Starbucks, one of the most well-known coffee shops in the world has experienced dramatic growth since the first store opened in 1971. After rising to dominance in its market Starbucks currently operates in 61 different countries with just under 17,000 stores worldwide. Recently the management team have been under severe scrutiny as the organisation has been accused of avoiding tax. An investigation conducted by Reuters discovered the company had paid only £8.6 million in corporation tax since launching in the UK 14 years ago, even though cumulative sales of £3 billion have been achieved. Despite the contrary the Starbucks PR team have fought back stating that they paid the correct level of taxes in the UK. (Neville and Malik 2012)
An Ethical Dilemma in a Business Context
Crane and Matten (2010) state business ethics is the study of business situations, activities, and decisions where issues of right and wrong are addressed. Considering this definition of business ethics it can be concluded that the Starbuck’s management team have found themselves in an ethical dilemma in a business context. As reported by Neville and Malik (2012) Margaret Hodge chair of the Parliamentary Committee stated that she thought it was right for customers to boycott the companies that had been avoiding tax payments. Furthermore when addressing the Chief Financial Officer of Starbucks over the matter she said ‘We’re not accusing you of being illegal, we’re accusing you of being immoral. ‘
Morality is concerned with the norms, values and beliefs embedded in the social processes which define right and wrong for an individual or a community as defined by Crane and Matten (2010)
Coupling the morality definition and the statement from Margaret Hodge accusing the Chief Financial Officer of being immoral it can be argued that for businesses operating in the UK it is wrong and unacceptable not to pay the necessary taxes.
Thomas Jones (1991) pioneered the idea of...