However, the growth of the corporation introduced the concept of a fiduciary duty between stockholders and board members, in both open and closed corporations. (Stevenson, p.1144). Put succinctly, the board of directors has a duty to its shareholders to increase profits, and majority shareholders may have a duty to the corporation to vote in a way that increases profits. As a result, business ethics can actually conflict with both corporate social responsibility and global corporate responsibility; because business ethics may indicate a less ethical means of practice if it would increase profits. As a result, many corporations have included responsible practices in their corporate mandate, thereby making it clear to any and all potential stockholders that one of the goals of the company is to engage in responsible and morally ethical behavior. Starbucks appears to be one such company.
Corporate Social Responsibility
It is difficult to define the notion of corporate social responsibility because different sources seem to suggest different definitions. However, it is clear that corporate social responsibility means that corporations have to take an interest in more than profits, and must consider how their actions impact their various stakeholders including: customers, employees, shareholders, and suppliers. In addition, corporate social responsibility involves an awareness of a company's impact on the environment. Corporate social responsibility is never discussed in the context of what a corporation has to do- those discussions involve regulation- but about the steps that a corporation takes to go beyond its minimum ethical requirements. Furthermore, corporate social responsibility is about more than a company's philanthropic efforts. According to Harvard University's Corporate Social Responsibility Initiative, corporate social responsibility "encompasses not only what companies do with their profits, but also how they make them. It goes beyond philanthropy and compliance and addresses how companies manage their economic, social, and environmental impacts, as well as their relationships in all key spheres of influence: the workplace, the marketplace, the supply chain, the community, and the public policy realm."
Global Corporate Responsibility
Like corporate social responsibility, there is no single definition of global corporate responsibility, perhaps because corporations face different global dilemmas, based on the type of business involved and many other factors. However, global corporate responsibility has several key elements. As identified by the Ethics & Policy Integration Centre (EPIC), global corporate responsibility needs to look at the following factors: compliance, workplace, marketplace, human rights, environment, public sector, community relations, management systems standards, corporate governance, and reporting standards. (EPIC). Compliance refers to the corporation's compliance with government standards, industry standards, and stakeholder expectations. Workplace refers to how the corporation treats its workers and includes issues ranging from salary to employee safety. Marketplace refers to how the corporation interacts in the market, including how it treats its customers, but also how it treats its competitors. Human rights refer to how a corporation handles human rights issues with regard to its various stakeholders. The environment deals with how a corporation handles the environment. The public sector refers to how a corporation interacts with governments, and whether it deals with them in an honest and ethical manner. Community relations refer to how a corporation interacts with community, and includes cultural sensitivity, social interactions, and civilization. Corporate governance refers to the relationships between company management, the board, the shareholders, and other stakeholders. Reporting refers to any reports that a corporation may file outside of its mandatory financial reports.
Management systems standards refer to how the corporation's internal structure is set up to ensure its compliance with other areas of global corporate responsibility. (EPIC).
Impact on the Stakeholders
Starbucks has several stakeholders to consider when determining the ethics of its business decisions. Those stakeholders include, but are not limited to: customers, suppliers, employees, shareholders, neighbors, and citizens. One need only look at the journey involved in a single cup of coffee to understand the truly global nature of Starbucks' coffee. The coffee begins as beans picked in an area, probably in South America. The people picking those beans could be akin to modern-day slaves or they could be independent Free Trade farmers. The land where the coffee is grown could be land that has destroyed the local environment, or the coffee could be shade grown, which preserves as much of the local environment as possible. The coffee is then shipped to the roasting plants, which involves interactions with more supplier-employees and the method of shipment helps determine the environmental impact of that coffee cup. Once at the roasting facility, how the...
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