Introduction

It is very essential for a firm to pursue and follow adequately all kinds of social norms and corporate social responsibilities along with the legal duties in an effective manner for enhancing their businesses and establishing a strong market hold. At the time when a company emerges, it not only looks for monetary benefits, but they are also held responsible for moral, environmental and quality issues (Corbaci et al., 2014). They also encompass legal responsibilities towards their shareholders, employees and others. A legal responsibility thus reflects the actions and practices that incorporate ethical rules and standards in the direction of ensuring stakeholders’ wellbeing, human resources efficacy, and societal developments in order to safeguard the stakeholders (Corbaci et al., 2014). Therefore, the main purpose behind presenting this task is to analyze and understand the legal responsibilities of a particular company, which, in this respect is Starbucks. For accomplishing this objective the entire report will be divided into two major parts. The first part will provide an overview of Starbucks and the second part will highlight the legal responsibilities of the company.

About Starbucks

Starbucks is a well-known multinational coffee chain that has succeeded in expanding its business globally, encompassing even those markets that were previously characterized by a strong preference for tea over coffee. Starbucks, the world’s biggest coffeehouse chain, is often regarded as the primary embodiment of the United States’ second wave of coffee culture. The firm had 32,660 shops in 83 countries as of September 2020, comprising 16,637 company-operated stores and 16,023 licensed stores (Brain, 2013). There are 18,354 shops in the United States, Canada, and Latin America out of the total of 32,660 (Corbaci, et al., 2014).

Starbucks has developed a public policy through adhering to the international ethical standards in the course of remaining legally compliant in the countries of operation. It stipulates human rights and equal chances for all the firm employees, in which each member or employee has the same right to work according to his talents. Legal statutes also safeguard employees, ensuring effective processes of satisfying their primary needs like health needs, and this is done through provision of employee healthcare policies (Garthwaite et al., 2017).

Starbucks operates under the philosophy of “how we live that every day,” which means they deliver high-quality coffee beans and excellent services. Starbucks offers hot and cold drinks, wholesome coffee, micro-ground instant coffee known as VIA, espresso, coffee latte, whole and loose-leaf tables including tea products, evolution fresh juices, frappuccano beverage, pastries from La Boulange and snacks such as chips and crackers (Garthwaite et al., 2017). They also try to meet all the necessary requirements of their personnel. They ensure that each of the outlets maintains quality in all aspects of the business and provides best service to the consumers. It is the manufacturers’ responsibility to offer their duty of care in the best interests of the consumer, and Starbucks operates on the basis of this principle.

Starbucks’ Legal Responsibilities

Starbucks needs to have certain legal responsibilities towards all their employees, shareholders as well as the society. Firstly, it has to oblige with duty of care towards its employees so it needs to provide them with a work environment which is conducive to growth and development along with other job securities and justifiable wages (Nguyen, 2020). Secondly for its consumers the company needs to supply quality services and quality coffee products and other beverages. Starbucks also must remain legally compliant to meet the socio-economic requirements of its stakeholders (Zein & Zein, 2020). A corporation has various legal responsibilities towards its employees, shareholders and other stakeholders. Corporate law endorses a firm with a legal entity to help them maintain legal functions to manage their businesses. In accordance with company law, Starbucks performs according to the firm’s constitution. It is the company’s directors who have a responsibility to look after the company and its members. They need to have the ability to hold such positions that require knowledge of corporate governance and laws (Aras, 2016). The shareholders are all responsible for the issuance of the bonus equity, a partially paid preference and redeemable shares. The company’s director or management authority is responsible for dealing with shareholder issues.

Starbucks is responsible for providing the employees with the necessary salary and it is Starbucks’ legal responsibility to provide dividends to its shareholders. The dividend payment always comes from the company’s earnings and Starbucks has the legal responsibility to ensure that dividend payment does not impact the company’s financial position. Starbucks’ shareholders who buy the share of the firm are entitled to the share capital from earnings for the correct amount. Just like any other business, for remaining legally compliant and to maintain transparency, Starbucks never buys its own shares. The stake can be purchased by the managers or the firm owner. The dividend is the shareholders’ fundamental rights. However, if the firm operates the business in loss, it might lower the owners’ dividend amount and transfer the shares accordingly. Moreover, Starbucks has the legal responsibility to ensure that all its employees are provided with job securities (Aras, 2016).

Since Starbucks is a coffee company, they also have the legal responsibility to provide the consumers with products that are fresh and harmless. The enterprise must monitor and manage production in accordance with appropriate legal considerations, since it does not only benefit the business but also has a social and environmental impact. It enables a firm to establish a solid commercial relationship (Burrows, et al., 2020). For this purpose Starbucks needs to strictly follow two laws of employment and they are as under:

Fair Labor Standard Act – This is crucial for Starbucks since its staff have a job in which salaries are paid per hour. Their work is very essential. Starbucks must pay all of his staff at least the nationally required minimum wage in order to comply with the federal legislation (Fridell, 2007). Since this rule is enacted and is monitored by the federal government, Starbucks should ensure that their hourly salary is equivalent to or more than the minimum salary levels. For Starbucks and its employees, this is tremendously essential (Fridell, 2007). Unless Starbucks complies with the federal requirements, their market reputation might suffer at it might be faced with embargoes propelled by the federal government.

American With Disability Act – This affects Starbucks tremendously because it’s an enterprise that takes pleasure in hiring a broad set of individuals including disabled persons (González-Masip, 2020). Starbucks is now obligated to provide certain accommodation for all employees with disabilities to comply with the concerned legislation (González-Masip, 2020). This might enable Starbucks to become a more accessible retail chain for disabled customers and a firm that meets the needs of physically or mentally disabled people. Such compliance can increase Starbucks’ opportunities to recruit and retain talents who might get interested to work for Starbucks’ considering the company’s market and public reputation as a socially responsible company.

Conclusion

Thus to summaries it can be said that if a company follows all its legal responsibilities in an effective manner then, it can gain a fair value and earnings from its business. Starbucks is an organization that has succeeded in integrating these principles in its business processes and operations. Starbucks follows the ethical code of business that helps it to perform its legal duties thoroughly, explicitly, and ethically. Starbucks also maintains business ethics in establishing legitimate business relationships with its suppliers both in the short- and long-run. Starbucks performs its corporate social responsibilities within a legal and ethical framework, which helps the company to remain profitable and ethical simultaneously.

References

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Fridell, G. (2007). Fair Trade Coffee: The Prospects and Pitfalls of Market-driven Social Justice. United States: University of Toronto Press.
Garthwaite, C., Garthwaite, C., Busse, M., Busse, M., Brown, J., Brown, J., & Merkley, G. (2017). Starbucks: A Story of Growth. Kellogg School of Management Cases, 1-20.
González-Masip, J. J. (2020). Knowledge Management for Corporate Social Responsibility. United States: IGI Global.
Nguyen, C. (2020). Sustainability marketing concept: Case Starbucks. United States: University of Toronto Press. United States: IGI Global.
Zein, T., & Zein, S. (2020). A legal perspective on Corporate Social Responsibility (CSR). BAU Journal-Creative Sustainable Development, 1(2), 1.