Corporate Responsibility: Just Sales or Doing Well by Doing Good?

The American Marketing Association Code of Ethics tells us that “as marketers, we must:

1. Do no harm. This means consciously avoiding harmful actions or omissions by embodying high ethical standards and adhering to all applicable laws and regulations in the choices we make.
2. Foster trust in the marketing system. This means striving for good faith and fair dealing so as to contribute toward the efficacy of the exchange process as well as avoiding deception in product design, pricing, communication, and delivery of distribution.
3. Embrace ethical values. This means building relationships and enhancing consumer confidence in the integrity of marketing by affirming these core values: honesty, responsibility, fairness, respect, transparency and citizenship. 

In addition, the AMA outlines a number of Ethical Values, including:

• Fairness – Represent products in a clear way in selling, advertising and other forms of communication; this includes the avoidance of false, misleading and deceptive promotion.
• Transparency – Explain and take appropriate action regarding significant product or service risks, component substitutions or other foreseeable eventualities that could affect customers or their perception of the purchase decision.
• Citizenship – Strive to protect the ecological environment in the execution of marketing campaigns.

(for a complete list of ethical values, visit the AMA website.)

Overall, based on the AMA’s ethics code and ethical values, I believe that Brita has failed miserably in designing and promoting their filterforgood.com campaign.

Pay close attention to how they are serving the water - really?

I don’t believe that Brita was intentionally, or even unintentionally, attempting to harm their consumers, however; they did consciously omit part of the story. The fact that they are encouraging people to stop using water bottled in plastic, while simultaneously not telling people outright that the Brita cartridges are not recyclable is intentionally leaving out part of the story – some might say they are intentionally misleading the public.

By not making a recyclable cartridge, Brita is also violating the ethical value of citizenship laid out by the AMA. 

It is not unrealistic to think that customers might make a different purchasing decision if they knew prior to buying a Brita that the cartridges are not recyclable. It is also quite possible that many consumers will lose faith in Brita as they begin to learn the full story.

Overall this campaign does little to add to the “integrity of marketing”, specifically in the areas of honesty, responsibility and transparency.

The problem with the AMA code of ethics and list of ethical values is that it’s not always this black and white when evaluating an ethical situation.

To expand on this, I will look at two other ethical theories, Kant’s Categorical Imperative theory and Mill’s Utility Principle theory.  

I chose Kant’s Categorical Imperative theory because the AMA lists ‘Respect’ as one of their Ethical Values, specifically to “Treat everyone, including our competitors, as we would wish to be treated.” (Many readers will recognize the similarity between Kant’s first manifestation of the categorical imperative and the Bible’s golden rule: Do unto others as you would have others do unto you.(Patterson, Philip (2010-07-21). Media Ethics: Issues and Cases (Pages 9- 10). Humanities & Social Science. Kindle Edition.))

Despite the fact that Brita is trying to eliminate plastic bottles from landfills, this outcome is not trumped by their withholding of facts regarding the recyclability of their cartridges. Consider if all companies withheld information from their consumers just because they see value in the outcome (cynics hold your tongue here!). Or as Oswald A.J. Mascarenhas wrote in him book, Responsible Marketing: Concepts, Theories, Models, Strategies, and Cases, “Marketers cannot use their customers as means to their own ends.” (page 33) In this case profitability and social image. It seems unfair (dare I say, unethical?) to “dupe” customers into thinking that they are “saving the world”, when really they are just replacing one “evil” one another.

Alternatively, if we look at Mill’s Utility Principle theory, we learn that “the focus is on the outcome - the consequences of the action.” (L. Bindig. COM503 Ethics Cheat Sheet) And that “the moral worth of an action is determined only by its resulting outcome, and that one can only weigh the morality of an action after knowing all its consequences.” (Wikipedia) (For the purposes of this evaluation I will put aside the fact that our text tells us that “utilitarianism…is so difficult to accurately anticipate all the consequences of a particular act.” (Patterson, Philip (2010-07-21). Media Ethics: Issues and Cases (Pages 12). Humanities & Social Science. Kindle Edition.))

The filterforgood.com website states that 300 water bottles can be replaced by one filter. Additional facts provided by Brita include:

• In 2008, the U.S. (the world’s largest bottled water consumer) used enough plastic water bottles to stretch around the earth more than 190 times.
• It takes 2,000 times more energy to produce a bottle of water than it does to produce tap water.
• 69% of bottled water containers end up in the trash and not in a recycling bin. 

When you add these facts together, does the outcome (as defined by Brita above) out way the fact that the cartridge itself is not recyclable?

