Starbucks Corporation and Its Social Challenges

Environmental Impacts

The environmental issue is complicated. Some cities do not have recycling or composting programs (Allison 6). The problem is the recycling market, they can separate the materials, but the main concern is who will collect them. The issue of sustainability is brought into focus regarding the recycling of materials (May, George, and Roper 7). The above scholars observed that by the late 1980s, major changes were taking place in the world whereby social impacts were unbearable since they brought about the issue of unemployment. Moreover, the gap between the rich and the poor was expanding. The poor were forced to engage in development to catch up with the rich. However, they had to be mindful of the environment. This is the main problem that would emerge as the company produces plastic materials. The greenhouse effect is known to cause ecological challenges, which affect the lives of many individuals, including farmers. The company would be forced to rethink the type of materials used in selling its products because paper products are hazardous to the environment.

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Challenges for Starbuck

Another issue that Starbuck is facing is Fair Trade coffee. This means that the product is produced under a standardized regulation, which would satisfy the needs of the customer without an additional price. This promotes the welfare of customers since they would feel the value of their money. Before the introduction of the concept, low-waged laborers, who are mostly farmers, encountered several problems as they were forced to consume substandard products at a high cost (Snider, Ronald, and Diane 89). The issue of Fair Trade coffee is of great importance to Starbuck customers since it convenes the needs of customers regarding the quality of products and costs. As their commitment to encourage and support Fair Trade practices, the management of Starbuck stated that it would brew a Fair Trade coffee for the customer if requested. As of May, George, and Roper (17) observed in their analysis, there has been tension been corporate rationality and social responsibility meaning that some individuals are only concerned with development while others are mindful of sustainability. In the case of Starbucks, tension exists between customers and the management regarding service delivery. Their dedication would be in doubt. The problem is that there is a disconnection between the corporate policy and implementation because the barista would give different reasons, such as they are not brewing it that day or it would cost more.

Corporate Social Responsibility Could Swamp Social Enterprise in 2013

Another issue that management is faced with is related to taxation. The issue of local coffee shops paying taxes and spending profits on businesses while Starbuck, an international brand, does not pay any tax is a challenge. The reason that they volunteered to pay their taxes for the next two years is that the public forced it to do so. The public opinion and some critics pushed the company into its tipping point. It feared that it would lose profit even if it knows that it does not pay taxes. The people would react because it is unfair for the local coffee shops to pay taxes while an international brand that earns a lot does not pay taxes. That is why most locals are in support of other local shops, but not Starbuck. Even though the company pays taxes in form of dividends, sales tax, and income tax for employees, members of the public are not convinced that the organization has always fulfilled its obligations in regards to taxation. The existing law requires that companies obey their legal obligations in terms of submitting their returns to the government. In 2010, the officials of the firm announced that the company would volunteer ten million pounds as taxes to the government. This is was more than what the law provides as regards the agreement between the company and the state bodies in charge of regulating businesses. The company engaged in this only to please the British public, but not to comply with the law since the law gives it an advantage of paying taxes through other means other than direct taxation.

Starbuck Struggles with Reducing Environmental Impacts

Starbucks is having a hard time addressing the environmental issue is because it knows that not all cities have the capacity to recycle paper cups. The main concern is how to dispose of wastes. The concern is not just on the stores, but also on the location (Cummins 4) The company needs to coordinate with the locals and officials from the government or make a partnership with agencies that can collect their wastes and dispose of them properly. It has tried dealing with the environmental issue internally by providing paper cups to customers, who are also concerned with the environment, but it forgot to come up with a proper strategy for disposing of wastes. With proper coordination with government officials, the company may perhaps find a better way on how to dispose of paper cups properly. In the meantime, the company should come up with a campaign agenda that encourages locals to engage in proper waste disposal, as it continues to explore some of the best options for waste management.

Challenging Starbuck

The Fair Trade program has been applied in other places, such as Chicago, successfully. Starbucks committed to supporting the city’s program. Two bloggers have made a move to investigate if the company can keep its commitment and fulfill its social responsibility. The major problem is that no proper coordination between the company’s policy and the ground personnel based in Chicago, which is in charge of operations. As May, George, and Roper noted, the focus is on two concepts, which include the place and participation of various stakeholders. This would coordination would probably provide utility in the evaluation of corporate ethos. There should be proper coordination between various offices in case the company is to realize its missions.

The details of the program should be discussed for the baristas to know the importance of this campaign (Stuart 112). This would allow them to demonstrate to the customer that they are willing to convene social responsibilities. Sometimes, proper coordination is always given less attention that is why there is difficulty in implementing campaign programs. It is not just enough for the people to know that the company wants to fulfill its social responsibility. However, the important thing is that the management should inform people about what agenda it has for them. Employees should have critical information since they face customers every day. They should have enough information regarding the details of serving Fair Trade coffee even if they are not brewing the coffee on that day.

