Social Responsibility of Starbucks

One of the most recent changes in the Starbucks infrastructure may give us some insight into their present plans for intense global marketing. Underlying the recent appointment in July 17, 2007 of Mr. Martin Coles as CEO for is Global and Foreign market operations, Starbucks said that it sees an “unparalleled demand for Starbucks around the world “ (Borrman Starbucks).

This new strategy of selecting Mr. Martin Coles as CEO of Global operations indicates the concern for Starbucks to set an intense program towards developing their coffee stores around the globe. At the time of the same news story broadcasted to the world, via stock market analyst and presses across the globe, Borrman also indicated a “rapid global expansion” (Borrman Starbucks). Does this communication from the Starbucks press office indicate a new phase of rapid development or is Starbucks poising itself in rapid transit to international waters?

Mr. Coles will be reporting directly to Mr. Jim Donald, president and CEO, which indicates the importance of such a position of such a decision. The July 17 newswire reported that Mr. Coles would take responsibility “for the United States and International store operations and store development, the global Consumer Group and Supply Chain Operations” (Borrman Starbucks). Further in the newswire Borrman tells the importance of this strategy for Starbucks, since Starbucks “continues on its pace to double in size in the next four to five years” (Borrman Starbucks). What is the goal of such an enterprise of Starbucks? Bormann reports Mr. Coles as saying that the goal is “to ensure that the Starbucks Experience consistently exceeds expectations for every one of our customers, in every one of our stores anywhere in the world” (Borrman Starbucks).

Mr. Howard Schultz, chairman of Starbucks, mentioned, “this new infrastructure is aligned to support our continued rapid growth and is a natural evolution of the business.” (Borrman Starbucks). This indicates that the strategy of Mr. Donald and the Board of Directors is to prevent crisis in the future rather than to wait for one to occur (Coombs 5). Given the role that organizational communication plays, while seeing that Coles, Alling and Skinner were all chosen because of their previous performance as strong team players in the Starbucks corporate store, then it is easy to infer that each of them, correlating to their past successes, have strong organizational communication strategies already at work. In what ways will the “centrality, pervasiveness, and complexity of organizational communication” be displayed in this current scenario of Starbucks natural development (Coombs 5)? How will this effect the already established Starbucks Experience”
for global customers?

In a recent visit to the Starbucks website and browsing thru their online documents, there were several bits of information which indicated the Starbucks Experience that will be continued. I say continued because as Mr. Howard Schultz indicated that this is a “natural evolution of the business” (Borrman Starbucks).

Social Responsibility Indicators

In a recent report called “Starbucks Corporate Social Responsibility” there were indicated the key factors which Starbucks test itself yearly for fiscal accountability. The main sections are Coffee, Society, Environment, Workplace and Diversity. Actually this is a mini-scope of their corporate report. The main indicators can be seen as the major channels which corporate communication is channeled thru its stores. In other words, this communication is “Central, pervasive, and complex” (Coombs 5). In order for Starbucks to produce the very best product on the global market, under this new leadership, Mr. Coles must communicate to those he manages towards this international market, both the goals of sales goals while keeping a balance with the environment. In other words, all of the systems must “interact” with one another (Coombs 7). For example, though this is not indicated in the above chart, Starbucks is very interested in what “rumors” are surrounding Starbucks. Not only is it interested, but also it has part of its website dedicated to listening to what others may want to share about “rumors” (rumor response).

There is a search engine on the page, which allows anyone to access this information 24/7 to check whether a rumor is actually recorded and responded to by Starbucks. The Starbucks managers seem indicate that they follow a classical management style where everyone communicates openly and democratically (Coombes 74). In other words, not only does Starbucks open to hear what U.S. citizens have to say, but now that they have become very serious about opening up international relations they must also rally forth into deeper waters. They must become adepts at the local cultures and taboos, so that they will not become offensive or unacceptable.