As with all ethical questions there is no right answer. While I think that it is irresponsible that Brita is misleading its customers by omitting the fact that the cartridge is not recyclable, Mill’s Utility Principle theory seems to be the most realistic way of looking at an ethical situation to determine how to proceed. 

If it were only that simple

Keeping secrets is much more a part of our daily life than we realize. Just about every day we’re “forced” to make decisions and judgment calls about what to repeat and what to keep to ourselves. Often times those decisions are made so quickly and with such habit that we don’t even realize it’s happening. It’s only when something conflicts with our ethics or morals that we take notice. 

Michael Scott from The Office discusses ethics

Every so often a colleague who is looking to “unload” or “vent” tells me something in confidence. Fortunately, the “he said/she said” stories I hear are not a matter of national security or life and death. 

More often than not, what I hear is of no consequence. However, once in a while I am told something that is a little more serious and I am forced to make a decision about whether to keep that information to myself or share it with my boss. I believe that ultimately I owe my allegiance to my organization and therefore many times I have chosen to disclose the news to my supervisor.  

If it were always that simple.
 
It is very easy to sit here behind my computer and speculate about what I would do if I were presented with a serious ethical dilemma. I don’t think it is that cut and dry. Similarly, it is just as easy to look back on a situation with 20/20 vision and critique how it played out. 

For the purposes of this assignment, I am going to attempt to describe how I would ideally like to address a serious ethical decision at work.

In our text, Media Ethics: Issues and Cases by Philip Patterson and Lee Wilkins, we read about Sissela Bok’s ethical decision-making framework. This model presents a three-step process for analyzing an ethical decision. She says that one should ask the following questions:

1. How do you feel about the actions?
2. Is there another professionally acceptable way to achieve the same goal that will not raise ethical issue?
3. How will others respond to the proposed act?  

 
This is certainly a process that I would feel comfortable moving through, however, I would add on as 3b, what will be the consequences of my actions?

Since I don’t intend on being a journalist, I am not going to argue the ethics of reporting the situation or not through the media, as the text did. Rather, it would be more likely that I myself might uncover a similar situation while working at a non-profit and be forced to decide between keeping it to myself and reporting it to my superiors or Human Resources. 

1.  How do you feel about the actions? Because nonprofits operate entirely on other people’s money, I believe that there should be separate guidelines for how that money is spent. I often feel very uncomfortable when I hear how freely non-profit funds are spent on what I deem to be luxuries (first class airfare, 5 star hotels, glamorous restaurants, etc.) In this example I would deem the incident as morally and ethically wrong and would feel compelled to say something about it.

2.  Is there another professionally acceptable way to achieve the same goal that will not raise an ethical issue? There is usually more than one way to address a situation and I think, in many cases, going to the media should be a last resort. In this example, since no one was harmed by the incident and keeping it a secret would harm no one, I believe the situation would be best managed in-house either through immediate termination or probation. Therefore, if I found out that my CEO or one of my colleagues were falsifying records for their own personal gain, I would either take it to my immediate supervisor or to Human Resources. As a last resort I may contact my Board Chair if I felt that it was not being addressed at a staff level.

3.  How will others respond to the proposed act? What will be the consequences of my actions? I think if this situation were reported in the media, people would be outraged, and rightly so. How could someone in such a position abuse public funds so poorly? Then it would likely raise other questions, such as, what else is happening that we don’t know about? In this situation, donors and the public are likely to lose faith in the organization and funds would see a decline. This would ultimately have an impact on the constituents who receive support from the non-profit. (Which is why, referring back to #2, I would advocate for keeping the incident in-house.) 

Regardless of laws in place to protect whistle blowers, it is usually the person trying to do the “right” thing that feels the impact. The first fallout that comes to mind would be finding another job. If it were revealed that I was the one that blew the whistle on the executive, regardless of whether it was the right thing to do, it is likely that future employers will question my ability to keep information secret. 

Ultimately, most people are looking out for themselves, and it is these consequences (and not a 3-step process) that many consider before taking any action. 

If I wanted to balance a wire, I would have joined the circus

Just over 10 years ago I found myself in an internal ethical debate.

I was working for an international corporation as an outside sales rep. To say I hated it would be an understatement and to say I was not good at it would be putting it mildly.

I needed a new career.

I decided to go back to school to become a fundraiser – a profession that I saw as a middle ground between extreme do-gooder and extreme “used car salesman”. Yes, I am aware that fundraising is really sales of another name, but I see a huge distinction – I was “selling” something I believed in.

Back then I naively thought that working for a non-profit would be easy. I would believe in what I was doing, and everyone else would too. Therefore we would always be putting someone else’s needs above our own and do “the right thing”.

