For the purposes of this assignment, let us imagine that the company for which Alex, Nik and Chris work is Starbucks. It is not improbable that such a company would be interested in establishing presence in a location like the island of Kava. However, a delicate interplay of ethical and economic factors underlies any decision like that. In the words of Chris, although bringing Starbucks’ business culture to Kava is important, “in the long run, economics drives everything.”
Most large corporations have already embraced different initiatives as a part of their corporate social responsibility agenda, since ethical conduct has become central to business success in the 21st century.
Giving back to the community through volunteerism and charitable donations is a way of promotion positive image and enhancing public relations. A company’s commitment to inclusive work environment allows it to attract and retain talented workforce. Ethical conduct with employees, shareholders, vendors, customers, analysts and news media are all integral elements of a strategy for achieving and sustaining competitive advantage.
While the concepts of business ethics and corporate citizenship have been around for many decades, it is only recently that they have risen to unprecedented prominence. The three reasons for this phenomenon are globalization, increased competition, and advances in information and communication technologies that have turned the world into a “global village” connected round the clock by instantaneous data flows and enabled global citizen networks and non-profit organizations to hold both governments and corporations to account. This is precisely the point what Alex means by saying that events at Kava affect the entire world. Thus, as Olson (2001) argues, it is well accepted today “that managerial decisions should involve ethical analysis as well as economic and legal considerations” (p. 2).
Still, the issue of social responsibility of business has been a highly contested one ever since Milton Friedman’s controversial 1970 New York Times article where he argued that “there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game” (p. 1). As corporate power grew over decades, the debate has been heating up, especially after suspicions over union leaders’ murders at Coca-Cola Colombian plants, Nike’s use of sweatshop labor in Southeast Asia, and Unocal’s dealings with Myanmar’s criminal regime. Recently, there has been a notable convergence between shareholder and stakeholder theories of corporate social responsibility. Proponents of the first approach argue that corporations should only be responsible to their shareholders: they believe the purpose of business is to create value for its investors, and by maximizing returns companies enhance social good. Yet environmental compliance, equal opportunity employment, philanthropy and disclosure are now believed to have a direct impact on business operations. The concept of triple bottom line, introduced by Elkington (1994; cited in Finfrock, 2008), sometimes referred to as “People, Planet, Profit”, suggests that business success cannot be viewed in financial terms only – it should acknowledge ecological and social impacts as well.
Thus, when Starbucks enters Kava, its corporate responsibility stance should be communicated clearly to Kava citizens and the international community. Regulators, concerned public and NGOs always keep an eye on global companies to ensure they do not engage in greenwashing. While it might be intuitive that Starbucks is trying to act ethically in every situation, its corporate social responsibility stance should be expressed formally and monitored carefully. Ethical values, such as honesty, responsibility, fairness, respect, openness, and citizenship, should be integrated into the company’s mission statement. Starbucks’ mission statement already sets an ambitious goal of enhancing profitability simultaneously with sustaining high levels of community involvement and environmental activism (Starbucks, 2009).
Actually, Starbucks has two mission statements: the fist can be seen as a corporate mission statement, while the second is, essentially, an environmental mission statement. The corporate mission statement includes a promise of a good work environment, an atmosphere of respect, dignity and diversity, and highest standards of excellence and consumer satisfaction. The environmental mission statement encompasses commitments to understanding of environmental issues and sharing information, developing innovative and flexible solutions to environmental problems, and striving to use environmentally friendly products (Starbucks, 2009). Since Kava is susceptible to environmental risks, and citizens of the island often suffer from natural calamities, Starbucks should be careful not to cause any damage to the environment that can further destabilize it.
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