Question

1) Describe in depth (a paragraph for each term) how Starbucks leadership demonstrates corporate governance, social responsibility, and business ethics.

2) Select a local organization with which you are familiar and describe in depth (a paragraph for each term) how the leadership of that organization demonstrates corporate governance, social responsibility, and business ethics.

Answer 1

1.

Starbucks aims to commit good governance, ethical code of conduct and social responsibility in the way they perform their business. The employee satisfaction and retention of the company is high because of the good CSR practices (Fridell, G, 2007). Customers are attracted more to the company because they perform CSR responsibly and this is the driving force for the organization. The measures company take to reduce its impact on the environment are initially cost consuming but for the longer run they prove to be beneficial in terms of reducing environmental damage and cost saving. The company invests in the measures to strengthen their supply chain that ensures them a sustainable growth. The company seeks approval and necessary licenses to operate from the concern regulating authority.

The company‘s board of directors strongly takes the responsibility in following the ethical governance principles. The company’s board has always been classified and the criteria for the appointment of the board member have always personal integrity and ethics on the top of the list along with considering professional and personal background. A strong and ethical corporate culture is important for the success of the organization. The company provides guidelines through a program called Starbucks Business Ethics and Compliance.

The way the company manages its corporate social responsibility shows that the company is willing to identify and prioritize the issues that have emerged and is able to address them in a systematic and integrated manner. Along with a dedicated team to take care of the CSR initiatives the company has also formed three cross-functional teams that take care of the specific responsibilities, the teams are, Emerging Issues Council and CSR Executive Committee.

The Emerging Issues Council was established in the year 2004 to identify and map the external key trends and issues that may impacts the business of the company. The council may involve external stakeholders to gain input once the issues are identified.

CSR Executive Committee was established to strengthen the overall CSR governance of the company. The aim of this committee is to set strategies and policies, to monitor the progress the company has made against its objectives, to oversee the CSR structure of organization at the local, regional and global level, to ensure that the integration and implementation is done throughout the company and to approve and review the social investment activity.

2.

Corporate social responsibility (CSR) can be defined as the "economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time" (Carroll and Buchholtz 2003, p. 36). The concept of corporate social responsibility means that organizations have moral, ethical, and philanthropic responsibilities in addition to their responsibilities to earn a fair return for investors and comply with the law. A traditional view of the corporation suggests that its primary, if not sole, responsibility is to its owners, or stockholders. However, CSR requires organizations to adopt a broader view of its responsibilities that includes not only stockholders, but many other constituencies as well, including employees, suppliers, customers, the local community, local, state, and federal governments, environmental groups, and other special interest groups. Collectively, the various groups affected by the actions of an organization are called "stakeholders." The stakeholder concept is discussed more fully in a later section.

Corporate social responsibility is related to, but not identical with, business ethics. While CSR encompasses the economic, legal, ethical, and discretionary responsibilities of organizations, business ethics usually focuses on the moral judgments and behavior of individuals and groups within organizations. Thus, the study of business ethics may be regarded as a component of the larger study of corporate social responsibility.