Are success and social responsibility related (or is the case of Starbucks just a coincidence)? Does a company have to be socially responsible to be successful? Explain and support your answer.
BAM101 “Mini”Assignment # 2: Starbucks and Corporate Social Responsibility
Starbucks Coffee is one of the top competitors in the retail coffee industry. They are known for their high quality products as well as their high level of social responsibility. Starbucks believes that success and social responsibility are not opposites, but rather go hand in hand.
One example of this company’s strong belief in social responsibility can be found in the low-cost pre–harvest financing assistance program they have fostered with Ecological Enterprise Ventures and Conservation International. These organizations are not-for-profit organizations that, through partnership with Starbucks, provide low cost financing for farmers in the Latin American coffee region. These loans are critical for farmers to stay in business – without them, many would be unable to pay their pickers who harvest the coffee crops. The problems for the farmers lie in two areas. One area is that due to the decreasing prices for coffee over recent years, coffee farmers are considered to be too high of a risk for many banks to provide them with affordable financing options. The second area is the timing of the payments they receive for their crops. The gap in time between harvest and sale of the coffee is where the problem lies. Pickers need to be paid once the crop has been harvested, but without financing, many farmers do not have the funds available to them until the coffee actually sells. Through the sponsorship of Starbucks, Ecological Enterprise Ventures and Conservation International provide these farmers with bridge loans enabling them to harvest and sell their crops. Starbucks does not view this assistance as charity. They like to view it as an “enlightened self-interest” that ensures a steady supply of coffee.
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