1. Collaborating with Activists:
How Starbucks Works with NGOs
Rhea Culbertson, Stephen Gilliam,
Amanda Hartnett, and Amanda Winchip

2. CASE OVERVIEW: The Facts
 STARBUCKS:  GLOBAL EXCHANGE:
 Leading Global Coffee  Non-Governmental
Retailer Organization (NGO)
 Socially Responsible  Promoter of Fair Trade
Company Coffee
 Criticizes Starbucks for
 COFFEE INDUSTRY: Failure to Buy and Sell Fair
Trade Coffee
 In 2000, $80 billion
 Disrupts Starbucks
industry
Annual Shareholder
 Second most commonly
Conference
traded global commodity
 Threatens Public
(second only to oil)
Boycotts

3. CASE OVERVIEW: Starbucks
 Mission Statement:
Establish Starbucks as the premier purveyor of the finest
coffee in the world while maintaining our uncompromising
principles while we grow.
 Guiding Principles: (Emphasis Added)
 Provide a great work environment and treat each other respect and
dignity
 Embrace diversity as an essential component in the way we do business
 Apply the highest standards of excellence to the purchasing, roasting,
and fresh delivery of our coffee
 Develop enthusiastically satisfied customers all of the time
 Contribute positively to our communities and our environment
 Recognize that profitability is essential to our future success

4. CASE OVERVIEW: Starbucks
Social Responsibility
“Our Commitment to Ethical Coffee Sourcing”

5. CASE OVERVIEW: NGOs
 Representatives of independent citizen organizations, known
as non-governmental organizations or NGOs, are often the
most effective voices for the concerns of ordinary people.
NGOs include the most outspoken advocates of human
rights, the environment, social programs, and more.
- United Nations
 NGOs originally evolved to influence government
 Now, NGOs focus their efforts on corporations, investors,
and customers.
 Corporations and NGOs now control much of the agenda
formerly dictated by government

6. CASE OVERVIEW: NGOs
 Individuals tend to have a higher degree of trust in NGOs as
they perceive their objectives as altruistic rather than merely
profit driven
 Capitalize on high levels of distrust in corporations
 Why are NGOs so influential?
 Unique ability to focus on single, specific issues
 “Category Killers”
 Ability to act swiftly
 Capitalize on existing tools (Ex: Media and Internet) to
communicate their message
 The number of NGOs has increased drastically over the past
decade.

7. CASE OVERVIEW: NGOs
 NGO Approaches:
 Developing Campaigns Against Business – Focus on single
issues and well-known organizations or brands.
 Attempting to Build Market Intelligence - Influence how
organizations conduct business
 Engaging Businesses – Involve the targeted organization(s)
 Making Market Mechanisms More Intelligent -Attempt to
change an entire industry.
 Disrupting Markets
 The NGOs tactics determine its potential threat to business

8. CASE OVERVIEW: Global Exchange
 Our Vision
We envision a people centered globalization that values the rights of
workers and the health of the planet; that prioritizes international
collaboration as central to ensuring peace; and that aims to create a
local, green economy designed to embrace the diversity of our
communities. In a world where the economics of quantity
fuels corporate power and political greed, the elite are
reaping profits while working people and the planet are
left to pay the price. In response to the global degradation
caused by this system of elite globalization, Global Exchange
envisions an alternative economics of quality centered upon
protecting international human rights to ensure that the cost of
globalization does not come at the expense of us all.

9. CASE OVERVIEW: Global Exchange
 Mission Statement
As an education and action resource center, we advance our vision
by working to ensure our members and constituents are
empowered locally and connected globally to create a just and
sustainable world. Global Exchange takes a holistic approach to
creating change. With 20 years working for international human
rights, we realize that in order to advance social,
environmental and economic justice we must
transform the global economy from profit centered to
people centered, from currency to community.

10. CASE OVERVIEW:
Global Exchange and Fair Trade
 Global Exchange
implements the
principles of socially and
economically responsible
business by operating
according to Fair Trade
Criteria.

11. EVALUATE: WHAT IF ANALYSIS:
Starbucks does buy/sell Fair Trade Coffee.
 PROS:  CONS:
 Reduces threat of public  Potentially negative impact
boycotts. on coffee quality.
 Maintains image of social  Potentially negative impact
responsibility. on existing suppliers.
 No demand for Fair Trade
Coffee from existing
customers.
 May reduce profit.

12. EVALUATE: WHAT IF ANALYSIS:
Starbucks does not buy/sell Fair Trade Coffee
 PROS:  CONS:
 Maintain high standard of  Potentially tarnishes public
quality coffee perception on Starbucks
 Maintain existing dedication to social
suppliers responsibility
 Maintain steady profits  Increases likelihood of
 Maintain customer potential public boycotts
satisfaction

13. Problems in the Mission Statement
 Provide a great work environment and treat each other
with respect and dignity
 Starbucks took a narrow interpretation to the work
place: their stores
 Global Exchange took a broad interpretation to the
work place: the farmers and the fields where
Starbucks’ coffee is grown

14. Problems in the Mission Statement
 Contribute positively to our communities and our
environment
 Starbucks meant they would hold themselves to a
higher standard
 Global Exchange decided they would hold Starbucks
to a higher standard

15. DISCUSSION QUESTION
Who gets to set the standards of CSR (the company, the
NGOs, a third party)? Do consumers really have that
much control over these issues?