Oh to go back to a simpler time.

Working with children in Vietnam

During this time I have worked for four remarkable non-profits, all child-focused, and I have met and worked with some amazing – and some not so amazing - people. With this track record it’s not a far stretch to imagine a similar future filled with children.

And when it comes to children, there is an endless list of ethical issues.   

·       Is the child accompanied by a guardian?

·       Have they signed a release to be photographed?

·       Do we tell their specific story or do we present a composite story of multiple children?

·       Do we name the child in the story or do we give them an alias?

In my current role, I work with children who have a serious illness. With this comes a whole new set of ethical (and legal) issues, making it an almost daily balancing act between promoting the cause (necessary to raise awareness and ultimately funds for the work we do) and respecting the child and their family in the process.

One of our core philosophies is that children are not an illness, they are a child first and their medical condition is only one component of who they are. In reality, we are a non-profit that raises money specifically for programs that support children with a medical illness. Not children who are homeless or who have a special athletic or musical talent; children who are sick. Therefore, in the eyes of some, it is imperative that the illness be placed first – an action that is in direct competition from our core philosophy.

So when a situation arises, such as a gala or a direct mail campaign, the ethical question becomes “how do we promote the cause while simultaneously respecting the child and their family?”

The first question I always ask myself is, “what will this child/parent think when they see/read this?” Will they be pleased to be the face of the campaign? Or will they be embarrassed / mortified / disappointed? I never want a child or parent to feel ashamed of their condition as a result of something we did.

According to Patterson & Wilkins (Media Ethics Issues& Cases), as a member of the program staff, I would come to a different conclusion than our development staff, as I have a different duty and a different constituent to whom I owe those duties – and that would be “OK”.

However, this only brings us so far – two opposing sides with no solution.

Immanuel Kant’s categorical imperative tells us that we should not be overlooking the child’s rights as a “means to an end”.

In direct competition to this is Jeremy Bentham and John Stuart Mill’s philosophy that the end is more important than the means, and therefore, the rights of this one child is less important because in the end we’ll be raising money for a larger group of children who would benefit immensely. More similarly, Communitarian ethics tells us that “community interest trump individual interests but does not trample them” (Patterson & Wilkins, page 14). Of course the solution is somewhere in between.

Which is why I think the Pluralistic Theory of Value is much more realistic in the real world as it allows for variables, and let’s face it, life is made up of shades of grey.

It’s a tricky thing ethics.

Moving forward, having the tools to wade through the “grey” in life and at work, most importantly with superiors who often have the last say regardless of your ethics, will be very helpful. 

The Lion, the Witch and the Wardrobe – a.k.a the Investor, the Government and the Community

Investor Relations:

By all accounts, Starbucks appears to be doing everything right when it comes to investor relations. The company comes across as extremely transparent, posting important information in a variety of different places and formats, most notably their Webcasts & Presentations.

The site also includes sections for Recent Financial and News Announcements; a complete list of the firms currently providing research coverage on Starbucks; financial Annual Reports dating back to 1999 (there is a separate Social Responsibility report); a list of their Board of Directors and Senior Officers; governance principles, committee charters and policies; an up-to-date Event Calendar that highlights upcoming conference calls and other scheduled announcements and presentations; Financial Highlights including Reconciliations, Store Counts, and Supplemental Data; First Call Estimates; 21 different Investor Frequently Asked Questions; SEC Filings; Stock Information; there is even a section that responds to recent rumors about Starbucks.

My only criticism of the site is that there is so much information. While I don’t think this is necessarily a bad thing, it would be nice to have a page that provides the main facts and figures – just the highlights so that I don’t need to click through all of the different sections to find what I need. They do have an Overview page, which I think was intended for this, however, I don’t think it is used most effectively. Having such a page would certainly help in a crisis. I would suspect that a great deal of the information within the investor relations section does not need to be updated more than a few times a year. Using the Overview page more effectively would enable them to highlight the most recent and news worthy information for regular visitors to gather.

Government Relations:

Of course a company as large as Starbucks could not exist without ever having to deal with the government. Given the locations that Starbucks grows and purchases beans from, they must deal with governments on a daily basis.

According to OpenSecrets.org, Starbucks does direct funds toward lobbying for the food and beverage industry. In my opinion it is quite low in comparison to many other companies of its size - $460,000 (2011), $730,000 (2010), $530,000 (2009), and $638,000 (2008).

However, what I found more interesting than the above, is Starbucks’ and Howard Schultz’s most recent “political” campaign.

