Case Study: Corporate Social Responsibility of Starbucks

Starbucks is the world’s largest and most popular coffee company. Since the beginning, this premier café aimed to deliver the world’s finest fresh-roasted coffee. Today the company dominates the industry and has created a brand that is tantamount with loyalty, integrity and proven longevity. Starbucks is not just a name, but a culture.

It is obvious that Starbucks and their CEO Howard Shultz are aware of the importance of corporate social responsibility. Every company has problems they can work on and improve in and so does Starbucks. As of recent, Starbucks has done a great job showing their employees how important they are to the company. Along with committing to every employee, they have gone to great lengths to improve the environment for everyone. Ethical and unethical behavior is always a hot topic for the media, and Starbucks has to be careful with the decisions they make and how they affect their public persona.

The corporate social responsibility of the Starbucks Corporation address the following issues: Starbucks commitment to the environment, Starbucks commitment to the employees, Starbucks commitment to consumers, discussions of ethical and unethical business behavior, and Starbucks commitment and response to shareholders.

Commitment to the Environment

The first way Starbucks has shown corporate social responsibility is through their commitment to the environment. In order to improve the environment, with a little push from the NGO, Starbucks first main goal was to provide more Fair Trade Coffee. What this means is that Starbucks will aim to only buy 100 percent responsibly grown and traded coffee.… Read the rest

Case Study: The Collapse of Lehman Brothers

Lehman Brothers Inc operated at a wholesale level, dealing with governments, companies and other financial institutions. Its core business included buying and selling shares and fixed income assets, trading and research, investment banking, investment management and private equity.

In September 2008, Lehman Brothers filed for chapter 11 bankruptcy protection. The company became insolvent with finances totalling $639 billion in assets and debt worth $619 billion; it became the largest bankruptcy in history. The company employed 25,000 employees worldwide including 5,000 and was the fourth largest US financial bank at the time of the bankruptcy. It also became the biggest victim of the subprime mortgage disaster that had put the global financial sector into meltdown.

History

In 1844 23 year old Henry Lehman the son of a cattle merchant immigrated to the United States from Rimpar, Bavaria. He set up home in Montgomery, Alabama where he opened a dry-goods shop. In 1847, following the arrival of his brother Emanuel Lehman, the firm became “H. Lehman and Bro.” With the arrival of their youngest brother, Mayer Lehman, in 1850, the firm changed its name again and “Lehman Brothers” was founded.

The brothers expanded their dry goods store into a cotton business after noticing the potential the highly valued cotton had, even accepting cotton as a payment for products within their shop. Cotton trading became a key part of their business and they eventually relocated to New York, there Lehman became a member of the Coffee Exchange and then on to the New York Stock Exchange in 1887.… Read the rest

Case Study on Business Ethics: Al Dunlap at Sunbeam

Early Days of Sunbeam

Sunbeam was formed in 1897 as the Chicago Flexible Shaft Company. The company originally manufactured and sold agricultural tools. By 1910 the company introduced the iron as its first electrical home appliance. Later other appliances such as mixers, toasters and coffeemakers were introduced. Sunbeam came to be known as a recognized designer, manufacturer and marketer of innovative consumer products aimed at improving lifestyle. In 1946, the company changed its name to Sunbeam Corporation. In 1960, Sunbeam acquired Oster which allowed Sunbeam to expand into other home products such as hair dryers and health and beauty appliances. The company later added electric blankets, mattresses, humidifiers, vaporizers and thermostats, among other innovations. Sunbeam soon became the leading manufacturer of electric appliances. The company survived the 1980’s as the US economy suffered, and many companies underwent acquisitions, restructuring, and closings. In 1981, Allegheny International acquired Sunbeam, and the company retained its name. In this acquisition, John Zink, manufacturer of air pollution-control devices and Hanson scale, manufacturer of bathroom scales, were added to the business. Unfortunately the undertow of the economy consumed the company as well, and Allegheny was forced into bankruptcy in 1988.

