The New Business Political Activist - Assignment Example

? The New Business Political Activist: Behind the Scenes Less Visible Politics is often a taboo It is one of those necessary parts of society, but one that many people shy away from openly discussing. Companies, by and large, struggle with this very issue of how involved to become in local and national politics. On the one hand, they do not want to be seen as taking sides or as pandering to certainly political causes only for the sake of self-gain, yet to remain silent could prove detrimental to their business. Starbucks has long been in such a position. From its early days, the Seattle based company has tried its best to remain above the political fray. Only recently has it become necessary to consider more political involvement in order to gain certain protections for their ever-expanding domestic and international business. It is important, however, to remain in line with corporate policy and to proceed cautiously. By examining key areas, one can make recommendations and postulate about the future political involvement that Starbucks will embark upon. The New Business Political Activist: Behind the Scenes Less Visible Question 1 In our modern era of increasingly big government, it is growing difficult for businesses to remain on the political sidelines. This is due in large part to the reality that so much of a businesses long-term success is dependent upon various financial and cultural issues that truly affect the bottom line. This becomes even more significant for companies with an international presence, due to the presences of trade barriers, tariff regulations, and production and manufacturing laws, just to name a few. For these reasons alone, if Starbucks is truly focused on long-term growth and expansion, both domestically and internationally, it is probably not a realist goal to stay entirely out of the American political arena. At some level, they will need to lobby the government in an effort to protect their company vision and to look out for the well being of their employees and shareholders. As mentioned in the first section of the reading, Starbucks is currently expanding their operations into Southeast Asia. In order for their business model to be effective, however, they depend on certain tax and trade benefits that mutually benefit themselves, America, and the target country. Ordinary small businesses likely do not have much political clout to speak of, so they would be at the mercy of whatever political arrangements are in effect at the time. Starbucks, however, is in a unique position given their size and their ability to impact the local economy of any region in which they operate (Slavoj, 2011). In addition, they are a major source of employment, and they possess the ability to greatly impact to coffee bean growth and production industry. Because of this, they need to be vocal in the political system in order to make their desires known and to receive preferential treatment based on their size alone. Were they to remain silent, on the political sidelines, they could likely find it difficult to support their current expansion efforts, affecting everyone involved with the corporation, either directly or indirectly. Question 2 There are countless political strategies available to Starbucks, any of which could prove impacting to their long-term economic outlook. Figure 9.2 mentions three main areas by which the company can begin to make their voices known to Congress and other affected government agencies (Goldsmith, 2010). These include lobbying efforts, direct communication, and expert witness testimony. As was mentioned in the article, the CEO and other members of the Board for Starbucks already have the direct voice of many influential political insiders. This is largely due to the size of the company and the positive business image they have built up over the years. They can use this to their advantage by communicating directly with members of the legislative body on items of interest to them. This can take place either directly or indirectly. Lobbying is a form of indirect communication that has proven effective in the past. Given Schultz’s reluctance to be publically involved in political matters, however, he might prefer to employ the use of lobbyists sparingly. If it involves an issue worth tackling, he would likely want to approach respective parties directly, by communicating with them personally. In addition, there are various ways that Starbucks could make their influence in American politics known. According to figure 9.2, the primary means of doing this include: Political contributions, economic leverage, political consulting, and office personnel (Goldsmith, 2010). Because of the companies, and Schultz’s, insistence that the company not become a political meeting place, they would likely shy away from making meaningful political contributions of any sort to one party or politician. Instead, the best course of action for them would seem to be economic leverage. By making it firmly known and realized the many advantages that Starbucks brings to the marketplace, they will ‘silently’ be lobbying for certain legislation through simple influence alone. Because Starbucks employs so many people, and they have a longstanding tradition of looking out for and providing employee benefits, this approach, couples with directly communicating with government officials, would seem to be the most prudent approach moving forward. Question 3 Engskov is obviously keen to be involved politically, as he sees it as a way to promote and ensure that the best interests of Starbucks as a whole is considered in the political arena. He even goes so far as opening the door to the possibility of forming a political action committee at some point in the future, to further cement their foot in various political circles. In order to ensure that this is effective, in addition to winning over Schultz’s undivided support, Engskov would be wise to look at certain areas of involvement for Starbucks moving forward that would help ensure the efficacy of any future endeavors in the political arena. Figure 9.5 effectively points out that this can begin, at its most basic level, with Starbucks contributing to various political action committees. While there are other ways to be involved as this level, contributing to various PAC’s that support the same business principles and ideologies as Starbuck’s would seem to be a good initial step. Political action committees are an effective outlet because they pool resources and look out for the interests of different individuals and organizations. As Starbucks continues to get its feet wet in this area, they can depend on the effectiveness of established PAC’s to represent their interests in the court of public and political policy. Moving to the next level of political involvement, we can reasonably assume that the best course of action for Starbucks would be to have an organizational lobbyist employed and assigned to look out for the best interests of the company. As shown in figure 9.5, other alternatives would be to have an employee grassroots involvement, or to have stockholder and customers become involved in the process (Goldsmith, 2010). Both of these concepts, however, would be too radical a shift away from Starbuck’s current reluctance to be openly involved in political matters (Baron, 2003). By having an organizational lobbyist, they would be looking out for their best interests, while at the same time minimizing their direct involvement in the political process. A final recommendation for Engskov to consider as Starbucks becomes more active in the political process is to have more participation from executives within the company. This would include encouraging Shultz to shed his reluctance to become too openly in political matters. It is important for high-ranking executives in Starbucks to openly vocalize the need for certain legislation in order for politicians to take notice and recognize the significance of such concerns. Question 4 The final question in this section centers on Starbucks thought to potentially become more politically involved in certain areas. As has already been discussed, the CEO of the company is reluctant to do so, but we do notice that he is beginning to allow others in the company to override his objections. This is a sound management strategy. While there are certainly times in a company’s life that the CEO must make unpopular decisions that no one in the organization agrees with, a certain amount of compromise is often necessary. As Starbucks has grown, it has become increasingly necessary to enter the political lobby in order to gain certain protections for and ensure the continued expansion of the company. As such, it is important that Engskov cautiously purse continued political involvement. He should not avoid or delay developing such strategies, but he should go ahead and proceed. To avoid or delay developing such strategies would not result in any benefits for the company. In fact, the costs could be significant. As Starbucks is currently embarking on an ambitious international expansion plan, they need to be lobbying for certain trade and tax benefits now, not later. In addition, there are many domestic issues on the table that directly affect and impact the livelihood of the thousands of Starbucks employees nationwide. It is important to continue the level of employee benefits that the company has prided itself on providing over the years, but the expense of doing so can easily become prohibitive (Thompson and Arsel, 2004). Owing to this reality, Starbucks will likely need to continue ramping up its involvement in political matters to ensure that they do not get caught of guard, potentially causing severe damage. References Baron, D. (2003). Private politics. Journal of Economics and Management Strategy, 12(1), 31-66. Goldsmith, A. (2010). Business, government, and society: The global political economy. Cengage Learning Company: New York. Slavoj, Z. (2011). Actual politics. Theory & Event, 14(4), 1-3. Thompson, C., and Arsel, Z. (2004). The starbucks brandscapte and consumers experiences of globalization. The Journal of Consumer Research, 31(3), 631-642. Read More