Corporate social responsibility refers to the manner in which a company conducts itself in an economically profitable manner and concerning for the law requirements, ethics and support for society. Being responsible means to be compliant with the law and conditions during discussion of ethics of an organization and the level of its support to the society. This is an implication that companies should be beneficial to society, while being concerned with their profits. For a company to be more successful, the management must ensure that it has an effective corporate social responsibility program. Since a good corporate social responsibility helps a company to build a good image in the eyes of prospective and existing customers, as well as in the surrounding community.
Therefore, a company can increase its profitability by incorporating a good CSR because it will attract many customers. As a result of increased pressure from the surrounding environments, it has been necessary for organizations to perform the roles of good citizens in an effort to remain profitable. It is expected for these organizations to remain ethical, as well as responsible, so that organizational legitimacy can be attained (Bryman & Bell 2007).
There has also been growth in the concept of CSR in the recent past, and it has been proposed that companies should be serious about their corporate social responsibilities. It is also a practice that has been regarded as a contributing factor to the success of a company, as well as a better image of a company to the general public. An example of some activities that a company can engage in building a strong corporate social responsibility include establishment of proper ways of discharging waste without pollution on environment and creation of employment to the surrounding community (De Vaus 2001). Also, a company can participate in funding development projects in the surrounding communities, such as construction of schools, hospitals, roads and so on.
Consequently, this paper focuses on examination of success of the global coffee company, Starbucks, and the method it uses to address CSR issues through its activities aimed at achieving this goal. This is focused on investigating information that is communicated through various methods of communication, in addition to the design of communication to attain CSR demands.
Also, this paper delves on investigating the relationship between CSR and the success of Starbucks. It also provides an evaluation of the organization’s effectiveness as a result of application of a number of CSR practices and, finally, provides a recommendation for the organization to improve on its CSR practices.
Review of Literature
It has been difficult for a number of organizations to apply the concept of corporate social responsibility. This is attributed to the goal of most companies that aim at gaining direct profits. However, it has been argued that companies can benefit from corporate social responsibility activities if they use the right strategy (Du, Bhattacharya & Sen 2010). Consequently, companies have strived to establish the best methods of ensuring business responsibility with regards to social problems, as well as aim at making profits. Therefore, CSR is regarded as an umbrella idea that involves citizenship, participation of stakeholders, managing the environment, observing business ethics and corporate social concerns. Thus, CSR refers to a single strategy aimed at running a business or in other cases its main business with the focus in major organizations.
In order to understand CSR, it is necessary to investigate the concept of triple bottom-line. This refers to an interactive thinking that accounts for social, environmental and economic factors that affect a business. Every company is affected by economic factors. Some companies focus on meeting their operational goals and do not care about the demands of their environment of operation (Forehand & Grier 2003). However, companies have been compelled to think beyond their individual needs, as a result of several impacts that can affect their operations. This has compelled companies to focus on their ethics of operation, as well as the benefits to the environment as a result of their activities. In order to achieve economic sustainability, a number of companies has relied on ethnic organizations that they cannot conduct businesses without staff, customers and society who have direct impact on the company, such as the possibility of losing business. This is based on the idea that ethics ensures that a company is able to receive a number of economic gains by using innovations during their business operations.
The environment is a resource that has been continuously destroyed by people in an attempt to obtain other resources. Consequently, there are two major things that are important in operation in a particular environment: maintaining the bio-systems and reservation of life (Marrewijk 2003). This is followed by renovating the natural resources that include solar cells with an aim of replenishing natural resources. Protection of the environment can be achieved by reducing the use of natural resources, such as wind energy that results in a reduction in electrical consumption. In addition, it is necessary to ensure that the environment is protected by treating waste products before disposing them to the environment.
Another component of the triple bottom-line is the social needs of the stakeholders of a company. In fact, social capital refers to the trust in the community which is measurable in terms of the ability to work together with people of the surrounding environment without causing conflict (Morsing & Schultz 2006). It involves an investigation of people who have been impacted by the organization and it involves participation in activities, such as training, relations with the community, ensuring safety of a product and creating a better working environment for employees. For the people who live outside an organization, it involves creating a better relationship with people, such as creating activities aimed at supporting or helping the community that may involve blood donation, donation of funds to the community or ensuring the conditions of life of the society are improved.
