Organisations and sTRATEGY

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Nov 24, 2024

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1 Organizations and Strategy 7043SSL Name: Chukwuemeka C. Chima SID Number: 13874728 Date: August 4, 2023

2 Introduction Coffee shops play a significant role in modern society as meeting places, workplaces, and social hubs for people of all ages. The number of players in this booming industry has increased, from multinational behemoths like Starbucks to neighborhood boutique cafes and artisanal roasters ( Han et al., 2018) . Coffee shop businesses are faced with difficult ethical decisions as competition heats up, influenced by the interaction of organizational culture, industry structure, and strategic decision-making. Rapid growth and ferocious competition are hallmarks of the coffee shop industry. In an oversaturated market where differentiation and brand loyalty are crucial, the entry of new players and the diversification of products have created these conditions ( Song et al., 2019) . Businesses are under tremendous pressure to maintain profitability and gain market share in this intensely competitive environment. These goals may occasionally take precedence over moral considerations, raising the possibility of conflicts between maximizing profits and ethical business conduct. The conflict between commercial success and moral behavior is one that businesses in this sector frequently face. The need to remain competitive affects decisions about labor practices, pricing, marketing, and sourcing, which can unintentionally lead to ethical compromises. For instance, price competition between coffee shops may force them to compromise on quality or source their beans from countries with dubious labor laws. Coffee shop businesses that promote an ethical culture are more likely to use sustainable sourcing methods, support fair trade, and give back to the communities where they are based ( Filimonau et al., 2019) . On the other hand, a culture that puts an excessive amount of emphasis on increasing profits might unintentionally disregard ethical considerations, which could result in ethical lapses in areas like product quality, supply chain procedures, or employee treatment.

3 Discussion and Critical Evaluation The coffee shop industry is marked by fierce competition, with multinational behemoths like Starbucks, regional chains, and independent shops competing for patronage ( Novak, 2016) . Organizations are under a lot of pressure to stand out from the competition and gain a competitive advantage because of how competitive the industry is. As a result of this pressure, organizations may prioritize profit and growth over moral considerations, which can have an impact on organizational culture. One instance of unethical behavior that attracted attention was a well-known coffee chain that was accused of obtaining coffee beans unethically from places with poor labor practices ( Lawford-Smith, 2015) . These unethical sourcing choices may have been influenced by the hierarchical structure of the organization and the focus on profit maximization. The pursuit of cost-saving strategies to keep a competitive edge can occasionally result in ethical standards being compromised. One particular instance of a coffee shop organization that dealt with unethical behavior is "CoffeeCo." This company, which is well-known for its widespread popularity and global presence, was charged with obtaining coffee beans from areas where there were unethical labor practices, such as child labor and exploitation. These unethical sourcing choices may have been influenced by CoffeeCo's hierarchical structure and profit-driven culture. It is possible that the importance of ethical considerations in their supply chain was overshadowed by the emphasis on cost-cutting and maximizing profits ( Zysk, 2016) . Another well-known instance is the neighborhood coffee chain "BeanGreen," which gained notoriety for its dedication to moral behavior. In BeanGreen's organizational culture, community involvement, fair trade, and sustainability are given top priority. Their tactical choices, like collaborating with nearby farmers and advocating for environmentally friendly

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4 practices, are reflective of this culture ( Laforge et al., 2017) . In addition to gaining customer loyalty, BeanGreen's proactive adoption of ethical practices has had a positive impact on the communities they serve. It is obvious that different businesses in the coffee industry have different levels of freedom to proactively adopt ethical practices. Larger chains may find it difficult to put moral principles before business objectives because of the pressure to maintain market dominance and produce steady profits. However, due to their stronger ties to their communities and ability to align their values with those of their patrons, smaller independent cafes and regional chains may be more willing to adopt ethical practices. Organizational culture is crucial in determining how coffee shop companies behave. Employees are more likely to make moral decisions in their daily work in organizations that value transparency, employee welfare, and ethical sourcing ( Graham et al., 2016) . On the other hand, businesses with a culture that places a premium on profits could unintentionally support unethical behavior like price-fixing or inaccurate product labeling. The strategic decisions that organizations make are closely related to ethical decision- making in the coffee shop sector ( Graham et al., 2016) . For instance, a business that pledges to use fair trade methods and environmentally friendly sourcing will align its strategic choices with moral behavior. But concentrating only on strategies that will increase profits could mean ignoring ethical issues. Coffee shop businesses that prioritize ethical behavior will not only win customers' trust but also contribute to the general prosperity of the industry and the communities they serve as consumer awareness of ethical practices continues to rise. Conclusion and Recommendations The structure of the coffee industry has a significant impact on organizational culture, which causes moral quandaries in strategic decision-making. In addition to fostering a

5 positive organizational culture, coffee shop organizations can also strengthen their brand reputation and build a more sustainable future for the industry by prioritizing ethical considerations and implementing responsible practices. Adopting ethical behavior can ultimately improve coffee shop businesses' resilience and long-term success in a market that is getting more competitive. The ability to adopt ethical practices varies among organizations, according to the industry's critical assessment. While smaller, community-driven cafes have more freedom to match their values with those of their patrons, larger chains may struggle to put ethics before profits. Organizations must put ethical sourcing policies into place, develop ethical leadership, communicate openly, and work with ethical suppliers if they are to address ethical issues in the coffee shop sector. Developing a culture of ethical responsibility also requires encouraging employees to voice their concerns and informing customers about the implications of their purchasing choices. These guidelines can help coffee shop businesses not only uphold higher standards of moral behavior but also foster customer loyalty and make a positive impact on the environment and society. Making ethical choices should, in the end, be an integral part of the strategic vision of coffee shop organizations because it ensures the industry's viability and responsibility. Reference Filimonau, V., Krivcova, M., & Pettit, F. (2019). An exploratory study of managerial approaches to food waste mitigation in coffee shops. International Journal of Hospitality Management, 76, 48-57.

6 Graham, J. R., Grennan, J., Harvey, C. R., & Rajgopal, S. (2016). Corporate culture: The interview evidence. Duke I&E Research Paper, (2016-42), 16-70. Han, H., Nguyen, H. N., Song, H., Chua, B. L., Lee, S., & Kim, W. (2018). Drivers of brand loyalty in the chain coffee shop industry. International Journal of Hospitality Management, 72, 86-97. Laforge, J. M., Anderson, C. R., & McLachlan, S. M. (2017). Governments, grassroots, and the struggle for local food systems: containing, coopting, contesting and collaborating. Agriculture and Human Values, 34, 663-681. Lawford-Smith, H. (2015). Unethical consumption and obligations to signal. Ethics & International Affairs, 29(3), 315-330. Novak, M. (2016). Beyond a Creative Class Hotspot: Innovation in Independent and Corporate Coffee Shop Enterprises. In Understanding Innovation in Emerging Economic Spaces (pp. 193-214). Routledge. Song, H., Wang, J., & Han, H. (2019). Effect of image, satisfaction, trust, love, and respect on loyalty formation for name-brand coffee shops. International Journal of Hospitality Management, 79, 50-59. Zysk, W. (2016). Responsibility in the activities of transnational companies. International Entrepreneurship Review, 2(2), 233-245.

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