Bmgt 2216 - Ethic Case Study Part one
Autor: Mnina • November 11, 2016 • Essay • 1,367 Words (6 Pages) • 861 Views
Lounis Matouk
09/10/2016
BMGT 2216
In my essay today, I will analyze the ethical substance and the corporate social responsibility of two companies that operate in the coffee industry. A multinational coffee company Starbucks and Mo’s Coffee shop, a small local company located in Grove City, Columbus.
On March 1971, three partners opened first Starbucks store in Seattle, Washington. In 1981, Howard Schultz, who was the supplier for coffee shop at first, bought out the two partners and took over the business to build, couple years later, a giant coffee company in the US. After his visit in Italy, he came back with a great willing to build a new concept for the business and bring to the United States the Italian coffeehouse tradition. Schultz’s experience in Italy has a big impact on the company’s future and offered a new meaning to the coffee business back then. His vision would to create a family atmosphere and sense of community around a coffee table as he was convinced that having a cup of coffee inside the store should make the place as second home for the customers. He purchased the company in 1987 and went public in 1992 with 120 stores around the country. Starbucks has extended its production line and sells pastries, cookies and other drinks. Today, the chain has grown to more than 24,000 stores across 70 countries with $78.27 billion capital market and more than 191,000 employees. Starbucks becomes the most powerful and admirable coffee company in the world. (Jennifer 190-200)
Mo’s Coffee shop store is small local business located in Grove City. The business was launched in 2008 as a small diner and serves breakfast and house coffee. The owner has extended his productions and now offers traditional cooked pancakes and serves lunch as well.
Both companies operate in the coffee retail business; however, there is a big difference amongst Starbucks and Mo’s Coffee shop. The distinction between the two businesses displays how different they operate and they impact the community. In fact, each organization has its specific approach toward the society and its own vision to the future as a business. The way it builds relationships with the stakeholders depends on the capacity and the size of the company, which explains the different strategies and behaviors that each company takes to whether extend the business or make any changes in the operations. Mo’s Coffee takes a very defensive strategy toward risk; as a small business, managers know that they faces many risks continuously. At this level, they don’t have a solid cash inflow and other alternatives to manage risks. In the other side, Starbucks with 24,000 stores, has strong balance sheet and able to take offensive decisions to extend more around the world. The manager also mentioned how hard it is to allocate resources in small business such as Mo’s. (Parslay) Each expense calculated, each penny needs to be counted to avoid any loss and ensure the profitability and thus the continuity of the business. However, Starbucks managers have also a responsibility in allocating resources, but accruing small loses won’t expose the whole company to bankruptcy as they might impact Mo’s Coffee shop. There are many other distinctions that we should take in consideration when it comes to analyze corporate social responsibility in Starbucks and Mo’s Coffee shop. The size and the capacity of each company emphasize indicate the dimension of SCR in each business; in his article at Forbes published on August 2014, Craig Smith, contributor at Forbes and Professor of Ethic and Social Responsibility, mentioned that corporate social responsibility is largely associated with big companies, they are more high profile and thus attract more attention. They are particularly concerned to protect and enhance their reputation with boarder as well as key stakeholders. (Smith).
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