Competitive advantage refers to the advantage that a company offers to its consumers that results in more values than the value of its competitors. It is a characteristic that differentiates a certain business from its competitors. In order to attain a competitive advantage, a business has to create value for its consumers and stakeholders without necessarily copying competitors (Porter 2008). There are a number of principles of competitive advantage that can be used by a business to its advantage. An example of competitive advantage principle is a strong value drive customer value. In order to attain the principle of strong values, the culture of the company must be aimed at achieving these values. This results in the creation of values from customers and society in general; it also results in a boost to the success of the business.
Another competitive advantage principle is the principle of CSR aimed at sustainable service business. This strategy will be successful if used on the basis of CSR. Though, it is important for organizations to realize that it involves a long-term strategy of being socially, environmentally and economically friendly, while supporting long-term benefits of a company. In addition, competitive businesses are highly intensive and customers try to evaluate the value of a product before making the decision to buy it (Carroll 1983). Some qualities that customers look for include the feel of a product and how the product tastes or how the product is designed. It is important for companies to provide their audience with an experience which ensures they respond to customer needs that has an impact of creating value services between the organization and customers. Another principle, which organizations should consider, is the principle of value-based service brand and communication for value delivery (Dawkins 2004).
Generally, most organizations have unique brands and it is important for them to communicate these brands to the right consumers, employees and other stakeholders with regards to images of the organization and its location. When an organization focuses on creating products of high value, they will acquire customer support or support from their stakeholders. On the other hand, if they are not, it will result into a tarnished image of the company and the company faces the risk of losing a number of their customers.
The main areas where Starbucks has focused its CSR is giving back to the community, observing environmental cleanliness, participating in charity activities, such as cleaning the environment and treating people with the respect they deserve (Esrock & Leichty 2000). This has been practiced on a daily basis, and it is also declared in the mission statement of the company. Generally, CSR at Starbucks takes place throughout the company and its subsidiaries.
An example of a commitment made to address socially responsible business is Commitment to the Origins. The company has made investments aimed at benefiting coffee producers, their families and surrounding inhabitants, as well as environment (Hallahan 1999). The company is focused on being a model organization in the world by enhancing world-wide trade in coffee and its production. This has been achieved by providing various forms of support to coffee farmers, such as loans for their farming activities or purchase of equipment for coffee farming. In addition, the company has assisted in training coffee farmers by contracting experts who give advice to farmers.
In addition, Starbucks is concerned with environmental needs by ensuring coffee grown in other countries is safely stored to prevent wastage as a result of spoiled berries. In addition, the company has participated in recycling programs that observe environmental sustainability. This has also involved participation in garbage collection and limiting the quantity of waste products released into the environment (Mitra 2011). There is also the commitment by the company towards the needs of the community. The company has strived to be a responsible neighbor and a participator in communities, where its partners and customers live, work or conduct other activities in their daily lives. This has involved participation in contributions towards helping less-privileged people in the society and participating in clean-up exercises aimed at improving living standards for the community.
The company is also committed to the needs of its partners such as employees, customers, shareholders and directors. The company believes in ensuring people are treated with the right amount of respect and dignity (Porter 2008). The main focus has been ensuring that employees of Starbucks are treated well. This involves proper communication that is motivational to employees and providing them with packages which ensure their lifestyles are improved.
There are particular strategic recommendations that would be beneficial, if applied in CSR at Starbucks. For instance, it will be recommended that the company maintains its efforts towards production of a highly satisfying product that meets the expectations of customers. This will ensure that the company’s products are liked and the possibility of shifts in demand for its products is minimal. Another recommendation is that the company needs to ensure that a comprehensive analysis of how the company communicates its CSR functions with the inclusion of all the methods of communications used by the company is conducted. This would be applicable to the points of purchase, sales promotion and determine the impacts of various channels used and the extent of their use. It would be also recommended that the aspect of competition faced by Starbucks from other companies is included into the CSR. The analysis has not included competitors in the structure of shareholders of the company, but it forms a significant component of CSR. By analyzing Starbuck’s CSR and their methods of communication, an idea could be obtained with regards to the approaches used by other companies to prepare for future opportunities or losses in operation. However, it is important to stress that based on the nature of operational environment of companies such as Starbucks, it is significant to ensure that communication efforts are analyzed, reviewed and compared with changing environments and the expectations of stakeholders to attain the current demands of operation’s effectiveness.