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  • Subject Name : Business Ethics

Executive Summary

The study has focused on the Sales Ethics of Starbucks. The company is the global coffee giant, which is indulged in both B2B and B2C business activities. The company employs business development team and sales force that ensures the compliance of sales ethics in business activities. The paper has developed the business case based on the ethical selling of the company. The potential recommendations based on the case scenario are developed in the following section.

Table of Contents

Introduction

Business Background

Sales Ethics

Sales Ethics Theories

Case Study of Sales Ethics in Starbucks

Positive Impacts of Sales Ethics 

Issues Associated to Sales Ethics

Conclusion

Recommendations

References

Introduction

In the succeeding analysis there is a description about the sales ethics and b2b model that is business to business model and the structure of these two factors within the Starbucks. Sales ethics is basically defined as the moral values of a company that it maintains during its sells in various regions. A company should have a good sales ethics that it sells its goods in the entire region in same prices and maintaining a good moral behavior with the customer. Sales ethics helps to build image in the market and gain the customer reliability on the products. As Starbucks is a multinational company, it should maintain the sales ethics with much more efficiency to hold the customer reliability. Not only the price but Starbucks has to train its employees to behave in a good manner with the customers, otherwise it loses its popularity.

Business Background

Starbucks is an American Company as stated above and it is very famous for its high quality coffee of many varieties and different snacks. The company has its first store in the year 1971 at the Seattle’s historic Pike Place Market (Tong et al., 2016). It was just a small store from where Starbucks has reached in this position today. Howard Schultz is the chief executive officer and chairman of Starbuck, turned the company into a new model by including various coffee essences from all over the world and blends them with the United States style.

Starbucks proceed with a b2b model and this idea proves as very useful for it. Starbucks import high quality coffee beans from other established multinational companies that enhance the taste of coffee. If there are more than one experts present in a project or services, then the outcomes are quite above the mark. It has so true for Starbucks. It used several experts companies for some special items and enhances the product quality by perfectly blending them. A small company or any start up business can learn this technique from Starbucks to grow at a faster rate.

Sales Ethics

Sales ethics means applying the principle of right or wrong in the marketing functions (Angel et al., 2016). Examples of sales ethics-

  • Whenever a customer purchases a product from the market, the individual assumes that the product will serve his necessity very effectively and it kept its promise whatever the product is marketing.
  • Whenever a product has come to sale in a market it should be noticed that the price of the product should be the same in all the states of a country. There should be no discrimination allowed in the price of the product in different state and it should be also noticed that the price should not be variable between the customers by any means.
  • If there any demand raised from the customer that should be resolved very quickly such that the customer does not have any complaint about the product.
  • This should be also noticed that no fake promises should be made to the customer for increasing the number of sales. The salesman should not be made fake promises to the consumer to fill up their sales quota.
  • The salesman should not sell such products, which the customer cannot sell further because of its expiry date.
  • To sell the product to the customer at the right quality and very quickly after getting payment is a very ethical sells. It is very ethical not to supply the product over a week after getting payment from the customer.
  • The product which is defective a company should Taking back those products from the customer, it is a great sign of sales ethics.

Sales Ethics Theories

Sales ethics are rarely seen in the present market scenario. All the company has illegal activities or practices at some certain level of execution of a work or project. All the attention has shifted toward gaining more without showing any ethical behavior among the corporate level workers as well as in the government sectors. Ethical behavior has several rules or policies that bound all the employees in a chain to maintain one way work progress. But there are few individuals present within an organization that does not follow all this ethical rules. Consumers purchase or take the products or services from the company which shows good moral and ethical behavior to them. As this behavior assure the customers about the reliability on the product. Lack in the ethical behavior among the workers may be because of the improper managing skills or operating skills within the organization. There are several theories (McMurrian et al., 2016) based on the sales ethical that can help to maintain a well-managed structure with good ethical behaviors:

Governance- The respective government of various countries has some policies or laws to bind the companies that they have to serve the consumer better with good ethical values. For this the government takes some steps to investigate about the quality of products and their prices to save the customers. If any company found as acting unethically then actions are taken according to the respective country law.

Responsibility- the theories related to ethical values in the business area describes the social responsibilities or duties of the corporate sectors. The main objectives of the business companies that to attract more stakeholders to make profit. They rarely focused on the ethical values. But in the present market system pressure are created over the organizations to work with a good ethical value and serve the customer better quality product or services against their valuable money. This can help to attract more customers and will be beneficial for the whole company.

