Starbucks Ethical Case Study

Section 1: What is Ethics?

Be sure to find a definition and provide it here. Why do you like this particular definition?

By definition “Ethics is based on well-founded standards of right and wrong that prescribe what
humans ought to do, usually in terms of rights, obligations, benefits to society, fairness, or
specific virtues” (Andre et al., 2010). In addition, ethics refers to well-founded standards of right
and wrong that prescribe what humans ought to do, usually in terms of rights, obligations,
benefits to society, fairness, or specific virtues” (Andre et al., 2010). Finally “ethics refers to the
study and development of one's ethical standards” (Andre et al., 2010). I decided to use this
definition because I felt it summarized all the ideas that Ethics studies. I think that this definition
did a great job at summarizing what Ethics means as an overview to society. It did a great job of
explaining all the aspects of ethics without being biased towards one aspect. I also enjoyed how
it explained how ethics work on the personal level and how it evolves personal ethic growth.

Section 2: What is your Chosen Profession?

Be sure to answer what your chosen profession is and why you’ve chosen it.

For my chosen profession I have decided to look into the food and retail industry. However more
specifically into the coffee industry. I want to look into this industry because it is what I am
passionate about. I have always wanted to open my own coffee shop and coffee is something I
am really passionate about and is the industry I already work in. I work at Starbucks and whether
I stay at Starbucks and move into corporate positions or do something on my own I want to learn
more about the ethics in the coffee industry. I especially want to look into the ethics of the coffee
trade since many of our products at Starbucks claim to be Fair trade and ethically sourced so i
would like to see how this compares to the rest of the industry.

Section 3: Case Study 1

Identify a case in your field regarding ethics. Summarize your case and cite it per APA Standards
as necessary. Make sure you include the following:

a) Who are the characters (people/companies/etc)

The Starbucks coffee company is the company that I will be looking at for my first case study.

b) What happened in the particular event you are summarizing? (walk your reader through each
step and explain how the event unfolded.)

What has happened in this event is that the Starbucks coffee company has been found to be
buying coffee from plantations in Brazil that have been using slave labor (Canning 2019). What
makes this such an issue is that it's not “ just any plantations, but ones that have been “certified”
to Starbucks’ C.A.F.E. Practice standards. This marks the second time in nine months that this
has happened, pointing to a huge systemic problem with the way Starbucks is meeting their
commitment to “99% ethical coffee.” (Canning 2019). It has been reported that In the fall of
2018, local labor inspectors published reports tying Starbucks to a plantation where workers
were forced to live and work in filthy conditions” (Canning 2019). The problems with all this is
that “Starbucks’ C.A.F.E. The Practice program is not bringing the problem to light” of slave
labor, it is better yet serving its own agenda (Canning 2019).

c) What were the options and what decisions were made?

The decisions being made here is that “Farmers are earning the same amount for their crop now
as they did 20 years ago (or less, when you consider the increased cost of production). The low
prices are creating a crisis in coffee, as detailed in an earlier post. Meanwhile, Starbucks gross
profit has gone steadily up” (Canning 2019). The problem is while Starbucks and other
companies have grown and have profited more and more, the price for green coffee has remained
the same while the farmers are living in poverty.

d) Why were these decisions ethical dilemmas?

The problem here is that the world is led to believe that their coffee from Starbucks is ethically
sourced when it had all been a facade. “It’s high time for Starbucks to drop the pretense of “99%
ethical” and commit to real fair trade and small-scale farmers” (Canning 2019).

e) What was the result of these decisions?

The reason that Starbucks is in this predicament is that they are the ones setting the rules. They
make all these ethical claims and then when “ barely any progress on an ethical commitment for
over a decade and then rewrites the standards and checks off the goal” (Canning 2019). The
problem and results of their actions stem from not being held up to international Free Trade and
of Ethical practices since there is almost no one bigger than them in the industry to hold them
accountable. While the Starbucks “standards differ from fair trade, but they get to the heart of the
issue: Is the goal to change the system of trade or to make someone feel good about their cup of
coffee?” (Canning 2019). At the end of the day no one is winning in a situation like this except
for Starbucks.

f) Why did you choose this ethical dilemma case study? What about this ethical dilemma caught
your attention?

