starbucks social responsibility essay

Starbucks CSR: Corporate Social Responsibility

Starbucks CSR programs and initiatives are led by Michael Kobori, chief sustainability officer for the world’s largest coffeehouse chain. CSR initiatives for Starbucks cover wide range of business aspects and employee relationships such as supporting local communities, educating and empowering workers, gender equality and minorities, energy and water consumption, waste reduction etc.

CSR Programs and Initiatives

Starbucks Supporting Local Communities

• Starbucks Community Store program aims to assist local non-profit organizations in their efforts to provide education and training to achieve poverty eradication for the young segment of population. The company plans to open 100 Community Stores by the end of 2025.
• Starbucks has cooperated with non-profit organizations, community leaders and organizational stakeholders to provide more than 520,000 hours of volunteering service around the globe. [1]
• The global coffeehouse chain runs FoodShare food donation program in all company operated stores in US and Canada. 10.4 million and 1.2 million meals were donated in US and Canada respectively in FY21.

Starbucks Educating and Empowering Workers

• Starbucks College Achievement Plan is an education program that allows employees to obtain online degrees from Arizona State University. Approximately 2500 employees earned their degrees via this program in FY21 alone
• It has been noted that “at the height of the global financial crisis, when other companies were cutting HR costs wherever they could, Starbucks invested in staff training, including coffee tastings and courses that ultimately qualified for credit at higher education institutions” [2]
• In FY21 the company oversaw more than 136000 course enrolments in Starbucks Coffee Academy and more than 55,000 course completions since launch.

Starbucks and Gender Equality and Minorities

• At present about 40% of Starbucks US employees are minorities and 65% are women.
• Among vice presidents, 48% are women and 15% are minorities.
• The global coffeehouse chain aims to achieve at least 30% BIPOC representation and 50% representation of women for all enterprise roles by 2025.

Diversity in Starbucks Corporate Roles [3]

• Starbucks previously achieved and currently maintains 100 percent pay equity in the U.S. for women and men and people of all races for partners performing similar work
• There are 12 partner networks within the company such as Armed Forces Network, Black Partner Network, Disability Advocacy Network and others
• The global coffeehouse chain has achieved and maintained 100% pay equity for women and men and people of all races performing similar work in the U.S. and achieved and maintained gender equity in pay in global company operated markets Canada and Great Britain.
• The multinational chain of coffeehouses received 100% score on the Disability Equality Index.

Energy Consumption by Starbucks

• Greener Store format in North America consumes 30% less energy compared to traditional stores
• 66% of company-operated stores are powered using renewable energy
• The world’s largest coffeehouse chain is committed to reach to 100% renewable energy in its global operations

Water Consumption by Starbucks

• The company plans to ensure that 50% of water it uses is conserved or replenished by 2030
• In FY21 water withdrawals in operations reduced by 11% compared to the base year of FY19
• Greener Store format in North America use 30% less water compared to traditional store formats

Waste Reduction and Recycling by Starbucks

• During the past five years Starbucks Japan has turned tons of spent coffee grounds into compost and feed for cows
• The global coffeehouse chain aims to reduce the waste it sends to landfill by 50% by 2030.

Carbon Emissions by Starbucks

• The world’s largest coffeehouse chain aims to achieve 50% absolute carbon reduction in scope 1, 2 and 3 greenhouse (GHG) emissions in all direct operations and value chain by 2030
• The company plans to become carbon positive i.e. store more carbon than it emits by year of 2030.

Starbucks and Sustainable Sourcing 

• The company has 10 Farmer Support Centres in Latin America, Asia and Africa
• Starbucks purchase of coffee from the Eastern Democratic Republic of Congo helped more than 4,500 small-holder farmers to more than triple their incomes.
• In FY21 99.9% of tea sourced by Global Coffee, Tea & Cocoa, the company’s global coffee sourcing team, verified as responsibly sourced
• Starbucks doubled the Global Farmer Fund to USD 100 million. Since FY18, USD 54.8 million in loans has been deployed.

Starbucks Corporation Report contains a full analysis of Starbucks corporate social responsibility including Starbucks CSR issues. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on Starbucks . Moreover, the report contains analyses of Starbucks leadership, business strategy, organizational structure and organizational culture. The report also comprises discussions of Starbucks marketing strategy and its ecosystem.

[1] Starbucks Global Responsibility Report (2014)

[2] Leinward P. & Davidson, V. (2016) “How Starbucks’s Culture Brings Its Strategy to Life” Harvard Business Review, Available at: https://hbr.org/2016/12/how-starbuckss-culture-brings-its-strategy-to-life

[3] Global Environmental & Social Impact Report 2021 , Starbucks Corporation

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Starbucks’ Social Responsibility and Brand Strategy

Introduction, alternative, proposed solution and recommendations.

