Business Values and Assessment of Starbucks and Nestle- Samples

Question: Discuss about the Business Values and Assessment of Starbucks and Nestle. Answer: Starbucks Starbucks is an American coffee company that was founded in Seattle in the year 1971. The industry in which Starbucks operates is coffee shop and the area served is worldwide. Starbucks serve hot and cold drinks , whole beans, micro ground, instant coffee through, espresso, cafe latte, they also offer loose leaf teas, like Teavana tea products. Starbucks also sell of products related to tea and coffee ("Starbucks", 2017). The core values of Starbucks are creation of a culture of belongingness that is warm where ever one is welcomed. Starbucks believe in acting with courage where the status quo is challenged. They believe in being present, connected with transparency, dignity and respect. They believe in delivering their best in whatever they do, they hold themselves responsible for whatever be the results. They are driven by performance through the perspective of humanity. According to the CEO of Starbucks Howard Schultz, he always believed in the link between success and values. He says that they are not into coffee business that serves people, rather they are in to people business serving coffee ("Starbucks", 2017). Nestle Nestle is Swiss company, the head quarter of the company is in Vevey, Vaud, Switzerland. The founder of the company is Henri Nestle, Charles Page and George Page. The industry that they operate in is food Processing (Nestle.com 2017). It is one of the largest food companies of the world. Nestle is a multinational company, they are into manufacturing of a wide range of food products, like baby food, breakfast cereals, medical food, coffee, tea, ice-creams, chocolates, frozen food, pet food and snacks. The company was founded in the year 1905. It operates in approximately 194 countries and they have four hundred and forty seven factories employing 339,000 people worldwide. As per the core values of the company they conduct their business as per the set principles that are based o fairness, honesty and concern towards people. Their code of business has created standards that cannot be negotiated or compromised, this behavior is set for all the employees that work in the organization, their overall beliefs and their leadership and corporate busiess andmanagement principles set the commitments. Their concern for children can be seen by the way they manufacture healthy whole grain breakfast cereals for children and teenagers (Nestle.com. 2017). The differences in the corporate social responsibilities of Starbucks and Nestle are not much because the some of the causes that they work for, both Starbucks and Nestle work for environmental sustainability like saving water and energy sources. One more thing common to both the companies is that they both work for the welfare of their suppliers, Starbucks makes sure that the farmers have good livelihood. Nestle also works for its suppliers and stakeholders welfare. One social responsibility activity that can be seen different in the organization, Nestle is that they take initiatives for the good health of children, they manufacture breakfast cereals in which they make sure that there is adequate content of whole grains, these breakfast cereals are meant for the young children and teenagers. On the other hand, Starbucks take initiatives by recycling they recycle their cups, they have greener stores for inventory management, where large open refrigerators are not used because of high carbon emission this CSR is done for the welfare of environment. Though both the companies take initiative for environment but the approach used by them differ, Nestle has taken the initiative for watermanagement to ensure that the employees, customers and the people of the community that the organization operates gets clean water. Starbucks for the welfare of the farmers from whom they get their raw materials like coffee beans and cocoa. Starbucks provide loans to the farmers so that the farmers can put all the required fertilizers and other essential elements to make a good yield. Other issues raised by Starbucks are forest conservation and climate change. The other initiatives of Starbucks are that they provide employment opportunities for the youth. While Nestle focuses on waste reduction issues, in their Nescafe factory at Orbe Switzerland, they are utilizing the wastes by converting it into energy, the use coffee grounds to generate steam and use it as renewable source of ene rgy. Thus, it can be seen that some of their issues are similar and some are different, there are some similar issues like environmental conservation and welfare of the society, but the approach here is different (Mason, Cole Goza, 2017). 