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Starbucks – Arizona State University Online education partnership is an example of Corporate Responsibility

June 24, 2014

Walking the talk of workplace ethics

 

As an academic and proponent of business ethics, I was delighted to read that Starbucks and Arizona State University (ASU) have developed a new scholarship partnership. The Starbucks College Achievement Plan (CAP) is available to company employees who enrolled full time or part time. The program will include an upfront "partial tuition scholarship," thanks to an "investment" from ASU. According to Starbucks CEO Howard Schultz, the new Starbucks College Achievement Plan is designed to support college completion with full tuition reimbursement for juniors and seniors to finish their degrees, or an on-ramp for freshman and sophomores with a scholarship.

 

Why do I think this is an example of corporate responsibility? Because Starbucks recognizes to develop better employees and future leaders for the company, it has to invest in their future growth and development. Even if the employees who go through the program do not go to work for Starbucks, the program will benefit society since those who leave Starbucks go to work for other companies and bring their skills and abilities to the table. Just imagine if every company could partner with an educational institution in online partnerships. Logic dictates that we could advance the technological knowledge and know-how of workers to help us better compete in an increasingly tech savvy world.

 

As for the details of the program, ASU said that, for each third- or fourth-year student, it would provide College Achievement Plan scholarships of $2,420 per semester, based on a student enrolled for 12 credits. Prices vary for ASU Online’s degree programs, but that CAP scholarship would cover about 40 percent of the cost of several of the lower-priced programs. Depending on their financial need, students could also be eligible for need-based university grants of up to $1,000 per semester, plus Pell Grants and other government student aid.

 

Under that example, high-need students would incur out-of-pocket costs of only about $500. Those with no need would have out-of-pocket costs of about $3,500. That’s where the Starbucks contribution kicks in. The company said it would reimburse third- and fourth-year students for their out-of-pocket tuition costs. The upperclassmen would become eligible for the reimbursement, provided to them on their paychecks, each time they completed 21 credits. Lower-division students enrolling from Starbucks would receive CAP scholarships from ASU of only $1,267 each, and no reimbursement on the gap between their student aid and their costs.

 

In broad terms based on current projections of the expected student profile, for every 1,000 upper-division students, the program would cost ASU about $24-million per semester and Starbucks about $11-million per semester. An additional $7-million would come from Pell Grants. ASU has funds from other areas of operations to cover the costs; it should be applauded for taking on the commitment to enhance the skills of workers at Starbucks.

 

I’ve always admired Starbucks because for several years it has been ranked as one of the top five most admired companies based on a study by Fortune. Moreover, it has been named one of the 100 most ethical corporations by Ethisphere. Most people that are familiar with the company and/or have worked for it know it provides a supportive environment within which to work. It has been a leader in providing health benefits for its workers and even 401-K retirement plans.

 

I’ve always believed that corporate responsibility goes hand in hand with ethical behavior. I am impressed by Starbucks commitment to high ethical standards. Its approach to ethical decision making is quite similar to the one I teach to my ethics students. Here is the Starbucks Ethical Decision-Making Process.

  1. Identify the ethical problem

  2. List solutions and any obstacles to resolving the problem

  3. Determine the best approach (what should you do)

    • Is it consistent with Starbucks Mission, Standards of Business Conduct and any applicable laws or regulations

    • Would your approach embarrass you or Starbucks

    • How would your approach look published in the newspaper

    • Would you be comfortable with the example it sets for future generations

    • If the decision is not clear ask for guidance

    • Follow through on your decision

Starbucks takes its social responsibilities very seriously. Through its program with ASU, the company has developed a model to train future mangers to be good leaders that should encourage similar academic-business joint educational partnerships.

 

Blog posted by Steven Mintz, aka Ethics Sage, on June 24, 2014. Dr. Mintz teaches at the Orfalea College of Business at Cal Poly, San Luis Obispo. He also blogs at www.ethicssage.com.

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