INTRODUCTION TO MANAGEMENT - SUMMER 2017
MIDTERM EXAMINATION
Please review the attached case “The Canary in the Coal Mine" on Starbuck's initiative to become a
sustainability leader. You will use this information to gain some insight into the company in order to
prepare your responses to the examination questions. You are not analyzing the case and you do not
need to search for any additional information on the company. Starbucks will just serve as an example
or focal point for your answers.
Please briefly, but fully, answer the following questions. Remember that this is an exam, not a research
paper or case study. Please email your completed exams to me at dlyons@udc.edu as an attachment,
NOT A LINK no later than 11:00pm on Saturday, July 15, 2017. I will deduct 10 points for every 15
minutes late. Exams will be evaluated on knowledge of concepts, critical thinking and the ability to apply
concepts. Please do not search for answers from other sources. Examples should be unique to you and
therefore differ for each student.
ANSWER ALL QUESTIONS: (18 points each -Total available points = 108)
group
1. Identify and briefly explain the four basic management functions in organizations. Based on your
review of the attached case and your knowledge of the management process, give two specific
examples of how you think Starbucks may have carried out each function in developing its
sustainability programs. The examples at one phase should be related at the next phase.
2. Briefly describe the seven basic managerial skills that managers should have. Give an example
of how YOU might have demonstrated each of the skills if you had worked as a Starbucks
manager on its sustainability projects.
3. Briefly describe the stages of development for groups. Imagine that you were responsible for
putting together the group that was responsible for developing and launching the sustainability
program. Briefly describe how YOU think your group progressed through the stages of
development and what was the outcome.
4. Identify the nature of the organization environment for Starbucks (please address all three
components). Give five specific examples of how components or dimensions of the external
environment might impact Starbucks. What competitive forces might influence the
environment?
5. Define ethical and unethical behavior. Identify at least three important stakeholder groups of
Starbucks and briefly describe how they are affected by or can affect Starbucks. Identify three
potential ethical problems that may arise in the sustainability program and give three specific
examples of ethical behavior and three examples of unethical behavior for each of these groups.
6. Briefly describe the four basic levels of international business activity. Where does Starbucks
place in these levels of activity? Identify five potential areas of concern that YOU think
Starbucks might face in its international operations. How would YOU recommend that they
address these issues
Management at Work
-JIM HANNA, DIRECTOR OF ENVIRONMENTAL
AFFAIRS, STARBUCKS
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
"If the only reason you're invested in
global press did Starbucks finally turn off the water. Today, says
sustainability is because it's the 'right
Ben Packard, "we look at water on the supply side of coffee”
thing to do,' you're in trouble."
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-
gram, which was launched in 2008. A year later, 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
as a leading sustainable brand start with its mission- (Leadership in Energy & Environmental Design), a rating
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
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-
fication. “My dream,” says Jim Hanna, "is that we solve the
cup issue and a customer walks into a store and says, 'Look at
A
sustainability.
greenhouse gas
“
on for our retail business by ... finding meaningful ways to
.
we aim to take care of those communities where we source
our core products, like coffee, tea, and cocoa.” It's a matter
"
of “nurturing the human spirit,” explains Packard, who adds
that incorporating that value into the firm's culture has al- that ultra-efficient air conditioning unit."
By 2015, Starbucks also plans to “ethically source” 100
lowed Starbucks to set and meet “very bold standards” in
percent of the coffee that it buys from producers. Over the
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 sustainable 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
gas emissions (primarily carbon dioxide). In order to of them in Latin America - who represent its coffee supply
reduce its footprint, Starbucks has set a series of realistic goals to
chain. Programs include 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-
streets or tumbling out of overflowing trash cans. By 2015, tal impact of coffee-production programs and practices. By
Starbucks intends to have front-of-store recycling bins in ev- 2012, 98 percent of the small coffee farms operating accord-
ery North American store.
ing to Starbucks-promoted C.A.F.E. practices had managed
Before we go any further, we should point out that al- to improve soil fertility, and 100 percent of the school-age
though Starbucks has incorporated sustainability practices children on those farms were able to attend school.
into its operations since 1990, it hasn't always been as sensi- 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
were hooked on your daily Starbucks latte or cappuccino be- the need to deal with a major issue in the company's environ-
fore 2008, you might have noticed, next to the giant espresso 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
quick-rinse equipment, and the water was kept running to en- of the climate solution," as Ben Packard puts it. “The conver-
sure that pipes stayed clean. Unfortunately, leaving the water gence of climate change and ecosystem deterioration," ex-
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-
swimming pool every 83 minutes. The company had been cific climates, and those climates are particularly vulnerable
* The nitrous oxide that puts the foarn 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
rising global temperatures. Thus if Starbucks intends to sur- “you're in trouble.” A business enterprise needs to see some
return on investment, and as Clarice Turner, Starbucks VP of
e over the long term, it makes good business sense to ensure
that it has access to its most important ingredient. “We're the U.S. business, puts it, that return “can manifest itself in many
anary in the coal mine," quips Hanna, likening the fate of the ways.” Front-of-store recycling, for example, saves thousands of
st victim of unbreathable air to the company's potential fate dollars annually in trash-hauling costs.” Of course, says Turner,
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
unival, 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?
-. 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?
5. In what ways might each group in Starbucks' task envi-
ronment-competitors, customers, suppliers, strategic
Case References
leereu Nusca, “In Sustainability, Starbucks Takes a Leading Role," Smart Claudia Girrbach, “How Starbucks Took the L.ead on LEED," GreenBiz.com
Femei (November 9, 2010), www.smartplanet.com, on June 26, 2014; (October 28, 2010), www.greenbiz.com, on June 26, 2014; Conservation
Charler Cameron, “Interview: Eight Questions with Starbucks Global International, “Cl and Starbucks Recognize That Forests and Coffee
Responsibility VP Ben Packard,” Inhabitat (May 12, 2014), http://inhabitat. l'armers 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,
bumal (December 5, 2012), www.bizjournals.com, on June 26, 2014; Philip 2013), www.sustainablebrands.com, on June 27, 2014; National Restaurant
stor, "Starbucks Wasting More Than 6 Million Gallons of Water a Day," Association. “Starbucks: Sustainability Pays Off in Dollars and Sense" "
LEC Veus (October 6, 2008), http://abcnews.go.com, on June 28, 2014; (March 12, 2014), www.restaurant.org, on June 26, 2014.
Putting Miscommunication in Context
YOU MAKE THE CALL
1. Think of the categories of the task environment-
competitors, customers, suppliers, strdtegic partners, regu-
lators -as groups of people with whom you might need
to carn 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 consifler when ranking the groups
in order of importance? Next, rank them in order of dif-
fel. Il hat factors did you consider when ranking them
floral enn.
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?
1. Emot more of Facebook-the one in-
3
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