The Starbucks Culture: Responsible, Radical Innovation in an Irresponsible, Incremental World

The Starbucks Culture: Responsible, Radical Innovation in an Irresponsible, Incremental World

Joan Marques (Woodbury University, USA), Angelo A. Camillo (Woodbury University, USA) and Svetlana Holt (Woodbury University, USA)
Copyright: © 2014 |Pages: 8
DOI: 10.4018/978-1-4666-4749-7.ch019
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Abstract

As we are bombarded with reports of immoral performances of larger and smaller corporations, we are nearly convinced that ethical companies are a thing of the past. Indeed, the pressure increases daily, and CEOs, facing narrow performance windows, often feel pressured to adopt a hit-and-run mentality, thereby contaminating their entire corporate culture. Yet, there are companies that continue to outperform their competitors and redefine their industries nationally and internationally while simultaneously following a strict moral compass. One such company is the Starbucks Coffee Company, a seasoned brand entailing 18,000 stores worldwide of which approximately 13,000 are located in North America. The Starbucks Corporation holds 5,500 coffeehouses in 61 countries under its direct supervision. After a successful expansion into China, Starbucks is now moving into India. Yet, through all of these aggressive moves, the coffee giant has managed to recurrently make the list of the world’s most ethical companies for good reasons. This case reviews Starbucks’ internal and external culture, examining its partner treatment, environmental awareness, farmer support, stakeholder inclusion, and other revolutionary strategies, in hopes to have these elements serve as a set of focus points for current and future leaders to consider.
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One Company, So Many Differences

The Coffee Operation

Coffee is big business and has been so for quite some time in human history. In fact, oil is the only trading commodity that tops coffee worldwide (Ruzich, 2008). Various estimates as to how many people depend on the growing of coffee for their livelihood range from 20 to 125 million (Ruzich, 2008, p.431). Whereas the above perspective may present coffee as one of the top global products, other notions classify this product in an entirely different light. For instance, Rindova and Fombrun (2001) refer to the coffee industry as a declining one, and compliment The Starbucks Corporation for its ability to still induce new demand at price points that are unmatched in the beverage industry. Rindova and Fombrun explain that Starbucks achieved this feat by redefining coffee as a beverage and restructuring the locations in which it was consumed.

Ravasi, Rindova and Dalpiaz (2012) also applaud Starbucks, but do so for its clever use of cultural resources in establishing their industry as such a successful one. These authors define cultural resources broadly as a blend of concepts, symbols, narratives and other forms of cultural expressions that exist in a society. Cultural knowledge is critical in this process, as it helps companies understand which cultural meanings and associations fit well with their products. Starbucks’ coffee bar is a great example of a retail format that works for society in the USA. Adopted from the Italian model, it took Starbucks an entire decade to mix and match different local cultural resources before the current successful model was developed (Ravasi et al, 2012). Understanding the importance of proper and effective utilization of space, Starbucks attracted the services of an anthropologist to get to the current, highly popular store design (Clark, 2007).

When dealing with such a critical and highly desired product within the global community, it is rather easy to fall into the trap of focusing only on increasing returns and neglecting any compassion-based maneuvers. However, Starbucks has managed to keep its socially responsible eyes wide open: since 2009 more so than in the decade before. The results have become visible: in 2012 the Starbucks Corporation made it to the 73rd place on Fortune’s list of the 100 Best Companies to Work For, up from 98th place in 2011. As prime reason for this ranking is listed, “The company's massive part-time workforce […] gets full health insurance benefits, stock awards - and free coffee” (100 Best Companies…). Perhaps Starbucks can mostly pride itself in the consistency of this factor: the company has always stood out when it came to just this particular provision for its employees: benefits even for those who are not in full-time service. One of the ways this is confirmed is in a 2004 article by Serwer and Bonamici, who state, “Starbucks is an unusual company. It strives to mix capitalism with social responsibility. It gives all its employees who work more than 20 hours a week stock options and health-care benefits” (p. 60).

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