Ethics In The Workplace: A Case Study Of Starbucks - An Essay On Competitive Advantage.

Report Title

Describe about ethics in workplace?

Ethics in the workplace and how it helps developing an organisational culture that serves as a competitive advantage against rivals.

Optional: Ethical leadership as the driving force behind the development of an ethical culture

To analyse the role played by workplace ethics in developing an organisational culture that serves as a competitive advantage.

• How ethical leadership is responsible for the development of an ethical culture that is essential for the success of an organisation?
  
  
• Why ethical organisations are are able to deliver high quality performance?
  
  
• To what extent ethics in workplace influence employee motivation and productivity?
  
  
• To what extent ethics and ethical decision making are responsible for determining overall organisational behaviour?
  
  
• How different ethical theories are applied in different ethical situations?
  
  
• How being an ethical organisation influence customer buying behaviour?
  
  
• Is brand loyalty affected by workplace ethics?

Established in year 1971, Starbucks today is the world’s largest coffee house company. It is the world’s premier roaster and retailer of speciality coffee and has more than 21,000 stores in 65 countries (Starbucks, 2015). The company reports a market capitalisation of $55.94 billion and is an important part of the restaurants industry. Starbucks has more than 182,000 employees working across various locations. With its headquarters in Seattle, Washington it is recognised as the market leader of food and beverages sector (Cooke, 2010). Starbucks is mainly involved in the manufacturing and sales of coffee and tea. The company operates in four segments namely; Americas, China/ Asia Pacific, Middle East/ Europe and Africa and Channel Development. Starbucks brand portfolio includes Seattle’s Best Coffee, Starbucks Coffee, Evolution Fresh, Tazo Tea, Torrefazione Italia Coffee and La Boulange. Howard Schultz serves as the CEO of Starbucks and is recognised as one of the world’s most effective leaders.

Starbucks has been recognised as the world’s most ethical organisation eighth time in a row. Under the ethical leadership of Howard Schultz Starbucks has achieved remarkable success and brand recognition. Howard Schultz is recognised as the driving force behind the development of an ethical organisational culture that serves as an unmatched competitive advantage against rivals. He is honoured with the 2013 Stanley C. Pace Award for Leadership in Ethics by the Ethics Resource Centre (Ethics Resource Center, 2014). This award honours individuals that possess unwavering integrity, moral vision and ability to influence others and get vision translated into specific goals. Howard Schultz is recognised for his ethical leadership which lead to the development of a values-based organisation, that delivery high quality service to customers, respect for humanity and is committed to serve the community.

Starbucks is recognised worldwide for its ethical sourcing and global supply chain that help them serve their most valued customers daily. In order to support coffee farming communities across the globe Starbucks that announced that its will expand its $70 million comprehensive ethical sourcing program by developing a new farming research and development centre in Costa Rica that will help farmers minimise climate change impacts and increase crop stability (Daily Finance, 2013). Starbucks considers its people as their most precious assets and help them achieve their goals by providing them ample opportunities to realise their full potential. Starbucks refer their employees as their partners and is concerned about their personal and professional development. Starbucks has been recognised as one of the world’s best company to work for. The company ensures that its baristas its baristas not only serve a cup of coffee to its customers but put in their best to enhance customers experience. Starbucks encourages workplace diversity and ensures that employee needs are met in order to keep them highly motivated.

Research Aim

Starbucks has been recognised as the World’s Most Ethical Company by Ethisphere Institute for the eighth year in a row (Starbucks, 2015). The company believes that ethics plays a vital role in the success of an organisation. Under the ethical leadership of Howard Schultz, Starbucks has developed an ethical culture that competitors cannot imitate. Despite being recognised as the world’s most ethical company Starbucks has been facing various ethical issues lately.

• Starbucks has been recognised as UK’s most unethical cafe by a leading consumer magazine (Watt, 2011).
  
  
• Only 8.5 percent of Starbucks coffee is Fair Trade certified then how is Starbucks actually supporting small coffee producers of Latin America and Africa (Kessler, 2015).
  
  
• Starbucks is accused for using and selling non-organic milk from factory farms and non-organic (GMO) foods and drinks (Kessler, 2015).
  
  
• Starbucks employees have reported that they do not receive enough salaried and benefits and are treated unfairly. In year 2009 there was 25% increment in CEO’s pay while the workforce was being reduced by 19%. Starbucks paid almost no tax for period of three years. It is accused of providing worse health care coverage for employee. Employees have reported that they were forced to share their tips with their bosses.
  
  
• Starbucks has been accused for charging higher prices from Chinese consumers as compared to other consumers.

