Starbucks Case Study

STARBUCKS CASE STUDY
Case Study
Two black males were detained in a Philadelphia Starbucks one year after Kevin Johnson
took over as the company's CEO, putting him to the test as a leader. The men didn't make any
purchases while they waited for a meeting with a business partner. They were asked to leave
by the store manager, but they refused and said they needed to meet someone. The men
refused to leave, so the management called the police, who then took the individuals into
custody.
An arrest was captured on camera by a different Starbucks customer, and the video rapidly
went viral. The woman who recorded the video said in an interview conducted following her
detention that even though she had not placed an order, she had been sitting there for some
time and hadn't been asked to leave. The business associate of the black guys can also be seen
in the video showing up during the arrest and asking the manager and the police what the
men had done wrong. The general public and individuals who saw the arrest described it as
racist and discriminatory.
On the following Monday, Johnson said that the manager had left the store after this incident
on a Thursday. In the days that followed the arrests, there were sit-ins and protests at the
Philadelphia Starbucks.
Shortly after the arrests, Johnson issued an apology and released a follow-up video, saying,
"The video taken by customers is very difficult to watch and the acts in it are not indicative of
our Starbucks Mission and Values. Every store must prioritize creating a friendly and secure
environment for all customers. Unfortunately, our procedures and instruction produced a poor
result—the justification for the contact to the Philadelphia police department was incorrect.
Before the event, Starbucks did not have a company-wide policy on requesting customers to
leave, and each store manager was free to make that choice. Starbucks has developed as a
gathering spot for the community as a result of its accommodating stance; anyone is welcome
to sit there without having to make a purchase. When Johnson apologized, he brought up this
neighbourhood and noted that Starbucks strives to create a setting that is "both safe and
welcoming for everyone."
Johnson also described the inquiry he and the business will do in his apology. In addition to
engaging with community stakeholders to find out what they could have done better, the
apology outlined concrete steps Starbucks leadership would take to learn from the incident.
Johnson admitted that the arrests had a negative impact on Starbucks customers and accepted
full responsibility for his staff’s behavior. Johnson stated that the corporation needed to
perform a thorough study of the procedures that led to this incident and that employees
required greater training, including on when to notify the police.
Following his apologies, Johnson travelled to Philadelphia and personally sat down with the
two guys to discuss what Starbucks needed to change.
Starbucks announced it would temporarily close 8,000 locations for unconscious bias training
the week after the arrests, and they did so on May 29, 2018. Starbucks published a revised
"Use of Third Place Policy" a month after the arrests, stating that anybody may use Starbucks
and its facilities without making a purchase and outlining what managers ought to do in the
event of a disruptive client. Furthermore, according to the policy, Starbucks aims to foster "a
culture of warmth and belonging where everyone is welcome. In keeping with our purpose
"to inspire and nurture the human spirit - one person, one cup, and one neighbourhood at a
time,' this policy is meant to assist sustain the third-place environment.
What is Ethical Leadership?

A culture of ethical leadership fosters alignment between an organization's mission and the
goals and values of its workforce. There are six ways that leaders can support moral
leadership in businesses across all industries. They cover both the "being" and the "doing"
responsibilities of a formal leader. Together, character and deeds form a framework for
investigating moral leadership behaviour.
1.Modeling: Character and Values

The leader's simple outward behaviour, which communicates her values and character to
others, is the first method. This is a key factor in determining the extent of her influence. No
matter what she does, people will view it through the prism of who she is as a person. Her
acts will carry more weight than those of someone with a dubious character if she is seen as
virtuous and having strong moral character and integrity.
2. Creating Community
Moral leaders make investments in fostering community. They accomplish this by making
decisions based on the organization's mission and core values. At crucial times, they reiterate
their adherence to these agreements and acknowledge and make use of the agreements
reached amongst diverse parties. By relating their narratives to the principles upheld by the
business, they serve as role models for actions that strengthen the culture.
3. Encouraging Ethical Conduct

