Workplace Ethics – Starbucks Case Study

1.0 Introduction What is workplace ethics? Workplace ethics is a group of moral principles, standards of behavior, or set of values regarding proper conduct in the workplace. Workplace ethics are most often related in decision making processes because it is the most important responsibilities that we place on the leaders of organization is upholding the highest standards of ethical behavior. Ethics at workplace refer to choosing the option that is determined to be the moral or right choice. Starbucks is one of the world’s most ethical companies. Starbucks makes conscious efforts to be a responsible company and conduct business in an ethical manner. In its business, Starbucks was proud of it ethical ways in doing their business. They are through community, sourcing, environment, diversity and wellness. Starbucks has openly display its commitment to being socially responsible and they want their customers to know exactly how they doing. In Starbucks, Business Ethics and Compliance is a program that supports their mission which is “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” It helps to protect their culture and their reputation by providing resources that help partners make ethical decisions at work. Starbucks has makes conscious efforts to fulfill its company’s mission. The majority of reports received by Business Ethics and Compliance involve employee relations issue that provides alternative reporting mechanisms as part of a comprehensive ethics and compliance program. Starbucks believes that conducting business ethically and striving to do the right thing are vital to their success. The program develops and distributes awareness materials, including the Standard of Business Conduct. In social responsibility, the Standard of Business Conduct is a statement of some of the company’s expectations of how they conduct Starbucks business, consistent with their mission and core value. In workplace, Starbucks has emphasis in three sectors of their employees. First, are global human rights, their commitment to basic human rights as a core component of the way they do business and how they engage with their partners. Second is equal employment opportunity, their non-discrimination policy help the large number of their employees have a steady working situation. Third is health care, their support for healthcare reform that allows them to continue to offer affordable coverage to our partners. 3.0 Case Study Starbucks lead by its CEO Howard Schultz is an international coffeehouse chain based in Seattle, Washington, United States. It is the largest coffeehouse company in the world with 16120 stores in 49 countries. Products of Starbucks include drip brewed coffee, espresso-based hot drinks, other hot and cold drinks, snacks and items such as mugs and coffee beans. Many products are specific to the location of the stores. Starbucks Italian styles coffee, espresso beverages, teas and confectionaries had made it one of the world’s biggest specialty coffee chain. With the intention of communicating to employees and customers of the values and principles that the company upholds, Starbucks Coffee Company has outlined its mission statements; “To inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time” (“Our Starbucks Mission” ,n.d ) . Even though Starbucks has a unique style of combining both Mission Statement and Vision Statement ( Garfieldml, 2012) its meaning is clear and concise. Viewing the statement in ethical perspective relating to its workplace it can be broken down into 4 key principles: Ethical sourcing of coffee – meaning a holistic approach to ethically source the highest quality coffee carefully blending, roasting and packing fresh. Our partner - where Starbucks refer to its employees will be treated with respect and dignity with safeguarded by health coverage. Ethical environment stewardship – are committed to the conservation of environmental resources. 3.1 Critical and Main Issues Starbucks commitment to ethical practices in the workplace environment is reflected in its setting up of a Standard of Conducts for its partners. The main ethical issues addressed in the code of conduct can be broadly categorise as commitment of partners to provide quality service to customers, conducive workplace environment for the partners and emphasis on integrity and fairness on all dealings.

1. Commitment to provide quality service

Partners should be committed not to harass or discriminate against customers, protect customers’ health and safety by following all proper procedure relating to storage, handling, preparation and providing service for Starbucks products.

2. Conducive working environment

Consistent with global human rights standard, Starbucks promote equal opportunity in its hiring and promotion practices make decision solely on job related criteria. Employment of partners under age of 18 will take into consideration legal requirement of age, hour task and ensure the partners’ education, health, safety and mental or physical development is not affected. Starbucks partners should respect each other’s dignity. All partners are entitled to work in an environment that is free of harassment, bullying or discrimination. Officers are assigned to enforce the rules and practices pertaining to workplace health, safety and security to safeguard the partners. Starbucks is committed to comply with laws and regulation applicable to wages. It emphasizes that work performed should be compensated accordingly. Thus partners compensated on basis of hours must report accurately (Ali., Haris, Arslan, Jan., Asad-ud, Bashir., Sufwan, Usman, & Ali, n.d). Starbuck College Achiever Plan motivates all benefits eligible partners to complete a bachelor degree with full tuition reimbursement through Arizona University top-ranked degree programs, delivered online (‘Working At Starbucks n.d ).