The main reason I chose this ethical dilemma case study was because it's where I work and also
because it deals with the coffee industry which I am very passionate about. I think it's really
important to understand where you work and what your company stands for. In addition I was
drawn to this ethical dilemma because it goes against everything we are preaching in our stores.
This article is claiming Starbucks isn't as ethical and as free trade as they state. The article also
exposed a lot of slade labor that is still being used in the company.

g) Why do you feel understanding this ethical dilemma in your industry/profession is necessary
for your leadership development?

I believe that this ethical dilemma was important for me to study, especially if I stay in the coffee
industry. It goes to show me a lot about what to believe in the story being told and to question
the ideas being sold to customers. In addition it's also very important to know about if I happen
to move up in the company to shine some light on the issues and figure out why these problems
are happening. Is it a matter of greed or just not knowing the gravitude of our actions as the
biggest coffee company in the world.

Section 4: Case Study 2

Identify a second case in your field regarding ethics. Summarize your case and cite it per APA
Standards as necessary. Make sure you include the following:

a) Who are the characters (people/companies/etc)

The Starbucks Coffee Company and the Nestle Company but more specifically the Nespresso
branch will be the companies that I will be looking at for this case study.

b) What happened in the particular event you are summarizing? (walk your reader through each
step and explain how the event unfolded.)

In this case study it was discovered Starbucks and Nestle were buying coffee from Guataelma
from farms who were using child labor. In the investigation “Dispatches filmed the children
working 40-hour weeks in gruelling conditions, picking coffee for a daily wage little more than
the price of a latte” (Doward 2020). In addition “Dispatches visited seven farms linked to
Nespresso and five linked to Starbucks. Child labour was found on all the farms” (Doward
2020).

c) What were the options and what decisions were made?

The decision that were made by both Starbucks and Nestle where to launch investigation and to
stop buying coffee from the farms in question of Child labor. They both mentioned they have
“zero tolerance fro child labour” but how they got to this point was not explained (Doward
2020). While they made the decisions to stop buying from these farms that does quite solve the
issue. As Doward mentions “It’s far too easy to announce an investigation and halt supplies from
these regions but this will further punish the farmers and desperately poor families who rely on
them. The reason these kids are working is that their parents – and the farms they work on – are
not paid enough” (Doward 2020).

d) Why were these decisions ethical dilemmas?

I think these decisions are ethical dilemmas because “These are all unsafe conditions for children
essentially, and in those conditions children simply shouldn’t be working” (Doward 2020). In
addition if these children are working over 40 hours a week, “ there is no way they can also be
having a proper education” (Doward 2020). It really becomes an ethical dilemma because it is
messing with the future of these children’s lives and their current quality of life.

e) What was the result of these decisions?

The immediate result that the companies took were to stop buying from these farms for the
growing season and to launch an investigation. While this makes the coffee Starbucks and Nestle
is selling not associate with child labor it doesnt solve the issue. The investigation might find
what farms are guilty but not why they had to do it. It doesn't go into that many coffee farmers
live in poverty and struggle every growing season while companies like Starbucks make more
money every day.

f) Why did you choose this ethical dilemma case study? What about this ethical dilemma caught
your attention?

I chose this ethical dilemma because it was extremely shocking and upsetting. It was honestly
very hard to believe that these huge companies that preach about their ethically sourced coffee
could be involved in a scandal like this. While I do have a hard time believing that they have no
idea this was happening, even more upsetting is that besides not using the farms the issues aren't
really fixed.

g) Why do you feel understanding this ethical dilemma in your industry/profession is necessary
for your leadership development?

