Lesson 1: The Importance of Business Ethics
Why do you think Starbucks has been so concerned with social responsibility in its overall corporate strategy?
From the textbook, it can be established that there are two reasons why Starbucks is concerned with its corporate social responsibility, including the negative impact on the company as well as the financial and non-financial rewards that influence the perception from the employees and the community at large (Ferrell, Fraedrich & Ferrell, 2013). The textbook shows that the company engages in responsible business practices in day-to-day operations (Ferrell, Fraedrich & Ferrell, 2010). For the last two decades, the company has realized high growth rates. It has a considerable budget focused on defending its image and perception among the consumers and the community at large. Moreover, the company’s operations are focused on protecting its culture and reputation through fostering commitment to ethical leadership, and its business operations are guided by integrity as a virtual (Starbucks Coffee Company, 2021).
The company uses a clustering strategy in which it establishes about two outlets in the street. However, this has raised concerns among the consumers. For instance, during the 2008-2009 economic recession, the company reconsidered the strategy that saw it close down hundreds of outlets that were non-performing (Danziger, 2018). In return, the company adopted the “breakfast pairings,” which was “a styled value meal” sold at affordable price. Moreover, the company introduced instant coffee that could be taken at home. Recently, the company rolled out a plan to close 8,000 stores following the May 29 aftermath. The aim is to address racial bias through educating the employees (Danziger, 2018).
Corporate social responsibility has both financial and non-financial rewards. Following Starbuck’s dedication and loyalty to its customers and suppliers, the company realizes an increasing market base and loyal customers. Moreover, the employees are proud of working at Starbucks, which is reflected in increased employee turnover and customer satisfaction.
Is Starbucks unique in being able to provide a high level of benefits to its employees?
Indeed, Starbuck can provide a high level of benefits to its employees. Based on the company’s size in terms of revenue gains and corporate social responsibility measures, the company offers a wide range of benefits to employees. Alongside the health coverage, other benefit options offered by the company include; adoption assistance, commuter benefits, employee assistance, tuition reimbursement, vacation, disability coverage, and personal insurance cover (Globalassets, 2021). Besides, the company offers accidental death and dismemberment to eligible partners and part-time employees and other benefits such as stock options and health insurance, and vision and dental cover (Globalassets, 2021). It is indeed rare to see a company providing such cover to part-time employees.
Do you think Starbucks has grown rapidly because of its ethical and socially responsible activities or because it provides products and an environment that customers want?
I believe that the growth of Starbucks has been realized through the combination of these two factors. The company positions itself to offers products and services that meet the customer’s wants and preferences. Moreover, the company offers an environment where employees feel comfortable and motivated to work; this creates a ripple impact. Employees are motivated and offer high-quality services that attract customer’s loyalty (Globalassets, 2021). Following the recession, the company came up with a strategy of selling its products at lower prices, making them affordable. This helps to retain and even expand the customer base. This is one of the factors that has enabled the company to continue its profitable operations.
Acting in a socially and responsible manner helped the company to realize its growth. For instance, the company’s decision to close some of its stores in various locations instead of opening new ones was responsible. Moreover, Starbuck shows its social responsibility by supporting literacy groups that ensure that even disadvantaged persons access education (Globalassets, 2021). Providing insurance cover to the disabled and offering seasonal employees a medical insurance cover helps create a positive image for the employees, customers, and the community.
Lesson 1: The Importance of Business Ethics
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