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Jacob (2012, p.259: Challenges Faced by Starbucks in Maintaining CSR CSR Implementation Cost

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Starbucks faces several challenges in maintaining its corporate social responsibility efforts. First, CSR activities are very costly for Starbucks and require disproportionate spending that affects other operations. This leads Starbucks to cut costs in services or employee pay. Second, CSR activities sometimes conflict with Starbucks' goal of profit maximization, forcing managers to choose between social benefits or profits. Third, Starbucks faces "greenwashing" challenges where its environmental claims are questioned, requiring additional training of employees and customers to promote its brand image related to CSR. Maintaining credible CSR efforts comes with financial and operational costs for Starbucks.

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Jacob (2012, p.259: Challenges Faced by Starbucks in Maintaining CSR CSR Implementation Cost

Uploaded by

WilliamAruga
88 views4 pages
Starbucks faces several challenges in maintaining its corporate social responsibility efforts. First, CSR activities are very costly for Starbucks and require disproportionate spending that affects other operations. This leads Starbucks to cut costs in services or employee pay. Second, CSR activities sometimes conflict with Starbucks' goal of profit maximization, forcing managers to choose between social benefits or profits. Third, Starbucks faces "greenwashing" challenges where its environmental claims are questioned, requiring additional training of employees and customers to promote its brand image related to CSR. Maintaining credible CSR efforts comes with financial and operational costs for Starbucks.

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CSR Challenges

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Starbucks faces several challenges in maintaining its corporate social responsibility efforts. First, CSR activities are very costly for Starbucks and require disproportionate spending that affects other operations. This leads Starbucks to cut costs in services or employee pay. Second, CSR activities sometimes conflict with Starbucks' goal of profit maximization, forcing managers to choose between social benefits or profits. Third, Starbucks faces "greenwashing" challenges where its environmental claims are questioned, requiring additional training of employees and customers to promote its brand image related to CSR. Maintaining credible CSR efforts comes with financial and operational costs for Starbucks.

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88 views4 pages

Jacob (2012, p.259: Challenges Faced by Starbucks in Maintaining CSR CSR Implementation Cost

Uploaded by

WilliamAruga
Starbucks faces several challenges in maintaining its corporate social responsibility efforts. First, CSR activities are very costly for Starbucks and require disproportionate spending that affects other operations. This leads Starbucks to cut costs in services or employee pay. Second, CSR activities sometimes conflict with Starbucks' goal of profit maximization, forcing managers to choose between social benefits or profits. Third, Starbucks faces "greenwashing" challenges where its environmental claims are questioned, requiring additional training of employees and customers to promote its brand image related to CSR. Maintaining credible CSR efforts comes with financial and operational costs for Starbucks.

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Part One

The issue of corporate social responsibility has turned out to be sufficiently pervasive in that the

concept owns an acronym-CSR In business cycles. CSR promotes competitive advantage

amongst organizations. As indicated by Jacob (2012, p.259) CSR forms effective means of

mitigating new forms of risks emerging in a company. There exists no framework in which CSR

is any firm could be evaluated. Thus, CSR activities expose firms to challenges which are faced

in the process of working to meet the needs of other stakeholders. The essay looks into

challenges faced by Starbucks with regard to CSR. Starbucks was started in the year 1971 being

the first retail store which opened within Seattle’s Pike within United States of America. Howard

Scultz became part of Starbucks in the 1981and worked hard in formulating ideas which had the

potentiality of steering the restaurant forward. Presently, Starbuck has reached new heights of

success in terms of business expansion globally. Starbucks aims at offering better excellent

client services in maintaining firm’s reputation. All these have compelled Starbucks in venturing

into CSR which has various challenges.

Challenges faced by Starbucks in maintaining CSR

CSR implementation cost

The key challenge Starbucks faces with CSR is that it cost the company disproportionally in

ensuring that the company maintains service delivery in its budgetary allocations. The cost of

meeting CRS activities is huge and particularly in monitoring the activities which have been put

in place. The company is pressured by safety regulators to ensure that the firm looks into various

environmental degradations. In this scenario, the restaurant faces cost challenges which affect

key operations of the company. Starbucks has to cut its service and product delivery costs in
meeting CSR operations. The majorly affected stakeholders are the employees who at times

undertake pay-cut in order to make the restaurant meet its activities. The key impact related to

costs is that the firm sacrifices other essential activities which could have led to effective

operations of the Starbucks.

Conflicts in profit motives

CSR cost is an obstacle for Starbucks. At times, CRS exercises are futile. The management of

Starbucks has a fiduciary onus for its stakeholders. The Starbucks management is to ensure that

profit maximization. However, as result of CRS activities, managers have forsaken profits so as

to ensure that Starbucks benefits the society. In this state, Starbucks management encourage

managers to look into various alternatives of operations which are likely to make the company

have better operations meant to enable the restaurant generate profits as it engages in CSR

operations.

Green-washing challenges

Green-washing describes practises of the corporate which seem to be environmentally

responsible exclusive of change representation conducts in an organization. For instance,

Starbucks has been labelled all natural being a coffee restaurant. The company has been

experiencing push from various pressure groups to make Starbucks produce organic foods.

However, this is carrying particular meanings for various Stakeholders in meeting the daily

operations. Customers have often reacted positively to the green-washing services. However,

others have been worried whether Starbucks meets its CRS exercises with regard to the green-

washing operations. With this challenge, employees are required to look into various measures of

ensuring that the company meets its environmental obligations with the regard of food products
produced. Due to green-washing acts, shareholders are forced to undertake some losses in order

to meet all the needed requisites by the company. It is thus essential for Stakeholders to look into

various activities which are likely going to have impacts in its daily operations. Employees are

required to come up with ideas in terms of their service delivery that would make Starbucks to

continue offering services and products which are recommended with the environmental groups.

The company trains customer representations that get empowered in various ways to promote the

Starbucks brand images via creation of amazing client experiences. Thus, the company

undergoes additional costs in making sure that focus on green washing is attained.

Part Two
Reference

Jacob, C.K., 2012. The impact of financial crisis on corporate social responsibility and its

implications for reputation risk management. J. Mgmt. & Sustainability, 2, p.259.

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