Starbucks' Corporate Social Responsibility and Ethics

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Starbuck’s Corporate Social Responsibility
Article Summary: Starbucks is leaving Russia by Melina Delkic
Starbucks recently decided to exit the Russian market as a response to Russia’s invasion of Ukraine. The company closed 130 stores run by a licensing partner around the country, leaving approximately 2,000 employees without jobs (Delkic, 2022). To streamline their transition to new opportunities outside the company, the coffee chain offered to pay the laid off workers six months’ worth of salary. Starbucks also stopped shipment of any of its products into the Russian market. In addition, the company offered all royalties earned from business in Russia towards relief efforts in Ukraine (Delkic, 2022). According to Starbuck’s chief executive, Kevin Johnson, the decision to exit Russia was influenced by the company’s mission and values which advocate for inclusivity of all people.
Importance of Corporate Social Responsibility
Corporate social responsibility (CSR) is built on the notion that corporations should demonstrate a commitment to give back to the people and communities they operate in. Fernando (2022) defines CSR as strategies adopted by organizations to operate ethically and in ways beneficial to society around them. According to Stobiersky (2021), CSR is built around four main obligations. First, environmental responsibility refers to the commitment by organization to adopt measures to safeguard the environment, such as reducing pollution and adopting sustainable business practices. Second, ethical responsibility requires organizations to operate in a fair and ethical manner. Third, philanthropic responsibility requires organizations to dedicate a percentage of their earnings towards initiatives that make society a better place. The last obligation is economic responsibility which demands that organizations must maximize profits for its stakeholders with due consideration for the other three responsibilities. There are many benefits that businesses gain from engaging in CSR initiatives. According to Corporate Finance Institute (2021), CSR builds stronger brand image, increases customer loyalty and sales, saves operational costs, enables companies to retain employees, and reduces regulatory burden. Thus, organizations are facing growing pressures to implement the concept of CSR in their operations as a way of keeping all stakeholders satisfied.
The Relationship between Starbuck’s CSR and Its Exit from Russia
Starbucks is considered a model company because of its high investment in corporate social responsibi...