Such leaders feel at ease aggressively promoting and increasing understanding of ethical
behaviour at work. They concentrate on intention and action and are aware of the pitfalls that
limit human beings' capacity for good behaviour. There are several inclinations that might
result in ethical blunders, including mistaking moral judgements for financial or commercial
ones, moving too rapidly to allow for moral consideration, and pressuring people to act when
they are weary or afraid. In order to combat these very human impulses, leaders can
communicate by asking questions, highlight desired virtues through inquiry, and reframe
problems so that their underlying moral challenges are more obvious. Sometimes taking
action involves good, old-fashioned courage, as well as being aware of the dangers of group
thinking.
4. Being Disciplined in Their Role

The most successful moral leaders tenaciously pursue their objectives. Those in formal
leadership positions are responsible for advancing particular interests. If formal leaders
discover an interest mismatch or conflict, they explicitly accept responsibility for changing
course. Because they tacitly accept the same obligation even when it is not required by the
formal function they occupy, informal leaders are commonly identified. Both formal and
informal leaders are disciplined to make judgements with heightened awareness to uphold
their role's commitments because they are conscious of the many and frequently conflicting
roles they have in life. Leaders assist people in the organisation in exercising this same
discipline, appreciating, and honoring the wisdom of judgements taken by clearly
distinguishing decisions that can be made by individuals or should be made cooperatively.
5. Clarifying Culture
Things go awry despite best efforts and intentions. Moral leaders pause when this happens to
define culture. At these times, they reaffirm or review the organization's mission, identify any
discrepancies between stated and actual values, take responsibility for the discrepancies, and
eliminate any ambiguity between policy and practice. Others in the organisation can assess if
their personal values and the values of the organisation are consistent as the culture develops
and becomes more apparent.
6. Designing Ethical Systems

Leaders dedicated to such a practise accept responsibility for creating ethical procedures in
the company that base decisions about pay and other benefits, such promotions, on the
organization's goals, mission, and values. Such people make investments in their own growth.
They regularly expand their knowledge and offer assistance outside of their own organisation.
Design norms and principles in their industry or other related ecosystems are improved by
masters in this field.
One excellent technique to assess a leader's success is to look at how well they can apply
these five ethical leadership levers. People with strong moral principles and the capacity to
put these principles into practice are more likely to found organisations where the mission is
clear and the values of the organisation and the employees align, resulting in longer, healthier
relationships between the organisation and the people associated with it as well as a higher
probability of the accomplishment of the purposes and goals of the organisation.
LEADER’S PERSPECTIVE
1. The organization's and the Philadelphia supervisor's errors were tolerated by the leader.
2. He was able to correct the mistake by meeting with the partners and altering the
organisational tactics after carefully considering the entire circumstance.
3. He decided to train the staff members again to be more hospitable to the clients and treat
them with respect as a result of the encounters that followed.
4. He also expressed his regret to the customers who had been injured since he felt it was his
duty to do so.
EMPLOYEE’S PERSPECTIVE
1. The employees were loyal to the manager as they did what they were asked to do.
2. They were hardworking and obedient and were just doing their job.
3. Employees also accepted their mistake and went for training again to provide better
experience to the customers.
CUSTOMER’S PERSPECTIVE
1. Customers believed they were harassed by the manager at Starbucks.
2. They felt disrespected because of the racist behavior of the company.
3. The incident becoming a public affair seemed fair to them and public support they got
helped their case.
MANAGER’S PERSPECTIVE
1. He believed what he was doing was right according to him and didn’t expect it to be the
reason for him losing his job.
2. He was the one in power so decided to use it at his advantage if he was racist.
In the end, I concede that the leader's conduct was moral because he admitted his error and
offered an apology to the people. He also made the decision to meet with the stakeholders
and hear from residents in the region. As a leader, he made some particular actions, such as
changing the organisational tactics and requiring the staff to go through planning and
developing a new moral framework that will assist the customers.

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STARBUCKS CASE STUDY

What is Ethical Leadership?

1.Modeling: Character and Values

3. Encouraging Ethical Conduct

4. Being Disciplined in Their Role

6. Designing Ethical Systems

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