PART 2 Understanding the Environmental Context of Managing 96 Management at Work The Canary in the Coal Mine warned that the dipper-well system wasn't good for its envi- ronmental reputation, but only after a blitz of bad PR in the global press did Starbucks finally turn off the water. Today, says "If the only reason you're invested in sustainability is because it's the 'right thing to do, you're in trouble. Ben Packard, “we look at water on the supply side of coffee”. as a resource to be protected --and Starbucks has plans to cut in-store water consumption by 25 percent. That goal is part of the company's Shared Planet Pro- A 'Look at 27 -JIM HANNA, DIRECTOR OF ENVIRONMENTAL gram, which was launched in 2008. A year later, Starbucks AFFAIRS, STARBUCKS ccording to Starbucks VP of Global Responsibility announced that, as part of the same initiative, all of its new Ben Packard, the company's efforts to establish itself stores would satisfy certification requirements for LEED (Leadership in Energy & Environmental Design), a rating as a leading sustainable brand start with its mission- the statement of its organizational purpose (see Chapter 6). system for the construction and operation of environment- “We aim to take care of the communities that we depend friendly buildings. Because the guidelines were developed for office buildings, Starbucks helped to create programs for on for our retail business by ... finding meaningful ways to be engaged with those communities,” says Packard. “And both new and renovated retail spaces, and 75 percent of all Starbucks locations opening in 2014 attained LEED certi- we aim to take care of those communities where we source fication. “My dream,” says Jim Hanna, “is that we solve the our core products, like coffee, tea, and cocoa.” It's a matter issue and a customer walks into a store and says, of “nurturing the human spirit,” explains Packard, who adds cup that incorporating that value into the firm's culture has al- that ultra-efficient air conditioning unit. lowed Starbucks to set and meet “very bold standards” in By 2015, Starbucks also plans to “ethically source” 100 percent of the coffee that it buys from producers. Over the sustainability Starbucks sells hot and cold beverages out of more than past 40 years, Starbucks has invested more than $70 million 23,000 stores in 64 countries, and those stores account for about in programs to support auctainable and socially sound agri- 80 percent of the company's carbon footprint- the total of its cultural practices among the roughly 1 million people -- most greenhouse gas emissions (primarily carbon dioxide). In order to of them in Latin Amtics --- who represent its coffee supply reduce its footprint, Starbucks has set a series of realistic goals to chain. Programs incluie loans to help farmers develop not be met by 2015, including the widespread recycling of the dis- only sustainable growing practices but forest-conservation posable cups that it hands out with almost every beverage sold- practices as well. about 4 billion per year. Actually, those cups constitute only a Since 2008, Starbucks has partnered with Conservation miniscule fraction of Starbucks' carbon footprint,* but accord- International (CI), a U.S.-based nonprofit environmental ing to Jim Hanna, the company's director of environmental organization, to implement C.A.F.E. (Coffee and Farmer affairs, “perception is reality” when it comes to disposable Equity) Practices — a set of independently developed guide- cups: What most people see is the litter strewn about the lines for monitoring the economic, social, and environmen- Starbucks intends to have front-of-store recycling bins in ev- streets or tumbling out of overflowing trash cans. By 2015, tal impact of coffee-production programs and practices. By ery North American store. 2012, 98 percent of the small coffee farms operating accord- Before we go any further, we should point out that al- ing to Starbucks-promoted C.A.F.E. practices had managed to improve soil fertility, and 100 percent of the school-age into its operations since 1990, it hasn't always been as sensi- though Starbucks has incorporated sustainability practices children on those farms were able to attend school. CI chairman and CEO Peter Seligmann points out that tive to environmental issues as some people would like. If you Starbucks’ sustainability efforts are motivated in large part by fore 2008, you might have noticed, next to the giant espresso were hooked on your daily Starbucks latte or cappuccino be- the need to deal with a major issue in the company's environ- quick-rinse equipment, and the water was kept running to en- sure that pipes stayed clean. Unfortunately, leaving the water swimming pool every 83 minutes. The company had been running in 10,000 stores worldwide used up more than 6 mil plains Seligmann, “is what creates stress on the ability of coffee lion gallons of water per day – enough to fill an Olympic-size farmers to produce crops.” The coffee bean grows only in spe- ment, both business and natural: namely, climate change machine, a sink called a “dipper well.” Baristas used it to "figuring out how to ensure that coffee farming can be a part of the climate solution," as Ben Packard puts it. "The conver- gence of climate change and ecosystem deterioration," ex- cific climates, and those climates are particularly vulnerable * The nitrous oxide that puts the foam in whipped