Starbucks: Social Responsibility Strategy

Introduction

Social responsibility refers to the ethical obligations that businesses and companies have towards improving the welfare of the society (Ferrell et al., 2012). It goes beyond maximizing resources in order to increase profits. It also includes aspects such as environmental conservation, improvement of leadership, organizational viability, as well as legal and regulatory requirements. According to the International Organization for Standardization (ISO), corporate responsibility develops a mutual relationship between businesses, the environment and society (Boone & Kurtz, 2011). Social responsibility measures the effectiveness and performance of businesses. It is a core aspect of business models for many organizations. This report will outline a social responsibility strategy for Starbucks, an American coffee company, and delve into four main areas: environmental conservation, ethical leadership, organizational viability, legal and regulatory considerations. Recommendations will be proposed in order to offer solutions to problems discussed in each of the aforementioned sectors.

Environmental considerations and recommendations

Environmental conservation and improvement are two of the most important aspects to consider when developing a social responsibility strategy. Starbucks provides an array of services and products like pastries, snacks, hot and cold beverages, and packaged food items (Schwartz, 2011). The company produces many goods that have far-reaching impacts on the environment. For example, it manufactures coffee beverages packaged in the materials that generate waste products, which pollute the environment if disposed improperly. In addition, the production processes release gases harmful for the environment (Schwartz, 2011). A social responsibility strategy should aim at reducing pollution and promoting a better use of raw materials.

Energy conservation and renewable energy

In order to conserve energy, it is important for Starbucks to establish energy-efficient stores. In 2012, the amount of electricity consumed by Starbucks increased by 1%, which was partly due to harsh weather conditions that led to more consumption of electricity in running the company’s air conditioning system. Starbucks should replace its water heating systems with modern technological equipment that consumes less energy like hybrid water heaters that save energy compared to the current heaters. Moreover, they can be used to cool the stores and thus reduce the amount of electricity used by air conditioners.

The company uses much energy in operating HVAC equipment that is used to create a comfortable environment for customers (Schwartz, 2011). However, with rising global temperatures, energy consumption will increase. On the other hand, the company provides an array of products the processing of which leads to high needs of energy. This results in purchase of equipment requiring much power like refrigerators, freezers, ovens, cookers, and water heaters (Schwartz, 2011). Obviously, the company should work towards purchasing energy efficient machines and tools as well as using renewable sources of energy instead of electric power. This will reduce consumption and encourage development of a clean energy that does not pollute the environment.

Recycling waste

Recycling waste is an effective strategy applied by companies to conserve the environment. Starbucks sells its products in cups and wrappers that generate waste that could cause environmental pollution (Mullerat, 2011). So, the company should develop certain ways of discarding these packages safely. Waste generated at its stores includes milk jugs, coffee grounds, cardboard boxes, bottles, and coffee cups (Mullerat, 2011). No doubt, developing extensive recycling initiatives will only improve the company’s operational processes.

Currently, it has succeeded in recycling waste in most of its stores. However, the recycling efforts have not come to fruition because many customers do not support their initiatives. Starbucks should create awareness through extensive advertisement and educational programs. In addition, many of Starbucks’ stores are located in shared premises where waste disposal is managed by the proprietors of the premises. This cuts the efficiency of their waste recycling and disposal efforts. That is why the company should take it as a priority to develop its own waste disposal program. This will improve efficiency because some commercial recyclers decline to take certain waste products generated by Starbucks.

Pollution

Starbucks operates several coffee roasting plants that release gases polluting the environment (Mullerat, 2011). Other emissions emanate from the company’s vehicles, aircrafts, and store operations. Thus, the company should keep in mind using renewable sources of energy that have fewer emissions like electric cars instead for fuel cars. These types of cars use batteries and therefore do not emit the harmful gases. It would be also preferable that the company utilizes renewable energy in its stores in order to reduce emissions from the office operations. The largest percentage of green house gas emissions are attributed to energy used in offices and roasting plants. Starbuck must focus on developing programs that encourage energy conservation.

Finally, it should consider helping farmers in adopting environmentally friendly methods of farming as a means of managing climate change. Evidently, this is important because Starbucks does not produce its own raw materials but purchases them from farmers and helping them reduce pollution and climate change is a part of its social responsibility.

