Gaining sustainable competitive advantages through CSR engagement and communication
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Gaining sustainable competitive advantages through CSR engagement and communication

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A CSR case study of Starbucks

A CSR case study of Starbucks

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    Gaining sustainable competitive advantages through CSR engagement and communication Gaining sustainable competitive advantages through CSR engagement and communication Document Transcript

    • Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup 286495 Supervisor: Steen Michael Hejndorf Gaining sustainable competitive advantages through CSR engagement and communication Total number of characters: 54,997 A case study of Starbucks “Coffee is the second most consumed beverage on the planet after water. It’s the second most traded commodity after oil. People drink coffee all day, every day in almost every country around the world.”
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Table of Contents 1 INTRODUCTION...............................................................................................................................1 1.1 Problem statement ............................................................................................................................................2 1.1.1 Research Questions................................................................................................................................2 1.2 Methodology.........................................................................................................................................................2 1.3 Delimitations ........................................................................................................................................................3 2 CORPORATE SOCIAL RESPONSIBILITY......................................................................................4 2.1 The Development of CSR.................................................................................................................................4 2.2 The Concept of CSR............................................................................................................................................5 2.3 Key Drivers of CSR ............................................................................................................................................6 2.4 The CSR Critics ....................................................................................................................................................8 3 THEORETICAL BACKGROUND .....................................................................................................9 3.1 First-mover Advantage in CSR Initiatives ..............................................................................................9 3.2 Three CSR Communication Strategies................................................................................................... 12 4 CASE STUDY....................................................................................................................................16 4.1 Starbucks’ Corporate Profile...................................................................................................................... 16 4.2 Stakeholders of Starbuck............................................................................................................................. 16 4.3 Competitive Market Situation - The Basis for a First-mover Advantage ............................. 17 5 EMPRICAL ANALYSIS....................................................................................................................19 5.1 Starbucks’ CSR Profile - Achievements and Activities................................................................... 19 5.2 Starbucks’ CSR initiatives and First-mover Advantage................................................................. 22 5.3 Starbucks’ CSR Communication Strategies......................................................................................... 25 5.4 Connecting and Reflecting upon the Findings................................................................................... 28 6 CONCLUSION ..................................................................................................................................30 7 FUTURE REFLECTIONS ................................................................................................................32 8 LIST OF REFERENCES ...................................................................................................................34 8.1 Books..................................................................................................................................................................... 34 8.2 Articles in Journals.......................................................................................................................................... 35 8.3 Online Articles................................................................................................................................................... 36 8.4 Other Online Sources..................................................................................................................................... 37 8.5 Starbucks.com Online Sources.................................................................................................................. 38 8.6 Online Videos..................................................................................................................................................... 40
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication 9 APPENDIXES...................................................................................................................................41 9.1 Appendix 1 - Attributes Fundamental for a First-mover Advantage...................................... 41 9.2 Appendix 2 - Central CSR Areas and Asymmetries......................................................................... 43 9.3 Appendix 3 - Three CSR Communication Strategies....................................................................... 46 9.4 Appendix 4 - Starbucks’ Mission Statement....................................................................................... 49 9.5 Appendix 5 – Starbucks’ CSR Profile...................................................................................................... 51 9.6 Appendix 6 – Starbucks’ CSR Visibility Examples............................................................................ 54 9.6.1 CSR In-store Signage........................................................................................................................... 54 9.6.2 CSR on Products.................................................................................................................................... 55 9.7 Appendix 7 - Examples of Stakeholder Involvement Communication Strategy .............. 56 9.7.1 Stop wasting pastries idea............................................................................................................... 56 9.7.2 Drink of the month and give to charity idea .......................................................................... 56 9.7.3 Bright idea............................................................................................................................................... 57 9.7.4 Start selling USA made products .................................................................................................. 58 FIGURES Figure 1: CSR attributes central for first-mover advantage (own adaption) ...............................9 Figure 1A: CSR attributes central for first-mover advantage (own adaption) ......................... 41 Figure 2: Elements of Sustainable First-Mover Advantage in CSR Initiatives............................ 10 Figure 3: Propositions in sustaining a first-mover advantage........................................................... 11 Figure 4: Three CSR communication strategies (own adaption) .................................................... 13 Figure 4A: Three CSR communication strategies (own adaption) ................................................. 46 Figure 5: Starbucks stakeholder map (own adaption) ......................................................................... 17 Figure 6: Environmental Mission Statement.............................................................................................. 23 TABLES Table 1: Asymmetries in CSR Capabilities .................................................................................................. 45 Table 2: Public relation models ........................................................................................................................ 47 Table 3: Three communication strategies................................................................................................... 48 Table 4: Mission statement principles....................................................................................................49-50
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 1 of 61 1. Introduction Today most people are influenced by many different organizations and corporations throughout every hour of the day, especially in the choices made concerning everything from the food we eat to what bank we can trust our savings. Consumer attitudes and desires are influenced by corporations through branding and different hidden advertisements, and political decision-making is affected by corporation lobbyists. Thus private corporations are achieving a more powerful position in society, plus growing in numbers and size they are more than ever seen to be an influential agent of the larger social system. Along with increasing influence and power comes responsibility, a responsibility that previously was reserved for merely public institutions, however as Cornelissen argues “companies are now more than ever assumed to act as responsible and proactive ‘citizens’”1 . When talking about responsibility, the concept of corporate social responsibility (CSR) has increasingly been the centre of attention. Due to the immense communication overload, consumer demands of today go far beyond the functional features of the product, as stated already in 1997 “consumers are looking for what a company stands for”2 . Thus consumers identify with their brand choices and due to the increasing corporate influence, they have become more critical of corporate operations in society. The growing competition and media coverage makes it important for organizations to appear the best way possible, and doing responsible business is argued to be one way of gaining strategic and reputational advantages3 . Hence this paper aims to look into the concept of CSR and its relation to competitive advantage. Numerous of corporations have already been trying to meet demands and have devoted attention to CSR programs in their overall strategies. This also means that social responsibility has become an acknowledged business parameter and that engaging in CSR might help meet stakeholder expectations. Nevertheless it will not necessarily generate competitive advantage on its own, consequently this paper further wish to discuss how CSR should be communicated strategically. One of these corporations that has devoted much attention to CSR programs is Starbucks, which is also one of the forth runners of CSR initiatives. As Starbucks is a well-liked brand, ranked no. 3 US corporation within its industry of food services, surpassed only by McDonald’s and Yum Brands4 , 1 Cornelissen (2011) p. 242 2 Jo Harlow, marketing vice president at Reebok in Klein (2005) p. 422 3 Cornelissen (2011) p. 236 4 Fortune 500
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 2 of 61 this paper is further based on an interest in examining Starbucks in terms of its CSR communication and how the corporation is able to use this beneficially in terms of gaining competitive advantage. 1.1 Problem Statement The goal of this paper is to examine and discuss the concept of CSR, its relation to competitive advantage and corporate reputation, and how CSR initiatives can be integrated strategically as a part of the corporate strategy and identity in order to get the most beneficial result. This will be answered through a case analysis on Starbucks’ CSR engagement and communication. Furthermore this will contribute to the short reflection of the future of sustainable CSR communication. 1.1.1 Research Questions RQ2: Does Starbucks’ CSR engagement meet the elements of ‘sustainable first-mover advantage in CSR initiatives’ put forward by Sirsly & Lamertz? RQ3: How does Starbucks communicate their CSR initiatives in relation to Morsing & Beckmann’s three CSR communication strategies? 1.2 Methodology The scientific method operates as a foundation of this paper. Scientifically, it takes a socio- constructive approach, claiming that society is a product created by humans, and vice versa. Social constructionism view knowledge as grounded in social existence, thus as society change so do ideas, ideology and values5 . This approach will encompass the central argument of the corporate communication context, to which expression is given through the product of individual and social interaction, thus changing together with society6 . The methodology initiates within the problem statement, outlining the scientific problem. In the process of testing the initial viewpoint and answering the research questions through a case study and empirical analysis of Starbucks – part four and five, the concept of CSR and relevant theory is reviewed and accounted for in part two and three. Sirsly and Lamertz’ sustainable first-mover advantage in CSR initiatives, and Morsing and Schultz’ three CSR communication strategies are chosen on the basis of their relevance to the problem statement. The theories are argued to support each other and are in the analysis interlinked. The analysis is characterised by the methodology of a 5 Berger & Luckmann (1966) 6 Hibberd (2005) p.26
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 3 of 61 directed content analysis – an interpretative analytic approach based on existing theory7 . The case study and empirical analysis are carried out by looking at Starbucks and its engagement in and communication of CSR in relation to the theory put forth in part three. The different data and information is collected through Starbucks’ external communication, mainly through its website where the corporation among other has a section on responsibility, and additional secondary material about the corporation. Looking through the collected data the paper is capable of determining Starbucks’ general CSR engagement and communication hereof, and analyzing the data in relation to the problem statement goals, and thus the relevant measures and criteria of the theories. Hence by connecting the findings and interpreting the results, one is able to draw conclusions to whether the goals have been achieved, and further include a future reflection. An important characteristic of the scientific method is that it should provide means of checking the validity of statements and results8 . Validity is in this paper obtained by comparing the content- analytic data of Starbucks with the external criteria of the theories. To claim that the research results are valid will thus also be to claim that the findings do not necessarily depend upon the specific data, methods and measurements of the particular Starbucks study9 . This will be verified in the analysis and conclusion hereof. 1.3 Delimitations Content analyses are typically a study of text, however in this paper a more overall perspective is taken in order to narrow down the scope, as it is not each of Starbucks’ single CSR initiatives that are in focus but rather the corporation’s CSR engagement as a whole. Also within the theoretical part Sirsly and Lamertz note in their model that parallel to the first-mover advantage also exist late- mover or follower advantages10 , however, here focus will be on how the CSR initiatives can generate a first-mover advantage. This part one has introduced the paper and provided a basis for understanding the worldview, structure and content. The following part will create further basis for both theory and analysis, presenting the concept of CSR. 7 Hsieh & Shannon (2005) p. 1277 and 1281 8 Sawin (2005) p.389 9 Weber (1985) p. 18 10 Sirsly & Lamertz (2007) p. 5