Starbucks is the largest international chain of coffee shops which has been consistently growing and expanding since the 1980s. In 2008, it faced a major crisis caused by the economic recession and the failure of the company’s aggressive expansion strategy. To address the crisis, it introduced significant changes to its corporate policy, focusing on five main aspects of its operations: the environment, employees, customers, suppliers, and communities. The alignment of the company’s general strategy with the core principles of business ethics allowed Starbucks to successfully overcome the crisis and achieve stable growth.

Starbucks is an American multinational chain of coffeehouses headquartered in Seattle, Washington. Currently, it is the largest coffeehouse chain in the world, operating more than 30,000 retail stores in 80 countries (“Starbucks company profile,” n.d.). Starbucks focuses on selling coffee grown under the highest standards of quality using ethical sourcing practices, positioning its stores as “a neighborhood gathering place,” and providing exceptional benefit programs to its employees (“Starbucks company profile,” n.d., para. 6). In the past few decades, Starbucks has achieved high levels of growth while maintaining a good reputation for social responsibility and business ethics.

In 2008, Starbucks faced a crisis that was a result of both the economic recession and the expansion of the store network in the previous years. A global recession caused the market to bottom out for expensive coffee drinks, leading to a drop in Starbucks profits (De Silva, 2020). At the same time, the company encountered problems with its aggressive expansion strategy that dominated for most of the 1990s and 2000s (Ng, 2018). With Starbucks stores located almost at every corner, the company started to be criticized for forcing many smaller coffee shops out of business. Its international expansion was also connected with numerous difficulties caused by a lack of sensitivity to the specific local needs and nuances.

To address the crisis, Starbucks decided to slow down its global growth plans and instead refocus on strengthening its brand, satisfying customers, and building consumer loyalty. Explaining the crisis, the company’s CEO, Howard Shultz, noted that “Starbucks’s heavy spending to accommodate its expansion has created a bureaucracy that masked the main problem” (De Silva, 2020, para. 8). In 2008–2009, the company closed 10% of its stores, which allowed it to continue to provide employees with health insurance (Ng, 2018). Further on, Starbucks invested in responsible programs for ethical sourcing, reducing environmental impact, and improving communities to translate serious management crises into better performance.

It can be concluded that Starbucks addressed the 2008 crisis by making radical changes in its business strategy. It pulled back on expansion that characterized the company’s development over the last several decades and focused on sustainability and customer experience (De Silva, 2020). Its guiding principles were updated to focus on increasing awareness in all aspects of business, from supplier relations to human resource management. Social change was proclaimed to be an important part of the company’s core identity, with Starbucks starting to invest more funds into social development programs to benefit local communities (“Starbucks company profile,” n.d.). Each business decision began to be evaluated based on its compliance with the company’s ethics. As a result, the company succeeded in both addressing the crisis and modifying its brand to reflect social developments and appeal to changing consumer tastes.

Starbucks could have chosen another strategy to respond to the 2008 crisis. It could have continued the same course of action that it has been pursuing over the previous several decades and adopted radical measures to reduce costs and retain profits. The closure of stores could have been avoided by reducing employee benefits and compromising on the quality of products and services. Instead of sustainable development and social change, Starbucks could have focused on cheaper labor and cheaper ingredients, continuing to expand as a multinational fast-food chain with a focus on quantity rather than quantity.

This strategy was not adopted by Starbucks because it violates the ethical principles on which the company is based and provides a non-sustainable solution which focuses on short-term rather than long-term benefits. Starbucks’s corporate mission states that the company is concerned with the environment, its employees, suppliers, customers, and communities and is committed to achieving social change (“Starbucks company profile,” n.d.). The proposed aggressive strategy would have violated all of these principles.

With the aggressive strategy, the company’s environmental concerns would have been abandoned, and it would have ceased investments into environmentally friendly solutions aimed at waste reduction, recycling, energy conservation, and partner education. Employees’ wages and health benefits would have been reduced, and the management’s attention would have been placed on employee productivity rather than satisfaction. Starbucks would have changed its supplier policy, purchasing cheaper lower-quality ingredients instead of paying premium prices to local farmers to support coffee-growing communities. In terms of customer experience, Starbucks would have focused on uniformity rather than customization, designing all its stores in the same way regardless of their location. It could have probably involved changes in the stores’ image from a welcoming environment where people can relax into a fast-food venue with grab-and-go food items and coffee. Investments in community support programs would also have been abandoned, and the focus on social change would have been replaced with a focus on profits and expansion.

Overall, adopting such an aggressive strategy to respond to the crisis would have meant compromising on ethics and violating the underlying principles of the company’s corporate mission. It would not have been consistent with the company’s policy and would have probably resulted in Starbucks being transformed into a fast-food coffee chain with cheap, low-quality products. The solution chosen by the company’s management at that time was more consistent and ethical.