Corporate Social Responsibility Could Swamp Social Enterprise in 2013

When it comes to taxation, the government is always involved. The company follows rules and regulations that are set and implemented by the government. Indeed, Starbuck has the option of not paying taxes as compared to the local coffee shops that pay taxes and spend profits on improving market shares. Starbuck is an international brand when it comes to the coffee business (May, Cheney, and Roper Juliet 2). Its brand is well established, but the customer has the absolute to decide on the type of the brand he or she would wish to consume. Therefore, no matter how much a company establishes its brand, still, the consumer will have the final decision that would affect the strategy of the management (Aston 3). The social impact in the company forced the management to pay taxes for the next two years. If consumers decide to switch brands and focus on supporting local coffee shops then automatically Starbuck would lose profit. In the modern market, information is very easy to relay meaning that Starbucks ‘ sales could be affected in other countries. Members of the public are of the view that big firms should always pay their taxes, irrespective of their relationship with the government. It is unfair for small companies to pay taxes while big firms are exempted. It is the responsibility of the government to ensure that each agency pays taxes since it would be a sign of commitment and concern to the members of the public.

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Customers

The customer’s interest is to receive a fair exchange on what they paid for. In other words, there should be value for their money. In this regard, May, George, and Roper (24) were of the view that the modern corporate rhetoric cannot speak its self-interested agenda, but instead, it listens to the views of other stakeholders, particularly those affected directly, such as employees. They expect the value and the quality of the product to be the best or be equal to what they pay. It is important to meet customer expectations. Their nature and power are that when they are not satisfied, they will look for an alternative and buy coffee from competitors. They have the power to boycott companies with unacceptable policies, as well as when products are not of high quality. To maintain customer loyalty, the firm should give out excellent customer service. Moreover, the company should always look for ways through which the quality of its coffee would be improved. In this regard, employees should be instructed to be friendly to customers. This would enhance good customer service.

Employees

Employee’s nature of interest is that they look for stable employment and good working conditions. It matters to them because they are investing their time and effort and they want to be valued. They want to receive fair pay for the assigned task. They also value their safety in the workplace and their working environment is of great concern. The power of employees is that if they receive unfair labor practice, they have the capability of bargaining through unions. They can also perform work actions or strikes and they can do this publicly, which will taint the company’s good reputation. They can be loyal to the company if the top management treats them with respect, offers good pay, and reasonable benefit packages. Employees should be given a discount on company products for them to feel a sense of belonging. The management should develop a safe and friendly working environment for employees since they deal with customers.

Stockholders

Stockholders’ interest is to receive a satisfactory return on their investments. Their interest is the appreciation of stock value over time. They also exercise their power of voting, based on their ownership. They have the right to inspect the company’s books to establish the performance of the company. This would give them information on what is happening internally because they invested time and resources. They can show their loyalty to the company because of the profit generated and the strong code of ethics that would protect them. They would value the social responsibility of the company regarding environmental preservation. This will help improve the image of the firm in the market.

Suppliers

Supplies include farmers who are the real owners of products. The nature of the interest of suppliers is to receive regular orders from their clients. The returns from the sale goods delivered are important because they need the payment for their internal operation. Fairtrade to farmers matters so much. Payment should also be on time and the rates should be fair. Their nature of power is that they can boycott the company because of unreasonable prices.

The Government

The government is a major stakeholder since it provides an enabling environment for doing business. The government protects the products of the company through the provision of security and support whenever the company faces challenges. Moreover, the government plays a regulatory role implying that other firms would not engage Starbuck in the unfair competition since the government would be ready to intervene.

Propose a CSR Solution for Each Social Challenge Identified

Starbuck Struggles with Reducing Environmental Impacts

Since the government is involved, Starbucks could make an effort to talk or make a campaign that would convince the states or municipalities to upgrade their recycling facilities. It is important to give details to the government on how the trash could affect the environment. The government would suggest a suitable strategy on how to dispose of trash properly. Since more and more people are becoming aware of the environmental impact of products that they purchase, it is important to bring the issue to the attention of the government for it to take action in terms of helping members of the public. May, George, and Roper (245) observed that in case a modern corporate rhetor fails to convene its major functions, it should take responsibility through a mutual mandate. It is not just the role of companies that should be fulfilled (Tedrick 9). The government has the responsibility to ensure that the environment is safe.

Challenging Starbuck

Proper information should be disseminated to its employees. Precise information regarding the campaign should be given to employees and the importance of social responsibility should be documented. Employees should give information on how the company would benefit from social corporate responsibility. It should be noted that the company would lose profits in case adequate measures are not taken to address the issue at hand. It is important to keep the baristas aware at all times. For instance, if the customer asks for a Fair Trade coffee then it should be given to him or her even if the company is not brewing the coffee on that day. By giving customers what they want, it is proof that the firm is committed to its social responsibility.