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 4 of 61 2. Corporate Social Responsibility This following section will explain and discuss the concept of Corporate Social Responsibility (CSR). Before addressing the concept and its key drivers, the development and need for CSR will briefly be discussed in order to enrich the understanding of the concept and its growing importance. 2.1 The Development of CSR Despite being a more or less voluntary deed, the rising attention towards CSR amongst corporations has not been entirely voluntary. Many corporations have been taken by surprise by the growing public interest in responsibility issues that not previously were a necessary part of corporate strategies11 . In a time where mass communication has become much easier, different activists make sure that both the media and the general public are aware of corporations that do not encounter their social responsibilities. Thus being a successful and highly visible corporation indeed bring along a great demand for being social responsible. Furthermore, research shows that “almost 80% of all US consumers do consider CSR an important characteristic for their purchase decision”12 , hence CSR is a crucial factor in corporations attempt to gain consumer attention. The active voices of consumers have obtained much power in regards to strengthen or threaten the market value of brands, and in order to reach these market voices many corporations have understood the necessity of integrating and communicating CSR policies13 , and will continue to do so, as the assessment of corporations’ social performance most likely will continue to grow14 . It is hereby argued that CSR is a socially constructed concept and the need for it has developed in line with the development of society. Thus it is important to keep societal developments in mind when integrating CSR into corporate strategies, emphasizing the worldview of social constructionism put forth in section 1.2. Having established the development and need for CSR and thus the foundation for the paper, the following will look into what is understood by the term. The clarification hereof will facilitate a base for further discussions and contribute to the understanding of the empirical analysis of Starbucks. 11 Porter & Kramer (2006) p. 2 12 Morsing & Beckmann (2006) p.14 13 Risk & Compliance (2008) p. 3 14 Morsing & Beckmann (2006) p.15
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 5 of 61 2.2 The Concept of CSR Being socially constructed, CSR is a complex concept in the sense that it covers many different aspects of business and has been studied within different academic fields15 . Thus there is no agreed upon definition - or as Pedersen notes: “CSR means different things to different people at different times”16 . According to Morsing and Beckmann there is a general agreement among marketers and scholars that “CSR is defined as the organization’s status and activities with respect to its perceived social obligations”17 . Nevertheless, corporations around the world presumably have different perceptions of what responsibility is and not the least what ‘sufficient’ CSR is. In an attempt to bring clarity to the term CSR and set a more specific base for this paper, some other definitions of the concept will now be presented. In their article Sirsly and Lamertz exemplify the concept by the definition made by World Business Council for sustainable Development saying that CSR is “the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life”18 . Sirsly and Lamertz further look into the idea that corporations also engage in corporate social performance including not only responsibility but also the process of responsiveness and behavior outcomes19 . This notion of the concept CSR can be argued to match the development in society very well, as a growth in consumer expectations combined with an increase in social media use, have intensified the demand for corporations to listen and respond to stakeholder concerns. Thus CSR is greatly related to stakeholder relationships and the reputational outcome hereof. Porter and Kramer further support the fact that CSR can be a significant strategic tool for strengthening a competitive context in which corporations operate. They define CSR by the following statements; “[…] CSR can be much more than a cost, a constraint, or a charitable deed - it can be a source of opportunity, innovation, and competitive advantage.” “When looked at it strategically, corporate social responsibility can become a source of tremendous social progress […].”20 However, one must keep in mind that perceiving CSR as an opportunity rather than as 15 Pedersen (2006) p. 138 16 Pedersen (2006) p. 139 17 Morsing & Beckmann (2006) p. 17 18 World Business Council for Sustainable Development (2000) p.10, cited in Sirsly & Lamertz (2007) p. 6 19 Sirsly & Lamertz (2007) p. 6 20 Porter & Kramer (2006) p. 1
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 6 of 61 damage control also requires for some corporations to change their mind-sets in order to achieve the competitive success. Both definitions above share the belief that corporations have responsibilities for the society’s good and puts focus on the engagement in the sense of how well corporations are able to engage with their stakeholders and define the central areas for CSR engagement, for it to be a source of competitive advantage. This paper will be based upon a mixture of them, defining CSR as the ability of corporations to examine and improve its impact on all those affected by its activities. The many different opportunities of viewing ones long-term reputation within the context of the social sustainability should encourage corporations to incorporate CSR in their strategies around the perspectives of their own stakeholders, for it to match their specific market situation. 2.3 Key Drivers of CSR Different definitions also affect different incentives for CSR engagement. In the following this paper’s view on the most predominant aims and benefits of engaging in CSR activities will be highlighted.  To achieve sustainable economical benefits Apart from the strong moral obligation, saying that corporations have a duty to do the right thing21 , there are those who define corporate responsibility in terms of the more profitable benefits. For many corporations engaging in CSR is based on a self-interest strategy. For instance an environmental project reducing energy usage, do not only reduce the environmental footprint of the corporation, it also tend to reduce the cost for the corporation itself, and thus creates shared value. Some corporations also recognize the advantage of CSR on long-term sustainability, as Porter and van der Linde argue “environmental standards that are well designed can be essentially self- financing by prompting cost-saving innovative approaches”22 . Thus one reason for engaging in CSR is the impact in can have on the corporation’s bottom line, which is also a reason why CSR should be integrated with corporate strategy and mission. However, it is contrary argued that sustainable business is no guarantee for profit alone. 21 Porter & Kramer (2006) p.2-3 22 Sirsly & Lamertz (2007) p. 7
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 7 of 61  To strengthening corporate image and reputation Aside from economical benefits, CSR initiatives also lead to more social benefits. Stakeholders have increasingly higher expectations of how Corporations should be managed, thus meeting these expectations through commitment to social responsibility, and achieving the positive publicity hereof, will boost reputation and corporate image, if communicated well23 . As presented in PwC’s 2002 Sustainability Survey Report, enhanced reputation is one of the main reasons for corporations to be socially responsibly24 . The benefits from reputation, are achieved “when stakeholders favorably perceive a firm’s actions as predictable and worthy of esteem in comparison to other firms”25 . Hence engaging in CSR comes with the opportunity and strategic option of differentiation26 . As argued by Cornelissen “[t]he point, then, is to align external commitments with the internal values and responsibilities […]”27 . CSR issues have thus become a worthy part of corporations’ value chain as the CSR image has a role in differentiation-based corporate strategy28 . In that sense one could argue for a circular effect, as reputational returns will create higher sales and often allow for premium pricing, thus in the long-run also create an overall increase in financial performance as well. Strong corporate reputation and image further affects internal stakeholders, making it easier to recruit employees. The other way around, presenting a satisfied workforce to the public would also have image related benefits. Moreover there are benefits in regards to investors, as socially responsible investment is an increasing tendency29 , viewing CSR as a sustainable ground for growth and profitability within corporations, and as a means of justifying a corporation’s reputational and regulation risk30 . However, this angle will not be in focus within this paper. All in all companies face many opportunities when engaging in CSR, and additionally corporations might be exposed to a variety of legal and reputational risks if they do not have adequate CSR programs. This supports the notion and argument of CSR being an important factor which corporations must look into and include in their strategies. 23 Gray & Balmer (1998) p. 697 24 Visser et. al. (2007) p. 128 25 Sirsly & Lamertz (2007) p. 7 26 Sirsly & Lamertz (2007) p. 7 27 Cornelissen (2011) p. 245 28 Porter & Kramer (2006) p. 5 29 Hancock (2005) p. 7 30 Risk & Compliance (2008)
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 8 of 61 2.4 The CSR Critics It is however also important to keep in mind the critics. Corporate Watch argue that “[CSR often is] an active attempt to increase corporate domination rather than simply a defensive 'image management' operation”31 . Herein lays the much discussed criticism that CSR is nothing more than a PR exercise, where many critics question the benefits, doubting “its effectiveness in actually tackling social and environmental problems”32 . Some believe that the CSR trend damage the free society as corporations use it only to make money33 . Nevertheless, this paper will look upon CSR as creating shared value for both corporations and society, when being properly integrated within the corporate strategy. 31 Corporate Watch 32 Hancock (2005) p. 7 33 Hancock (2005) p. 8
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 9 of 61 3. Theoretical Background In the following part Sirsly and Lamertz’ first-mover advantage in CSR initiatives and Morsing and Beckmann’s three CSR communication strategies will be used in the clarification of CSR and the discussion of how corporations are able to generate favorable stakeholder attitudes and differentiate themselves by communicating CSR initiatives as a part of their core corporate values and communication. This is relevant for the paper in order to conduct the analysis and hence evaluate how Starbucks have integrated and communicated CSR initiatives to gain competitive advantage. 3.1 First-mover Advantage in CSR Initiatives The need for sustainability and responsibility and the advantages hereof have long been seen as implicit, however, today’s business reality means that corporations must act strategically, also within their nonmarket environments, wherein the term CSR is a critical aspect of organizational performance34 . Sirsly and Lamertz propose a framework indentifying essential elements of strategic CSR initiatives to generate a competitive first-mover advantage, which is all about gathering market share and attaining competitive advantages and superior performances35 . However for a CSR engagement to lead to sustainable advantages it must be characterized by three attributes of; “(a) the centrality of the CSR initiative to the firm’s mission, (b) the specificity of the benefits of the CSR initiative to the firm, and (c) the visibility of the CSR initiative to the firm’s stakeholders”36 . The attributes are visualized below in figure 1 and are further explained in appendix 1. Thus corporations must exploit a resourced-based view on strategic management, and have these strategic elements help generate internal sustainability and thus ensure external defensibility. By this, strategic management is not limited to the market alone, it also embraces the ability to respond to stakeholder concerns as well as social issues, hence making CSR a key area of strategic concern and corporate activities in general37 . Figure 1: CSR attributes central for first-mover advantage (own adaption) 34 Sirsly &Lamertz (2007) p. 5 35 Sirsly & Lamertz (2007) p. 1 36 Sirsly & Lamertz (2007) p. 2 37 Sirsly & Lamertz (2007) p. 1-2
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 10 of 61 CSR initiatives characterized by these attributes above “should result in a behavioral commitment [...] that ensures ongoing resource contributions to maintain the advantageous CSR performance”38 . Thus they create the internal conditions essential for acquiring a sustainable strategic CSR positioning. The three attributes are fundamental to Sirsly and Lamertz’ model below and establish an important basis for the sustainability of any CSR engagement. Figure 2: Elements of Sustainable First-Mover Advantage in CSR Initiatives39 The first-mover advantage should furthermore arise on the basis of three types of asymmetries between a corporation and its competitors. The first asymmetry exist when a corporation already posses a key resource. The second asymmetry arises based on the effects of a learning-curve, meaning that first entry on a market create a lead-time advantage. This also includes stakeholder perceptions, as an early entrant can have great impact on how attributes are valued, as argued by the authors “When faced with commercial choices, the value that stakeholders attribute to a CSR 38 Sirsly & Lamertz (2007) p. 8 39 Sirsly & Lamertz (2007) p. 17
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 11 of 61 initiative is translated by the preference they actually accord the initiator.”40 Thirdly first-mover advantages can occur on the base of a corporation having a pioneering position on the market, enabling consumer loyalty and commitment, also when competitors enter the market, as the cost of switching might by high for customers41 . Within their model Sirsly and Lamertz also identify three central areas of CSR initiatives being; environment assessment, stakeholder management, and social issues management42 . They argue that performance within these areas is complementary to each other, and thus form an overall and integrated CSR profile of the corporation43 . Having strategic capabilities in these three areas is important for corporations to attain a CSR first-mover advantage44 . The asymmetries mentioned above need to be identified and linked to the CSR initiatives and the strategic capabilities hereof, in order to assure that competitors cannot easily reproduce the initiative to achieve the same benefits. See appendix 2 for a more detailed description hereof. The authors put forward the two below propositions in sustaining a first-mover advantage. Figure 3: Propositions in sustaining a first-mover advantage45 Through these propositions Sirsly and Lamertz hereby finalize the concept, stating that “[a] first- mover advantage is thus likely to accrue to a firm and generate sustainable competitive advantage when it capitalizes on asymmetries in environmental scanning, stakeholder management, and issues management to develop a strategic CSR initiative that is central to the firm mission, visible to 40 Sirsly & Lamertz (2007) p. 4 41 Sirsly & Lamertz (2007) p. 4 42 Sirsly & Lamertz (2007) p. 12 and Appendix 2 43 Sirsly & Lamertz (2007) p. 18 44 Sirsly & Lamertz (2007) p. 12 45 Sirsly & Lamertz (2007) p. 19-20
