Three Concepts of Social Responsibility of Starbucks

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Three Concepts of Social Responsibility of Starbucks

By | March 2008
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Social responsibility means that organizations are part of a larger society and are accountable to that society for their actions. Like ethics, agreement on the nature and cope of social responsibility is often difficult to come by, given the diversity of values present in different societal, business, and corporate cultures. There are three concepts of social responsibility which are profit responsibility, stakeholder responsibility, and societal responsibility. Profit responsibility holds that companies have a simple duty that is to maximize profits for their owners or stockholders. Nonetheless, there are concerns about profiteering. Profiteering occurs when a company makes excessive profits usually by taking advantage of a shortage of supply to charge extremely high prices. In addition to sales through company-operated retail stores, Starbucks sells whole bean coffees through supermarkets and it has leveraged its brands by expanding beyond its coffee kiosks and stores to bring the Starbucks’ coffee experience directly to workers at their employer’s offices. Through its business alliance programs, corporate cafeterias and other businesses are able to serve Starbucks coffee and its related products. Starbucks reinforces its brand through multiple channels ranging from the relatively low profit grocery market segment to the high profit margin, experience-based, retail business cafes and kiosks. However, Starbucks viewed the profitability as essential to it future success. When Starbucks’ guiding principles were conceived, profitability was included but intentionally placed last on the list as it was least important. It was believed that adherence to the five other principles would ultimately lead to good financial performance. Stakeholder responsibility focuses on the obligations an organization has to those who can affect achievement of its objectives. These constituencies include consumers, employee, suppliers, and distributors. Stakeholder responsibility is...