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Corporate Social Responsibility Could Swamp Social Enterprise in 2013

Starbuck can commit itself to pay taxes fairly by promising to pay yearly, not just for the next two years. People need to see the commitment of big companies, such as Starbuck because they know that paying taxes, can help the economic status of the country. People would want to see fair treatment (Kratschmer 78). For instance, if small coffee shops pay their taxes then it follows that big coffee companies, such as Starbuck, should follow suit by paying their taxes as well. Communication should be done internally and externally meaning that employees should be informed always and the government should be consulted (Mercer 90).

Starbuck Struggles with Reducing Environmental Impacts

New employees would be trained on how to separate the waste properly. It should be communicated through training. Moreover, policies and commitments ought to be discussed in detail. There should also be communication externally between the government and the management. When waste facilities are established in every state or municipality, the company can save costs through waste disposal.

Challenging Starbuck

Old and new employees should be aware of this program. They should be aware always and make sure that they give customers what they want because it would reflect on how committed they are to supporting the Fair Trade program. Details about the program can be given to the employees through meetings. It could generate profit for the company, especially if the price of the Fair Trade coffee is higher as compared to the usual orders of customers.

Corporate Social Responsibility Could Swamp Social Enterprise in 2013

The management, together with the government officials, should coordinate the issue of taxation internally. It is the company’s responsibility to pay taxes, to be fair enough to customers, and to other businesses. It could mean losses in some amount of money for the company, but they could gain the trust of their customers and it could result in continuous patronage of their products.

Starbuck Struggles with Reducing Environmental Impacts

Costs can be high for the company if the government asks for financial support. What they can do is to convince other companies to support the program. If the government can afford it, it could mean no cost for the company and it could as well save expenses on how to dispose of wastes because the government can move in to help in disposing wastes properly (McLaughlin and David 65). It is best for the company because it can show its concern for the environment.

Challenges facing Starbuck

It could mean an extra cost for the company since it needs to have stocks for the Fair Trade coffee without knowing how many customers will order it for the day, but it could also be a profit because of the selling price. The customers will have a good image of the company’s commitment to the public.

Corporate Social Responsibility Could Swamp Social Enterprise in 2013

Proper payment of taxes is not a loss for the company because it should be done. The company needs to pay its taxes to be fair and equal to other businesses. It should not consider it a loss because consumer patronage is productive. A good reputation would boost the performance of the company.

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The success of the program can be measured by computing the number of customers visiting the company’s shops in various parts of the country. Moreover, the locals would respond in a certain way after realizing that the company supports environmental conservation. The best in measuring the effectiveness of the program would be to design response questions, which would collect critical information from customers regarding their perceptions of the company (Liew 43). This would be done every time the Fair Trade coffee is served. They can also measure their proper waste disposal techniques. This would determine whether the company can minimize waste disposal costs. The assessment would be concerned more with obtaining feedback from the external public, which comprises mainly of the government and customers.

Conclusion

Every company has some social issues and responsibilities, which must be met for it to operate well. These social issues can never be resolved at the same time, but the company can come up with a program that would allow it to be committed and be faithful to its social responsibilities, to the government, and the environment. It does not need to go for other people’s opinions regarding taxation issues. An organization should always be committed to its policies, rules, and responsibility to earn public trust. When customers realize that the organization is doing something that fulfills their interest, they would tend to be loyal to the products of such a company.

Works Cited

Allison, Melissa. “Starbucks Struggles with Reducing Environmental Impacts.” The Seattle Times, 5.1 (2013): 1-18. Print.

Aston, Robert. “Corporate Social Responsibility Could Swamp Social Enterprise in 2013”. The Guardian, 5.5 (2013): 1-12. Print.

Cummins, Anna. “Challenging Starbucks”. Chicago Fair Trade, 1.1 (2013): 1-7. Print.

Kratschmer, Philipp. Organizational Culture is highly Resistant to Change. New York: GRIN Verlag, 2011. Print.

Liew, John. Employee training a study of education and training departments in various corporations. Sydney: General Books, 2009 Print.

May, Steve, George Cheney, and Roper Juliet. The Debate Over Corporate Social Responsibility. Oxford: Oxford University Press, 2007. Internet resource. Web. 19 May 2013.

McLaughlin, Damien, and David, Aaker. Strategic market management: a global perspective. Chichester: Wiley, 2010. Print.

Mercer, David. Marketing Strategy: The Challenge of the External Environment. London: Sage, 1998. Print.

Snider, Jamie, Ronald, Hill, and Martin, Diane. “Corporate social responsibility in the 21st century: A view from the world’s most successful firms.” Journal of Business Ethics, 48.2 (2003): 175–187. Print.

Stuart, Rogers. Marketing Strategies, Tactics, and Techniques: A Handbook for Practitioners. Westport: Quorum Books, 2001. Print.

Tedrick, Catherine. “Stakeholder Analysis”. Slide share, 2.1 (2011): 1-9. Print.

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