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 12 of 61 stakeholders and with firm-specific benefits beyond those of public good.”46 They further recognize that the visibility of the CSR initiative can be a result of the utilization of CSR asymmetries, meaning that it the first-mover advantage may still be obtainable without the presence of visibility at first hand. However as mentioned in the appendix 1 the control of positive visibility is important, and might depend on the communication being tailored to the salient stakeholders47 . Through the first-mover advantage framework strategic opportunities are recognized. Sirsly and Lamertz thus support the motivation behind CSR engagement as these strategic CSR initiatives are argued to “provide both tangible economic gains in market share and cost savings as well as intangible, but nonetheless valuable, enhancements to reputation and social legitimacy”48 . 3.2 Three CSR Communication Strategies After having discussed and established how the CSR initiative should be structured and what it should incorporate in order for it to generate a competitive advantage, this section will now go one step further and determine how the CSR initiative should be communicated best possible to stakeholders. As argued in Sirsly and Lamertz’ above theory, visibility is a central attribute to any CSR initiative, and despite visibility being most credible coming from an reputable and independent source49 , the corporation itself have to initiate the communication. Thus Morsing and Schultz’ three CSR communication strategies will here be presented. Based on Grunig and Hunt’s characterization of public relations models (1984) being; press agentry, public information, two way asymmetric, and two way symmetric50 , Morsing and Schultz have developed three types of stakeholder relations for the communication used by corporations when engaging in CSR. Namely the stakeholder information strategy, the stakeholder response strategy, and the stakeholder involvement strategy as visualized in figure 4 below51 . The full table developed by Morsing and Schultz is to be found in appendix 3, including a more thorough explanation. 46 Sirsly & Lamertz (2007) p. 18 47 Sirsly & Lamertz (2007) p. 22 48 Sirsly & Lamertz (2007) p. 22 49 Sirsly & Lamertz (2007) p. 11 and Appendix 1 50 Grunig & Hunt (1984) p. 21-25 51 Morsing and Schultz (2006) p. 325
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 13 of 61 Figure 4: Three CSR communication strategies (own adaption) The stakeholder information strategy is a one-way flow of information from corporation to stakeholders, and is similar to Grunig and Hunt’s public information model. This strategy has the purpose of distributing information, in order to inform the general public about the corporation’s favorable CSR initiatives as objectively as possible. Focus is here on the design of the concept message, in the attempt to ensure positive stakeholder support.52 However such an approach might run the risk of the ‘self-promoter’s paradox’ as credibility of the communication originates from the corporation itself53 . The stakeholder response strategy is based on Grunig and Hunt’s two-way asymmetric communication, where communication flows to and from the external stakeholders. Being asymmetric the corporation however still attempts to modify public attitude and behavior, and does not change as a result of public relations54 . This strategy takes an evaluative mode, where the focus of CSR initiatives is decided upon feedback from the public. This model is frequently used by corporations, however in is important to note that Morsing and Schultz question and elaborate on the model arguing that “what aspires to be a two-way communication mechanism is really [sender oriented and] a one-way method for supporting and reinforcing corporate actions and identity”55 . Thus using this strategy, corporations need to carefully choose their communication to engage stakeholders, as they need their endorsement. The stakeholder involvement strategy does in contrast engage in real mutual dialogue, as persuasion comes from both the corporation itself and its external stakeholders. This implies that corporations might also be influenced by stakeholders and thus must change when necessary. By engaging in these dialogues corporations explore mutually beneficial actions, and are able to keep up with the 52 Morsing & Schultz (2006) p. 327 53 Morsing & Schultz (2006) p. 332 54 Morsing & Schultz (2006) p. 327 55 Morsing & Schultz (2006) p. 328
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 14 of 61 development of stakeholder expectations and further the corporation’s own ability to meet these56 . The CSR initiative hereby depends on its ability to integrate both internal and external CSR concerns in a continuous dialogue. The stakeholder involvement strategy is further interlinked with the two above strategies, however it argues that informing and evaluating is not sufficient alone. Hence, the corporations must ensure a concurrent interaction with stakeholders in order to bring about mutual understanding and rational agreement57 . On the basis of CSR being a continuously developing concept demanding continuously adaption, Morsing and Schultz highlight that “stakeholder involvement becomes increasingly more important for ensuring that a company stays in tune with concurrently changing stakeholder expectations”58 . Thus the three strategies cover the development of stakeholder relationships. While one-way communication of CSR initiatives is necessary in giving sense to stakeholders, it can no longer stand alone. In order to survive, stakeholders, whom corporations are depending on, need to be engaged in long-term value creation. This interaction will generate long-term mutual relationships, being another source of competitive advantage59 . Having a positive recognition from stakeholders and being perceived as a legitimate corporation further cause a smaller need for loud CSR communication60 . Reputation surveys indicate that subtle CSR communication such as “annual reports and websites are the preferred means of CSR communication by stakeholders”61 . Such a communication strategy might have little public display, yet it allows for a stronger focus on content. Morsing and Schultz, however, also suggest that such minimal releases would very much benefit from adding stakeholder involvement, as allowing for stakeholder expression of support and/or thoughts about the CSR initiative, will then generate the needed visibility62 . 56 Morsing & Schultz (2006) p. 328 57 Morsing & Schultz (2006) p. 328 58 Morsing & Schultz (2006) p. 336 59 Morsing & Schultz in Morsing & Beckmann (2006) p. 139 60 Morsing & Schultz in Morsing & Beckmann (2006) p. 147 61 Morsing & Schultz (2006) p. 336 62 Morsing & Schultz in Morsing & Beckmann (2006) p. 155 Comment: In practice communication with stakeholders is costly and time-consuming, thus the stakeholder dialogue is likely to be located somewhere between the extremes of the above strategies, making the complexity of the environment manageable, by focusing maybe on a limited number of stakeholders and issues (Pedersen (2006) p. 142-143).
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 15 of 61 Combining the above two theories from Sirsly and Lamertz and Morsing and Schultz one will have an overall perspective of how corporations best possible structure their CSR initiatives in terms of form and content, and further communicate these to stakeholders to achieve not alone competitive advantage but also improved stakeholder relationship. Thus the above section set a valuable basis for the forthcoming case study and empirical analysis of Starbucks. The first-mover advantage theory will be used in the case study accounting for asymmetries within section 4.3 on competitive situation, and in the empirical analysis evaluating Starbuck’s use of the attributes. The three CSR communication strategies will be applied as a part of the visibility attribute and further as assessment of Starbucks’ CSR communication.
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 16 of 61 4. Case Study This following section is set to paint the picture of the Starbucks Corporation, involving the history of the corporation, stakeholders and competitive positioning, including asymmetries setting the basis for a first-mover advantage. 4.1 Starbucks’ Corporate Profile Starbucks is an international chain of coffeehouses, and is known for being a premier roaster and retailer of specialty coffee. The first Starbucks opened in Seattle in 1971, and 16 years later Howard Schultz, now CEO of Starbucks, bought the Starbucks Corporation. To begin with, Starbucks was a roaster and retailer of whole bean and ground coffee, tea and spices, however Schultz had a vision to create an Italian inspired coffeehouse “a third place between work and home” as he said63 . His first goal was to open 125 coffeehouses within five years, a goal that seemed too optimistic at the time, but would attract no skepticism today64 . Five years later the number of Starbucks coffeehouses had reached 165, and it has grown almost ever since, now celebrating the corporation’s 40th anniversary with more than 17,000 stores in 50 countries65 . The overall Starbucks mission is “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time”66 , however the mission statement implies much more than that. It takes in obligations towards the product and the people behind it, partners, customers, stores, neighborhood, and shareholders67 - principles that the corporation lives by every day. Thus the corporate mission embraces all Starbucks’ stakeholders and sets a good basis for the corporate image68 . See appendix 4 for the full elaborated mission statement. 4.2 Stakeholders of Starbucks The stakeholders of Starbucks are many and the most predominant ones are depicted in figure 5 below. These stakeholders are both internal and external, however, in this paper focus would be on the external, as they are the ones targeted in the CSR communication analyzed and discussed in the following part. Nevertheless the internal stakeholders must also be kept in mind as internal 63 Our Heritage 64 Clark (2007) p. 63-66 65 Company Profile 66 Company Profile 67 Mission Statement 68 Gray & Balmer (1998) p. 697
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 17 of 61 sustainability further creates prospect for sustainable CSR initiatives and the possibilities of the competitive advantage69 . Figure 5: Starbucks stakeholder map (own adaption) Some external stakeholders are more important than others, for instance customers are often said to be the main stakeholder group, however, in a more globalized and technological world, all stakeholders have some sort of influence on the corporation in each their different way, and thus need to be a part of Starbucks’ values and decision processes, which Starbucks also accomplishes in its mission statement. 4.3 Competitive Market Situation - The Basis for a First-mover Advantage As the empirical analysis will take point of departure within Sirsly and Lamertz’ first-mover advantage it is necessary to include and evaluate on the market situation of Starbucks, as one of the main factors in their theory is the ability to capitalize on asymmetries between the corporation and its competitors70 . Thus this section will shortly account for the competitive market surrounding Starbucks. 69 See section 3.1 page 70 See section 3.1
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 18 of 61 Starbucks’s primary competitors are other premium coffee houses, and chains such as Caribou Coffee and Tully’s Coffee are direct and main competitors to Starbucks71 . “Accounting for nearly three-quarters (73%) of the market value, Starbucks is the clear market leader”72 , and neither Caribou Coffee and Tully’s Coffee have the same experience within the field, first being established in 199073 and 199274 respectively. Thus with its leading experience and still expanding market share worldwide, Starbucks hereby meet the basic requirements for achieving a first-mover advantage, seeing that the corporation gain benefit of asymmetries in regards to both the effects of a pioneering positioning and a learning curve, as accounted for in section 3.175 . In a time where many consumers have a busy everyday life, Starbucks is also facing greater competition from quick service restaurants as for instance Mc Donald’s and Dunkin’ Donuts, despite their entire different approach to coffee76 . Secondary competitors would further comprise other coffee manufactures making specialty coffee for home use, such as Green Mountain Coffee. Hence, Starbucks is facing a threat of substitution from corporations producing the same products, and satisfying the same needs, a threat that further creates a greater demand for differentiation. Not being able to compete only on product, convenience and price, Starbucks have hereby done wise in taking in the CSR perspective on top of their already quality products. Caribou Coffee, Tully’s Coffee and most secondary competitors also engage in some CSR initiatives, however with the benefits of asymmetries Starbucks still have the desired lead, if it manage to live up to the principles of first-mover advantage, and further communicates its potential to stakeholders. 71 US Coffee Shops 72 Mintel 73 Our Story 74 About Tully’s 75 Section 3.1 p. XX of this paper 76 Starbucks Competition and Liu (2009)
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 19 of 61 5. Empirical Analysis This following part comprises the empirical analysis of Starbucks’ CSR engagement and communication. 5.1 Starbucks’ CSR Profile - Achievements and Activities For a global corporation like Starbucks it is a challenge to develop a strategy that both communicates consistency and demonstrates respect for and value of the individual communities in which the corporation operates. However, Starbucks has made a great obligation in applying sustainable, globally recognizable and locally relevant initiatives. The corporation first started engaging in CSR 10 years ago, making it a part of the corporate identity, and thus the uniqueness of the corporation77 . Back then, according to Ben Packard vice president of Global Responsibility, Starbucks was one of the few that reported such initiatives and objectives78 . A lot has changed since then, and Starbucks now also face competition in the field of CSR. Hence acquiring a first-mover advantage, which Starbucks does have the prerequisites to do79 , could be of great benefit for the corporation’s future competitive position, when communicated properly. Starbucks’ own perspective on CSR is that “[a] responsible company is one that listens to its stakeholders and responds with honesty to their concerns”80 . This definition puts focus on responsibility as measured by the ability to listen to stakeholders, thus it corresponds to the definitions and notions from Sirsly and Lamertz81 , and hereby also assist the reasoning behind analyzing Starbucks on the basis of their first-mover advantage theory. Based on Starbucks’ own and the overall definition of CSR, discussed in section 2.2, arguing that corporations should be able to examine and improve its impact on all those affected by its activities, and that CSR should be incorporated into the corporate strategy with a stakeholder perspective in mind, one could argue that Starbucks is indeed engaging in CSR. The corporation calls its commitment to doing business responsibly “Starbucks Shared Planet” and the main areas of CSR initiatives herein are listed below, see appendix 5 for a more detailed elaboration of each area. 77 Gray & Balmer (1998) p. 696 78 Dawson (2011) 79 See section 4.3 80 Starbucks, CSR Report, (2004), cited in Blowfield & Murray (2008) p. 13 81 See section 2.2
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 20 of 61 Giving back to community is all about “bringing people together, inspiring change and making a difference in people's lives”82 . It involves CSR initiatives as community services with employees engaging in innovative volunteering, neighborhood clean-ups, youth action grants, the Starbucks foundation supporting communities around the globe improving access to education, agricultural training and levels of health, the (STARBUCKS)RED project fighting ADIS in Africa, Ethos® Water Fund supporting water, sanitation and hygiene education programs, and the newest campaign; Create jobs for USA acting according to societal developments and supporting underserved communities and lending programs for small business83 . Environmental stewardship entails “the importance of caring for [the] planet working with and encouraging others to do the same”84 . A corporation as Starbucks has a great environmental imprint, take for instance their extensive water use or the great paper and plastic trail85 . Thus the corporation does wise in having focus on this. Starbucks for instance engage in CSR activities as recycling in stores, reusable cups, purchasing renewable energy, focus on water-saving solutions, reduced energy consumption and re-establishments of natural habitats to addressing the problem of climate changes. Starbucks acknowledge that part of its success depends on a healthy coffee harvest, now threatened by climate changes, which the corporation then must address. As stated by Ben Packard, Starbucks VO of Global Sustainability "The way we see it, addressing climate change will help companies like ours reduce operating costs and mitigate future economic instability due to extreme weather conditions, agricultural loss and the very real human costs they bring."86 82 Community 83 Nocera (2011) and Starbucks: Community 84 Environmental Stewardship 85 Bryant (2009) p. 180-181 86 Lubber(2008)
