Responsible Management in Action

Intercontinental Hotel Group versus Starbucks: A CSP Challenge

How does one compare the world’s largest hotel chain from the company. IHG’s activity, on the other hand, would
with the world’s largest coffeehouse brand? The CSP model be categorized as economic responsibility (level 1), as the
­provides a reliable framework with which to compare ­company mentions, as the reason for creating and imple-
­businesses from very different industries. Both companies menting its academy program, that they “have found it
have become involved in responsible sourcing programs, difficult to attract and retain talented employees in the region
which will be the subject of our analysis. [referring to China].”
Starbucks (SB) has pioneered its r­esponsibility SB’s stakeholder responsiveness can be assessed
toward community stakeholders in the supply chain as proactive (level 4). When Starbucks instituted
through its Coffee and Farmer Equity (C.A.F.E.) Practices C.A.F.E., there was little fair trade activity in the agricul-
program, which supports small local farmers in their com- tural sector and no for-profit company that showed a
munity development and integrates them into Starbucks’s comparable degree of involvement. SB proactively antici-
fair trade network to provide communities with a decent pated the needs of small communities (the stakeholder).
income. Starbucks procured 367 million pounds of coffee The IHG Academy follows good practice examples of
(86% of their global purchase) through the C.A.F.E. other companies with similar programs (e.g., Cisco’s
Practices program in 2011. The signature program of the Networking Academy and the often-made claim for the
Intercontinental Hotel Group (IHG) for involvement with necessity of hotels becoming more closely involved with
community stakeholders in the supply chain is the IHG their communities). Those features suggest accommodative
Academy, a training program that prepares individuals from stakeholder ­responsiveness (level 3).
local communities to work in the hotel sector. The IHG The issues maturity for SB can be categorized
Academy annually trains 5,000 students, mostly in China, as consolidating (level 2). The issue of community
but also in the United Kingdom (UK), the United States, and development through fair trade in the coffee industry
Russia. Students are offered permanent jobs with IHG after is a mature topic, which has been well consolidated
graduating from the program. among stakeholders. IHG’s topic of economic community
In the CSP analysis, which is summarized in Figure 4.6, development in the hotel industry, however, is a rather new,
we find widely varying results for the two companies. emerging issue (level 3).
For the responsibility category, SB can be placed on level The organizational implementation of SB’s program
4, discretionary responsibilities, as the program is far has exceeded the strategic level (strategic positioning of SB
­exceeding the scope of what would be morally required through its deeply implemented responsibility practices) and
can be placed on a civic stage (level 4), where SB has long
been a role model inspiring other actors inside and outside
Figure 4.6  CSP of Intercontinental’s and
its industry to improve their practices. IHG’s implementation
Starbucks’s Responsible Sourcing Programs
level is managerial (level 2), as the program is embedded
Average social into central management processes (e.g., human resources
performance management and hotel operations) but has not yet found
4
application on a corporate strategy level.
Those findings result in an average CSP score of 2 out
3
2 of 4 for Intercontinental and 3.5 out of 4 for SB.
Organizational Responsibility
implementation 1 category
0 Sources: Baer, E. (2012). Lessons from Starbucks: Building a sustainable
supply chain. GreenBiz. Retrieved March 30, 2012, from www
.greenbiz.com/blog/2012/03/21/lessons-starbucks-learned-building-
sustainable-­supply-chain?utm_source=GreenBuzz&utm_campaign=ac0abb9d73-
GreenBuzz-2012-03-21&utm_medium=email; IHG. (2012). Corporate
© Cengage Learning, 2015

responsibility report. Intercontinental Hotels Group. Retrieved March 30, 2012,

Issues Stakeholder from www.ihgplc.com/index.asp?pageid=722; Ashley, C., et al. (2007). The role
maturity responsiveness of the tourism sector in expanding economic opportunity. Corporate Social
ResponsIbility Initiative Report, 23; CISCO. (2012). Cisco Networking Academy.
IHG Academy
CISCO. Retrieved March 29, 2012, from www.cisco.com/web/learning/netacad/
Starbucks C.A.F.E. index.html

96 Part B Domains

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