This was very helpful for my leadership development because it goes further into explaining the
many issues that plague the coffee industry. It is very important to be informed on as many
issues that will affect the industry I plan on staying in.

Section 5: Case Study 3

Identify a third case in your field regarding ethics. Summarize your case and cite it per APA
Standards as necessary. Make sure you include the following:

a) Who are the characters (people/companies/etc)

The Starbucks Coffee Company yet again

b) What happened in the particular event you are summarizing? (walk your reader through each
step and explain how the event unfolded.)

In the event being discussed here was the racial profiling that starbucsk was accused of in
Philadelphia. What happened was “Two black men were sitting in a Philadelphia Starbucks when
they were arrested for not making a purchase. The manager of the store called the police and said
that two men were sitting in the store when they hadn't bought anything and they refused to
leave.” (Booth 2019). Following the police being called “the officers arrested the two black men
on suspicion of trespassing (Booth 2019). This then all led to “immediate backlash and cries of
racism, along with boycotts and protests against the coffee chain” (Booth 2019).

c) What were the options and what decisions were made?

The decision being made by the store was to follow the policy and wheel the police might have
not been needed to get involved. The end result happened based on the policies in place at
starbucks. The decisions being made by the company after that was an apology from the CEO
and a full shut down of the company to review racial bia and discrimination training,
d) Why were these decisions ethical dilemmas?

These were very serious ethical dilemmas because they deal with distinction and racial profiling.
They are serious topics that should not have to be continued to be dealt with in this day and age
but sadly are.

e) What was the result of these decisions?

“The arrest scandal was so big that even Starbucks knew they had to do something bigger than
just release a public apology. A few weeks after the incident, the company announced that they
were planning to close more than 8,000 United States stores for several hours on May 29, 2018
in order to conduct racial-bias training for employees” (Booth 2019).

f) Why did you choose this ethical dilemma case study? What about this ethical dilemma caught
your attention?

I chose this ethical dilemma because I was working for Starbucks when all this happened and I
really wanted to look into and reflect upon what happened. I thought it was very interesting to
see all these years later how the whole event went down and reflect on how it has changed the
company overall.

g) Why do you feel understanding this ethical dilemma in your industry/profession is necessary
for your leadership development?

I believe it was necessary for me to review this case because it is still an issue I see present in the
company today and its effects are still around. While we have been forcesd to be put through so
much training on the topics of discrimination and racsime the probelm will still be out in society.
I really believe it was necessary to review the effects of this case on Starbucks and its future and
notice and learn from their mistakes.

Additional Requirements & Tips for Success:

● This is a writing assignment, so all answers should be written in complete sentences and
paragraphs.
● Because you will find work in a wide variety of professions after graduation, students
need to utilize a wide variety of databases in order to locate different case studies;
however, I have found that The Markkula Center for Applied Ethics site can be
particularly helpful for this assignment.
● Review the grading rubric before beginning. Make sure you know what’s required for
points!
● If you can’t answer the who, what, when, where, why, and how questions, it’s probably
because what you’ve picked isn’t a case (a single example).
● EVERY piece of information you take from anywhere needs to be cited with both an in
text citation (last name, year) and an entry in your reference list
● Use APA formatting for all citations and references.
 References

Booth, J. (2019, February 06). The biggest scandals to ever hit Starbucks. Retrieved August 28,
2020, from https://www.mashed.com/144844/the-biggest-scandals-to-ever-hit-starbucks/

Canning, A. (2019, June 19). Starbucks Has a Slave Labor Problem. Retrieved August 28, 2020,
from https://fairworldproject.org/starbucks-has-a-slave-labor-problem/

Doward, J. (2020, March 01). Children as young as eight picked coffee beans on farms supplying
Starbucks. Retrieved August 28, 2020, from
https://www.theguardian.com/business/2020/mar/01/children-work-for-pittance-to-pick-
coffee-beans-used-by-starbucks-and-nespresso