This research report analyses various ethical issues faced by Starbucks to understand the significance of workplace ethics and ethical decision making in order to develop a sustainable business. Decisions made with a lack of regard to ethics can lead to serious consequences that include low employee performance, weak employee relations, and legal issues and reduced company credibility. Starbucks has spent years to secure such a huge market share and build a strong brand image. It is recognised as world’s most ethical company for the eighth year in a row and such issues can spoil its reputation. Under the ethical leadership of Howard Schultz Starbucks had built an ethical culture that serve as a competitive advantage for the organisation which it must retain in order to retain its customer loyalty.

This research project aims to explore and resolve the following problems in relation to Starbucks:

• The ethical issues faced by the employees of Starbucks like minimum wages, health care benefits, unfair treatment etc.
  
  
• Unethical use of non-organic milk and food products that are hampering consumer health.
  
  
• Safe guarding Starbucks ethical organisational culture in order to retain its competitive advantage and thus its brand loyalty.

In order to analyse the various ethical issues faced by Starbucks it is important to collect both quantitative and qualitative data from both primary and secondary sources. Some of the common ways of collecting data is conducting surveys with employees, face to face in-depth interviews of key players and analysis of related documents.

1. Is Honesty an important element in day to day operations? (Yes/ No)
   
   
2. Do you feel a pressure to act unethically? (Yes/ No)
   
   
3. Are you treated with the respect and integrity that you deserve? (Yes/ No)
   
   
4. Does your employer ensure all your employment rights are safe guarded (Yes/No)
   
   
5. Does your employer ensure all health and safety policies are enforced? (Yes/No)
   
   
6. Are you well aware of the behaviours that violate law and organisation’s ethical standards? (Yes/ No)
   
   
7. Are you encouraged to report ethical misconduct?(Yes/ No)
   
   
8. Do you agree your organisation supports and ethical culture? (Yes/ No)
   
   

Face to Face interview: Employees and Store managers can be interviewed to gather further information related to their perception about Starbucks being an ethical organisation. Questions will be related to policy enforcement, unfair treatment, wages, benefits, integrity, work-life balance, learning and development opportunities, career growths etc.

Documents: Company annual reports, Journals, Articles on newspapers and reputed magazines, discussion forums, social media etc

This research project intend to analyse the level of job satisfaction felt by employees of an organisation that has been recognised as world’s most ethical organisation for the eighth year in a row. It tends to get an in-depth understanding of employee’s perception about ethics. It tends to study the role played by ethics in workplace in developing an organisational culture that itself serve as a competitive advantage for the organisation. It aims to study the affect workplace ethics has on consumer brand perception and consumer buying behaviour. It tends to find solution for ethical issues faced by Starbucks so that it can retain its organisational culture.

This research will be greatly helpful for Starbucks in identifying the root cause behind the ethical issues faced by the organisation. Though these research findings they will be able to formulate strategies that will help them increase job satisfaction among employees and brand loyalty.

Ethics, Business ethics, Ethical Theories, Deontological theory of ethics, Utilitarian theory of ethics, Ethical decision making, Ethical leadership, Ethical culture, Employee ethics, Consumer ethics, Ethics and Motivation, Ethical Dilemmas, Starbucks as an Ethical Organisation, Organisation behaviour, Organisation culture.

References

Cooke, J. A., (2010) From bean to cup: How Starbucks transformed its supply chain. [Online]  Available at: https://www.supplychainquarterly.com/topics/Logistics/scq201004starbucks/ [Accessed 2014].

Daily Finance, (2013) Starbucks Expands $70 Million Ethical Sourcing Program With New Global Agronomy Center. [Online]  Available at: https://www.dailyfinance.com/2013/03/19/starbucks-expands-70-million-ethical-sourcing-prog/ [Accessed 2015].

Ethics Resource Center, (2014) Starbucks CEO Howard Schultz Receives Pace Award For Leadership In Ethics. [Online] Available at: https://www.ethics.org/news/starbucks-ceo-howard-schultz-receives-pace-award-leadership-ethics [Accessed 2015].

Kessler, B., (2015) A Starbucks boycott percolates over Fair Trade and organic ingredients. [Online] Available at: https://www.binghamtonhomepage.com/story/d/story/a-starbucks-boycott-percolates-over-fair-trade-and/37216/khSwtmNhf0aShAqoqiA1sg [Accessed 2015].

Starbucks, (2015) Business Ethics and Compliance. [Online]  Available at: https://www.starbucks.com/about-us/company-information/business-ethics-and-compliance [Accessed 2015].

Starbucks, (2015) Our Heritage. [Online]  Available at: https://www.starbucks.com/about-us/our-heritage [Accessed 2015].

Watt, C., (2011) Starbucks named most unethical cafe in UK. [Online]  Available at: https://www.heraldscotland.com/news/home-news/starbucks-named-most-unethical-cafe-in-uk-1.1087515 [Accessed 2015].