The US multinationals Starbucks, Google, and Amazon have been accused of not paying enough corporate tax in the UK. International companies are able to exploit national and international tax structures to minimize corporate tax. The outcome – they don’t pay their fair share. This happened after the executives had been heard by the parliamentary committee last month to face questions about their tax structures. They are accused of using loopholes to avoid paying their fair share. They are not accused of being illegal, they are accused of being immoral. Journalists were trying to reach out to them to ask questions but they all insist they pay enough taxes in the UK and around Europe. What’s changed in part is pressure from consumers. But Starbucks says it has listened to customer feedback an
Показать всеd the feedback from employees. When you walk inside a Starbucks café you can see a board saying this is our community activity, showing pictures of people picking coffee beans in the rain forest. But you are struck by the contradiction – these people aren’t willing to pay their taxes in the UK.
Starbucks tax schemes (transcript from CNN Money Program)
The report says Starbuck has avoided paying tax for one key reason – it has reported a loss for every single year it has arrived in the UK. That’s despite having opened 735 outlets. Take the last three years for example. During this period Starbucks racked up almost 2bn in sales. It said it made no profit so it paid no tax. In comparison McDonalds’ sales were 5.8bn and it paid 100mln in tax. The books confirmed that Starbucks hadn’t been profitable for ten years meaning it’s not liable for corporation tax. But investors said repeatedly that the UK business was profitable. This is how Starbucks have structured its profit. It buys coffee for Europe from Jamaica,
Panama and Costa Rica. The beans, however are not bought in the UK but from a firm based in Switzerland. After this the beans are shipped to Amsterdam where they are roasted; and then they finally reached the UK. It’s a complicated maneuver, but this supply chain is the way of pushing profits around the world and reducing the tax bill in a particular country. And all the practices applied by Starbucks are indeed legal. And in their statement in the UK it is written: “We will continue to pay our fair share of taxes to the letter of the law in the UK as we always have. This is in keeping with our values in business holding ourselves to the highest ethical standards, be it in the way we source our coffee or pay out taxes.” Скрыть
BUS 9510 Business Ethics
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What is violated by the government authorities is the ethics of duty – they could have prosecuted the owners of those shops (α) for employing illegal immigrants and (β) for the sweatshop practices violating human rights.(d) clothing retailers.They appear to be the second most unethical group, because their main concern is maximizing profits by whatever means – the next step would be reselling stolen clothes. First of all, they do not respect the ethical norm of fairness and duty. Nor do they respect the norm of caring. They don’t care much for the Thai being sent back to Thailand. 46. In your opinion, are human beings essentially good, needing only support and encouragement for their development, or are they essentially self-seeking, such that an economic system is wise to build on this s
Показать всеelfishness and make best use of it?To answer this question, I would raise the issue of people’s motivation and consider Maslow’s hierarchy as, in my view, it is these developmental steps, or levels of needs that an economic system builds on. Individuals cannot get the next higher level until they reach the lower level, and some never reach beyond a certain level. For those resting on the basic needs level, an economic system has created workplaces that pay employees enough that they can pay their utilities and buy clothing food etc. The same is true for the safety and security level, but here, in addition, the system has created the mechanisms that help employees feel physically safe (e.g. anti-harassment laws) and job-secure (e.g. layoff benefits). For those seeking belonging and love, the system has produced workplaces where managers had been trained in business schools and courses to learn, for example, how to prevent an employee from being alienated from the company. The system has had to work the hardest to figure out the mechanisms to attract/retain self-actualized employees, as those appear to be the most valuable assets for companies.47. Exercise: Write Your Own Obituary.Write your own obituary that will appear in your city newspaper. Assume that it is written by your best friend who knows the real you in addition to your accomplishments. After you do a first draft, show it to a good friend for their comments. Write this in a maximum of 300 words.G. V. P., 50, of St. P. died June 13, 2015. He was born in St. N, the only son of R. and M. (S.) Ps. He was educated in St. N. public schools and later served in the Army. He went on to receive his BA from St. P. State University and his Masters from C. University. In 1981 he was married to the former C. H. at St. O. Church in St. P. They have two children. Mr. P. was employed by the Institute of D. in St P. since 1990. He was previously employed at G.E. Company in St. N. G. was an active member of the B. Rotary Club, serving twice as President and later as the District Supervisor. He was twice elected to the school board in