2.The differences that can be seen in the corporate social responsibilities of the organizations exist because their difference in their operations, the main operations of Starbucks is beverages, they process coffee beans, and they have coffee shops that provide coffee and snacks to their customers. Nestle is quite diversified in their production of processed food, this is reason that some of initiatives taken by Nestle like increasing the whole grain content in the breakfast cereals cannot be undertaken by Starbucks because they are not into manufacturing of process and packaged food. Starbucks takes other steps like recycling; the cups used by the customers are recycled because there is scope for that. Starbucks belongs to beverages as well as service industry but Nestle belongs to food manufacturing industry (Glowik, 2017). Since Starbucks have coffee houses that serve customers coffee and other snacks, therefore, manpower is required, these employees do not need manufacturing or engineering skills, so Starbucks gives opportunities to youth to work at their stores. While Nestle requires skill manpower who can perform manufacturing related tasks, therefore it is only possible for Starbucks to employ less skilled youth, Nestle cannot take this initiatives in their CSR it would be a risk for them (Fontaine, 2013). 3.The social accounting approach is the method by the quality of reporting as per the eight standards set by Zadek et al., (1997), this are principles of quality. In the method two companies are compared by the quality of reporting they use for their social accounting, the eight principles are, inclusivity, comparability, completeness, Evolution, Management policies and systems, Disclosure and continuous improvement. Nestle Nestle Reason Inclusivity The social accounting includes all the aspects it can be seen in their social reports. Comparability Yes the performance of the organization can be compared on the basis of assessment Completeness All the areas of the social activities of the organization has been included nothing has excluded. Evolution It is very difficult to cover the social footprints of any organization at a time, it varies with time, so, does its relevance. Management policies and systems The management policies and practices have been included and clearly discussed in their social accounting. Disclosure There is transparency in social accounting of the activities but there is limitation to the information provided in social reports, some information are confidential and hence cannot be disclosed. External Verification The external auditors and audience have verified the social report. Continuous Improvement There has been improvement in the social report of the company. Table 1: Zadek, Evans Pruzan, 2013 Starbucks Starbucks Reason Inclusivity All the activities undertaken by the organization are included in social report of the organization. Comparability The social report can be compared according to the external benchmarks. Completeness The social report is complete because it includes everything, nothing has been systematically or deliberately excluded. Evolution All the social footprints of any organization are difficult to be covered because it varies with time and so does its significance. Management policies and systems Management policies and systems are mentioned in the social report but it is very difficult for the external audience to understand it. Disclosure There is no conflict between the internal management and the external audience as the company has maintained transparency. External Verification The social reports have been externally verified. Continuous Improvement Their social reporting approach is improving continuously. Table 2: Zadek, Evans Pruzan, 2013 4.The social reports by these two companies reflect their concern towards the society in which they operate. Both the companies take steps to address different issues related to the society and the planet. The companies have tried to be ethically strong by taking a number of initiatives in their corporate social responsibilities. It can be seen in their social and sustainability reports. Nestle has an agenda to improve the quality of life of the people and leading them to a healthier future. The impact areas of Nestles Creating Shared Value model are, Nutrition, health and wellness Rural development Water conservation Under the domain of Nutrition, health and wellness they have set an ambition to improve the lives of 50 million children by 2030, they have aimed to help these children lead healthier lives. With the help of Cereals Partners worldwide, they have joined hands with the General Mills with an aim to fulfill the wholegrain requirements of the children and teenagers. All the breakfast cereals of the brand have 8 gram of whole grain content per serving. Their objectives for 2020 is to add 750 million portions of vegetables and 300 million portions of fiber rich grains, like pulses, nuts and seeds (Salib et al., 2015). Under the domain of rural development, Nestle aims at improving the lives of farmers who supply them resources that