The premise behind business ethics is surrounded around the idea of social responsibility among the business world and business leaders, and how it can be applied to maximize the social interest of the stakeholder.

According to Freeman and his “Stakeholder Theory,” businesses must create value for their customers, suppliers, employees, and communities in a collective manner, not individualistically[1]. In doing so, business leaders are able to unleash the maximum utility of their stakeholders by making decisions that are in the social interest.

Similarly, according to Milton Friedman, business executives are also responsible for the desires of their stakeholders when conducting business[2]. However, Friedman elaborates on this point by making the distinction that business executives’ primary responsibility is to increase profits while demonstrating some level of social responsibility and ethical business behavior.[3]

In late March, 2016, Howard Schultz, CEO and chairman of Starbucks, addressed a large crowd at the company’s Annual Meeting of Shareholders conference, posing the question: “What is the role and responsibility of all of us, as citizens?” Indeed, Starbucks, one of the world’s largest coffee chains, is ranked among one of the World’s Most Ethical Companies according to the Ethisphere Institute.[4]

One example of how Starbucks exhibits social responsibility is through its new FoodShare program, which aims to collect food donations from its customers in order to feed American citizens who face poverty[5]. According to a 2014 report by Feeding America, 46.7 million Americans (14.8%) were in poverty[6]. By implementing this program, Starbucks is showing Americans how it cares about the less fortunate through its charitableness. This program also comes at little to no cost to consumers, since all proceeds are on a donation-basis. This allows Starbucks to show value to its stakeholders through its charitable program, while also increasing its profits; this is the very essence of Friedman’s argument regarding social responsibility, as mentioned above.

Fine Print NYC [7]

In addition to its FoodShare program, Starbucks also has a variety of other initiatives which display the company’s level of social responsibility. For example, the company strives to increase sustainability through its One Tree for Every Bag campaign, and encourages citizen engagement in politics through its TurboVote project[8]. These are some examples of how Starbucks builds trust with its stakeholders, as to portray itself as a leader in ethical business in the corporate world.

Altogether, Starbucks has proven itself to be a world leader when it comes to ethics in business. By tackling such issues such as poverty, sustainability, and political engagement, Starbucks simultaneously shows value to all of its stakeholders. This is the very framework behind Freeman’s “Stakeholder Theory,” and is one more reason why Starbucks leads the pack in business ethics.

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