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 21 of 61 Ethnically sourced coffee implies the goal “for all of [Starbucks’] coffee to be grown under the highest standards of quality, using ethical trading and responsible growing practices”87 . To reach this goal Starbucks has with the help of Conservation International and Fairtrade developed guidelines to ensure a responsible supply of coffee, tea and cocoa. Furthermore Starbucks offer loan programs and is setting up farmer support centers working directly with the farmers to help reduce costs, improve quality etc. As Starbucks CEO, Howard Schultz states “We feel very strongly that the long-term success of our company is directly linked to the long-term success of […] all the coffee farmers around the world”88 . Wellness and Diversity are also areas of Starbucks’ CSR initiatives. Wellness involves improving health within communities, by offering nutritious food and beverage options, giving consumers the possibility to live healthy. Diversity is based on a commitment to celebrate cultures, and Starbucks thus extend to all customers and support all communities.89 Starbucks hereby engage in CSR initiatives that attend to the corporation’s impact on environment and the areas where the corporation operate. The activities do far from only benefit the corporation; they are all initiated with the stakeholders in mind. One could argue that all stakeholders, shown in the map in section 4.2, do in some way benefit from the various CSR initiatives. Thus Starbucks’ CSR engagement is in alignment with this paper’s definition of CSR and further Sirsly and Lamertz’ three central areas of CSR initiatives being; environment assessment, stakeholder management, and social issues management90 . 87 Ethnical Sourcing 88 The New York Times (2007) 89 Wellness and Diversity at Starbucks 90 See section 3.1 and Appendix 2
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 22 of 61 5.2 Starbucks’ CSR initiatives and First-mover Advantage To recap from section 3.1 achieving a first-mover advantage requires that the corporation’s CSR initiatives are characterized by the attributes of centrality, specificity and visibility. Looking into Starbucks’ overall mission statement that embraces the corporation’s different obligations to stakeholders91 , the CSR initiatives above are very much linked hereto, thus making the initiatives central to the corporation’s core mission and opening for the opportunity of achieving reputational and image related benefits. One could argue for Starbucks’ CSR initiatives being established on the basis of the mission statement principles. A couple of years ago Starbucks further initiated a transformation to get back to the core of the corporation and back to the importance of the mission statement, in the effort to move forward after the time of a financial crisis. An extra focus was put on sustainability and environmentalism and Starbucks’ approach to this, being a part of the corporations’ DNA from the very beginning92 . This further enhances the centrality of the corporation’s CSR initiatives. As Starbucks’ president of Global Development, Arthur Rubinfeld argues; “We cannot afford not to do this, in the transformation of the company going forward, sustainability has to be a part of the company’s forward motion”93 . Moreover, Starbucks also has a supporting environmental mission statement including a list of principles that further outline the corporation’s willingness to make sure that its affect on the environment is as positive as possible, which is beneficial to the corporation’s image as well94 . The statement and principles are visualized in figure 6 below. 91 See section 4.1 92 Rubinfeld (2011) 93 Rubinfeld, (2011) time [1:29]-[1:38] 94 Maignan & Ralston (2002) p. 497
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 23 of 61 Figure 6: Environmental Mission Statement95 This supporting mission statement further enhances the centrality of Starbucks’ CSR initiatives, and especially the CSR areas; Environment and Community embracing the values and commitments listed above96 . Some might argue that Starbucks have a too widespread CSR scope, however being a global corporation with coffee shops and suppliers all over the world, fulfilling the obligation of commitment and environmental leadership in all facets of their business further demands CSR engagements that likewise touch all parts of corporate involvement. Moreover despite the numerous of initiatives and ambitious targets, Starbucks manage to be well under its way in reaching their global responsibility goals for 2015. Out of 12 goals in the Starbucks Global Responsibility Report from 2010, only four goals are not on track and need improvement, and in fact two goals have already been achieved97 . The clarity of this presentation and the honesty of the update against targets are definitely positive, however it is important to note that the information communicated is seen from the corporation’s one-sided point of view. As mentioned Starbucks’ CSR initiatives do not only embrace benefits for stakeholders but also for the corporation itself, this for instance comes to show in the energy and water consumption reduction programmes, as Starbucks here will benefit from cost savings. Furthermore, combined with initiatives such as ethnical sourcing and farmer support, the CSR engagement will most likely 95 Business Ethics and Compliance 96 See section 5.1 and Appendix 5 97 Starbucks: Global Responsibility Report (2010)
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 24 of 61 attract a price premium due to the increased product quality, thus leading to specific benefits for the corporation itself. Hereby Starbucks’ CSR initiatives are further characterised by the attribute of specificity. As Rubinfel states himself; “environmentalism and attention to detail in sustainability does not need to cost more […] there are long term opportunities for the decisions that all of you, all of us make over time, that pay back in tremendous ROI’s that cannot be quantified and cannot be qualified.”98 Aside from the corporation-specific economic gains, one would also have to incorporate the timeframe for further benefits, as the value of many CSR initiatives requires a more long-term horizon to be fully understood99 . Meaning that some of Starbucks’ CSR initiatives most likely will generate unique reputational judgements in the long-run, which will further add to this attribute of specificity. Moreover the reputation and image in the eyes of stakeholders will be reinforced in comparison to the reputation of its competitors when for instance news agencies write positively about Starbucks’ program to help create American jobs100 , when (RED) announces their new partnership with Starbucks in a press release101 , when the grass root organization GBM announces that they wish to learn from Starbucks successful partnership with farmers102 , when Ethisphere features Starbucks in 2011 World’s Most Ethical Companies for several years in a row103 , when passionate consumers blog about Starbucks104 , or when green@work a corporate sustainability magazine praises the CSR strategy at Starbucks105 . The firm-specific strategic value of the CSR initiatives thus has a great impact on competitive positioning. Nevertheless it is important to note that such publicity can be negative as well, which will be discussed later in this section. When it comes to the last attribute; visibility, it is argued that Starbucks has done good in visualizing their good deeds to stakeholders. A part of this attribute has already been touched upon above when accounting for different examples of reputable and independent sources openly supporting Starbucks’ CSR initiatives, which is some of the most credible and invaluable visibility a corporation can get106 . Apart from second hand visibility Starbucks’ CSR initiatives are visible to stakeholders on the Responsibility section on the corporation’s website, in social media, in annual 98 Rubinfeld (2011) time [4:54] - [5:19] 99 Sirsly & Lamertz (2007) p. 22 100 WTVM (2011) and Reuters (2011) 101 (RED) Press Release (2008) 102 The Green Belt Movement (2006) 103 Ethisphere (2011) 104 Starbucks Passion 105 Timm (2005) 106 Sirsly & Lamertz (2007) p. 11 and Appendix 1
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 25 of 61 reports, in business conducts and in global responsibility - goal-process reports. Furthermore, the corporation’s engagement is also communicated to customers in stores and on most products which is illustrated in appendix 6, however Starbucks does not take part in any direct pull marketing107 outside their stores to make their CSR engagement visibly to stakeholders and the general public. This means that if stakeholders wish to know more about the corporation’s social responsibility they have to be somewhat active in finding the information themselves, thus within the attribute of visibility lies also the corporate need for attracting stakeholder attention and interest, and hereby being able to capture the benefits of positive impressions108 . That has however not been a big problem for Starbucks. The corporation has for example been able to attract much more hits on their website than compared to their biggest competitor Caribou Coffee. Where Starbucks attracts 671.3k US visitors each month to their website, Caribou only attracts 30.8k US visitors a month109 . This vast difference in popularity is most likely attributed to the success of Starbucks’ wide geographic reach, leaving the corporation with more branding and reputational power110 . The difference presents asymmetries between Starbucks and its competitors, which Starbucks is able to capitalize through its CSR engagement. 5.3 Starbucks’ CSR Communication Strategies Looking into the attribute of visibility the paper will here draw a line towards Morsing and Schultz’ three CSR communication strategies; the stakeholder information strategy, the stakeholder response strategy, and the stakeholder involvement strategy, accounted for in section 3.2. Going back to the visibility of Starbucks’ CSR initiatives above, it can be argued that the corporation engages in a mixture of the three strategies. The one-way information strategy Starbucks uses on its homepage and in the different public available reports where the corporation informs the general public about its favorable CSR initiatives. The response strategy is for instance used in the ability for stakeholders to comment on the different posts made concerning CSR by the corporation itself on the website111 . Also the corporation’s social media channels such as Twitter, Facebook and YouTube comprise this communication strategy, inviting stakeholders to have an opinion and comment on the different CSR engagements and other initiatives. This two-way asymmetric communication demonstrates to stakeholders that the corporation listens and values their concerns, 107 High spending on advertising and consumer promotion to build up consumer demand (tutor2u) 108 Appendix 1 109 Case Study: Caribou Coffee vs. Starbucks (2009) 110 Case Study: Caribou Coffee vs. Starbucks (2009) 111 Pablo 2011
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 26 of 61 and Starbucks can then use this as an evaluation of corporate actions, however not necessarily with the need to change as a result hereof112 . Additionally the “My Starbucks Idea” concept goes under this communication strategy, the concept suggest that stakeholders share their different ideas on the website, tell what they think of each other’s ideas and hereby join a discussion around the Starbucks brand113 . This is not purely CSR communication but the concept among others contains a section for involvement ideas, with main focus on social responsibility. Through this concept Starbucks can get feedback from stakeholders, and as everybody is able to rate and comment on each other’s ideas, Starbucks can use this as an assessment of which CSR initiatives and concerns that are most important for stakeholders. However, as Starbucks here in fact review and launce some of these ideas, this communication channel also becomes two-way symmetric, using the stakeholder involvement strategy, engaging in real mutual dialogues114 . For example in 2008 an idea was posted proposing that Starbucks should strengthen the encouragement of using reusable tumblers115 when purchasing freshly brewed drinks. This idea got numerous supporting ideas and comments, so Starbucks responded hereto and launched different size tumblers to match the paper cup sizes, larger discounts for bringing one’s own tumbler, and reinforcement of barista training regarding these procedures116 . A year after Starbucks further posted a video on their YouTube channel encouraging customers to bring a tumbler and then save 10₵ and a great amount of paper cups – a video that got 17.475 views117 . Also Starbucks asked back if anyone had ideas how to further encourage customers to bring their own tumbler to save paper waste, and additional 165 comments were made by stakeholders. This is just one example of Starbucks engaging in mutual dialogue with stakeholders and hereby being able to explore mutually beneficial actions, and thus keep up with the development of stakeholder expectations118 - more examples are presented in appendix 7. Thus Starbucks integrates external concerns with its internal strategies and hereby strengthens the sustainability of its CSR initiatives and the mutual understanding from stakeholders. As argued by Morsing and Schultz stakeholder involvement becomes increasingly more important in order for corporations to stay up-to-date with stakeholder expectations, and create the long-term 112 Section 3.2 and Morsing & Schultz (2006) p. 327-328 113 Starbucks: My Starbucks Idea and Groundswell (2008) 114 Section 3.2 and Morsing & Schultz (2006) p. 328 115 Reusable mugs perfect for on-the-go. Help keep coffee hot, or iced coffee cold – while saving a paper cups. 116 Starbucks: Reusable cups 117 Bring in a Tumbler (2009) 118 Section 3.2 and Morsing & Schultz (2006) p. 328
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 27 of 61 mutual relationships that are one source of competitive advantage119 . As Starbucks mainly has positive recognition from stakeholders the corporation also have a smaller need for loud CSR communication, however it is an advantage for the corporation that it adds to the more subtle CSR communication of its website and annual reports with actual stakeholder involvement. By allowing for stakeholder expressions will not only support the CSR initiatives but also strengthen Starbuck’s reputation and generate the visibility needed for a first-mover advantage. However as mentioned in section 3.1, having a strong CSR reputation and corporate image also makes the corporation more vulnerable to damage from the double edge of visibility. Achieving the majority of its CSR visibility through communication online, including social media, Starbucks is not able to fully control the value of visibility. This means that time and effort must be put into monitoring its CSR initiatives and the publicity hereof, in order to be aware of opportunities and risks. Having high focus on CSR as Starbucks, one is also target of a variety of advocacy groups who might accuse the corporation of failing to live up to its goals of social responsibility. One example of such case occurred this year when stakeholders questioned the purpose behind the recent campaign; Create jobs for USA, a case that is also mentioned in appendix 7. Hereto Starbucks responded with a clarification of the purpose of the campaign and a justification of their actions. Moreover back in 2008 Starbucks was put in the spotlight after an investigation done by the U.K. newspaper The Sun, revealing that the corporation wasted up to 6 million gallons of water every day120 . The investigation showed that each Starbucks had a cold tap running all day, called a dipper well - used to clean utensils, and due to the corporation’s health and safety rules at the time, staff were not allowed to turn it off as the constant flow would prevent germs breeding in the taps121 . However this regulation was much criticized by both activists and water companies, and disapproved in a time where water shortage was/is one of the world’s biggest problems122 .This raised questions about Starbucks’ much hyped environmental records, and further exposed misalignments in corporate mission and culture - a gap between the corporate objectives and values, and the actual behavior123 . Nonetheless, Starbucks did defend itself and now states on the website “[w]e are implementing new alternatives to the dipper well system used to clean utensils that we believe will significantly reduce our water usage across the globe” and that the corporation “will 119 Section 3.1 and 3.2 120 Victor (2008) 121 Balakrishnan (2008) 122 Victor (2008) and BBC News (2008) 123 Hatch & Schultz (2001) p. 130
