Policies and institutions

Stren and Polese (2000) define social sustainability as “policies and institutions that have the overall effect of integrating diverse groups and cultural practices in a just and equitable fashion”.

Arguably, the greatest threat to the social sustainability of coffee production results from the economic conditions facing coffee producers (IISD, 2011). Farmers depend upon coffee as their source of income and as a result declining coffee prices can have a direct impact on important aspects of life such as education and medical services.Moreover, it is suggested that the performance of the market is transmitted to workers through general working conditions and wages. In a recent survey of coffee plantations in Guatemala, it was found that none paid the country’s minimum wage and that a majority of them did not even pay half the minimum wage (IISD, 2011). As well as exploitive wages, child labour is reported to be widely used in growing countries. In the plantations of Kenya 50-60% of the workers during coffee pickings peak season were children (Johnson, 2006).Within Starbucks CSR reports (Starbucks, 2011), the ways in which the company are working with farmers and coffee-growing communities are expressed as; 1. Supporting farmers with small-scale farms and who grow Fair Trade coffee 2.

Paying the prices that high quality coffee commands 3. Buying Certified Organic coffee 4. Helping conserve wildlife and biodiversity in Africa’s coffee regions through the African Wildlife Foundation (AWF) 5. Investing in a better future for farmers through loan programs.Involving our partners and customers in our work with coffee farmers in Costa Rica with Earthwatch Expeditions (additional information can be found on their website: http://www. earthwatch. org/expedition) Starbucks involvement in the welfare of coffee-growing communities can be expressed in a CSR pyramid. Fig.

9 Adaption of CSR Pyramid for Starbucks’s approach to coffee farmers (Carroll, 2001) This pyramid represents obligations that exist for a corporation and the significance of these responsibilities. Through fair-trade Starbucks help to create jobs, establish local business linkages and invest in staff and technology development.Starbucks help to improve the quality of life through loan programs and proving farms, and by paying the high prices that quality coffee demands Starbucks demonstrate their commitment to operating fairly. Legal responsibilities are relatively less important in the pursuit of CSR; however through the advertisement of the conditions in farming countries have strengthened the human rights aspect of legalisation. Furthermore, Starbucks recognise farmers as Starbucks key stakeholders who “can affect the achievement of the organisations objectives” (Freeman, 1984).Using the descriptive stakeholder theory which “ascertain how corporations actually do take into account stakeholder interests” (Crane and Matten, 2004) we can see how Starbucks deal with the social issues facing them.

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Commitments schemes such as the CAFE Practices Program which “reflects the acceptance of increased corporate responsibility for the progressive improvement of key elements of worker and producer well-being” (Macdonald, 2007) is proof of the recognition that they must build upon their relationship with coffee bean farmers to ensure sustainability.These programs give guidelines for working with coffee farmers to ensure high-quality coffee and promote “equitable relationships with farmers, workers and communities as well as protecting the environment” (Enquist, 2007). Starbucks success in entering new markets relies on its ability to “cultivate meaning relationships with customers and local community leaders” (Enquist, 2007).

Starbucks continually reinforce their commitment to corporate social responsibility and in doing so; ensure that its activities within the company and stakeholders are widely publicised instilling trust as a global and local corporation.This image is transferred further in there sales items, where the moral significance of purchasing fair-trade branded goods is widely publicised and therefore enhances corporate reputation. 5. 0 Ethical Evaluation and Recommended Action 5. 1 Ethical Evaluation There is the need and opportunity to improve the sustainability of the coffee market on a local, regional and global level. The primary focus of Starbucks future operations must focus on the integration of economic imperatives within a framework of social and environmental responsibility in order to create a sustainable enterprise.Within this report I have argued that Starbucks have consistently applied their corporate ethical values and consequently are well placed to achieve their ambition of being a corporate responsibility leader. The greatest threat to the sustainability of current coffee production practices lies in their social impact as they define, the economic conditions facing coffee producers.

Producers depend directly upon the coffee market for revenue and declining trade in coffee can result in reduced resources for social essentials such as medical services and education.Starbucks recognition of this is demonstrated by their implementation of ethical theory, and with their “ethics of rights”, they consider whose rights need to be respected and whether the fundamental rights of these people are being respected (Crane and Matten, 2004). By addressing the rights of the producers, Starbucks provide better conditions for coffee farmers, helping to maintain a co-operative relationship and mitigating the impact of any negative press received. In doing so Starbucks ensure continuation in coffee harvesting in areas of high biodiversity is beneficial to all parties involved[a].My recommendation for Starbucks to improve the sustainability of their future would be to provide even further support for the communities and workers involved in the production of coffee. This could be done by ensuring; 1.

Producers should be paid wages that cover; production, living and environmental costs at a flat rate rather than being dependent on the variable commodity pricing of coffee. 2. Employment restrictions should be applied in accordance to international governing bodies rather than local laws. 3. Provide or promote mutual support among farmers to solve management problems in the farm; developing a community spirit.4. Promote the guidelines needed to achieve fair-trade certification so more producers can benefit. Fair trade certification is available only to small farmer groups and organizations – promote the guidelines needed to be met to achieve fair-trade status so more producers benefit.

My research on the ethical philosophies espoused by Starbucks has led me to believe that this is a corporation which clearly understands that while shareholder demands for economic performance are unrelenting; their satisfaction would not be possible if they were cynical in applying ethical principles to their business operations.It is their realisation of the need to respect all stakeholders, particularly those involved in their supply chain that allows them to be confident of a sustainable future. It is clear to me that the Starbuck executive pays as much attention to their “licence to operate” granted by public acceptance, as they do to their profits. I believe this is a company that clearly recognises the connection between market dominance and CSR leadership and have focused on the latter to achieve the former.

I believe that Starbucks ethical focus is the foundation stone for their creation of a successful and enduring enterprise.ReferencesBooks Crane, A. and Matten, D.

(2004) Business Ethics – A European Perspective. Oxford: Oxford University Press Crane, A. , Matten, D. (2010). Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization.

Oxford: Oxford University Press. Ekings, P. (2000). Economic growth and environmental sustainability: The prospects for green growth.London: Routledge. Elkington, J (2004).

Cannibals with Forks: Triple Bottom Line of 21st Century Business. Oxford: Capstone. 3. Freeman, R. (1984).

Strategic management: a stakeholder approach. Boston:Pittman. Rogers, A.

(1992). Eastern Africa -The Conservation Atlas of Tropical Forests of Africa. New York: IUCN, 143-160 Schaltegger, S. , Burritt, R. ; Petersen, H. (2003). An Introduction to Corporate Environmental Management. Striving for Sustainability.

Sheffield: Greenleaf Publishing Ltd,182.

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