16. Problems in the Mission Statement
 Starbucks’ vulnerabilities:
 Size of the company
 Ubiquitous locations
 High Visibility
 High ideals in the mission statement
 Based in the United States
 Pure-play in the coffee industry
 Solution: better to act on high ideals than to state them

17. How much is enough?
 Starbucks dedicated  Worked with several
resources in commitment NGOs
to communities and  Numerous accolades
environment for social responsibility
 Hired Director of  Paid above-market
Environmental Affairs prices for coffee
(1994)
 Created Senior Vice
President for
Corporate Social
Responsibility (1999)

18. DISCUSSION QUESTION
Other corporations such as The Gap and Shell, have also
been subject to continuous criticism from NGOs despite
their attempts to position themselves as socially responsible
companies. Can a company ever be socially responsible
enough? When a company openly sets a mission to be
socially responsible, is it just setting itself up to be a NGO
target?
How much CSR is enough?
At what point do you say no?

19. How much is enough?
 Incorrectly perceived immunity from criticism and
interference over social responsibility from:
 Customers
 Media
 Other NGOs

20. Living Up to the Mission Statement
 Local & World-wide programs:
 Local: Latitude given to store managers for donations
to local charities and causes
 Corporate: Cumulative $1.8 million donated to
CARE by 2001 for use in coffee-growing countries
 Living up to high social responsibility ideals by
reasonable standards
 Everyone does not use reasonable standards

21. Threat Assessment
 Nike (HQ in Oregon)  Starbucks (Washington)
attacked by Global determined not to
Exchange in the 1990s become “Nike of the
for repeated failure to coffee industry” by
meet labor standards in adopting Fair Trade
developing countries. standards & practices.

22. DISCUSSION QUESTION
What impact do NGOs
have on your (a
consumer’s) buying
decision? Ex: Nike, Wal-
Mart, conflict diamonds,
etc…..- Have we
become desensitized?

23. NEXT STEPS: Starbucks
 Motivating Factors
 Buy the Farms
 Join NGO’s
 Streamline the Supply
Chain
 Collaborate
 Openness

24. NEXT STEPS: Starbucks
MOTIVATING FACTORS BUY THE FARMS
 Research how the profits  Allows Starbucks to
of fair trade coffee are control their supply and
broken down. quality of beans
 Does Global Exchange  Could decrease external
or TransFair have pressures from NGO’s
ulterior motives?
 If so, Starbucks could
refute NGO’s
credibility.

25. NEXT STEPS: Starbucks
JOIN THE NGOs STREAMLINE THE
SUPPLY CHAIN
 Provide suppliers the  Cut the number of
proper licensing to become middlemen
fair trade certified  Decrease in “coyotes”
 Allows Starbucks to means….
keep its suppliers  Increase profits for small
 Continue selling high farmers
quality coffee

26. NEXT STEPS: Starbucks
COLLABORATE OPENESS
 Communicate with  Keep an open ear and
NGO’s open mind
 Collaborate on efforts to  DON’T ignore criticism
better the coffee industry or accusations from
 Be proactive NGO’s

27. DISCUSSION QUESTION
“Many organizations have found that, through carefully
developed partnerships, each party can move beyond
their respective organizational restraints to achieve
results that exceed what each can accomplish
individually.”
Would Global Exchange have been more successful with
an initial collaborative approach?

28. Starbucks: The Star Candidate
 Starbucks boasted it’s socially responsible practices in
many ways and included a statement of this devotion in
their mission statement, which would pigeon-hole them
into cooperation.
 It was a large company with a strong brand image, which
could change the industry.
 It was based in the U.S. with free-standing stores, which
would make demonstrations easy.

29. Lessons from the case
1. Realize that socially responsible companies are likely targets but also attractive
candidates for collaboration.
2. Don’t wait for a crisis to collaborate.
3. Think strategically about relationships with NGOs.
4. Recognize that collaboration involves some compromise.
5. Appreciate the value of NGOs independence.
6. Understand that building relationships with NGOs takes time and effort.
7. Think more like an NGO by using communication strategically.

30. LESSONS LEARNED
• Objectively assess the landscape.
• You will be judged according to your stated
goals.
• Risk associated with Pure Play.
• Collaborate with detractors.

31. DISCUSSION QUESTION
Compare the ethical implications of Starbucks decisions
to that of Pfizer?

32. DISSCUSSION QUESTION
 What is the tobacco industry’s obligation to
society?
Do different industries have differing levels of social
responsibility?

33. QUESTIONS OR COMMENTS
Thank you.