St. P, a position he proudly held from 1981-1994, serving as President in 1993-1994.He leaves his beloved wife C.; his son P. and his wife M. of the city of S.; and a daughter F. of the town of G. He also leaves a brother F. and his wife L. of the city of L.Funeral services are private and will be held in at 10 am on June 15, 2015 at St. A. Church in St. P. with Rev. D. S. presiding. Memorial gifts in Mr. P.’s memory can be made to the R. Heart Association, 24 L. Lane, St. P. 19433Arrangement are being handled by the O.S Funeral Home, St. P.48. Case: Ebola Virus and Entertainment. The 1995 film Outbreak is based on a real-case outbreak of the Ebola virus in Zaire, Africa. The Atlanta Center for Disease Control (CDC) sent a team to a "hospital deserted save for a few patients dying the ugly, bloody death of Ebola. . . no running water, no telephones. . . and contained the disease. Dustin Hoffman played the movie lead role. C.J. Peters, MD, is chief of Special Pathogens, CDC. Peters is fighting budget cuts for his unit. Note the comparative data.CDC's Pathogens BranchWarner Brothers OutbreakSalary: Dr. C. J. Peters $125,000Budget: CDC FY $7,200,0001995: Spending on Ebola: $1,800,000Dustin Hoffman: $6,000,000 Production: $54,000,000Gross in 3 months: $67,000,0001. What do these comparative expenditures tell us about American values and priorities?These expenditures tell us that the American entertainment industry promotes values that are totally different from human values. The former rely on external factors, such as people’s admiration, how the actor (Hoffman) appears to them in terms of his image, his own and his film character’s achievements and successes, as well as his social statuses and successes. While human values are about affiliation with persons’ family and friends, community feeling, the feeling of compassion toward those in need or in trouble.2. Is there an inequity in these figures? Why or why not?There is an obvious inequity in these figures. Global health disparities are always troubling but juxtaposed with the figures from the Hollywood expenditure on a film about dire health problems they appear grotesque. To spend so little on the real problem is not morally justified, no matter how big the size of the returns.49. Case: America's Most Admired Corporations. A survey of executives and financial analysts to determine "America's most admired corporations" ranked Merck as number one and Philip Morris and RJR Nabisco among the top ten. Criteria included quality of management, quality of products or services, financial soundness, and community and environmental responsibility. Manville was rated among the "least admired" because of its involvement with asbestos. The core business of both RJR Nabisco and Philip Morris is cigarettes.1. Do you agree with ranking Merck as number one? Give your arguments.No, I don’t. The company that is in the spotlight of ethical crises cannot and should not be ranked as number one. First, it was Vioxx scandal that tarnished Merck’s public image, which forced the company to withdraw Vioxx from the market after multiple deaths from heart attacks allegedly caused by the drug. Now it is NuvaRing contraception product causing lethal blood clots. The product remained long on the market despite evidence of serious risk, with the Merck’s executives denying the responsibility. It looks like this is “a case of a greedy drug company marketing a drug without disclosing known potentially lethal dangers.” 2. Do you agree with the rating of Manville? Give your arguments.I would agree with this rating because of its inflicting asbestos-related injuries to thousands of individuals. However, despite filing for bankruptcy after being involved for a long time in litigation, the Manville Trust is still in operation. This is because the company’s management took a proactive position and was open to the public and didn’t deny the responsibility. So, ethically, it doesn’t look much worse than Merck. 3. Do you agree with the position of Philip Morris and RJR Nabisco? Give your arguments.Not quite. Although tobacco-producing companies like PM and RJR are rated so high, perhaps thanks to their financial results on the stock market and their CSR activities, they do not deserve to be ranked that high. And the reason for this is apparent – tobacco-related deaths are projected to rise to 8.3 million people in 2030 (from 5.4 million in 2005) as the activities of multinational tobacco companies spread the smoking epidemic to developing countries. As far as CSR is concerned, since tobacco companies aren’t allowed to promote their products through advertising by law, they quite aggressively engage in corporate social responsibility activities, which offer them an alternative channel to reach their audiences. Through CSR activity, such as supporting a wide variety of health and education programs in areas where they operate, tobacco companies like PM and RJR are also trying to win back their public image. CSR has been strategically applied by them to prevent the government guidelines from cutting tobacco consumption. In reality, this has mainly been a tokenistic PR exercise, without any actual changes in policy. Their initiatives are nothing more than a smokescreen to give them the chance to sidestep their responsibilities of dealing with social issues. CSR and the tobacco industry is just another oxymoron created by these controversial companies. 