cream accounts for more of Starbucks' carbon footprint than all of its U.S. roasting operations combined. CHAPTER 3 Understanding the Organization's Environment 97 to rising global temperatures. Thus if Starbucks intends to sur- you're in trouble." A business enterprise needs to see some vive over the long term, it makes good business sense to ensure return on investment, and as Clarice Turner, Starbucks VP of that it has access to its most important ingredient. “We're the U.S. business, puts it, that return "can manifest itself in many canary in the coal mine," quips Hanna, likening the fate of the ways.” Front-of-store recycling, for example, saves thousands of first victim of unbreathable air to the company's potential fate dollars annually in trash-hauling costs.” Of course, says Turner, as one of the first victims of climate change. working to reduce the company's environmental impact is Starbucks, then, sees sustainability as a matter of business the right thing to do,” but she hastens to add that highly visible survival, and if business isn't the operative word, at least it's at sustainability efforts also “put a halo on your brand and busi- the top of the list. “If the only reason you're invested in sus- ness, which is very real to both consumers and employees. If tainability is because it's the right thing to do,” says Hanna, done right, those efforts have a tangible bottom-line impact.” Case Questions 1. The term sustainability refers generally to the mainte- nance and preservation of systems and processes. At what types of systems and processes are Starbucks' sus- tainability efforts directed? 2. In what ways might Starbucks' sustainability efforts be affected by events in each dimension of its general ex- ternal environment-economic, technological, sociocul- tural, political-legal, and international? In which dimensions can the company be most proactive in taking steps toward its sustainability goals? In which dimensions are events most likely to necessitate reac- partners, and regulators- be involved in its sustainability efforts? Be sure to include competitors in your answer. List each group in order of its importance to Starbucks' sustainability efforts; explain your ranking. 4. According to Ben Packard, “One of the strengths of Star- bucks' culture is treating the people and places where our products come from and are served in a better way. Not delivering on that vision and mission would be a problem in the culture of this company." Why is the management of its culture important to the success of the company's sustainability efforts? In what ways can Starbucks work to ensure that the values reflected in its sustainability commitment are embraced by members of the organization? tive steps? 3. In what ways might each group in Starbucks' tash envi- ronment-competitors, customers, suppliers, strategia Case References Andrew Nusca, “In Sustainability, Starbucks Takes a Leading Role,” Smart Claudia Girrbach, “How Starbucks Took the Lead on LEED," GreenBiz.com Planet (November 9, 2010), www.smartplanet.com, on June 26, 2014; (October 28, 2010), www.greenbiz.com, on June 26, 2014; Conservation Charley Cameron, “Interview: Eight Questions with Starbucks Global International, “CI and Starbucks Recognize That Forests and Coffee Responsibility VP Ben Packard,” Inhabitat (May 12, 2014), http://inhabitat. Farmers Can Be Solutions to Climate Change” (2014), www.conservation. com, on June 26, 2014; Christina Williams, “Starbucks Sustainability org, on June 26, 2014; Jennifer Elks, “Starbucks Expands Ethical Sourcing Leader Urges Others to Make the Business Case,” Portland (OR) Business Efforts with New Global Agronomy Center,” Sustainable Brands (March 20, Journal (December 5, 2012), www.bizjournals.com, on June 26, 2014; Philip 2013), www.sustainablebrands.com, on June 27, 2014; National Restaurant Victor, “Starbucks Wasting More Than 6 Million Gallons of Water a Day," Association, “Starbucks: Sustainability Pays Off in Dollars and Sense" ABC News (October 6, 2008), http://abcnews.go.com, on June 28, 2014; (March 12, 2014), www.restaurant.org, on June 26, 2014. YOU MAKE THE CALL Putting Miscommunication in Context 1. Think of the categories of the task environment- competitors, customers, suppliers, strategic partners, regu- lators -as groups of people with whom you might need to carry on some form of cross-cultural communication. First, rank the five categories in order of importance when it comes to ensuring effective communications. What factors did you consider when ranking the groups in order of importance? Next, rank them in order of dif- ficulty. What factors did you consider when ranking them in order of difficulty? How did the issue of cultural con- text affect both of your rankings? 2. In what ways — both positive and negative -- might an organization's culture reinforce the role of interpersonal and communications norms among its members? Un- der what circumstances might an organization find it advantageous to adjust the effects of cultural context on communications, both with people inside the organiza- tion and with people outside of it? What practical steps might an organization take to adjust the effects of cul- tural context on its communications practices? 3. Log on to the front page of Facebook -- the one in- tended for Americans. Look it over and then log on to (Continued)
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