This past fall Schultz wrote in an open letter, “ I asked fellow business leaders to join me in urging the President and the Congress to put an end to partisan gridlock and, in its place, to set in motion an upward spiral of confidence…First, to withhold political campaign contributions until a transparent, comprehensive, bipartisan debt-and-deficit package is reached that honestly, and fairly, sets America on a path to long-term financial health and security. Second, to do all we can to break the cycle of economic uncertainty that grips our country by committing to accelerate investment in jobs and hiring.”

When so many people cow-tail to the government in order to stay in favor, I think it is extremely gutsy for a company and CEO of his caliber to stand up and speak out publicly on such a sensitive issue.

Corporate Social Responsibility:

Visit the Starbucks site to see how you can mane a difference

As with Investor Relations, Starbucks’ Corporate Social Responsibility (CSR) relations is impressive. In fact, there is simply too much to talk about in this short blog. However, an entire sub-section of their website is dedicated to their five pillars - Community Involvement, Ethical Sourcing, Environmental Stewardship, Wellness and Diversity - for anyone who is interested in learning more. The site allows you to learn more about the different initiatives, read their Shared Values blog, review their progress toward set goals, and how you can make a difference.

Because most of their corporate controversy has centered around their social responsibility, specifically the way they acquire their beans and treat local farmers, I would suggest that they link their section on rumors to this page so that readers can quickly learn Starbucks’ “side of the story”. I would also recommend adding this section to their Facebook page, as people are more likely to visit this than the corporate website. This would also allow them to post accurate information quickly in the event of a crisis.

Being able to communicate accurate information as quickly as possible, on many different forums and in a variety of ways is most important in today’s technological age.  

A Love Hate Relationship

The votes are in. People love Starbucks – and hate it. There are more blogs by and about Starbucks then I would ever have guessed.

Unofficial blogs range from the general, such as Starbucks Melody, who just has a passion for coffee, and Starbucks Drama who gabs about the “goings-on” inside a Starbucks store.

To the specific, such as Unspoken who posts recipes for many of Starbucks’ beverages.

To the international, such as Starbucks In Japan who, surprisingly, blogs about what’s new at Starbucks in Japan, and Bucked by the Star who posts only photos taken inside Japanese stores.

Not my cup, but my name - this should read "Kelly"

To the utterly wacky, such as Pat’s Papers who, in addition to non-Starbucks related content, has dedicated a section to the misspelled names written on the side of the cups, to Starbucks Everywhere, which is the personal blog of a guy on an adventure to visit ALL company-operated Starbucks (he’s visited over 10,000 to date!).

Then there are those written by Starbucks employees, such as Starbucks Dave. Dave describes the blog as a “place to talk about the company I love.” He is also quick to tell his readers that its “not an official Starbucks website.”

Finally, but not completely, there is Starbucks Gossip: Monitoring America’s Favorite Drug Dealer, which, as you can gather from the title, focuses on the, shall we say, less positive side of Starbucks.

There’s not much that employees and fans alike are not blogging about. Of course I have not had the pleasure of speaking with anyone from headquarters, but my guess is they are very pleased with the (online) interaction that customers and employees are having with their company. These bogs are directly inline with their image of “community”.

With all of these unofficial blogs, one would think that Starbucks would not need to have one of their own. Not true. Starbucks itself has four official blogs (that I was able to locate).

There is the main Starbucks Blog, the Shared Values Blog, and two Starbucks Partner Page’s (one for American employees and one for non-USA staff).

Surprisingly, since Starbuck’s is generally very consistent with their branding and messaging, the main Starbucks blog seems to be centered on corporate activities and company products (including their other divisions). The Shared Values blog focuses on their social responsibility around the world. Again, all about what they are doing at headquarters.

I would have expected a blog that talks more about their customers and their connection with the company. I suppose since there are so many unofficial blogs focusing on this content, that it is their job to cover what is missing. (This is where I need to remind my readers that Starbucks has “My Starbucks Ideas”, which, while not a blog, is an online portal for customers to submit their own ideas for the company to implement.)

I do appreciate that both blogs appear to be written by a variety of Starbucks staff members rather than one un-named employee, which is consistent with their philosophy that their employees as “partners” rather than just “staff”.

I was pleased to see that the company does host two internal blogs specifically for staff (partners) only.  Since these two blogs are password protected its hard to say what the topics cover, however, I would hope that they offer content such as advance release of corporate news, tips and techniques for staff, and opportunities for online training and professional development.

“Care more than others think wise. Dream more than others think practical. Expect more than others think possible.” Howard Schultz

Other than CEO Howard Schultz, who is the public face of Starbucks, there is no official spokesperson.