3. Emphasis on integrity and fairness on all dealings

Partners must be committed to work fairly and honestly with government official and are not permitted to influence outcome by exchanging bribes. Partners must be truthful and straightforward in their dealing with government so as to meet high ethical and legal standard. Sales practice and advertising must compete on merit of product and services and communication with customers must be accurate and truthful. Partners committed to fair and open competition and must not use unethical means to eliminate competitors or control market price. Partners are prohibited from offering, giving, soliciting or recovering any form of bribe or inducement. Partners must ensure accuracy and integrity of Starbucks corporate reports and honest in disclosure of information to the authority. 3.2 Starbucks Application of Relevant Organizational Behaviour Principles and Concepts To monitor and enforce the ethical conduct of its partners at the workplace Starbucks had developed asset of Standard of Business Conduct which is a resource distributed to all partners to help them make appropriate decision at work. To further help the partners facing with ethical problems Starbucks had set up a Business Ethics and Compliance unit headed by a partner resource. Considering partners who are not comfortable facing an officer to report unethical practices, Starbucks Ethics and Compliance Helpline is an avenue to report issues through free phone call. This facility operates 24 hours every day. Ethics And Compliance Webline is another way for partners to ask for guidance which can be submitted anonymously and treated in confidential manner. The above enforcement measures reflect Starbucks attempt to promote ethical behaviour at the workplace by applying the concept of motivation by rewarding partners through fair wages and benefits, interpersonal communication with the resource partner of the Business Ethics and Compliance to assist in preventing and resolving problem and the most important is through setting up a structure standard code of behaviour to modify the behaviour of its partners. All these efforts had resulted in the company being awarded one of the most ethical companies by Ethisphere for the year 2007 to 2012 Allegra strategies had also voted Starbucks as the ‘Most Ethical Company , European Coffee Industry for the year 200 to 2011 (Ali et.al n.d). 3.3 Criticizes or Comments First and foremost, we would like to have some comments on the critical issues of Starbucks identified by us in our study. Those issues found by us are the commitment of Starbucks to provide quality service to customers, the providing of a conducive working environment for employees and the emphasis on integrity and fairness on all dealings in the company. It is very important for a company to have commitment to provide quality service to customers. This is because it will increase the satisfaction of customers towards the company. The quality service provided will act as Starbucks’s competitive advantage to create loyal customers. Starbucks’s reputation can also be enhanced through the spreading of news about the good service provided by the company through blogs and social media. This will attract more customers and increase the revenue of Starbucks. A working environment which is conducive is a key element to the performance of the employees and also is one of the individual rights for the employees. The work environment creates behavioural patterns in human development and has both physical and psychological influences on employees in the company. A harmonized and comfortable environment will increase the productivity and job satisfaction of employees. When the employees are in a peaceful environment without any disturbance or unethical problems created by others in the company, they can be more focused in their work and put more effort in it as well as have a better performance. The emphasis on integrity and fairness on all dealings by Starbucks is a key factor to support the ethical principles which are individual rights and distributive justice. Managers that are being fair and integral can avoid conflicts happen between employees and a peaceful as well as friendly working environment will be created in the company. This will also enhance employees trust on Starbucks and improve their loyalty to the company. In conclusion, we have positive comments on the main issues in Starbucks and they are quite important to support the ethical principles. 4.0 Recommendations After studying about the topic that we chose that is ethics at workplace, we found that there are many ethical practices practised by employers as well as employees in Starbucks which is the company that we chose. We have some suggestions on how they can further improve practising ethics in Starbucks. First of all, we suggest Starbucks to use ethical screening for job applicants during interview. Ethical screening is the process of checking these job applicants against certain moral standards and removing those who do not conform. This can be done by checking the resumes of those applicants which contain the behavioural information that reflects the attitude of the applicants. The interviewers should also interview them about how they managed the ethical issues faced by them at their previous workplace and how they are going to solve the ethical problems cases when they face them in the future. Besides, they should also make sure the applicants share the same ethical values with the company and will maintain them on the job. This can prevent one unethical employee to have a bad influence on others in the company that may ruin the good image of an ethical company. Moreover, Starbucks can expose new employees