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 28 of 61 continue to include water-saving technologies in [its] equipment specifications”124 . Thus Starbucks has made an attempt to re-align and create consistency between its mission, culture and image hereof. Starbucks’ response to this negative publicity is what William L. Beniot calls a ‘corrective action’ within his image restoration theories, as Starbucks attempts to play down the negative effects by emphasizing good behavior and promising to correct the problem125 , however this is another topic and discussion that will not be elaborated on in this paper. The direct effect of negative publicity will most likely be damaging to the corporate image, being the immediate mental picture that stakeholders have of the corporation126 . Nonetheless, through both these examples of negative CSR publicity above, Starbucks makes use of the Stakeholder involvement strategy meeting the stakeholders with openness towards both ideas and critique, which in the long-run will help generate some positive reputation despite being based on a negative claim. However, in the corporation’s global responsibility report from 2010, Starbucks fail to make a reference to the corporation’s own stakeholder engagement, which is also part of the GRI guidelines127 . This could be argued to be a missing point in the stakeholder information, as the corporation then will not be able to gain full benefits from its stakeholder engagement, not including it in the reporting. 5.4 Connecting and Reflecting upon the Findings Starbucks is able to capitalize on competitive asymmetries because of its pioneering positioning and market experience, and on this basis the corporation has developed capabilities for performing CSR initiatives that generate first-mover advantage. Behind this logic lies the notion that sustainable competitive advantage often is a result of asymmetries within the existing skills and processes of a corporation that when developed can produce a unique value creation128 . Based on the findings above Starbucks manage to engage in CSR initiatives that are central to the corporation’s mission, with corporation-specific benefits, and visible to stakeholders, and through stakeholder management and communication Starbucks prioritizes and meets stakeholder interests and is thus able to generate capabilities of reputational benefits and behavioral commitment that competitors cannot 124 Starbucks: Water Conservation 125 Benoit (1995) p. 79 126 Gray & Balmer (1998) p. 697 127 ”Global Reporting Initiative (GRI) guidelines serve as a framework for reporting on social, economic, and environmental performance.” Cited in Blowfield & Murray (2011) p. 217 128 Sirsly & Lamertz (2007) p. 8
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 29 of 61 replicate129 . Thus through the central areas of CSR initiatives and beneficial communication hereof presented by Sirsly and Lamertz and Morsing and Schultz in part 3, Starbucks generates asymmetries based on strategic capabilities within these areas, and hereby ensure ongoing resource contributions needed for acquiring a sustainable competitive advantage130 . Thus Starbucks’ CSR engagement provides the corporation a first-mover advantage, which is only confirmed by the corporation’s success and competitive position131 . As mentioned in the analysis, one will also have to consider the time frame. Through this first- mover advantage, having the CSR engagement as integrated into the competitive strategy, Starbucks is capable of gaining from short and long-term strategic opportunities, including both economical returns and reputational benefits. Furthermore, on the background of this first-mover advantage Starbucks can to some extend set itself as the standard against which competitors, now considered as followers, are evaluated. This will strengthen the corporation’s reputation and maybe also even influence the direction of more general environmental regulations132 . Being consistent with the theoretical arguments and meeting the criteria hereof, the observed results above suggest validity133 . This also means that the findings do not necessarily depend on this particular case but can to some extend be generalized. All together this analysis proves the importance of integrating CSR initiatives into the corporate strategy and aligning them with corporate mission, culture and image, which is applicable to all corporations and thus generalizable in the broad perspective. Engaging in CSR initiatives and having these as a central part of one’s corporate identity will be beneficial for most corporations, if of course they are communicated properly to stakeholders, involving mutual dialogue and shared values. This could among others be achieved through the use of social media developments, to ensure the transparency needed within today’s market. Thus, despite the fact that not all corporations are able to obtain a first-mover advantage it is still argued to be somewhat self-beneficial for corporations to utilize resources and capabilities to meet societal demands and engage in stakeholder relationships, it will just not generate the same competitive advantage as having competitive asymmetries present. 129 Sirsly & Lamertz (2007) p. 14-15 and Appendix 2 130 Sirsly & Lamertz (2007) p. 12 and Appendix 2 131 Starbucks (SBUX) 132 Sirsly & Lamertz (2007) p. 18 133 Weber (1985) p. 20 and section 1.2
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 30 of 61 6. Conclusion The paper has been built on an interest in the relationship between CSR, competitive advantage and stakeholder relationship. With the aim of verifying the underlying claim herein stating that; integrating and communicating CSR initiatives as a part of the corporate strategy corporations are able to generate prospects for a favourable competitive advantage, a case analysis of Starbucks has been carried out. Based on an understanding of the concept and its potentials, CSR is connected to competitive advantage and stakeholder relations through the clarification of the two theories of Sirsly and Lamertz and Morsing and Schultz, further used as a foundation for the analysis of Starbucks’ CSR engagement and communication. To conclude on the paper it is found important to review the market situation of CSR and thus also its importance for corporations. We live in an age of consumer culture where the market is influenced by consumption and consumer decision making. This consumption, conversely is also very much influenced by the increasing power of corporations. Consumers identify themselves with brand choices and one could argue for Maslow’s hierarchy of needs being turned upside down as the postmodern consumers of today have their lower needs satisfied and do now strive to satisfy higher needs, such as self-actualization through brand choices. Meaning that consumers do not buy a cup of coffee simply to quench ones thirst but rather to satisfy these higher needs – expressing an identity that matches the corporate values behind the brand. It has in this paper been argued that signals of social responsibility could represent a key component in consumers’ efforts to develop this desired identity as we live in a global society where an interest in and concern about social issues has increased. Through the first part of the paper it is clarified that CSR is all about the corporation and its environment. To some corporations CSR is used to minimize risks and is nothing more than activities that corporations undertake to ensure that it comply society’s demands and hereby earn its ‘licence to operate’. However other corporations go beyond this and use CSR to illustrate their corporate methodology as a whole, these corporations take an inclusive approach where corporate behaviour arises naturally from the corporation’s mission and values. Concluding from the analysis this is also what Starbucks have done and further benefitted from the success hereof. Engaging in CSR initiatives that are central to the corporation’s mission, with corporation-specific benefits and visible to stakeholders, based on competitive asymmetries, Starbucks meet the elements of Sirsly
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 31 of 61 and Lamertz’ sustainable first-mover advantage in CSR initiatives. Combined with stakeholder management, dialogue and mutual relationships Starbucks prioritizes and meets stakeholder interests and thus also follow the favorable stakeholder CSR communication combination put forth by Morsing and Schultz. Hereby Starbucks develops and presents one unified corporate brand, achieving a first-mover advantage, differentiating the corporation through its CSR initiatives and communication hereof, adding meaning to the corporation’s identity. This also means that Starbucks gains the reimbursements from customer collaboration and loyalty and thus price premium providing both social and economical benefits. Acting on corporate principles and values in all corporate areas, including CSR, will be what generate the desired long-term benefits and differentiation from competitors, as Starbucks is able to generate capabilities of reputational benefits and behavioral commitment that competitors cannot replicate. Starbucks is an example of how corporations influence changes to the better in today’s world and at the same time use this involvement to benefit the corporation itself. Hereby it is established that well managed and communicated CSR becomes a valuable and central element of corporations, influencing core success factors as corporate reputation, image and identity, and thus generating prospect for favorable competitive advantage. A final remark will be that CSR not is as 'black or white' as it may seem, using different parameters to uncover CSR engagement and the success hereof will provide different results.
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 32 of 61 7. Future Reflections During the last years CSR has changed from being a nice thing to do to being a core corporate value defining the best corporations134 . By doing what is right, corporations can often do quite well, however it does not come without challenges. CSR is, as any other corporate scheme, affected by the trends and developments within society and corporate life in general. Thus for instance the significant influence of the ‘new era’ of globalization bringing changes to corporations’ place in society, will also affect the integration of responsibility. Together with globalization comes global trade, stakeholder expansion, and greater visibility, uncovering new social issues and increasing pressure on corporate responsibility135 . In recognizing the future of CSR one should thus not only to consider the different methods and ways forward, but also the context in which the corporation operates and is observed. Hence an understanding of globalization and the societal developments herein, including cultural awareness and adaption, is important and necessary for corporations, as CSR will continue to grow within this context. Another perspective on this paper could have been to look deeper into such challenges that corporations are facing due to societal changes, and what Starbucks have done to overcome these. Despite the fact that Starbucks live up to the elements of the theories prescribed within the paper, and that its CSR achievements will have earned the corporation considerable recognition and strengthened its reputation, does not exclude the corporation from facing these future challenges as well. Along with an increasing focus on CSR and growing global demands come also stronger regulations on global CSR reporting, enhancing the importance of accuracy and transparency136 . If the scope of the paper allowed it, one could further have analyzed Starbucks’ CSR reporting in more detail. Despite Starbucks is doing well in reaching its ambitious global responsibility goals, the corporation’s reporting could be more forward looking, and more comprehensive in terms of transparency revealing detailed plans of how the these goals will be achieved, which would increase trustworthiness and hence stakeholder relationships. Blowfield and Murray argue that “[t]he future course of corporate responsibility will, to a large extend, be determined by how business’ obligations to involve itself in major societal issues […] 134 CSR Trends 2010 135 Blowfield & Murray (2008) p. 72-87 136 Blowfield & Murray (2008) p. 171
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 33 of 61 are defined and realized”137 . This paper agrees and further claims that the degree of passion within the individual corporation will also make a difference in corporate competitiveness. Being passionate about its clearly stated mission will help Starbucks to keep its position, further through an ongoing assessment of the external environment and dialogue with stakeholders Starbucks will be equipped to manage relevant issues and act upon possible challenges as well as opportunities. Hence the corporation has the essential tools for staying ahead of competitors138 . However, the good work needs to be maintained and improved alongside with societal developments. There will always be room for improvement and innovation within the always developing field of CSR, and the pressure will still be on Starbucks to do more and better. Thus the corporation will continuously need to be up-to-date with societal changes, evolving stakeholder expectations and global impacts, and to maintain its high level of CSR and its ‘license to operate’. One could argue that corporations do not really have the choice not to consider their footprint on society, given that they need to obey to both government and societal systems, locally and global. The question then is; how responsible is responsible enough? 137 Blowfield & Murray (2008) p. 387 138 Sirsly & Lamertz (2007) p. 13 and Appendix 2
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 34 of 61 8. List of References 8.1 Books  Benoit, William L. Accounts, Excuses, and Apologies: A Theory of Image Restoration Strategies. State University of New York Press, 1995.  Berger, Peter L., and Thomas Luckmann. The Social Construction of Reality. New York: Doubleday & Co, 1966.  Blowfield, Michael and Alan Murray. Corporate Responsibility: a critical introduction. New York: Oxford University Press, 2008.  Blowfield, Michael and Alan Murray. Corporate Responsibility. New York: Oxford University Press, 2011.  Bryant, Simon. Everything but the Coffee: Learning about America from Starbucks. University of California Press, 2009.  Clark, Taylor. Starbucked: A Double Tall Tale of Caffeine, Commerce, and Culture. New York: Back Bay Books, 2007.  Cornelissen, Joep. Corporate Communication: A Guide to Theory and Practice. London: Sage, 2011  Dobers, Peter. Corporate Social Responsibility: Challenges and Practices. Santérus Academic Press Sweden, 2010.  Crowther, David and Lez Rayman-Bacchus. Perspectives on Corporate Social Responsibility. Ashgate. 2005.  Grunig, James E., and Todd T. Hunt. Managing Public Relations. New York: CBS College Publishing, 1984.  Hancock, John. Investing in Corporate Social Responsibility: A Guide to Best Practices, Business Planning & UK’s Leading Companies. London: Kogan Page, 2005.  Hibberd, Fiona J. Unfolding Sosial constructionism. Springer, 2005.  Klein, Naomi. No Logo. London: Harper Perennial, 2005.  Morsing, Mette, and Suzanne C. Beckmann. Strategic CSR Communication. Copenhagen: DJØF Publishing, 2006.  Visser, Wayne et al.. The A toZ of Corporate Social Responsibility. John Wiley & Sons Ltd., 2007.