Over the last decade, Starbucks continues to operate in line with its business strategy adopted in 2008. To maintain the current level of growth and improve the company’s business ethics, it can be recommended to further develop this strategy without introducing any radical changes. To maintain competitive advantage, improve consumer experience, and expand market presence, the company’s activities need to be focused on the environment, consumers, employees, suppliers, community, and promoting social change.

In line with its environmental mission statement, Starbucks should stay committed to reducing waste, conserving energy, educating its partners, and increasing consumer awareness. One of the major company’s initiatives is to increase the use of reusable cups and personal tumblers among its consumer base to reduce the amount of waste. It can be recommended to provide more substantial discounts to people bringing in their reusable cups.

Customer satisfaction should continue to be of utmost importance to Starbucks. The focus needs to be placed on the quality of the coffee, the atmosphere of the coffee shops, and the overall Starbucks experience rather than rapid expansion. Starbucks stores should be designed as places where people would want to spend time and relax, and when expanding to foreign countries, particular attention should be given to addressing the local specifics to avoid previous marketing mistakes.

The existing employee programs are designed in line with the company’s guiding principles of putting people before profits, and they should be further developed in this direction. The key elements are diversity, investments in employee education, commitment to employee well-being, and provision of a comfortable working environment (Tikson & Hamid, 2017). All employees have a voice at Starbucks, which is emotionally rewarding and results in high motivation and personal satisfaction (Tikson & Hamid, 2017). Further developments may include providing increased employee medical and psychological support to address the challenges of the COVID-19 pandemic.

As suppliers are concerned, Starbucks is committed to building positive relationships with small coffee growers while also working with governments and non-profits in the regions of its operation. It has developed a set of socially responsible coffee-buying guidelines that ensure preferential buying status for participants who receive high scores in best practices (“Starbucks company profile,” n.d.). Further developments need to be in line with the company’s goal of increasing its ethically sourced coffee to 100%.

Community involvement should continue to be one of the cornerstones of Starbucks’s business strategy. It should include identifying and addressing issues specific to local communities, participation in social development programs, and involvement in discussing serious issues. Despite some controversies surrounding Starbucks’s previous activities in this area, this approach requires further development, especially in the times of the pandemic. Specific initiatives need to be proposed to support local communities in their handling of the crisis.

Overall, the strategy of the company’s further development should be a continuation of its current business strategy, with utmost attention given to sustainability and increasing awareness in all aspects of its operation. The specific actions to maintain Starbucks’s competitive advantage and increase consumer loyalty need to be in line with the company’s corporate mission. Each business decision needs to be evaluated to ensure its compliance with the ethical values, and the interests of communities and employees need to be placed above profits. Adherence to ethical values helped Starbucks to overcome the crisis and achieve its current market position, and there is no indication that it should be abandoned.

Starbucks’s current business strategy was developed as a response to the 2008 crisis, which was partly a result of the company’s aggressive expansion policy. The strategy is based on ethical and social values, and the company is committed to ensuring that all its’ operations are consistent with the established moral guidelines. The alternative to this strategy could have been a more aggressive approach focused on further expansion and cost reduction. Its’ inconsistency with ethical values prevented it from being adopted, and the company’s management chose a more sustainable strategy that proved to be successful. It is recommended to further develop this strategy without implementing any serious changes. The company’s focus on the environment, employees, customers, suppliers, and communities ensures its commitment to long-term rather than short-term outcomes, which serves as the basis of Starbucks’s consistent growth.

De Silva, D. (2020). Starbucks: Lessons from the financial crisis . Seeking Alpha.

Ng, D. (2018). How Starbucks’ growth nearly destroyed the business, until one man saved its skin . Channel News Asia.

Starbucks company profile . (n.d.). Starbucks.

Tikson, S. D. S., & Hamid, N. (2017). Human resources policies and work culture: A case of Starbucks . Journal of Business, Management, and Informatics, 14 (1), 1–11.

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Starbucks Corporation’s Organizational Social Responsibility

Business decisions and actions have significant impacts on society and can cause collateral damage if they remain unchecked. Many organizations focus on financial concerns, exercising an individualistic ethic of selfish gain (Kang & Namkung, 2018, p. 1140). A growing body of literature purports that business effectiveness calls for a more balanced view of economic and relational influence, which is achieved through establishing a code of ethics and social responsibility. As such, business leaders need to understand the impact of their decisions and behavior on moral and environmental aspects of life (Kang & Namkung, 2018, p. 1140).

The proponents of the stakeholder theory suggest that the effectiveness of a business is measured by the degree to which it appreciates and effectively manages its contribution to society. Different organizations vary broadly in how their operations influence the social sphere of life. Irrespective of whether or not Corporate Social Responsibility (CSR) initiatives capitalize on financial returns, the proponents of stakeholder theories claim that businesses are more likely to achieve long-term effectiveness if they thoughtfully address salient concerns in society.