Lindsay Lohan enjoying a smoke and a Starbucks

There are however, countless “promoters” of Starbucks coffee. In fact, it’s hard not to pick up an entertainment magazine these days without seeing a celebrity walking around toting a Starbucks cup in one hand and a dog-in-a-purse in the other.

Unfortunately for Starbucks, not all would be the ideal spokesperson.

If Starbucks were to choose someone to represent their company it would have to be someone who is also environmentally and socially responsible, since this is Starbucks’ image.  I think to name someone who simply likes coffee would be a huge mistake and go against one of Starbucks’ main principles – Expect More Than Coffee. 

40 years and counting

Last week I briefly mentioned that Starbucks released a new logo this year. Below is a short video of CEO, Howard Schultz, discussing its evolution.

To be or not to be? Why choose?

I have to admit, I am not always the most observant person, so it should come as no surprise that when asked to comment on Starbucks traditional media relations activities my reaction was, “what activities?” I simply cannot recall hearing about Starbucks on the radio, ever seeing a TV commercial or even passing by posters or signs on the street.

Thank God for Google.

A quick search of  “Starbucks and Traditional Media Relations” brought me into a whole new world.

I quickly learned (and was not all that surprised to discover), that in 2008, Starbucks was named one of the worst brands in social media. Now I know you’re thinking, social media is not traditional media relations. I’m getting there.

That was the light bulb for Starbucks. By 2009, the coffee company had more than 5 million fans on Facebook and nearly 500,000 followers on Twitter, making it the 3rd highest rated brand in social media. As of today, they have over 26 million Facebook fans and almost 2 million Twitter followers.

So what does this have to do with traditional media relations, you continue to ask? Well, for Starbucks the two are inseparable. Through one, the other becomes stronger.

In 2009, Starbucks launched a $28 million ad campaign to compete with McDonald’s who was promoting its new line of McCafé coffee drinks.

The Starbucks campaign consisted of advertising posters being placed in six major cities. Wow right. $28 million for some posters in a few cities across the US. I want that account. But in actuality, this was just the beginning; and where my above tangent comes into play.

Following the placement of these posters, Starbucks challenged people to track down the posters and be the first to post a photo of one using Twitter. The campaign eventually included newspapers and magazines, and YouTube videos, but the goal was to use (limited) traditional print media to create an unlimited viral campaign promoting Starbucks coffee across multiple mediums.

“The idea for the Starbucks photo contest came from watching what people already do on Facebook and Twitter”, said Chris Bruzzo, vice president for brand, content and online at Starbucks. “Each year, people race to post the first photos of Starbucks shops decorated in red for the holidays”, he said, “It shows a level of connection to our brand that we wouldn’t have concocted on our own,” Bruzzo said.

And it worked.

Generally speaking, Starbucks prefers new forms of media relations. “Starbucks’ social media presence gave it an advantage over competitors with gigantic ad budgets because its fans wanted to talk about it online…It’s the difference between launching with many millions of dollars versus millions of fans.” Said Bruzzo.

As another example of how the company is mixing traditional with new media relations, on the Saturday before the presidential election, Starbucks sponsored a 60-second television commercial on “Saturday Night Live” advertising free coffee on Election Day. The video was then posted online. By the following Tuesday, the video was the fourth-most-viewed video on YouTube, and people were mentioning Starbucks on Twitter every eight seconds.

The video was brilliant. Not only did it drive people into their stores, but it also matched their brand perfectly. Like the print ads mentioned above, the backdrop for the video was a paper/burlap-esque texture, similar to a traditional coffee sac. In addition the video was all about community, one of Starbucks most important principles. The video reminded its viewers that Starbucks cares about the communities in which they are located (both in this country, across the pond and in the fields where the beans are grown). The time slot chosen is even more brilliant. At the time, Tina Fey’s impersonation of Sarah Palin made the show one of the most watched and talked about. Starbucks connection to the show and the political content was seamless.

Recently, the company launched a new logo and with that came additional promotion. The company, which sponsors Morning Joe on MSNBC, is now promoting a new bag of coffee featuring the news show’s name, and in keeping with their philanthropic image, the bag includes a $5 donation card to DonorsChoose.org allowing customers to donate directly to a school classroom project of their choice. Another brilliant strategy. The money does not go to the company’s foundation where they get to choose – they’ve given the choice back to their customer to keep the money in their community.

 

In closing, I believe that Starbucks is doing a brilliant job of combining traditional and new forms of media relations to effectively promote their business (their online news center on their corporate website is one of the best and most intuitive sites I have ever seen). I think it’s effective because they have clearly thought about who their audience is and how they are interacting with the company, and presenting everything that comes out of their door with a consistent look and message. It makes me wish I lived closer and could be a part of this incredible movement.