50. Exercise: Ethical Climate of an Organization.The goals, values, and ethics of an organization are vitally important yet often do not receive the attention they deserve. The purpose of this project is to enable you to examine and articulate the values, ethics, and commitments of the organization where you work (or any organization of your choice).To complete the project do the following: 1. Decide on the organization you wish to study (e.g., a firm about which you have access to information).Starbucks Corporation.2. Indicate (a) the name and field of business of chosen firm, (b) sources of information.(a) Starbucks, an American coffee company and coffeehouse chain; (b) mainly the online resources but also personal experience of visiting the Starbucks cafes worldwide. 3. Determine the proclaimed goals, values, and ethics of the organization and its proclaimed commitments to its key stakeholders - customers, employees, suppliers, the local community, the larger community (including the physical environment), and shareholders. For this purpose, study the mission or goal statement of the organization, its codes of ethics, the speeches of top managers, and relevant materials from annual reports or training manuals. Indicate any values missing from those proclaimed. Be explicit and comprehensive.Constant communication with customers; obtaining customer feedback on the quality of service. Providing employees (referred to as partners), including part-timers, with extensive benefits such medical insurance, company share ownership, job-security guarantees, various kinds of training, including the Starbucks College Achievement Plan - an innovative education benefit to help Starbucks partners complete their degrees online through Arizona State University; hiring veterans and military spouses. Ensuring social, economic and environmental standards for suppliers; practicing ethical sourcing aimed at sustaining long-term supply of high-quality coffee and caring for the lives of coffee farmers and their communities. For larger communities – addressing climate change by building more energy efficient stores and facilities; conserving energy and water; investing in renewable energy; exploring new solutions for recycling and making their cups sustainable; supporting educational programs for youth globally; funding community-building programs; raising finance through various programs for the Global Fund to help eradicate HIV/AIDS in Africa; and many more (See Appendix 4. Determine the real goals, values, ethics, and commitments of the organization. Consult individuals who have direct contact (employees, customers, others), use personal observation, and study written materials evaluating the company.Like for all multinational corporations, making profit for Starbucks’ is the primary goal. It isn’t only aimed at making profit but it is also committed to maximizing it. Like some other multinationals, Starbucks behaves unethically in certain countries like, for example, practicing tax-avoidance (See Appendices 5 and 6)5. Prepare a report (at least 3 000 characters) of your findings. This may include an appendix with supporting materials. Spell out the (a) proclaimed values and (b) real values of the firm. Determine if the organization is doing what it says it does. Specify what it is doing to meet obligations to stakeholders. Indicate if it is meeting these obligations very well, satisfactorily, or not well and give suggestions for improvement. Be explicit and specific.The proclaimed values of Starbucks are Constant communication with customers; obtaining customer feedback on the quality of service; arranging special coffeehouses referred to as stealth Starbucks where they tested their new products on local communities.Providing employees (referred to as partners), including part-timers, with extensive benefits such medical insurance, company share ownership, job-security guarantees, various kinds of training, including the Starbucks College Achievement Plan - an innovative education benefit to help Starbucks partners complete their degrees online through Arizona State University; hiring veterans and military spouses. Ensuring social, economic and environmental standards for suppliers; practicing ethical sourcing aimed at sustaining long-term supply of high-quality coffee and caring for the lives of coffee farmers and their communities. For larger communities – addressing climate change by building more energy efficient stores and facilities; conserving energy and water; investing in renewable energy; exploring new solutions for recycling and making their cups sustainable; supporting educational programs for youth globally; funding community-building programs; raising finance through various programs for the Global Fund to help eradicate HIV/AIDS in Africa; and many more (See Appendix 4)For consumers – paying their fair share of taxes to the letter of the law in keeping with their values in business holding themselves to the highest ethical standards, be it in the way they source their coffee or pay their taxes.The real values of Starbucks: Like for all multinational corporations, making profit for Starbucks’ is the primary goal. It isn’t only aimed at making profit but it is also committed to maximizing it. Like some other multinationals, Starbucks behaves unethically in certain countries like, for example, practicing tax-avoidance (See Appendices 5 and 6). Definitely, the organization is not always doing what it says it does. It is doing many good things to meet obligations to stakeholders, such as those listed above and in the appendices. It is probably meeting these obligations satisfactorily. However, it does