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 35 of 61  Weber, Robert Philip. Basic content analysis. Beverly Hills: Sage, 1985. 8.2 Articles in Journals  Carroll, Archie B. “Ethical Challenges for Business in the New Millennium: Corporate Social Responsibility and Models of Management Morality.” Business Ethics Quarterly. 10.1 (2000): 33- 42.  Dill W. R. "Environment as an Influence on Managerial Autonomy." Administrative Science Quarterly 2.4 (1958): 409-443.  Gray, Edmund R., and John M. T. Balmer. “Managing Corporate Image and Corporate Reputation.” Long Range Planning. 31.5 (1998): 695-702.  Hatch, Mary Jo and Majken Schultz. “Are the Strategic Stars Aligned for Your Corporate Brand?”. Harvard Business Review. 79.2 (2001): 128-134.  Hsieh, Hsiu-Fang, and Sarah E. Shannon. “Three Approaches to Qualitative Content Analysis.” Qualitative Health Research. 15.9 (2005): 1277-1288.  Morsing, Mette and Majken Schultz. “Corporate social responsibility communication: stakeholder information, response and involvement strategies.” Business Ethics: A European Review. 15.4 (2006): 323-338  Sawin, Enoch I. “The Scientific and Other Bases for Evaluation Procedures.” ETC: A Review of General Semantics. 62.4 (2005): 386-404.  Simpson, David. “Ethics and Corporate Social Responsibility.” Report on Business. Advertising Supplement to February (2002).  Sirsly, Carol-Ann Tetrault, and Kai Lamertz. “When Does a Corporate Social Responsibility Initiative Provide a First-Mover Advantage?” Business & Society. August (2007): 1-27.  Pedersen, Esben Rahbek. “Making Corporate Social Responsibility (CSR) Operable: How Companies Translate Stakeholder Dialogue into Practice.” Business and Society Review. 111.2 (2006): 137–163.  Porter, Michael E., and Mark R. Kramer (2006). “Strategy and Society.” Harvard Business Review, Spotlight. December (2006): 1-14.  “Risk & Compliance.” Bloomberg Law Reports. 1.8 (2008).  Maignan, Isabelle & David A. Ralston. “Corporate Social Responsibility in Europe and the U.S.: Insights from Business’ Self-presentations.” Journal of International Business Studies. 33.3 (2002): 497-514.
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 36 of 61 8.3 Online Articles  Balakrishnan, Angela. “Starbucks wastes millions of litres of water a day.” The Guardian 6 Oct. 2008. 7 Dec. 2011. <http://www.guardian.co.uk/uk/2008/oct/06/water.drought>  BBC News. “Starbucks denies it wastes water.” BBCNews 6 Oct. 2008. 7 Dec. 2011. <http://news.bbc.co.uk/2/hi/7654691.stm>  Dawson, Gloria. “Starbucks Exec Dishes on New Corporate Social Responsibility Plan.” Earth911.com. 18 Apr. 2011. 7 Dec. 2011. <http://earth911.com/news/2011/04/18/starbucks-corporate-social-responsibility-plan/>  Ethisphere. “2011 World’s Most Ethical Companies.” Ethisphere. 2011. 7 Dec. 2011. <http://ethisphere.com/2011-worlds-most-ethical-companies/>  Lubber, Mindy S.. “From Starbucks to Nike, Business Asks for Green Legislation.” Havard Business Review. 5 Dec. 2008. 7 Dec. 2011.  Lui, Leona. “McDonald's McCafé Takes Aim at Starbucks in Europe.” Bloomberg Business Week 24 Sep. 2009. 7 Dec. 2011. <http://www.businessweek.com/magazine/content/09_40/b4149070703260.htm>  Nocera, Joe. “We can all become Job Creators.” The New York Times. 17 Oct. 2011. 7 Dec. 2011.<http://www.nytimes.com/2011/10/18/opinion/nocera-we-can-all-become-job- creators.html?_r=2Z>  Mintel. “US Coffee shops still simply too hot to handle.” Market Research World. December 7, 2011. <http://www.marketresearchworld.net/index.php?option=com_content&task=view&id=566>  WTVM. “Starbucks debuts program to help create American jobs.” WTVM.com 8 Nov. 2011. 7 Dec. 2011. <http://www.wtvm.com/story/15926159/starbucks-debuts-program-to-help-create- american-jobs  (RED) Press Release. “Starbucks joins (RED) to help safe lives in Africa.” (RED). 29 Oct. 2008. 7 Dec. 2011. <http://www.joinred.com/press/article/starbucks_joins_red_to_help_save_lives_in_africa>  Reuters. “Starbucks kickstarts fund for American jobs.” TVNZ. 4 Oct. 2011. 7 Dec. 2011. <http://tvnz.co.nz/business-news/starbucks-kickstarts-fund-american-jobs-4436594>  The Green Belt Movement. “Wangari Maathai Visits Starbucks Coffee Company in Seattle.” 16 Mar. 2006. 7 Dec. 2011. <http://www.greenbeltmovement.org/a.php?id=142>
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 37 of 61  The New York Times. “Ending Dispute, Starbucks Is to Help Ethiopian Farmers”. The New York Times 29 Nov. 2009. 7 Dec. 2011. <http://www.nytimes.com/2007/11/29/business/29sbux.html?sq=starbucks%20%20responsibility&st =nyt&adxnnl=1&scp=10&adxnnlx=1323273955-fcrVyYU3NqRxt3SEh4GZxw>  Timm, Brenda. “Sustainability: A Success Strategy at Starbucks.”green@work Jul/Aug 2005. 7 Dec. 2011. <http://www.greenatworkmag.com/gwsubaccess/05julaug/starbucks.html>  Victor, Philip. “Starbucks Wasting More Than 6 Million Gallons of Water a Day.” ABCNews. 6 Oct. 2008. 7 Dec. 2011. <http://abcnews.go.com/International/SmartHome/story?id=5964908&page=1#.Tt-h8PLFKuJ> 8.4 Other Online sources:  About Tully’s. 2010. Tully’s Coffee. 7 Dec. 2011. <http://www.tullyscoffeeshops.com/company/>  Case Study: Caribou Coffee vs. Starbucks. 2011. Seoanalysisnow. 7 Dec. 2011. <http://sites.google.com/site/seoanalysisnow/case-study-caribou-coffee-vs-starbucks>  Corporate Watch. The arguments against CSR. 7 Dec. 2011. <http://www.corporatewatch.org/?lid=2688>  Fortune 500. Industry: Food Services. May 23, 2011. 7 Dec. 2011. <http://money.cnn.com/magazines/fortune/fortune500/2011/industries/147/index.html>  Groundswell – Mystarbucksidea.com. 2008. Forrester. 7 Dec. 2011 <http://www.forrester.com/Groundswell/embracing/mystarbucksidea.html>  Our Story. 2011. Caribou Coffee. 7 Dec. 2011. <http://www.cariboucoffee.com/page/1/company-info.jsp>  CSR Trends 2010. 2010. PriceWaterHouseCoopers. 7 Dec. 2011. <http://www.pwc.com/ca/en/sustainability/publications/csr-trends-2010-09.pdf>  Starbucks Competition. 20 Nov. 2009. Wikinvest. 7 Dec. 2011. <http://www.wikinvest.com/stock/Starbucks_%28SBUX%29/Competition>  Starbucks Passion. Tumblr.com. 7 Dec. 2011. <http://starbuckspassion.tumblr.com/>  Starbucks (SBUX). 2011. Investorguide.com. 8 Dec. 2011. <http://www.investorguide.com/stock- fundamentals.php?ticker=SBUX>  Tutor2u. “Promoting – push and pull strategies.” Tutor2u.net. 7 Dec. 2011. <http://tutor2u.net/business/marketing/promotion_pushpull.asp>
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 38 of 61  US Coffee Shops. FoodEditorials.com. 7 Dec. 2011. <http://www.streetdirectory.com/food_editorials/beverages/coffee/us_coffee_shops.html> 8.5 Starbucks.com Online Sources:  Bright idea. 2011. Starbucks. 7 Dec. 2011. <http://mystarbucksidea.force.com/ideaview?id=087500000004CnkAAE>  Business Ethics and Compliance. 1 Sep. 2011. Starbucks. 8 Dec. 2011. <http://www.starbucks.com/assets/sobc-english-2011-09-01.pdf>  Company Profile. July 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/about- us/company-information>  Community. 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/responsibility/community>  Corporate Governance. 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/about- us/company-information/corporate-governance>  Diversity at Starbucks. 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/responsibility/diversity>  Drink of the month and giving to charity. 2011. Starbucks. 7 Dec. 2011. <http://mystarbucksidea.force.com/ideaview?id=087500000004CjYAAU>  Energy Conservation. 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/responsibility/environment/energy>  Engaging Young People. 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/responsibility/community/youth-action>  Environmental Stewardship. 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/responsibility/environment>  Ethnical Sourcing. 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/responsibility/sourcing>  Ethos Water Fund. 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/responsibility/community/ethos-water-fund>  Idea Launched: Stop wasting so many pastries. 2011. Starbucks. 7 Dec. 2011. <http://blogs.starbucks.com/blogs/customer/archive/2010/03/15/idea-launched-stop-wasting-so- many-pastries.aspx>
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 39 of 61  Mission Statement. 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/about-us/company- information/mission-statement>  My Starbucks Idea. 2011. Starbucks. 7 Dec. 2011. <http://mystarbucksidea.force.com/>  Our Heritage. 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/about-us/our-heritage>  Pablo, R. “Cocoa Origin Trip Report – Ecuador.” 10 Jan 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/blog/cocoa-origin-trip-report-e28093-ecuador/648>  Press Release 1 Nov. 2011. “Create Jobs for USA Program Launches in U.S. Starbucks Stores and Online” Starbucks. 7 Dec. 2011. <http://news.starbucks.com/article_display.cfm?article_id=581>  Recycling & Reducing Waste. 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/responsibility/environment/recycling>  Reusable cups. 2011. Starbucks. 7 Dec. 2011. <http://mystarbucksidea.force.com/ideaview?id=087500000004D30AAE>  Starbucks Foundation. 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/responsibility/community/starbucks-foundation>  Starbucks Global Responsibility Report: Goals & Progress 2010. 7 Mar. 2010. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/assets/goals-progress-report-2010.pdf>  (Starbucks) RED. 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/responsibility/community/starbucks-red>  Start selling USA made products. 2011. Starbucks. 7 Dec. 2011. <http://mystarbucksidea.force.com/ideaview?id=08750000000Hkt6AAC#comments-top>  Stop wasting so many pastries. 2011. Starbucks. 7 Dec. 2011. <http://mystarbucksidea.force.com/ideaView?id=087500000004OmUAAU>  Supporting Farmers and Their Communities. 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/responsibility/sourcing/farmer-support>  Tackling Climate Change. 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/responsibility/environment/climate-change>  Water Conservation. 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/responsibility/environment/water>  Wellness. 2011. Starbucks. 7 Dec. 2011. <http://www.starbucks.com/responsibility/wellness>
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 40 of 61 8.6 Online Videos  Rubinfeld, Arthur. “"Glocalization": How Starbucks is Leveraging Local with Its Global Brand.” 2011. Sustainable Brands - Life Media. 7 Dec. 2011. <http://www.sustainablebrands.com/digital_learning/event-video/glocalization-how-starbucks- leveraging-local-its-global-brand>  “Bring in a Tumbler 365 days a year, save 10¢ a day and 365 paper cups.” 22 Apr. 2009. Starbucks Coffee on YouTube. 7 Dec. 2011. <http://www.youtube.com/starbucks#p/c/DE306ACB43F07627/8/gMqH_c1zY_8>
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 41 of 61 9. Appendixes 9.1 Appendix 1 – Attributes Fundamental for a First-mover Advantage Figure 1A: CSR attributes central for first-mover advantage (own adaption) Centrality implies that the CSR initiative must be congruent with the corporation’s core mission or strategic objective139 . It is here important to note “that any reputation benefits derive from a link between the CSR activity and the strategic mission of the organization, whereas outside of the core strategy only moral legitimacy may be gained.”140 . Thus in order to achieve the reputational benefits of a CSR initiative, and hereby also the competitive advantage, the initiative has to be linked to the strategic mission of the corporation. Specificity is described as “The firm’s ability to capture or internalize the benefits of a CSR program, rather than simply creating collective goods which can be shared by others in the industry, community or society at large”141 . Thus, as the first-mover advantage arise in a competitive context, the strategic value of a CSR initiative has the best impact on the competitive positioning when some of the benefits are exclusive to the corporation itself and not only the general population. Visibility entails that a strategic CSR initiative must be visible and recognized by internal and external stakeholders for it to have an impact on competitive and social outcomes and at the same time set a basis for the benefits of reinforced legitimacy and firm reputation142 . Within the attribute of visibility lies also the corporate need for attracting stakeholder attention and hereby being able to capture the benefits of positive impressions. The source of visibility must be credible in order to attract the right stakeholder attention, this is best achieved when reputable and independent sources 139 Sirsly & Lamertz (2007) p. 8 140 Sirsly & Lamertz (2007) p. 9 141 Sirsly & Lamertz (2007) p. 9 142 Sirsly & Lamertz (2007) p. 10
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 42 of 61 openly support the CSR initiative143 . It is important to note that the reputational benefits rest in the eye of the beholder, meaning that visibility may have to be altered according to the perceptions and expectations of different stakeholders. However having a strong CSR reputation also makes corporations more vulnerable to damage from the double edge of visibility – as corporations no longer are able to fully control the negative visibility, due to the revolution of global media reporting144 . Thus one must carefully monitor ones CSR initiatives and be prepared to handle any negative publicity. 143 Sirsly & Lamertz (2007) p. 11 144 Sirsly & Lamertz (2007) p. 10