Case Study of Sales Ethics in Starbucks

Starbucks always has a strict control over the ethical behavior. Not only the sales but the customer satisfaction, safety is also an important point to Starbucks. It provides 24*7 services to its customers and never compromise with the quality of its products. Starbucks always respect their customers and never support any discrimination. It maintains a balanced price all over the world which has made it most popular. Starbucks never support any social discrimination toward any person in social cultures and give respect and values same to all the customers. A very serious issue in the USA present in the social culture is the racism and Starbucks never support it and even protest against such activities. All these ethical behavior brings Starbucks the achievement.

The code of ethics allows the company Starbucks to meet the ethical selling responsibilities and obligations. Mainly, sales ethics deals with the avoidance of discrimination in the selling activates of the companies. The product quality, price, quantity of the products are equal for each buyer of the company. Ensuring the similarity of the product properties regardless of any buyer, Starbucks maintains its sales ethics. The company is mainly a B2C business. However, the B2B activities are also conducted by the company. The company is engaged with the companies like Regency Centers, Dean Foods, are engaged in B2B relationship with Starbucks. Moreover, Starbucks sales the coffee beans to Amazon and other online platforms, where the B2B relationships are established.

Hence, the sales ethics are indispensible part of the business. The online and offline buyer of the company are equally treated, as the company does not differ the quality or quantity of product in anycase. As suggested by Sridhar, & Lyngdoh, (2019) it is unethical to establish discriminatory practices while selling the products. It is not ethical to allow differences between the products advertised and sold. The company ensures to sell the products that are said in the advertisements. The company maintains transparency in sales; hence, the same properties of products are maintained in the sold goods that were showcased during advertisement (Starbucks, 2020). The claims and concerns of the buyers are to be resolved and fixed within the time (Starbucks, 2020).

The sales will be ethical when the customers will take the responsibilities of the products even after selling. The company complies with the ethical code of conduct by allowing the buyers to directly contact to them and to the (CECO) chief ethics and compliance officer (Business Ethics and Compliance, 2020). The company provides the customer care call details, and link to the online portals to connect to the company. Starbucks allows the businesses and the customers to make complaints against the executives who dissatisfied the customers with their service. The company aims to avoid the areas of conflict of interest with the B2B partners, which is an integral aspect of the Business Ethics and Compliance policies of Starbucks.

The company has one of the most satisfactory customer care services. The helpline are available 24X7. The business avoids the discrimination in selling the products. The prices of the products are relatively same in the different markets. The study conducted by Blake, (2017) represents the variance of cost of the products of Starbucks in different market places. The following data indicates that the prices for the products are approximately same in different markets, which is one of the most crucial aspects of the sales ethics.

Price variance of Starbucks in different market place

Figure: Price variance of Starbucks in different market place

(Source: Blake, 2017)

The company provides the superior quality of products. Starbucks have not fraud with the potential buyers which is the indication towards ethical sales. According to Gabbatt, (2018) the company has closed more than 8000 cafes in US to the exercise of racial biases. The instant strict action against discrimination is one of the instances of ethical selling of Starbucks. The company does not only intend to serve the customers with coffee, they support and encourage sales ethics. The instance of closing the shops represent the company supports ethics and morality over profit. Though the closing of shops have resulted huge loss, the company chose to sale their products ethically. The company never deceived with people by selling the poor quality of products. The avoidance of false premise of selling products, transparency, honesty, integrity, instant customer service, avoidance of discrimination are some of the aspects of ethical selling of Starbucks.

Positive Impacts of Sales Ethics

There are large scale positive outcomes of good ethical practices. It helps to build customer faith, reduces the legal issues, and gain popularity among the customers as well as the job seekers. Some of the impacts of sales ethic are described here:

Gain customer faith- customers always seek for good ambiance or service in any organization. If a customer faces any discrepancy or other issues like being overcharged, not getting proper service they will not prefer the same company in the future for their needs. Here a good ethical behaviour of the workers can build the customer faith and satisfaction that made them as the regular customer.

Increase reputation- if any customer gets satisfied from the product or serviceability or behaviour of a company then he or she might suggest his or her close ones or friends to

give a chance to that company. This increases the company popularity and also increase in the customer number.

Create a good atmosphere in the workplace- If all the workers are properly trained to maintain the ethical views of the company then all the works will be going in a same direction. That increases a good relationship among the coworkers and also a good workplace ambiance. This gives more satisfied workers as well. Among larger numbers of workers having good ethical values one can often think to indulge him or herself in any unethical work. (Huang et al., 2016)

Starbucks always maintain all the ethical behaviour and that helps to achieve all the above positive results. That is why Starbucks is so popular having largest coffeehouse chain in the world. All this ethical practices helps Starbucks to fly over the border boundaries of the origin country.