Corporate Social Responsibility (CSR)

Today’s ever-shifting business environments and consumer behavior have forced corporations to fulfill their social obligations in areas where they operate. Some strategies and policies aim at motivating companies to recognize the impacts of their activities on society (Li et al., 2019, p. 174). CSR is primarily concerned with promoting sustainable development by creating social, economic, and environmental plans that benefit the affected community. This business initiative assumes many forms, and its implementation varies from one organization to the other.

For instance, some companies apply CSR based on human rights and environmental effects, while others focus on addressing corporate governance, safe working conditions, and health. Regardless of its purpose, the central role of CSR is to improve and promote corporate sustainability. Starbucks Corporation is one of the famous public companies whose emphasis on CSR benefits its stakeholders and adds value in the promotion of its products. The firm has developed robust CSR strategies, and its exploration can inspire other establishments to integrate suitable policies to manage the influence of their decisions and actions on stakeholders.

Starbucks Corporation: Company Background

Starbucks Corporation is an American multinational based in Seattle, Washington. It is renowned for its vast chain of coffeehouses and roastery reserves. The company started as a single store in 1971 to offer the world fresh and premium roasted whole coffee beans. Purchased by its former chairman and CEO, Howard Schultz, and local investors in 1981, the narrow storefront grew exponentially to cherish people with the romance of coffee tradition. Since its inauguration, the company set out a norm to deliver first-rate coffee that inspired a stronger connection with the consumers. Today, Starbucks purchases, prepares, and distributes premium whole coffee beans globally.

Aligning CSR Aspect with Starbucks Mission

Defining purpose and activating supporting values positions a company for long term success, especially in today’s dynamic business climate. Starbucks’ mission is “to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time” (Starbucks n.d., par. 7). The company’s CSR approach aims at promoting its connection with consumers. This initiative is guided by the perspective that customers have a high affinity for products that make them feel good (Campbell & Helleloid, 2016, p. 39).

In Starbucks, it is believed that enthusiasts are captivated by the quality of the coffee they drink. The mission statement aligns with its CSR strategy since it provides an engaging work environment that inspires respect and dignity. Workers in Starbucks are regarded as partners rather than mere employees. The company promises fair treatment and a safe workplace, a deep-rooted guiding principle that inspires commitment and loyalty. This tendency brings about a sense of inspiration that nurtures a positive attitude towards tasks.

How Starbucks has demonstrated CSR as stated in its Strategy

The organization has demonstrated social responsibility in line with its strategy. The CSR initiative has been achieved through Starbucks’ certification system that portrays the approach as ethical. To promote this plan, the firm developed the Coffee and Farmer Equity Practices (CAFE) program to guide growing and harvesting of coffee in a socially and environmentally responsible way (Ecolabel Index, n.d., par. 1).

Starbucks is continuously developing and implementing better initiatives aimed at maintaining a sustainable coffee business. Furthermore, the company conducts business in ways that attract and retain its partners. According to Campbell and Helleloid (2016), Starbucks employees are actively engaged in implementing its CSR initiatives, an activity that increases their job satisfaction. As such, most workers have achieved significant personal growth, boosting production and delivery of nourishing coffee products. The CAFE program has also promoted customer loyalty, which is believed to be the driving force behind Starbucks’ exponential development and prowess in the industry.

Improving on the Current Social Responsibility Related Actions of the Organization

Starbucks has invested heavily in CSR to maintain ethical sourcing practices. The firm has also gone to a further extent to establish its certification system. However, it is essential to mention that Starbucks’ CAFE program does not meet the required Fair-Trade Standards. For instance, in 2006, the company began purchasing Arabica coffee from Ethiopia by faking that it had been certified by the highest standards. However, this move resulted in the devastation of forests, endangering wildlife habitats. As a result, Starbucks needs to seek an external certification to avoid bias from its internal accreditation system (Kang & Namkung, 2018, p. 1140). This move will increase confidence among customers and their sources.

Campbell, K., & Helleloid, D. (2016). Starbucks: Social responsibility and tax avoidance. Journal of Accounting Education , 37 , 38-60.

Ecolabel Index. (n.d.). CAFE practices. Eco-Label Index . Web.

Kang, J. W., & Namkung, Y. (2018). The effect of corporate social responsibility on brand equity and the moderating role of ethical consumerism: The case of Starbucks. Journal of Hospitality & Tourism Research , 42 (7), 1130-1151.

Li, Y., Liu, B., & Huan, T. C. T. (2019). Renewal or not? Consumer response to a renewed corporate social responsibility strategy: Evidence from the coffee shop industry. Tourism Management , 72 , 170-179.

Starbucks. (n.d.). Company information . Web.

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