STARBUCKS CORPORATION: A BITTERSWEET

REPUTATION RECOVERY
Team Name- “JDA”
Abhishek Singh
Deepasha Goyal
Janhavi Vishwakarma

Indian Institute of
Management Amritsar
 STARBUCKS’S MISSION AND VALUES
Mission
 To inspire and nurture the human spirit—one person, one cup, and one neighborhood at a time.

Values
With 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
In April 2018, Starbucks faced a significant public
relations crisis when an incident of racial bias led to
the unwarranted arrest of two Black men in one of its
Philadelphia stores. This incident resulted in a
substantial public outcry, protests, and negative
publicity, leading to a crisis in the company's brand
image. While Starbucks has taken proactive steps,
such as conducting racial bias training, public and
media scrutiny continues. The primary challenge now
is to prevent similar social mishaps from occurring at
the customer-facing level while rebuilding and
maintaining the trust of customers and stakeholders.
Starbucks needs to define its next steps and priorities
for the future, ensuring that diversity and inclusion
become an integral part of its corporate culture and
brand identity.
•In April 2018, Starbucks faced a major public relations crisis following
an incident of racial bias at a Philadelphia store.
•Two Black men were wrongfully arrested, leading to widespread public
outrage, protests, and accusations of racial bias against Starbucks.
•CEO Kevin Johnson issued an apology and announced plans for racial-
bias education and training for all employees.
•Despite proactive measures, Starbucks continued to face public and
media scrutiny.
•The primary challenge was not only to manage the immediate crisis but
to prevent similar incidents in the future.
•Starbucks needed to make diversity and inclusion a core part of its
corporate culture.
•The company had to ensure that employees understood the importance
of creating a welcoming and inclusive environment.
•Engagement with local communities and a long-term commitment to
diversity and social responsibility were also essential.
•The goal was to foster an environment where diversity and inclusion
were central to Starbucks's values and brand identity.
•This approach would help rebuild trust and prevent similar incidents
from happening in the future.
Diversity, Equity, and Inclusion (DEI) are of paramount importance in various contexts, including workplaces, educational institutions, and society at large. Here are some key
reasons why DEI is essential:

 Enhanced Innovation and Creativity: Diverse groups tend to generate a wider range of ideas and perspectives, which can lead to more innovative solutions to complex
problems.
 Better Decision-Making: Diverse teams are more likely to consider a broader range of viewpoints, resulting in more comprehensive and informed decision-making
processes.
 Improved Problem-Solving: Diverse and inclusive environments encourage the exploration of various angles and solutions to problems, leading to better outcomes.
 Global Perspective: A diverse team can better understand and navigate international markets and diverse customer bases, making a company more competitive in a
globalized world.
 Enhanced Reputation: Organizations and institutions that prioritize DEI often have more positive public images, which can lead to improved brand loyalty and wider
customer support.
 Talent Attraction and Retention: Prioritizing DEI helps attract a diverse talent pool and inclusive workplaces often have higher employee satisfaction, leading to lower
turnover rates.
 Social Responsibility: Embracing DEI is part of an organization's social responsibility, contributing to a more equitable and just society.
 Compliance and Legal Requirements: DEI initiatives often align with legal requirements related to equal employment opportunities and non-discrimination.
 Reduced Costs: Inclusive workplaces experience lower turnover rates, which can lead to cost savings in recruitment and training.
 Innovation and Adaptability: DEI fosters a culture of innovation and adaptability, as different perspectives encourage thinking outside the box and adapting to change.
 Educational Equity: In educational institutions, DEI ensures that students from all backgrounds have equal access to quality education, promoting a more equitable
society.
 Health and Well-being: In healthcare and well-being contexts, DEI can address disparities in healthcare access and outcomes, leading to better health for all.
 Civil Rights and Social Justice: DEI is a fundamental component of advancing civil rights and social justice by addressing systemic discrimination and promoting equality.
 Equal Opportunities: DEI ensures that all individuals, regardless of their background, have equal opportunities to succeed and advance in their careers, fostering a fair
and just society.
 Cultural Competency: DEI promotes cultural competency, which is vital in a diverse society to understand and respect different cultures, traditions, and perspectives.
 Sustainability: DEI is closely linked to sustainability efforts by promoting fairness and equality in resource distribution and environmental initiatives.
 Public Relations &
Continued Racial Bias Stakeholder Engagement
Training •Proactive PR strategy
•Ongoing employee •Demonstrate unwavering
development commitment
•Regular updates to address •Engage with customers
evolving issues and the community

Diversity & Inclusion Transparency &

Committees Accountability
•At store and regional levels •Promptly address incidents
•Monitor and promote diversity •Swift action against discrimination
•Organize diversity events •Strong message of intolerance
Community Engagement
•Participate in local events
•Sponsor social justice initiatives
•Build strong community relationships
Starbucks' financial success at the end of fiscal year 2018, despite a major PR crisis and the costs associated with
the racial bias training, can be attributed to a combination of factors, including its PR response but not solely
limited to it. Here's an analysis of why Starbucks exhibited such resilience:
•Starbucks had a history of
•Starbucks' proactive and comprehensive emphasizing values related to
response mitigated damage to its brand and diversity, inclusion, and social
reputation. responsibility.
•A quick public apology and commitment to •This established culture instilled
racial bias training were key components. confidence in stakeholders regarding
the company's commitment to
addressing the issue.

•Starbucks communicated its

•Starbucks, as a financially robust commitment to diversity and inclusion
corporation, could invest in a as a long-term part of its identity.
comprehensive response without significant •This long-term focus reassured
financial strain. stakeholders, including investors,
•The company's resources allowed it to about the company's dedication to
commit to initiatives like racial bias change.
training.
• Proactive Response Matters:
Starbucks' proactive and comprehensive response to a PR crisis was a critical factor in mitigating damage to its brand
and reputation.
• Culture Shapes Resilience:
Starbucks' corporate culture, emphasizing values related to diversity and inclusion, played a significant role in
maintaining stakeholder confidence.
• Financial Strength Counts:
As a financially robust corporation, Starbucks had the resources to invest in comprehensive initiatives without
significant financial strain.
• Long-Term Commitment is Vital:
Starbucks' long-term perspective on diversity and inclusion reassured stakeholders about the company's dedication to
change.
• Sustained Efforts are Necessary:
To maintain resilience, Starbucks should continue diversity and inclusion efforts, involving ongoing training and
community engagement.
• Transparency and Accountability are Key:
Maintaining transparency and accountability is essential for addressing issues promptly and demonstrating
commitment.