Issues Associated to Sales Ethics

Ethical issues can touch every part of an organization as it has a vast control over it. Ethical issues can occur due to many reasons; it can be a cause of unethical behaviour of workers, high level authorities, some company compromises, law bindings and other. After all the strict guidelines all the workers are not have same moral views due to different characteristics of different people. A person can harm the company’s ethical goals to gain own profit or any other illegal motive, it can be jealousy, own perception general characteristic, influence from outside and for many other causes (Mullen et al., 2016). Here are some of the examples of ethical issues are described that are:

  • Misuse of the power of any higher authority within the company.
  • Taking advantages of company’s faith.
  • Making wrong entries in the revenue sheet.
  • Decreasing the product quality to make profit for own and make the customer fool.
  • Compromise with any outside politics or higher authority to take the business ahead (Mullen et al., 2016).
  • Not maintaining proper work hours or negligence with the responsibilities.
  • Accepting bribes from the outside of the company.

Starbucks always tries to avoid of minimize these issues as it know the value of the customer reliability. The customer satisfaction can give the best profit to any company and in a continuous way without any fear. This is the best strategy to gain profit and Starbucks knows this very well. All these qualities of great management gives the company highest success comparing too its first small single store in USA. Although in between a strict and well operated company, it has some unethical workers in some stores. But it is quite obvious because of its vast spreading.

Conclusion

Fromm all the study, a clear reflection has shown of a good company. Every small company or start-ups should learn or go through a study about the background of Starbucks and its development steps to learn business strategy toward success and perfection. The process of becoming a multinational company chain by adopting several business strategies like b2b model and adopting ethical values is well defined in the Starbucks structure. B2b is a very good decision to enhance the quality of products to attract more customers and spread the business as well. Moreover, the business planning and strategies of Starbucks are very well designed and greatly executed.

Recommendations

Here is a small recommendation that Starbucks can reduce its product cost a little that can attract middle income groups also. And also it may conduct some program in every store to train the workers and keep them motivating to hold ethical views.

Leadership- A good leadership in a company reflects its good characteristics among others. People generally have an expectation about their trainer or leader that he or she might have good moral and ethical behavior. When the employees of higher ranks do not show good ethical values then it could be a massive failure for a company. There are three factors that help to decide the ethical points that are as, utilitarianism, ethical egoism and altruism. Starbucks needs to work on the same.

Safety of customers- This is one of the main point in the ethical theories of business. This theory describes about the quality, reliability, promoting or pricing system. Unethical behavior or practices can directly affect the customer safety that’s why it is most important.

References

Ameer, I., & Halinen, A. (2019). Moving beyond ethical decision-making: A practice-based view to study unethical sales behavior. Journal of Personal Selling & Sales Management, 39(2), 103-122

Angel, J. J., & McCabe, D. M. (2018). Insider trading 2.0? The ethics of information sales. Journal of Business Ethics, 147(4), 747-760.

Blake, I. (2017). The VERY different prices you'll pay for the same Starbucks coffees. Retrieved 2 May 2020, from https://www.dailymail.co.uk/femail/food/article-4309472/How-Starbucks-coffee-costs-world.html

Business Ethics and Compliance. (2020). Retrieved 2 May 2020, from https://www.starbucks.com/about-us/company-information/business-ethics-and-compliance

Campbell, K., & Helleloid, D. (2016). Starbucks: Social responsibility and tax avoidance. Journal of Accounting Education, 37, 38-60.

Case, R. (2020). Professional Ethics, Professionalization, and Regulation of Pharmaceutical Sales. Integrity, Transparency and Corruption in Healthcare & Research on Health, Volume I, 105

Gabbatt, A. (2018). Starbucks closes more than 8,000 US cafes for racial bias training. Retrieved 2 May 2020, from https://www.theguardian.com/business/2018/may/29/starbucks-coffee-shops-racial-bias-training

Huang, L., & Paterson, T. A. (2017). Group ethical voice: Influence of ethical leadership and impact on ethical performance. Journal of Management, 43(4), 1157-1184.

McMurrian, R. C., & Matulich, E. (2016). Building customer value and profitability with business ethics. Journal of Business & Economics Research (JBER), 14(3), 83-90.

Mullen, E. W., Cory, S. N., & Martinez, G. (2016). ETHICAL ISSUES AND SELLING: PERCEPTIONS OF MEN AND WOMEN. International Journal of Sales, Retailing & Marketing, 5(2)

Sridhar, G., &Lyngdoh, T. (2019).Flow and Information Sharing as Predictors of Ethical Selling Behavior. Journal of Business Ethics, 158(3), 807-823.

Starbucks. (2020). Business Ethics and Compliance, Standards of Business Conduct [Ebook] (pp. 1-32). Starbucks. Retrieved from https://www.starbucks.ph/media/Business-Ethics-and-Compliance-eng_tcm70-11290.pdf

Tong, S. (2016). More Than Coffee: Starbucks’ Social Media Presence Analysis.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Business Ethics Assignment Help

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