not behave ethically as far as their consumers in different countries are concerned, by avoiding paying taxes. If Starbucks wants to remain a successful company, it should stop the unethical practices of avoiding paying taxes and start holding themselves to the highest ethical standards as it says it does, rather than just pay lip service to corporate social responsibility.APPENDIX 1History of Starbucks(Transcript of the Starbucks Boardroom Masterclass Video http://edition.cnn.com/2007/BUSINESS/10/01/boardroom.masterclass/#cnnSTCVideo )One of the world’s biggest brands, Starbucks, at last count 19,000 stores across the globe and growing.And this is where it all began – Pike Place Market in Seattle of the U.S. West Coast. Back in the 1970s it sold coffee by the bean, but the passion for the product was enough to attract the young Howard Schultz from New York. “It’s hard to believe that I walked into this store in the late 70s and the store changed my life.” Schultz convinced the owners of Starbucks to take him on. In Seattle he found his calling. But it would take the trip to the other side of the world to form his vision.A visit to Italy in the early 1980s convinced him the U.S. was ready for Italian style coffee-house culture – top quality coffee, good conversations & comfortable surroundings – the ingredients he says are at the heart of the Starbucks experience. But Starbucks management were not so keen. And Schultz left the company he loved to start all over. The result – his own café chain Il Giornale. And he brewed an immediate hit. Then opportunity knocked – Starbucks was out for sale. Schultz raised $4M and bought the company in 1987. The two chains then merged becoming the Starbucks we know today, serving up millions of cups of coffee each week in more than 40 countries. Its enormous success, its status in popular culture, its profitability has made Starbucks a household name, led by a chairman who says enough is never enough, and continues to follow his dream of taking the Starbucks experience to every corner of the globe. Welcome to Shanghai. You’ve been here several times… every time I come here, I’m amazed by how much this place changes… the economic development… every time you come back it’s almost like you’re visiting a different place, don’t you think?I think I’ve been here 4 or 5 times over the past 12 months. And every time I come back it seems as if it’s been transformed all over again. China and specifically this part of the world will be the #1 growth region for Starbucks.Let’s talk about how so, because your international expansion is going to be driving a lot of Starbucks growth going forward. You have identified as you just said that China is a key market. Just how big are you plans for China?We’re approaching 600 stores in greater China, 300 in the mainland. I think at the end of the day, there’ll me thousands of Starbucks stores in China. But I think it’s important to know despite the success that we have enjoyed in other parts of the world, success is not an entitlement anywhere, especially in China. We have to come here, we have to earn the respect of Chinese customers and do it in the way that is very respectful and very sensitive to how people live here. When you look at a market, do you radically alter the Starbucks model, or is it much more of a case of one size fits all with a few sort of modifications?I think when you look at Starbucks as a business case what we've done and the way we do business is quite different than a classic consumer brand, and let me be specific. Most consumer brands that have emerged in the last 10-20 years have been built through traditional marketing and traditional advertising. Starbucks is not an advertiser. People think we are a great marketing company but in fact we spend very little money on marketing and more money on training our people than advertising.Just quickly, was that always the plan?Well, when we started we had no money. We had no choice, we had to figure out a different way, but the point I want to make is that we built the brand by the experience and when you look back at history of Starbucks we are the quintessential experiential brand built by what happens inside of our stores. The mantra has been this: if you want to exceed the expectations of your customer, you can't do that unless you exceed the expectations of your people first, which means you have to treat people with respect and dignity. People want to be a part of something larger than themselves and at the end of the race there has to be something in it for them.APPENDIX 2Starbucks missionhttp://www.starbucks.com/about-us/company-information/mission-statement OUR MISSIONTo inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. OUR VALUESWith our partners, our coffee and our customers at our core, we live these values: Creating a culture of warmth and belonging, where everyone is welcome. Acting with courage, challenging the status quo and finding new ways to grow our company and each other. Being present, connecting with transparency, dignity and respect. Delivering our very best in all we do, holding ourselves accountable for results.We are performance driven, through the lens of humanity.APPENDIX 3Starbucks Global Responsibility Reporthttp://www.starbucks.com/responsibility/global-report What is the Role and Responsibility of a For-Profit Public Company?A year ago, I posed this question at our annual shareholders meeting. This report includes some answers to that question. Скрыть
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