Tuesday, 8 March 2011

The politics of corporate social responsibility

Rather than get on with my work I foolishly clicked on a link on an email that took me to a report on Justmeans that cited Ethical Consumption magazine in branding Starbucks "the most unethical coffee chain in the UK". And that got me so cross that I am sharing my rage with you. Now forgive my pedantry but, what does such a headline mean? So Starbucks may be more unethical than other coffee chains but maybe better than other sandwich bars and cafes? Who cares?

But worse than the nonsense in this is the train of trendy but misguided political assumptions. There seem to be some quite fair criticisms in the article but some of the factors that have led to the overall judgement are blatantly dependent upon your political viewpoint. For example, Starbucks is slated for resisting unionisation of its US outlets; well they have a lawful right to do so and many employers in the US and UK do that...within the law. They are slated for sharing in their employees tips in the USA and being taken to court for it. Well, that sounds terrible, except that that is not what it was about - the company thought the shift supervisors should share in the tips, not Starbucks itself. That does not sound so terrible to me. Having reported that judgement was against Starbucks, the next sentence tells us that judgement was overturned on appeal. So Starbucks acted legally and, as far as we know, morally correctly.

And we get from the article "In the year 2009 when the company slashed costs by $580m, CEO Howard Schultz still got a 25% pay rise." Ok...and why is that necessarily so terrible? The CEO was employed by the shareholders to improve profitability. In fact he had stepped down as CEO and returned in 2008 when the company was in considerable trouble. As far as the shareholders are concerned he did a very good job and was handsomely rewarded. Remember that those shareholders include pension funds and charities: they include you and me. Of course the employees who lost their jobs when costs were slashed would not be happy but the employees who kept their jobs because the business did not go broke would be happy.

This is what the company said
Schultz greatly exceeded the board's expectations, the filing said. "He drove the Company to achieve strong financial results for the year despite the extraordinary challenges facing the Company in a period of unprecedented global financial turmoil, and made significant progress in transforming Starbucks and returning the Company to sustainable, profitable growth while preserving its values and guiding principles."
  Unfortunately too many people in the CSR debates hold a political perspective that colours their judgements. It is entirely possible to believe that Corporate Social Responsibility is a good thing without distorting the facts and without attacking companies and individuals unfairly.

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