Leadership – Starbucks and Corporate Social Responsibility
Starbucks Building Relationships with Coffee Growers
The Starbucks success story is evidence of the connectivity between organizational success and corporate social responsibility (CSR). What began as a single coffee shop 33 years ago in Seattle, Washington, has grown to 5,945 outlets throughout the United States, 2,392 outlets in 28 other countries, and $4.1 billion in revenues for fiscal year 2003 alone (Isodro, 2012). A major component Starbucks’ success is their belief in and use of the triple-bottom-line business philosophy, which believes that companies have an unspoken contract with society that demands they serve stakeholders beyond shareholders and customers (McShane, Von Glinow, 2012).
When a company serves a stakeholder by helping that stakeholder solves its problems, three things happen. First, it enables that stakeholder to stay in business and produce a steady uninterrupted flow of products for the company. Secondly, that steady flow of earned income can subsequently be funneled back into the stakeholder’s own community, meeting social, educational, and medical needs. Having their basic needs met, also enables stakeholders the freedom to better 0focus upon their respective business objectives, which again benefits the company. This is a deliberate strategy we see between Starbucks and its coffee bean producing farmers, as Starbucks guarantees upfront financial provision to farmers to meet their labor and other business costs. Starbucks knew that it was in their own best interest to help those farmers stay in business. It became a win-win situation.
As a leader in its industry, Starbucks has a responsibility to be a role model for smaller retailers to follow. They not only have the ability to influence how other retailers do business, but they can also establish industry standards. Smaller retailers may not have the resources to do all that Starbucks does, but they can to some degree do what Starbucks does. When these smaller retailers follow the business principles that have brought success to Starbucks, they increase their own chance of success.
Without accepting adequate social responsibility, it is unlikely that a company will remain successful. McShane and Von Glinow point out that contrary to what some organizations believe, research indicates that consumers do care about how organizations respond to social responsibility. One American survey showed that four out of five people indicated a company’s commitment to social issues influences their purchase and employment decisions. In another survey, more than two-thirds of a group of North American students said they would refuse to even work for a company they considered to be socially irresponsible (McShane, Von Glinow, 2012). This data shows that American consumers demand corporate accountability from companies who withdraw resources from their communities.
References
Daft, R.L., Marcic, D. (2011). Understanding management. South-Western Cengage Learning. Mason, OH 45040.
Isidro, I. (2012). Learning from Starbucks: 10 lessons for small businesses. Retrieved on September 29, 2012 from https://www.powerhomebiz.com/vol144/starbucks.htm
McShane, S.L., Glinow, M.A. (2012). Organizational behavior. McGraw-Hill Irwin.
New York, NY.
