Background and organizational framework
Starbucks Corporation was founded in 1971 in Seattle Washington and it is the world’s leading retailer of specialty coffee. The company specializes in selling quality coffee sourced from the finest coffee beans while improving the lives of coffee farmers across the world. Starbucks corporation started out as a single outlet in Seattle and currently, it has more than 20,000 company operated and licensed outlets in North America, Middle East, Latin America, Europe and Africa. The company also sells its products in designated outlets like airports, hotels, universities, grocery stores and other prominent retailers (Starbucks Fiscal, 2012).
The Corporate Sustainability Model
The Corporate Sustainability Model describes the corporate sustainability performance, the actions that the management takes and their consequences on the social, environmental, and financial dimensions. At Starbucks, the company and its employees are committed to good governance, ethical conduct and social responsibility while doing business. The company does this through having various inputs like setting aside human and financial resources, processes like sustainability strategy and actions. The output has been the ability to maintain relationships with the stakeholders and its sustainability performance. The outcome has been its outstanding corporate financial performance (Lee, 2007).
How Starbucks plans for capital budgeting and risk assessment
Starbucks has always purchased coffee beans at premium prices over the commodity’s market price in the world. However, the commodity has volatile prices as coffee supply is affected by a range of factors. Drop in prices negatively affects coffee growers and because of these factors, Starbucks recognizes the importance of ensuring that here is a stable supply of quality coffee and that the coffee farmers have a sustainable livelihood. Starbucks focuses on securing contracts with these farmers in order to promote sustainable coffee production (Lee, 2007).
The social and environmental impacts of the activities and decisions of Starbucks
The corporate and ethical activities and decisions of Starbucks have enabled the company to attract and retain its partner through high levels of engagement and satisfaction among the partners. The company has also attained customer loyalty as customers believe in companies that are committed to corporate social responsibility. The company engages in various environmental measures including supporting sustainable coffee farming, and using energy efficient equipment and lighting and this has led to cost-savings and environmental benefits like energy conservation and safe practices. The activities of the company have also enhanced the lives of coffee farmers and suppliers (Starbucks Fiscal, 2012).
Starbucks’ reporting and disclosure of its sustainability measures
Starbucks’ reporting and disclosure of its sustainability measures is influenced by Global Reporting Initiative’s (GRI) 2002 Sustainability Reporting Guidelines that has enabled the company to determine the relevant data and metrics to include in the sustainability report. The company focuses on various performance indicators on their products, society, environment, workplace and diversity. The company also incorporates quality information and data while reporting which the board of directors also takes responsibility for the evaluation and the subject matter (Quelch, 2006).
Commitment of top leadership to sustainability
The board of directors at Starbucks holds the management of the company responsible to manage and operate the company while upholding strong ethical and governance principles. The selection of board members is based on personal integrity and ethics and the members are expected to act in this manner. The company’s mission is cantered around providing the finest quality coffee while maintaining uncompromising principles and is spearheaded by the company’s top leadership. The company relies on a dedicated corporate social responsibility group that reports directly to the company’s vice president (Starbucks, 2001).
There is a shared sense of corporate social responsibility in Starbucks that is reflected in the company’s leadership and among the employees. Starbucks has various shareholders in its business including employees who are considered partners, suppliers, shareholders, governments, environmental groups, customers, community members, among others. The company proactively engages these stakeholders in their activities by understanding their concerns and considering their inputs on issues of topical importance. The company does this by holding meetings and roundtables on issues regarding these stakeholders (Quelch, 2006).
Major stakeholders and their role
The major stakeholders for the company are the employees who are considered the company’s partners, shareholders, customers, suppliers and the government. The employees are able to own stocks and work for the best interests of the company; the stakeholders own the company and make decisions that are best for the company. The customers are considered crucial as they dictate what the company should meet while the suppliers ensure that the company is able to provide finest quality coffee (Starbucks, 2006).
Starbucks’ commitment to good governance, ethical conduct and social responsibility has earned the company a position as the most responsible company in the world. As a result, customers have remained loyal because of the social responsibility. Starbucks has earned various awards for corporate social responsibility including being in the list of “100 Best Corporate Citizens”, “The 100 Best Companies to Work For” among other awards. The company has a strong reputation worldwide and this makes it easy for the company to be welcomed in local communities and given licenses to operate (Starbucks, 2006).
In order to improve its current sustainability strategy to improve its overall performance, Starbucks needs to invest more in sustainable coffee farming so that other industry players may start supporting sustainable coffee farming. The company also needs to improve on its communication to its stakeholders and the public on its governance, ethical conduct and social responsibility in order to enhance understanding of its activities among the public.
Background and organizational framework