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Current Ethical Issue in Business

Essay by review  •  December 30, 2010  •  Essay  •  1,544 Words (7 Pages)  •  1,476 Views

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CURRENT ETHICAL ISSUE IN BUSINESS

INTRO

Ethical issues in business are a common placed every day occurrence that will never cease to exist. We will discuss an ethical issue that involves a large American corporation and its practices when dealing with suppliers of produce that is essential but not solely used by this business. We will present several point of views backed by literary findings that suggest ethical practices may or may not be at hand.

BODY

Mr. Donald states that one of the main goals of Starbucks is to expose the world to the coffee production/industry in Africa by showcasing African coffee name brands. However, there is evidence that points to the real goal - that goal, simply put, is greed. The article "Starbucks Seeks The Right Blend of Global Ambition And Ethical Trade", written by Robin Pagnamenta, of the Times Online, in my opinion would be a goal oriented based theory.

Last year the American chain operated 12,800 stores globally and earned 6.4 billion dollars in revenues. Further, Mr. Donald plans to open a total of 40,000 Starbucks stores, 50 percent of them outside of the United States. "We open six new stores every day", says Donald. "We opened our first in Brazil last week. Cairo opens next week", he continues. Incidentally, Donald was paid $2.7 million last year, a former chief executive of America's Path mark supermarket chain - a far cry from the salary he earned at that level.

Manifested Ground Rules

Every thriving company must embrace some sort of code of ethics ground rules which will guarantee its success. In this case, Starbucks wants to promote high standards of practice; by selling the richest and aromatic coffees in the world to the general public. They acquired these blends from some of the riches soils in the world - mostly from the continent of Africa (Kenya, Tanzania, Rwanda, and Ethiopia.)

Another ground rule could be promoting acceptable business behavior, as Donald gives examples of how his company founded such programs as world educational foundations, environmental initiatives, and development loans that would aid destitute Kenyan coffee growers. Why would there be destitute coffee growers if the business behavior/practices were acceptable?

Starbucks has established a reputable empire, which shows the occupational maturity. When the company first opened its doors many people laughed at the idea of a "high-end" coffee shop with a funny name but as time went on, they grown to become a common household name. While they have matured in the eyes of Americans they are still new to accommodating all of the third world countries from which they exploit.

Some of the fundamentals business ethics/ground rules such as, "honesty is the best policy", "the customer is always right", and following the concepts of Truth in Advertising are applied on the surface in the Starbucks case, but a closer examination will show that there may be some breaches in philosophy. There was a "misunderstanding" between the Ethiopian government and Starbucks in regards to control of coffee exportation from Africa and applying for US trademarks. There was an opportunity for Starbucks to boost the grower's annual income, but this effort failed at the hands of Donald, according to the Prime Minister.

The business industry standards consist of integrity, quality, respect, equal opportunity, fairness in dealing with customers, and professional conduct, to name a few.

Ethical standards are everywhere and they apply to everyone no matter how big or how small. From the homeless man that stands on the corner begging for money to Bill Gates. We all have our own ethics, some good some bad. Now expand that to business. Business ethics is much more complex. You must get all your employees to agree and abide by the general ethics of your business. Starbucks is one of the fastest growing businesses in the United States. They now are moving out to the rest of the world. This means Starbucks need to change its business ethics.

Starbucks buys their coffee beans from other countries. The chief executive spends a lot of time out of the US. "He says that he spends 40% of his time traveling and is on the return leg of a whirlwind trip to visit coffee growers and officials in Kenya, Tanzania, Rwanda and Ethiopia."(Times online Para 2) Right now Oxfam accuses Starbucks of bad business ethics by selling coffee beans from Ethiopia at $26 a pound. Ethiopia only receives 5% to10% of that amount. Meles Zenawi, the Ethiopian Prime minister, counters this by reporting that Starbucks is buying 400% more coffee than 4 years ago and at a 28% higher than market value. So of the $1.30 to $2.60 they should be getting $0.94 to $1.88 a pound. Is this bad business ethics or just good business?

"Oxfam says that Starbucks has blocked the Ethiopian Government's efforts to take greater control of coffee exports by applying for US trademarks for three regional coffee brands, a move the could boost the growers annual income by 47 million pounds."(times online para 13) Both of these alleged violations of business ethics have brought controversy to the way Starbucks conducts business. Of course Starbucks denies all allegations and states that they are doing what is right and in the best

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