This seems to be a very great preventive tool from things exploding. Crisis management seeks to use a “set of factors designated to combat crises and lessen the actual damage inflicted by the crisis” (Coombes 4). Presently Starbucks is represented in the Americas, Europe, Asia, and Middle East. These various cultures have their own native tongue. When visiting an international Starbucks webpage it is written in the native language. For example the webpage to the Starbucks Turkey is in Turkish. Each page is designed to give the Starbuck Experience, where you have the choice of store locators, recipes, and response form. All of these elements combine to make or reproduce the same original Starbuck Experience as in its original stores in the USA.

Starbucks shows in every way throughout its corporate structure and its advertisements, both nationally and internationally, that is undergoing an extensive period of growth and that it is NOT undergoing a crisis, nor needing to change its management for fixing a crisis. Rather, it communicates that it is confident to have and implement that it needs to make advanced growth in the international market.

Home, School or Business

One of the successful leveraging tools Starbucks offers is the choice of Starbucks delivered to your home or your office. Furthermore, it also has a program for Universities and other public institutions, where Starbucks doesn’t have property, to offer Starbucks for its customers and these are called licensed stores (licensed stores).

A Card Just For You

Starbucks offers its customers the choice of creating its own card, which it can use to add bucks to and use in all of its stores. It is the choice of a custom made card: you simply choose a card, select the theme and order the card in three easy steps (Customized Starbucks). This is a great way for Starbucks to communicate the Starbucks Experience, since it allows the customer to have a huge variety with very little effort on their part. The card is easily added to, much like any credit card that is used for debit transactions and withdrawals. Secondly, it also makes the experience fun and easy to do.

Criticisms

Some of the major criticisms that have been launched against Starbucks are “cultural imperialism,” “labor disputes,” “coffee bean market,” “anti-competitive tactics.” (Wikipedia Starbucks). At a location in Beijing, the site of the former Imperial Palace became a Starbucks store; it was forced to close because of the great controversy that was created by its presence “on Chinese culture.” These are some of the issues the likes of Mr. Coles need to deal with on a daily basis. Another criticism launched at Starbucks was its anti-competitive tactics; that is, when it comes into an area it tends to buy out all of its major competitors and makes the smaller companies fear its power as a large corporation. When it first opened in the UK it purchased its entire rival, Seattle Coffee, and turned them into Starbucks stores. Leveraging itself with the prime land that was purchased to still open more stores. Lastly, another criticism against Starbucks is their relationship with the Free Trade Coffee (FTC).

It has purchased in the area of over three hundred million pounds of coffee in 2006 with about 6% being FTC traded. The company TransFair is the only certified company that trades Fair Trade Coffee and encourages the impact Starbucks has made on the market. Criticizers feel that the less fortunate and less powerful companies that make their livelihood thru coffee cannot afford the FTC since the contract costs around 20K per license (Wikipedia Starbucks).

A recent criticism arose against Starbucks in regard to a deal with Ethiopian Coffee Makers. There are three brands of Ethiopian Coffee, which are widely profitable for Ethiopia, but Starbucks has decided not to trade these particular coffees for many reasons. The Ethiopian government is criticizing it by not supporting the income that would result from the sale of these specialty brands. Starbucks prefers to deal with smaller Ethiopian Coffee farmers for social responsibility issues (Phoenix Starbucks).

Chris Grimshaw of Corporate Watch says that Starbucks creates “the illusion of ethics” (Starbucks OCA). Some have even recommended that shops who have 100% FTC are more highly recommended over Starbucks which acts like a superstore and runs smaller stores out of business, which “can never be 100 per cent ethical” (Starbucks OCA). The spokespersons for the Organic Consumers Association said that in a recent report by Global Marketing it found that Starbucks customers found the company as “arrogant, intrusive and self-centered” (Starbucks OCA). The reporter further commented that it is “no surprise then that Starbucks has invested significantly in CSR-Community Social Responsibility (Starbucks OCA).

We can see that despite the new strategies of Mr. Coles and others to leverage and make great strides in the international market, building more stores and furthering its global purchase of land; Starbucks has to deal with much controversy, not only with the past but also wherever it goes. These controversies and criticisms seem to be an ever-present issue that Starbucks has to deal with as it seeks to expand itself more and more.