Recommendations

Starbucks should apply a recycling program that will form the foundation for its environmental conservation initiative. To promote it, Starbucks is to recycle waste products such as coffee cups, recyclable wrappings, cardboard boxes, bottles, and jugs. Obviously, recycling should include materials that are not biodegradable. So, the company should purchase energy efficient equipment and replace the existing one because of considerable power consumptions like energy efficient refrigerators and hybrid water heaters. Finally, Starbucks should shift from the use of electricity to renewable sources of energy. These energy sources have few emissions thus the company will reduce pollution factors to its minimum. In addition, the renewable energy is cheaper, and thus it will reduce the operating costs of the company.

Ethical leadership considerations and recommendations

Leadership is an important aspect that should be taken into account when developing a social responsibility strategy. It is the responsibility of leaders to ensure that all elements of the strategy such as recommendations, policies, and rules are implemented (Schwartz, 2011). They should focus on the welfare of employees, customers, and communities. In addition, leaders should practice ethics in their efforts to promote the social responsibility strategy of the company.

Employees

It is worth noting that leaders’ main goal is to make sure that employees adhere to the company’s vision and values, which are aimed at improving social responsibility and environmental sustainability. Starbucks’ management should involve employees in developing the company’s mission and values, and guarantee that they practice them in their daily activities. For example, leaders should control employees in disposing waste in accordance with the company’s regulations.

Starbucks should also empower employees in order to promote implementation of the strategy. The company’s management could also provide the necessary resources that will enhance implementation of policies. Good leaders empower employees, and embrace responsibility and accountability. Therefore, they should mind empowering employees by delegating duties and responsibilities. For example, they could allow employees to develop recycling programs that they deem as the most appropriate for Starbucks. Following the topic, the management should allow employees to spearhead its efforts for enhancing environmental sustainability.

Conducting evaluations could help ensure that employees integrate the company’s mission and values into their career progression programs. Social responsibility is attained through employees’ efforts to implement strategies that lead to the attainment of goals and objectives. Finally, leaders should take the welfare of employees more seriously focusing on understanding their concerns, solving their problems, and helping them overcome challenges that hinder their efforts towards promotion of the social responsibility.

Customers

In the first place, it is to be remarked that customers are an integral part of any business. Starbucks’ first priority is to deliver products and services that fulfill the needs of their customers while maintaining safety and improving recyclability. It should also promote their social responsibility efforts by involving their customers. For instance, they could educate their clients on the importance of recycling waste, or on good ways of disposing it. It would be a positive idea to assume the responsibility of educating customers about the social and environmental impacts of the company’s products and services. So, they should consider developing new products that promote social responsibility and environmental sustainability.

Local communities

Paying more attention to the social communities is one of the aspects of social responsibility. Starbucks’ leaders should take interest in the welfare of local communities that could involve learning the concerns and needs of the people, contributing towards social development, and financing programs that promote their welfare. Employees should also be allowed to participate in the community programs and projects, for example, cleaning initiatives and awareness programs. The company’s appropriate departments should devote their time to teach the communities on the ways to conserve energy or keep the environment clean. Lastly, the leaders should consider promoting diversity in the communities in which they operate. So, they could develop a program that enhances awareness in the community about racial, economic, cultural, and ethnic diversity.

Recommendations

First, leaders should develop a policy that will ensure that employees follow strict waste disposal rules. The policy should have provisions for disciplining employees who fail to follow these rules. Employees are prone to ignoring rules and regulations. Therefore, leaders should punish those employees who ignore the requirements of the recycling program. Secondly, they should conduct a training workshop to sensitize their customers and educate them on how to dispose waste safely. Such a training program should include aspects of waste disposal such as methods of disposal and safety precautions. In order to ensure safe disposal, Starbucks should teach customers how to differentiate between biodegradable and nonbiodegradable waste. Leaders should ensure that the program also lays emphasis on recycling of waste other than disposal. At last, leaders should create awareness among local communities regarding the importance of the proper waste disposal. In general, the local communities should be widely involved into Starbucks’ environmental conservation initiatives. Creating awareness could include using local youth groups to spearhead environment-cleaning activities in the local communities. Leaders should encourage the employees to take part in these activities in order to show their willingness and readiness to conserve the environment.