are required for manufacturing of the products of the organization. For this purpose they use tools like Rural development framework and Response-Inducing sustainability Evaluation, this tools are consistent and hence are used for enhancing the lively hoods of rural farmers (Tai Chuang, 2014). Under the domain water conservation, According to the company water is the human right and hence they ensure, their employees, customers, farmers and the society receive pure and clean water. They consider the sustainability concept and control their usage and withdrawal of water resources and they focus on water treatment (Clapp Rowlands, 2014). As far as star bucks are concerned, under corporate social responsibility they carry out different tasks. The categories that falls under the CSR of star bucks are, Ethical sourcing- Star bucks believes in ethical sourcing and for that purpose they have been committed towards providing the best quality of products through ethical sourcing, they respect their suppliers of coffee beans, cocoa and tea (Galalae George, 2017). Farmer support- They know it pretty well that that they need to support their farmers. Environment- They take initiatives towards the environment by reducing their impact on environment, conserving the energy and water, using stores and facilities that are energy efficient, they use Greener stores. Recycling- They use recycling techniques in recycling and food packaging they recycle the cups (Phillips, 2014). 5.The discussion of the group was mainly focused on comparing the CSR activities of the two companies, group members mainly focused on rating the companies on the basis of their initiatives in the CSR activities. There were conflicting views as one of them believed that Starbucks CSR activities are much effective than Nestle, while one other group member had an opinion that what Nestle does for the society is more useful. According to my friend, thinking about the nutrient intake of children is a unique idea and it is very important, the other one strongly argued that providing the employment opportunities to the disengaged youth. I have a different opinion from that of my group members; according to me, the corporate social responsibilities cannot be compared. Both the companies take initiatives that are effective in their own ways, every measure taken by the companies affect the society and the community in a positive way so it cannot be compared. Moreover, their areas of operation s are also different, so there are chances that activities that they undertake will be different because mostly companies include CSR activities in their areas of operations. It depends upon the companies what are the most concerning issues to them and what steps will be feasible for them to undertake. It also depends upon the human beings to see and judge, every individual has different perspective that is the reason there is difference in opinions, but according to me CSR activities cannot be judged. After I kept I shared m views with m group members all of them agreed that comparison cannot be done and hence it would not be wise to rate the companies based on their CSR. In the end it was concluded that both the companies have been doing a lot incorporate social responsibility, their operations are different if they were in to similar operations, comparing and contrasting could have been possible. References Clapp, J., Rowlands, I. H. (2014). Corporate social responsibility.The Essential Guide to Global Environmental Governance. Routledge: London, 42-44. Fontaine, M. (2013). Corporate social responsibility and sustainability: the new bottom line?.International Journal of Business and Social Science,4(4). Galalae, C., George, S. (2017). Case Study 1: Nestl in Mexico: The Good Food Versus The Good Life Dilemma. InStrategic Marketing Cases in Emerging Markets(pp. 1-10). Springer International Publishing. Glowik, M. (2017). 4.7 Case study: Starbucks.Global Strategy in the Service Industries: Dynamics, Analysis, Growth, 156. Home. (2017).https://www.nestle.in. Retrieved 6 September 2017, from https://www.nestle.in/ Mason, A., Cole, T., Goza, N. (2017). STARBUCKS: A CASE STUDY OF EFFECTIVE MANAGEMENT IN THE COFFEE INDUSTRY.Journal of International Management Studies,17(1). Phillips, N. (2014). Corporate Social Responsibility ReportingNestl Company.City. Salib, J., Sun, D., Wu, J., Wen, X., Huang, C. C. (2015). Corporate Social Responsibility. Starbucks. (2017).Starbucks Coffee Company. Retrieved 4 September 2017, from https://www.starbucks.in/ Suliman, A. M., Al-Khatib, H. T., Thomas, S. E. (2016). Corporate Social Responsibility.Corporate Social Performance: Reflecting on the Past and Investing in the Future, 15. Tai, F. M., Chuang, S. H. (2014). Corporate social responsibility.Ibusiness,6(03), 117. Zadek, S., Evans, R., Pruzan, P. (2013).Building corporate accountability: Emerging practice in social and ethical accounting and auditing. Routledge.