to the company’s code of ethics, code of conducts and ethical decision making process during the orientation to improve the ethics in the company. The company’s codes of ethics and conducts act as its conscience and provide a common ethical reference point for employees. By reviewing these conducts, employees will know about what they should do and what they should not do in the company. They also know whether the issues appear in the future are considered ethical or not ethical according to the company’s code of ethics and code of conducts and solve it with the best and necessary solution. Furthermore, Starbucks can improve ethics in the company by providing ethics training workshops for all employees annually to supplement ethics codes. The managers that organise these training workshops should provide some real cases with ethical violations of Starbucks’ ethics code and let them think carefully and discuss among themselves about what they should do for those scenarios. After that, the managers should teach them the correct and best solutions to solve these kinds of ethical problems. Through these workshops, the employees will know what to do when they face these kinds of ethical issues in the future and the relationship between employees will also be enhanced through the interaction in the workshop as well as build trust between each other. We also recommend Starbucks to strengthen the ethics which are individual rights and distributive justice of the work unit by rewarding those employees with ethical behaviours equally and punish those with unethical behaviours through work goals and performance appraisals. The managers should praise those employees that achieve the goals in an ethical way or even give them a certificate for being an ethical employee to encourage them. This will also act as a motivation for other employees. At the same time, they should give the same punishment to those employees with unethical behaviour by giving them a warning letter so that they will not do it again in the future. This can also act as an example for other employees so that they will not make the same mistake as these unethical employees. By doing this can avoid developing moral confusion in the company. The next suggestion for Starbucks is the managers or the direct supervisors of the employees should model appropriate behaviours in themselves as they are actually the most important ethics reference point for the employees. Ethical behaviours in a company start at top management because the employees tend to follow the behaviour and action of their managers towards an ethical issue. It has a greater influence on employees compared to the stated policies of the company. Therefore, the words and actions of the managers should always be aligned with the company’s code of ethics and code of conducts. They should act with integrity all the time in order to maintain an ethical workplace. In conclusion, there are many other ways that Starbucks can further improve ethics in the company other than what we suggest here. Improving ethics at workplace is very important in order to be a famous company with good image and quality as well as employees and employers can work together harmoniously without creating any unethical issues on behalf of the company and the customers. 5.0 Conclusion Starbucks is one of the most ethical companies in the world. Starbucks was proud of it ethical ways such as community, sourcing, environment, diversity and wellness in doing their business. It has openly display its commitment to being social responsibility. The program of Business Ethics and Compliance is to support their mission and help to protect their culture and reputation. Starbucks has emphasis their employees into three sectors which is global human rights, equal employment opportunity and health care. In Starbucks, they are using three principles in workplace ethics. First is utilitarianism, it can divide into two types which are act-utilitarianism and rule-utilitarianism. Second is distributive justice who means sharing of the benefits and burdens of our lives among people. Third are rights, rights played a central role in ethics and it is important to ensure that the freedom and well-being of each individual will be protected when others threaten that freedom or well-being. There are 3 key principles in Starbucks. (1) Ethical sourcing of coffee, (2) Our partner and (3) Ethical environmental resources. The main ethical issues addressed in Starbucks’s code of conduct for its partners can be categories as commitment of partners to provide quality service to customers, create a workplace environment which is conducive for the partners and emphasis on integrity and fairness on all dealings. After study, we found that there are many ethical practices practiced by employers as well as employees in Starbucks. Starbucks should use ethical screening for job applicants during interview. Starbucks also can expose new employees to the company’s code of ethics, code of conducts and ethical decision making process during the orientation to improve the ethics in the company. Besides that, Starbucks can improve ethics in the company by providing ethics training workshops for all employees annually to supplement ethics codes. Moreover, Starbucks also need to strengthen the ethics which are individual rights and distributive justice of the work unit by rewarding those employees with ethical behaviours equally and punish those with unethical behaviours through work goals and performance appraisals. Last but not lease, Starbucks should model appropriate behaviours in themselves as they are actually the most important ethics reference point for the employees.

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