Organizational viability considerations and recommendations

Starbucks should consider improving certain aspects of their business so that they can align them with their strategy for organizational viability. These include innovation, customers’ experience, and cost of operations. Other considerations include business diversification and embracement of technology. Diversifying business operations is imperative in order to cushion Starbucks against harsh financial times. In case of a financial downturn in the coffee sector, then other business operations can generate money to keep the coffee business afloat without risk of bankruptcy or closure. Finally, embracing technology is necessary because of the influence of the digital era. Automation of certain services will reduce the number of employees and consequently improve output. For example, the management should consider investing in automated coffee machines.

Cost reduction

The coffee sector is experiencing new entrants, as proprietors seek to dominate different sections of the industry. One of the issues to consider when developing a social responsibility strategy is how to gain a competitive advantage over other firms. Thus, Starbucks should think about reducing its cost of production in order to lower prices of products, as the cost of production is a factor that determines the profitability of a business. Also, the company must keep in mind positive effects of using processing equipment that consumes energy efficiently. In addition, it should purchase multipurpose machinery that performs various activities concurrently in order to reduce energy consumption. Starbucks has many outlets that have increased expenses. That is why, it would be very helpful to reduce the number of stores and instead focus on those that have many customers.

Refocus on customers’ experience

Starbucks’ recent expansion program has eroded the customers’ experience in its stores, which has a direct effect on its future profitability because customers have started to shift to other companies that have better customer experiences. It goes without saying that the company should improve customers’ experiences at its stores, which creates competitive advantage. For example, they could introduce music and luxurious seats that will leave customers satisfied and eager to come back. Moreover, they could change the designs of the stores in order to attract more customers and cater for their different tastes. It would have positive effects if Starbucks incorporates community activities into their programs. The management should consider supporting the events of the local communities in which they operate. Therefore, it could be beneficial to close underperforming stores and focus on revamping those that perform well.

Innovation

Businesses gain competitive advantages by implementing innovative ideas that guarantee future profitability and growth (Schwartz, 2011). Starbucks should integrate new technologies into its business model in order to increase the number of its clients. For example, the company could use social media to reach out the customers for expanding its customer base. It would also be better for the company to use technology to improve customer experiences. For example, it could consider offering free internet access at its stores, which could be done during weekends or during certain hours of the day to reduce the costs. Innovative ideas such as helping customers in placing an order through their mobile phones could also be reviewed. The company must aim at improving its relationship with the clients with the help of innovative ideas. Finally, the company should consider introducing reusable cups and wrappers that will reduce the amount of waste generated.

Recommendations

Starbucks should get rid of the machinery that consumes much electrical power, which will reduce the cost of operation and increase profitability. Ovens, heaters, refrigerators, and coffee roasting machines should be replaced with a more energy efficient equipment. The company could also change the design of its stores to improve customers’ experience and thus attract more clients. Moreover, extensive research should be conducted on customers’ tastes and preferences. The management should focus on fulfilling the needs of the clients and improving their experiences. For example, the management should invest in automated coffee machines that will improve customer service and save time. Automation of certain services is important because it will reduce expenses and improve customers’ experience. Lastly, Starbucks should introduce a service that allows customers to place orders through their mobile phones. This will enable them to save time by getting their orders promptly.

Legal and regulatory considerations and recommendations

Legislation affects the operations of businesses significantly. Among these laws one could mention recycling laws, food safety laws, and waste disposal laws.

Recycling laws

It has already been stated that several laws influence the development of a recycling program for Starbucks. The government classifies different waste products, and these classes determine whether they are fit for recycling or not (Boone & Kurtz, 2011). Some states have rules that fine customers should not throw away the waste products possible to be recycled such as beverage containers and coffee cups. This regulation would have a great impact on the Starbucks’ recycling program because it would target its customers. However, the program under consideration would have a negative impact as well because one of its elements would be participation of the clients. Thus, Starbucks should consider creating awareness among customers about such laws. In the state of California, the bottle bill regulation requires all businesses to recycle single-use bottles and containers including plastic, glass, and aluminum containers. This regulation affects Starbucks recycling efforts. The regulation is aimed at strengthening curbside recycling and decreasing the use of landfills for waste disposal.