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 43 of 61 9.2 Appendix 2 – Central CSR Areas and Asymmetries As mentioned in section 3.1, Sirsly and Lamertz do in their first-mover advantage theory identify three central areas of CSR initiatives being; environment assessment, stakeholder management, and social issues management. These areas are further elaborated on below. Assessing the external environment comprise initiatives considering social, legal, institutional, technological and other nonmarket factors. “Assessment of the nonmarket environment is a key area of activity in which organizations may develop unique capabilities to stay ahead of competitors”145 . Environmental scanning and interpretation of information are key organizational tasks that precede strategic action because of uncertainty in the external environment146 . Detecting a shift in stakeholder interest, new technology or changes in the environment may advise the corporation of opportunities in new CSR initiatives or improvement of existing CSR performance147 . “Thus, building an effective system for scanning the environment and gathering relevant information to assess market and nonmarket sectors equips the firm with the essential tools for staying ahead of others”148 . Assessing the external environment can also be used to decide on the right timing for new CSR communication. If there is high public attention to a certain social benefic, the corporation can take advantage of this and build reputation associating its own CSR initiatives with the given public attention149 . Stakeholder management refers to the activities wherein the corporation attempt to deal with and balance the interest of its different salient stakeholders150 . Stakeholder management is seen as a “strategic tool to improve financial performance and provide a sustainable competitive advantage over the long term”151 , and depends very much on a mutual relationship between the corporation and its stakeholders. A CSR initiative may be developed into a first-mover advantage if stakeholder interests are met and prioritized and the visibility hereof is controlled in order to gain reputational benefits due to the support from stakeholders. Being able to identify the importance of stakeholders and meeting their interest will hold strategic and reputational advantages that can then be used to 145 Sirsly & Lamertz (2007) p. 13 146 Dill (1958) 147 Sirsly & Lamertz (2007) p. 13 148 Sirsly & Lamertz (2007) p. 13 149 Sirsly & Lamertz (2007) p. 13 150 Sirsly & Lamertz (2007) p. 14 151 Sirsly & Lamertz (2007) p. 14
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 44 of 61 block similar initiatives by competitors, as they will then be judged as followers152 . Thus a corporation’s central position within its stakeholder network, compared to competitors, allows for a stronger influence and is an asymmetry providing the opportunity to develop key capabilities and build a sustainable competitive advantage. Engaging in mutual communication and relationship with stakeholders will be useful for the corporation in terms of obtaining valuable information relevant to the effectiveness of CSR initiatives, but also in terms of social capital153 . Issues management is the identification of issues of interest to stakeholders, and requires diagnosing and interpreting issues that can develop a response strategy to protect the corporation from potential treats154 . Capabilities within this area should be found in the corporation’s ability to interpret events and identify them as strategic relevant before competitors, will most likely also enable the corporation to employ relevant CSR initiative before competition and thus receive the reputational benefits155 . From this a corporation might benefit from the centrality of the particular issue to the corporation’s mission and image. “Altogether, learning effects in dealing with social issues that arise from unique experiences in a given CSR domain may produce sustainable advantages156 ” and provide the corporation with valuable skills and positive reputation. Having strategic capabilities within one or more of these areas is important for corporations to attain first-mover advantage157 . As Sirsly and Lamertz propose “first-mover advantages in CSR initiatives may arise when a given firm is able to assess its environment, deal with social issues, or manage stakeholders in such a way that an asymmetry exists between that firm’s capability and that of other firms, providing the focal firm with the ability to stay ahead of its competitors in gaining economic or social benefits or both158 ”. Thus the asymmetries mentioned in section 3.1 need to be identified and linked to the CSR initiatives and the strategic capabilities hereof, in order to assure that competitors cannot easily reproduce the initiative to achieve the same benefits. This is done in the table developed by Sirsly an Lamertz below. 152 Sirsly & Lamertz (2007) p. 14 153 Sirsly & Lamertz (2007) p. 15 154 Sirsly & Lamertz (2007) p. 15 155 Sirsly & Lamertz (2007) p. 15-16 156 Sirsly & Lamertz (2007) p. 16 157 Sirsly & Lamertz (2007) p. 12 158 Sirsly & Lamertz (2007) p. 12
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 45 of 61 Table 1: Asymmetries in CSR Capabilities159 The assumption of Sirsly and Lamertz is “that once asymmetries are identified and linked to a given CSR initiative, managers are able to make them a high priority, fund them, and turn them into valuable resources or capabilities”160 . 159 Sirsly & Lamertz (2007) p. 12 160 Sirsly & Lamertz (2007) p. 12
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 46 of 61 9.3 Appendix 3 – Three CSR Communication Strategies Morsing and Schultz’ three types of CSR communication strategies; the stakeholder information strategy, the stakeholder response strategy, and the stakeholder involvement strategy are elaborated on below. Figure 4A: Three CSR communication strategies (own adaption) The stakeholder information strategy is a one-way flow of information from corporation to stakeholders, and is similar to Grunig and Hunt’s public information model. This strategy has the purpose of distributing information, in order to inform the general public about the corporation’s favourable CSR initiatives as objectively as possible. Focus is here on the design of the concept message, in the attempt to ensure positive stakeholder support.161 However such an approach might run the risk of the ‘self-promoter’s paradox’ as credibility of the communication originates from the corporation itself162 . The stakeholder response strategy is based on Grunig and Hunt’s two-way asymmetric communication, where communication flows to and from the external stakeholders. Being asymmetric the corporation here attempts to modify public attitude and behaviour, and does not change as a result of public relations163 . This strategy takes an evaluative mode, where the focus of CSR initiatives is decided upon feedback from the public. This model is frequently used by corporations, however in is important to note that Morsing and Schultz question and elaborate on Grunig and Hunt’s model stating that “what aspires to be a two-way communication mechanism is really [sender oriented and] a one-way method for supporting and reinforcing corporate actions and 161 Morsing & Schultz (2006) p. 327 162 Morsing & Schultz (2006) p. 332 163 Morsing & Schultz (2006) p. 327
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 47 of 61 identity”164 . Thus using this strategy, corporations need to carefully choose their communication to engage stakeholders, as they need their endorsement. The stakeholder involvement strategy does in contrast engage in real mutual dialogue, as persuasion comes from both the corporation itself and its external stakeholders. This implies that corporations might also be influenced by stakeholders and thus must change when necessary. By engaging in these dialogues corporations explore mutually beneficial actions, and are able to keep up with the development of stakeholder expectations and further the corporation’s own ability to meet these165 . The CSR initiative hereby depends on its ability to integrate both internal and external CSR concerns in a continuous dialogue. The stakeholder involvement strategy is interlinked with the two above strategies, however it argues that informing and evaluating is not sufficient alone. Hence, the corporations must ensure a concurrent interaction with multiple stakeholders in order to bring about mutual understanding and rational agreement166 . As mentioned in section 3.2 the development of the three types of CSR communication strategies is based on Grunig and Hunt’s characterization of public relations models167 shortly presented below. Press Agentry: Public relations serve a propaganda function – one-way communication. Public Information: One way communication with the purpose distribution of information. Not a lot known about audience, but accuracy essential. Two Way Asymmetric: Scientific persuasion. Sender receives feedback but aims to change attitudes not organizational practices. Two Way Symmetric: mutual understanding. Sender receives feedback with view to changing practices- dialogue not monologue. Table 2: Public relation models168 164 Morsing & Schultz (2006) p. 328 165 Morsing & Schultz (2006) p. 328 166 Morsing & Schultz (2006) p. 328 167 Grunig & Hunt (1984) p. 21-25 168 Grunig & Hunt (1984) p. 21-25
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 48 of 61 These above characterisations of public relations models are used in Morsing and Schultz’ three CSR communication strategies as the communication ideals, each of the three communication strategies are furthermore put in relation to sensegiving and sensemaking. See full table developed by Morsing and Schultz below. Table 3: Three communication strategies169 169 Morsing & Schultz (2006) p. 326
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 49 of 61 9.4 Appendix 4 – Starbucks’ Mission Statement The overall mission statement of the Starbucks corporations is: “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” 170 Hereto a secondary statement is linked; “to establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow”171 , thus Starbuck’s mission further takes in the corporation’s different obligations and thus the principles that it lives by every day. See these principles/objectives in the below figure. Application of these principles are most likely used within the corporation as a guideline for all employees the corporation’s goals, while maintaining a certain type of standard. The mission statement along with the set of guidelines further support external stakeholders, noting that they should be satisfied by the Starbucks decisions and initiatives. Our Coffee It has always been, and will always be, about quality. We’re passionate about ethically sourcing the finest coffee beans, roasting them with great care, and improving the lives of people who grow them. We care deeply about all of this; our work is never done. Our Partners We’re called partners, because it’s not just a job, it’s our passion. Together, we embrace diversity to create a place where each of us can be ourselves. We always treat each other with respect and dignity. And we hold each other to that standard. Our Customers When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers – even if just for a few moments. Sure, it starts with the promise of a perfectly made beverage, but our work goes far beyond that. It’s really about human connection. Our Stores When our customers feel this sense of belonging, our stores become a haven, a break from the worries outside, a place where you can meet with friends. It’s about enjoyment at the speed of life – sometimes slow and savored, sometimes faster. Always full of humanity. 170 Mission statement 171 Corporate Governance
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 50 of 61 Our Neighborhood Every store is part of a community, and we take our responsibility to be good neighbors seriously. We want to be invited in wherever we do business. We can be a force for positive action – bringing together our partners, customers, and the community to contribute every day. Now we see that our responsibility – and our potential for good – is even larger. The world is looking to Starbucks to set the new standard, yet again. We will lead. Our Shareholders We know that as we deliver in each of these areas, we enjoy the kind of success that rewards our shareholders. We are fully accountable to get each of these elements right so that Starbucks – and everyone it touches – can endure and thrive. Table 4: Mission statement principles172 172 Mission Statement