Socrates and KLD

It seems that Starbucks seeks to create a better image of it and to grow in the global market and put more money into Communal Social Responsibility-it was one of the 100 top ethically run companies in America last year (Socrates KLD). The list of 100 corporations is rated according to several factors those same indicators, which Starbucks puts in its yearly reports: Environment, Social, Governance and the Controversial (Socrates KLD). This means that Starbucks is very earnest about the image it is producing in the places where it goes and the markets it does business in. Starbucks has committed to give an account of all critical areas and their improvement year by year. This is one of the strategies it seeks to improve its image to both shareholders and those others who witness its business practices and growth (BHRRC Corporate).

Summary: Response to Criticism

It seems only reasonable that a response to the criticism to Starbucks should be offered, in view of the overwhelming evidence to the contrary opinions. Taking into consideration the fact that Starbucks was awarded by a recognized authority among its peers for Corporate Responsibility (Adams [1-77]) as well as evidence showing that Starbucks constantly seeks to establish a responsible relationship with its “partners” and environment it must be conjectured that there is a discrepancy in communication between those who interpret Starbucks business practices and the Starbucks Corporation that communicates these business decisions and practices. In fact, Starbucks is open to discuss with all persons these issues, rumors and results of its business (Adams 77).

What are these discrepancies? This seems to be one of the key factors in this report and analysis of Starbucks ongoing development and efforts to grow both with an expanding multicultural environment as well as with a highly sophisticated and multi-faceted population. Not only are non-profit organizations such as Greenpeace, March of Dimes or United Way, Roman Catholic Church the recipients of criticisms, but also for profit Corporations have much more reason to be criticized on all levels. As we have shown in this analysis, Starbucks, even being listed as one of the major 100 Corporate Responsible institutions in America, still falls under heavy criticism. As with every criticism that comes, there is also a response. What better response could Starbucks make than that of openness to its critics and assure its present Shareholders that it desires to excel in providing world-class coffee and service, to change its corporate managerial team to provide more quality service, have a greater accountability that others can verify for themselves, be open to dialogue with media and public and to stand its ground with a steady professionalism wherever it places its stores.

I believe that it will always be inevitable that large corporations will be the object of both praise and blame, as well as reflect the critical mindset that surrounds it. Furthermore, this kind of criticism cannot go unnoticed, nor can it be disregarded lest the people that it seeks to serve will get the message that it cares little about the personal interests of those whom it serves. In the words of Mr. Moss Adams LLP what Starbucks reported in it s CSR is a “fair representation of. …Performance and activities…reasonable supported by documentation, internal processes and activities, and information provided by external parties” (Adams 77). Lastly, what may be considered as criticism to one person, may on the other hand be actually an honest assessment of natural growth by another or be seen as normal reactions or indicators of healthy public opinion to normal business practices-at the corporate level. The Starbucks Experience may have to constantly revise its ability to take in multicultural attitudes as well as constantly expose itself to a vast array of personal or private opinions from professional not for profit organizations, governments and critics, but this is not an indicator that its business methods are wrong or unethical, despite the contrary, as long as it can indicate, document, assess and report its growth in clear and reasonable methods of accountability. After all even the original owners didn’t think that selling specialty coffees would be profitable (Wikipedia Starbucks).

Starbucks Corp. [SBUX] seeks to provide world class coffee and food items to its multicultural customers at a premium price; simultaneously incorporating into its corporate infrastructure methods of applying and replying to rumors, criticism and areas needed to come serve its customers. It seeks to demonstrate a willingness to understand its multicultural customers and expand when possible in order to incorporate its “partners” into its multicultural Starbucks Experience.

Its criticisms awaken in its management a more whole and natural growth which gives evidence of its is ever-widening service to its global customers. In its growth it seeks to benefit those around it by sharing its resources with those environments for a mutual partnership in bringing its products to its customers. Meanwhile, it seeks to adapt to each culture with the mentality and talents of those whom its corporate principles seek to serve. It demonstrates to shareholders, customers and the world it serves that the Starbucks Experience is unique and accessible to every culture.