their coffee is ethically sourced through
the C.A.F.E Practices, or fair trade. As a corporation, Starbucks has a responsibility
to the coffee farmers and the land itself, or the stakeholders. It is Starbucks
“vision that together we elevate our partners, customers, suppliers, and
neighbors to create positive change. To be innovators, leaders, and contributors
to an inclusive society and a healthy environment so that Starbucks and
everyone we touch can endure and thrive.”

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trade is similar to ethical sourcing. It strives to help suppliers, the farmers,
and producers in less economically developed countries receive a fair price for
the goods that they produce. Fair trade coffee dealers
guarantee the growers a fair wage for their products, and in return the
farmers promise to provide decent conditions for their workers and to grow
their coffee in an environmentally friendly way. So, the little
extra money that customers pay for coffee goes directly to the coffee farmers. On
the website, Starbucks invests in programs to help local communities and ensure
a long-term supply of high quality coffee. Many other businesses view this as
ethical, and even ranked Starbucks as one of the most ethical companies.

there has been debate over the high standards Starbucks holds themselves to. Many
social and environmental professionals address the fair-trade principle. The
Organic Consumers Association has tested Starbucks and their coffee purchases.
Starbucks claims that they ethnically source 99 percent of their items. In
2013, Starbucks revealed just 8.4 percent of their coffee was without affirmed
exchange. This implies that the purchases met the low guidelines of C.A.F.E. (Kessler).
These guidelines are centered around the farming communities, not on Starbucks’
own commitment to farmers. The C.A.F.E. program guidelines don’t determine
either a base cost or a standard for arranging value that would ensure a
reasonable cost for the farmers.

employees, also called partners, of Starbucks get higher quality employee benefits.
Starbucks offer bonuses, 401k matching, discounted items, health coverage, and
even college tuition to full-time and part-time employees. The Starbucks
College Achievement Plan offers employees, full tuition coverage through
Arizona State University’s online degree programs. The program helps student
avoid going into debt and offers a quick reimbursement process. Starbucks also emphasizes
relationships with its employees. After witnessing his father treated bad at
work, Schultz made sure to treat his partners the best he could. He offers a
higher wage than most restaurants and employee benefits that are not offered
elsewhere (Enz 10). They are expected to represent the company well to the
customers. When the workers of a business are satisfied in their work environment,
the customers are pleased.

have been a few times where customers have been upset with Starbucks. In 2015,
a woman was handled a hot tea at the drive-through window. The cup was so hot,
the woman spilled the drink on herself, caused it to burn her and kill her dog
who was also in the car. The customer sought over $75,000 in damages. A
Starbucks spokesman refuted against the women to show it was not the employee’s
fault (Wang). Even though the employee did not double-cup the drink, Starbucks
tried to blame the customer. According to the lawsuit, there is a written
policy on how to serve hot drinks. However, employees are graded on how fast
they prepare and serve drinks to the customer.

The Starbucks Foundation was created to
open up the job market, water and hygiene, and develop the local community. It
started in 1997 by funding literacy programs in the United States and Canada. It
them grew to assist the youth and farm communities. The program, Opportunity
for Youth, reaches out ages 16 to 24. Starbucks is seeking to hire non-white,
poor young Americans. The youth unemployment remains high, which holds them
back from getting a steady job. With the help of Schultz, he invested in the
youth and young adults by providing jobs and internships. By hiring these young
adults, it will improve the employment status and the supply and demand sides
of the labor market (DePhillis).

main competitors are McDonald’s and Dunkin’ Donuts. The two competitors are
known for their cheaper priced coffee. They have worked to improve their image
and atmosphere as they began to introduce their upscale versions of specialty
coffees. Many can say that Starbucks high prices may lead to increase supply,
which can raise their profits. Starbucks is known for their specialty drinks
and higher quality of coffee. The customer is put first at Starbucks, which
makes the overall experience and atmosphere better. In 2003, McDonalds
remodeled its stores to give the customers a better dining experience. Where
Starbucks stores are all company owned, the McDonald’s locations are franchised.
This gives Starbucks the ability to maintain more consistency across its
locations (Brizek 5).

conclusion, Starbucks is an all-around ethical company. They follow the C.A.F.E
standards and guidelines to reward farmers for meeting social and environmental
goals. Because of fair trade, environmental and community services programs, the
company was voted number one 2011 World’s Most Ethical Companies in food services
and cafes. Being an ethical corporation makes the employees want to work hard
and provide quality service for its customers. Starbuck’s growing concern
outside their company makes a difference with the customer experience. They
increase awareness about the farming communities and its producers. Employees
who help inside and outside the corporation will feel they are making a
difference. They also feel this because Starbucks strives for equal opportunity
when hiring. Starbucks works to achieve the company’s code of ethics, code
of conducts, and ethical decision-making process for others. 

Categories: Economics


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