Ethics in business operations is fast taking precedence among emerging trends in the corporate world. Over time, due to increased literacy levels, reduction in information asymmetry, and increased awareness levels, people have shown an increased desire to take responsibility for the commodities they use. According to Greenwood and Freeman (2018), the increasing diversity of dimensions in the business world and changing attitudes of individuals towards business operations have increased the issue of ethical concerns among businesses. While stakeholders in the past were keener on the production of commodities, contemporary stakeholders have shifted focus to a more holistic approach, amalgamating production and ethical principles. Ferrell et al. (2019) define business ethics as the business standards generally acceptable by relevant stakeholders as right or wrong in business operation. In their view, Ferrell et al. (2019) explain that contemporary stakeholders are interested in production and ethical behavior, and social responsibility. This paper explores contemporary ethical issues in business using Starbucks company as the point of focus.
While Starbucks has been credited widely as one of the most ethically sensitive companies globally, there are various allegations of unethical practice that continue to face it. Remarkably, the company has faced lawsuits over alleged use of cocoa produced by unethical means, using labor from underage children. According to Doward (2020), Starbucks used various unethical practices and disguised them under the proper advertisement. In his findings, despite underage children being involved in cocoa production, Starbucks Corporation fraudulently advertised its hot chocolate as “ethically sourced” (Doward, 2020). The advertisement phrase used by Starbucks Corporation, “Ethically Sourced,” meant by implication that the company portrayed itself as using cocoa that did not involve any aspect of child labor (Doward, 2020). This was deceptive as, in a genuine sense, underage children worked on various cocoa farms, from which the company got raw materials. Doward (2020) explains that it is unethical for the company to continue sourcing cocoa produced under such unlawful circumstances as child labor besides false misrepresentation.
From Starbucks’ perspective, the company got its cocoa lawfully in bulk from the intermediaries which pooled cocoa from various small-scale farmers. This implied that tracing all the cocoa to the farm would be somewhat untenable (Doward, 2020). In Starbucks ’ view, in line with its mission statement, the company aims at having a holistically ethical supply chain. The dilemma that arises is that the issue of child labor in cocoa production is endemic and that it is difficult if not impossible to use cocoa without incurring child labor. In its defense, Starbucks has explained that it is non-tolerant to such unethical practices as child labor and has since deployed various teams to conduct investigations into such claims (Doward, 2020). Moreover, Starbucks claims to have suspended the purchase of coffee from the farms suspected to be indulging in child labor (Doward, 2020). Essentially, given that child labor is both unethical and morally incorrect, products that involve child labor at any point can be considered as unethically produced.
There are various stakeholders whose collective action may help resolve the unethical issue of child labor in Starbucks’ supply chain. Key stakeholders are customers, the government, employees, suppliers, and the general society served by Starbucks. These stakeholders could help curb the issue of child labor in different ways. For example, the International Labor Organization (ILO) places the government at the center of curbing child labor (Thévenon & Edmonds, 2019). Among the most instrumental roles of the government would be reviewing the national laws on hiring children and putting stringent measures on those indulging in child labor.
Moreover, it could sponsor child education to minimize school dropout and reduce child labor (Thévenon & Edmonds, 2019). On the other hand, customers and the Starbucks society can join hands in reducing child labor through taking civil responsibility (Silva & de Campos, 2020). This implies that consumers increase their sensitivity towards the value chain of various products to ensure that no unethical practices are involved (Silva & de Campos, 2020). On the other hand, the general society could report any cases of such unethical practices as child labor and environmental irresponsibility to relevant authorities whenever they identify any (Thévenon & Edmonds, 2019). Other stakeholders like the suppliers, the company, and employees could also contribute to solving this menace by strictly adhering to ethical practices. Suppliers can do this by ensuring that they source their supplies from farmers whose production processes are ethical and engaging only legally accepted personnel in their operations. Conversely, employees can achieve this by being ethically sensitive throughout the delivery of their services.
In conjunction with its stakeholders, Starbucks can resolve the issue of child labor using various approaches. An instrumental approach is taking responsibility for all the relevant stakeholders (Boersma, 2018). According to Boersma (2018), children do not work out of will but are compelled by situations. If all stakeholders took responsibility, then no farm would hire an underage. Another viable approach is investing ethically. Starbucks could enhance investigation rigor and ensure that it sources all its inputs through ethical procedures (Boersma, 2018). In the process, the company could issue such threats as boycotting the purchase of cocoa beans from those farms that engage in unethical practices such as child labor. Other approaches include NGO sensitization and initiatives against child labor, enhancing access to education, and creating awareness on the need to avoid child labor. Such sensitization would increase child uptake in schools and enhance the reluctance of farmers and parents to allow their children to be involved in child labor.
Over time, scholars and philosophers have come up with alternative theories that could help resolve ethical issues in business. Ethical theories are generally concerned with identifying and encouraging suitable activities to engage in and avoid the wrong ones. The most instrumental theories are utilitarianism, norm theory, and deontological theory (Singh & Mishra, 2018). Norm theory concerns itself with distinguishing right from wrong and using the identification to form the morally upright values and codes of conduct (Singh & Mishra, 2018). On the other hand, Deontological theory explores the procedures and frameworks for judging morality given the predetermined set of rules (Singh & Mishra, 2018). While the two theories have received significant ethical credit, they may not be sufficient to help Starbucks combat the child labor dilemma.
A more holistic theory that Starbucks can apply is the utilitarian theory. According to utilitarianism, businesses need to consider the repercussions of their decisions (Goyal, 2019). Utilitarianism suggests that the most ethical decision for a business maximizes the welfare of the majority of stakeholders to the organization (Goyal, 2019). For Starbucks, its decision on whom to purchase cocoa from should be led by this theory. Child labor worsens its victims’ well-being and therefore needs to be eliminated. The utilitarian approach is therefore instrumental for the company in combating child labor. The major disadvantage of this theory is that it only considers the happiness of the majority in decision making ignoring such vital aspects of the business as profits (Goyal, 2019). However, this can be overcome by setting operating business standards that prevent unnecessary losses.
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Doward, J. (2020). Children as young as eight picked coffee beans on farms supplying Starbucks. The Guardian. https://www.sunoutreach.org/wp-content/uploads/2021/02/Child-Labour-and-the-Coffee-Industry.
Ferrell, O. C., Harrison, D. E., Ferrell, L., & Hair, J. F. (2019). Business ethics, corporate social responsibility, and brand attitudes: An exploratory study. Journal of Business Research, 95, 491-501. https://doi.org/10.1016/j.jbusres.2018.07.039
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