In 1990, Michael Price, manager of Mutual Shares, corporate turnaround executive Paul Kazarian, and hedge fund manager Michael Steinhardt purchased the bankrupt Sunbeam. Under their leadership, Sunbeam went public as Sunbeam-Oster in 1992. Despite these obstacles, the board at Sunbeam felt that a profitable future was ahead, and they just had to search for someone to lead them in the right direction.… Read the rest

Case Study: Corporate Social Responsibility at The Body Shop

The Body Shop (TBS) has developed 2500 stores in 60 countries with a range of over 1,200 products in approximately 30 years, and is the second largest cosmetic franchise in the world. After the first TBS’s outlet founded in 1976, the company has experienced rapid growth and with expanding rate of 50% annually. When its stock first obtained a full listing on the London Stock Exchange, its price increased by more than 500%. In 1999, TBS was even voted as the second most trusted brand in UK by the Consumers Association. The founder, Anita Roddick had received numerous awards including Dame Commander of the British Empire for her contributions. TBS’s success is hard to observe from the extrinsic value but the ethical value which make the success of TBS so legendary and inspiring.

Anita Roddick, founder of TBS first entered the industry by using £4,000 to open a small stand-alone shop of natural ingredient cosmetics and skincare products. Through her early travel experience, she had seen the potential of those natural ingredients being produced as cosmetic and skincare products commercially. Due to the budget constraint, Roddick used the urine sample containers purchased from local hospital as the containers of her products. The shop’s walls are painted with dark green to cover the damp. To save cost on advertisement, Roddick spread aroma in front of her shop to gain attention of the patrons. The strategy pursued was a huge success and another shop was able to be opened before the first year ended.… Read the rest

Case Study: WorldCom Accounting Scandal

Founded initially as a small company named Long Distance Discount Services in 1983, it merged with Advantage Companies Inc to eventually become WorldCom Inc, naming its CEO as Bernard Ebbers.WorldCom achieved its position as a significant player in the telecommunications industry through the successful completion of 65 acquisitions spending almost $60 billion between 1991 and 1997, whilst also accumulating $41 billion in debt. During the Internet boom WorldCom’s stock rose from pennies per share to over $60 a share as ‘Wall Street investment banks, analysts and brokers began to discover WorldCom’s value and made “strong buy recommendations” to investors.’ During the 1990’s WorldCom evolved into the ‘second-largest long distance phone company in the US’ mainly due to its aggressive acquisition strategy.

A cycle became apparent in the marketplace where an acquisition was seen as a positive move by the analysts leading to higher stock prices of WorldCom. Consequently this allowed WorldCom to gain greater financing and backing for further acquisitions repeating the cycle. One of the most significant and largest acquisitions was that of MCI Communications Inc in 1998, becoming the largest merger in US history at that time. British Telecommunications were also in the running for the takeover of MCI Communications making a $19 billion bid, when Bernard Ebbers the CEO of WorldCom decided to place a counter bid 1.8 times higher than that of what BT had placed, at $35 billion. Evidently this takeover was agreed and the merger between the two brought MCI WorldCom into second position behind that of AT&T in the telecommunications market.… Read the rest

Case Study: The Collapse of Enron

Enron Corporation is an energy trading, natural gas, and electric utilities company located in Houston, Texas that had around 21,000 employees by mid-2001, before it went bankrupt. Its revenue in the year 2000 was more than $100 billion and named as “America’s most innovative companies for six consecutive years by Fortune. Enron was a company that was able to profit by providing the delivery of gas to utility companies and businesses at the fair value market price. Enron was listed as the seventh largest company in the United States and had the domination in the trading of communications, power, and weather securities. In 2002, the company used to be a member of the top 100 fortunes companies but later on after facing an accounting scandal, the company started to collapse. The scandal of Enron has been the largest corporate scandal in history, and has become emblematic of institutionalized and well-planned corporate fraud; the Enron scandal involves both illegal and unethical activities.

The CFO Jeffrey Skilling and the CEO Ken Lay played major roles in the Enron scandal. Both of them committed securities fraud and conspiracy to inflate profit. In disguise debts of Enron, Lay and Skilling used off-the-books partnerships, after that they lied to investors and employees about the company’s disastrous financial situation while selling their own company’s shares. Enron’s top level management has violated several accounting laws, SPE laws, and bent the accounting rules to satisfy their own desires of profit in the short term but ignoring long term repercussions for investors, stockholders, employees and the business itself.… Read the rest