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 51 of 61 9.5 Appendix 5 – Starbucks’ CSR Profile Below Starbucks’ main areas of CSR engagement will be exemplified, it is however important to note that these are only extracts of the numerous CSR initiatives that the corporation engage in. Community Let’s create job for USA is a campaign encouraging consumers to buy the “Indivisible” wristbands, available for a $5 donation, when they stop by Starbucks to get their daily coffee. Donations will benefit the "Create Jobs for USA" Fund, which pools donations from Starbucks customers, employees and concerned citizens into a nationwide fund to be used for community business loans in the U.S. Starbucks themselves seeded the fund with a $5 million contribution from their corporate foundation.173 In 2008 10,000 Starbucks partners attended the annual leadership conference to connect with one another, recommit to Starbucks’ mission and values, and focus on building the corporations for the future. This year the conference was held in New Orleans, and as a part of the experience, partners contributed approximately 50,000 volunteer hours, to help rebuild the communities of New Orleans.174 The Starbucks Foundation was created in 1997 to support commitment to community, and it consists of many sub foundations supporting communities around the globe. Among other improving access to education, agricultural training and levels of health in communities of that produce their coffee, tea and cocoa.175 Starbucks have partnered with Product (RED)™ to help fight AIDS in Africa, where Starbucks have deep relationships to coffee growing communities. When customers pay with their (STARBUCKS)RED Card, Starbucks make a contribution to the Global Fund to help people living with HIV/AIDS in Africa, already contributions equaling more than 18 million daily doses of medicine, have been generated.176 173 Press Release 1 Nov. 2011 174 Community 175 Starbucks Foundation 176 (Starbucks) RED Community Service Create jobs for USA (Starbucks) RED
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 52 of 61 Ethos® Water was created to help raise awareness about the fact that more than 1 billion people on our planet cannot get clean water to drink. Every time customers buy a bottle of Ethos® Water, they contribute 5 cents to the Ethos® Water Fund, which is a part of the Starbucks Foundation. “So far more than $6 million has been granted to help support water, sanitation and hygiene education programs -benefiting more than 420,000 people around the world.”177 With Starbucks™ Youth Action Grants, the corporation “hope[s] to nurture and inspire youth to engage, lead and create positive solutions for the challenges they see in their local communities”. The program give grants to organizations to support young people give them financial assistance and have them help identify and address needs in their neighborhoods.178 Environment Starbucks is committed to significantly reduce the waste that their stores generate especially when it comes to recycling, as it is important to both customers and our planet. This goal is being reached through greener and reusable cups, recycling in stores, offering used coffee grounds as composting to customers and working with local governments.179 The energy used in Starbucks stores makes up roughly 80% of the corporations entire carbon footprint, being their single biggest impact on the climate, thus also their biggest opportunity to make improvements. These improvements include reduction of energy consumption – investing in new systems, and purchasing renewable energy that represents 20% of the total electricity used.180 Water is a key ingredient in most Starbucks beverages, and is essential to the operation of stores. Thus Starbucks is working on understand how water can be used most responsible. This includes having water-saving technology equipment, alternatives to cleaning systems, and high-pressure water instead of an open tap.181 177 Ethos Water Fund 178 Engaging Young People 179 Recycling & Reducing Waste 180 Energy Conservation 181 Water Conservation Ethos Water Fund Starbucks recycling Energy conservation Water conservation Engaging youth
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 53 of 61 Climate change poses a serious threat to the world’s coffee-growing regions and Starbucks is aggressively pursuing strategies to address this problem. Starbuck have partnered with Conservation International to improve coffee production, conserve and restore natural habitat, and explore opportunities to facilitate farmer access to forest carbon markets.182 Ethnical Sourcing Starbucks has with the help of Conservation International and Fairtrade developed ethical sourcing guidelines that help them purchase coffee, tea and cocoa that is responsibly grown and ethically traded, in order to help create a better future for farmers.183 Starbucks is working directly with farmers to develop responsible growing methods and investing in their communities to ensure a sustainable supply of quality coffee, this includes loan programs and farmer support centers helping farmers to lower the cost, improve quality and increase production.184 Wellness Starbucks’ obligation to wellness means supporting policies and efforts to improve the health of communities in addition to offering nutritious and balanced food and beverage options to our customers. Part of this includes initiatives such as menu labeling, low fat options and reduction of sodium in food products.185 Diversity Starbucks welcome a diversity of people and ideas, meaning that they are committed to upholding a culture where diversity is valued and respected. The corporation encourages diversity in their suppliers by actively seeking out women and minority-owned businesses, engage partners/employees that are as diverse as the communities they serve, extend to all customers and support all communities.186 182 Tackling Climate Change 183 Ethical Sourcing 184 Supporting Farmers and Their Communities 185 Wellness 186 Diversity at Starbucks Climate change Coffee, Tea & Cocoa Farmer Support
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 54 of 61 9.6 Appendix 6 – Starbucks’ CSR Visibility Examples 9.6.1 CSR In-store Signage Source of images: Starbucks.com and Google images In the stores Starbucks is communicating their CSR engagement in different ways. Some examples include; displays of their fair trade products, written communication of responsibility, tumblers for sale accompanied with appropriate signage encouraging customers to help reduce paper waste, and recycle bins allowing for separate disposal of cups and sleeves and paper products. All these visual and more indirect communications will for customers symbolize a corporation committed to social responsibility that further encourage consumers to be the same. All the in-store signage reflecting the Starbucks’ CSR engagement is not pushed at consumers as a “see how good we are” promotion, but rather as an encouragement and dependency. The corporation let customers know that by choosing the Starbucks brand they can themselves take part in being social and environmental responsible. Through a Starbucks purchase customers will identify with the brand, and thus add responsibility to their own identity. Starbucks hereby shows its dependence on its most important stakeholders – the customers are a great part of the corporation’s responsibility.
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 55 of 61 9.6.2 CSR on Products Source of images: Starbucks.com and Google images Starbucks also communicate CSR through/on their products letting customers know that when buying Starbucks products they too are a part of the responsibility. Above is some examples are visualized. For instance on the reusable cups and sleeves customers are met with statements saying that they now help Starbucks help the planet. Starbucks CSR initiative; the Ethos Water Fund187 is clearly a part of product communication, as the Ethos water bottles are sold in their shops, and “every time customers buy a bottle of Ethos Water, they contribute 5 cents to the Ethos® Water Fund”188 . Furthermore, Starbucks’ partnership with (RED), helping fight AIDS in Africa189 is visualized for customers on the African coffee beans sold in the shops, and on the special sleeve customers get when paying with their (STARBUCKS)RED Card. Every time customers pay with this card Starbucks make a contribution to the Global Fund to help people living with HIV/AIDS in Africa. 187 See section 5.1 and appendix 5 188 Ethos Water Fund 189 See section 5.1 and appendix 5
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 56 of 61 9.7 Appendix 7 – Examples of Stakeholder Involvement Communication Strategy 9.7.1 Stop wasting pastries idea In 2008 an idea was put forward by one of Starbucks’ barista, thus an internal stakeholder, that “expired” pastries should be donated to the hungry instead of wasting them. Hereto the Starbucks team answered that this is a case that should be handled locally at store level, and suggested that she discussed it with her manager to find a local charity that would work with them.190 Two years later the Starbucks Retail Implementation team announced that they listened and has been working on a new donation program in collaboration with Food Donation Connection, making it easier for every store to donate unsold food to local organizations, helping to feed people in the communities191 . This new program thus embraces stakeholder opinion and dialogue, and simultaneously contributes to the local communities. 9.7.2 Drink of the month and give to charity idea In this situation a customer proposed that the Starbucks stores should include a drink of the month, and further having 5-10 percent of the sales of this drink go to support a specific charity or community cause, as this would bring attention to the community item. 190 Stop wasting so many pastries 191 Idea Launched: Stop wasting so many pastries
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 57 of 61 Starbucks responded saying that it was an interesting idea that certainly would be shared with the team. A while later Starbucks responded again to the idea and the many comment that were written hereto, stating that since the idea was posted Starbucks had had some different programs where a percentage were given back to charity with a purchase. Furthermore, currently (at the time of the response post) Starbucks have a Check-in App on Facebook, where Starbucks will donate $1 to Conservation International, when customers "check in" at a Starbucks Store. 192 9.7.3 Bright idea Here a partner in one of the Starbucks stores wrote “I'm a partner in Jacksonville FL. We recently changed all of the lights in the store to CF (compact florescence). We think all stores should do this to reduce our energy consumption.”193 To this idea and all the comments that where made hereto, the Starbucks team first answered that everyone that posted was absolutely right in their observations and that “CFLs definitely is a double-edged sword when looking to reduce the environmental footprint”194 . The response also include that Starbucks already have a good contract with their lightning supplier involving a recycling system. Further the team response that the corporation is also looking into LED technology, as “LEDs use even less energy than CFLs and last even longer”195 . However at the moment they are really expensive so the interested should stay tuned and to see the result of the number crunching, determining if the reduced amount of electricity is worth the big financial investment. Later Starbucks’ global responsibility department responded to this post, stating that the corporations is now retrofitting the stores with LED lights to significantly reduce the energy use.196 192 Drink of the month and giving to charity 193 Bright idea 194 Bright idea 195 Bright idea 196 Bright idea
    • Gaining Sustainable Competitive Advantages through CSR Engagement and Communication Corporate Communication 1st semester exam 2011/2012 Master of Arts in Corporate Communication Student: Tine Grarup - 286495 Page 58 of 61 9.7.4 Start selling USA made products Late October this year a stakeholder posted a comment concerning the new Create jobs for USA campaign. The idea involves a concern for the new CSR campaign saying that a “all you read in the headlines in the last five years is how big American corporations are posting record profits by selling out American jobs to foreign countries, by producing merchandise oversee and selling back to Americans”197 . Thus this stakeholder questions the intention of the new campaign, arguing that Starbucks itself produce most of their retail selection in China, not investing much time in investigating American opportunities, which would create many of the most needed jobs. The stakeholder hereby accuses Starbucks for false advertising, until proven otherwise. Starbucks responded to this concern with the following statements. “Though our roots are in the United States, we are a global company with stores in more than 55 countries. In countries where we do business, we are proud to be a part of the fabric of the local community” and “As a global company, we work with manufacturers and source merchandise in 11 countries around the world including: China, Germany, Japan, Mexico, Poland, Portugal, Spain, Taiwan, Thailand, the United Kingdom and the United States.”198 Furthermore the response makes it clear that when potential supplier are considered, which also involves local US suppliers, the main factor is that they have aligned commitments to ethical sourcing along side with great quality and service. Regarding this new campaign the response stated that the wristbands created for the campaign are actually made in the US and manufactured by US suppliers, and the corporation will of course continue to explore the opportunities of integrating additional US suppliers in the future.199 197 Start selling USA made products 198 Start selling USA made products 199 Start selling USA made products