Food safety laws

Food safety is a priority for all businesses that sell beverages and food products. Therefore, Starbucks should guarantee the safety of its products during the purchase of the raw materials. In addition, food safety matters because the processes of production determine the quality of the goods. In the effort to reduce costs, Starbucks should take into account the impact of the cost-reduction measures on food safety. The Food Safety Act (2006) and the Food Production Act (2000) outline the rules that should be followed in order to ensure production and the sale of safe food. For example, under the Food Safety Act, the use of toxic detergents in cleaning of utensils is prohibited. The act recommends food grade detergents that cannot cause food poisoning. It is much desirable that Starbucks pay more attention to the effect of its production processes and equipment on food safety. The Food Quality Protection Act requires companies that produce their own raw materials to avoid the exposure of food materials to chemicals. The regulations could affect the production of coffee by Starbucks because of the possible exposure of coffee beans to pesticides.

Waste disposal laws

Waste disposal laws are very severe and it is necessary for Starbucks to review them before developing a waste disposal strategy. The government has classified wastes into different categories including toxic waste and non-toxic waste (Boone & Kurtz, 2011). So, the company should also consider classifying its waste products in order to determine the best methods of disposal. Some laws prohibit certain wastes to be liquidated in landfills because they pollute the environment. This is why, the company should educate its customers to promote responsible waste disposal. Waste materials that result from the use of toxic detergents are considered as hazardous. Starbucks should use detergents made from food grade materials in order to avoid producing hazardous waste. In states such as California, Arizona, Alaska, and Colorado, the plastic bag ban regulation prohibits the use of plastic bags in order to manage waste disposal.

Recommendations

It is worth stating that Starbucks should apply the government laws to classify its waste products into two groups: recyclable and non-recyclable. This will help the company replace the non-recyclable products with recyclable ones. It should also adhere to the food safety laws in order to make sure that they do not get into trouble with the government, or compromise the health of its customers. Starbucks should use low-tolerance pesticides in their farms to reduce cases of beans toxicity due to their exposure to chemicals. All equipment used in coffee processing and manufacture of snacks should follow the international quality standards. Finally, different waste disposal containers should be provided for different types of waste products because waste cannot be mixed. This will only benefit for improving recycling and disposal processes. Starbucks should recycle waste materials such as food scraps and coffee grounds. These materials can be used to manufacture detergents and bioplastics that can earn extra income. In addition, they should use recyclable materials to manufacture cups instead of plastics. Recycling will reduce costs associated with waste disposal, and consequently improve the profile of the company with regard to environmental sustainability. To reduce expenses further, Starbucks should form networks with non-profit organizations that promote environmental sustainability.

Conclusion

The social responsibility involves developing initiatives that focus on maximizing profits while improving the welfare of the society. Starbucks could improve its social responsibility by adhering to the recommendations of the discussed strategy that could be based on aspects such as environmental conservation, improvement of leadership, organizational viability, and following the legal and regulatory requirements.

The Starbucks company has done a lot towards being a responsible organization. However, more effective solutions could be implemented. Recommendations for a social strategy include reducing energy consumption, adhering to the government rules and regulations, and incorporating technology into its operations and activities. In addition, the strategy includes active participation of leaders in matters that affect employees, customers, and communities. The management should present professionalism and practice ethics in its working processes. They should also promote the implementation of strategies and initiatives that are aimed at improving the company’s social responsibility. Finally, they should advocate for the welfare of employees who work hard towards utilizing the strategies of the company.

References

Boone, L., & Kurtz, D. (2011). Contemporary Business. New York, NY: John Wiley & Sons.

Ferrell, O., Fraedrich, J., & Ferrell, L. (2011). Business Ethics, 9^th ed.: Ethical Decision Making and Cases. New York, NY: Cengage Learning.

Mullerat, K. (2011). Corporate Social Responsibility: The Corporate Governance of the 21^st Century. New York, NY: Wolters Kluwer Law & Business.

Schwartz, M. (2011). Corporate Social Responsibility: An Ethical Approach. New York, NY: Broadview Press.