Starbucks Corporation: A Bittersweet Reputation Recovery

<p style="color: white; background-color: rgb(3, 70, 56); font-size: 16px; display: inline-block; border: 0px solid rgb(197, 183, 131); padding: 4px 4px;"><a href="https://www.iveypublishing.ca/s/product/01tOF000002kr3NYAQ" style="color: inherit; text-decoration: inherit;"> AVAILABLE AS A DIGITAL LEARNING EXPERIENCE </a></p><br><br>In April 2018, following an in-store incident in Philadelphia that resulted in the unwarranted arrests of two Black men, Starbucks Corporation (Starbucks) faced a severe public relations crisis. A video of the incident, posted on Twitter, quickly generated widespread attention, online criticism, and in-person protests from people who accused the coffee giant of having exhibited racial bias. Within a few days, Starbucks shared press releases that featured its chief executive officer personally apologizing and taking responsibility for the incident. The chief executive officer also announced that US Starbucks stores would close for an afternoon for racial bias training and education. Although many public relations experts and customers commended Starbucks for its response, others continued to criticize Starbucks, claiming that its response wasn't genuine, but merely an attempt to protect reputation and avoid losing business. Further, while the training may have yielded positive education for employees, was it enough to prevent similar incidents from occurring in the future? What could Starbucks do to demonstrate its intentions were genuine? How could it correct its mistake, address the root cause of the incident, keep customers' trust, and thrive as the world's largest coffee retailer?

This case is intended for undergraduate and graduate courses related to leadership, communications, organizational culture, and corporate strategy. Students will analyze a business situation that demonstrates implicit bias and reflect on their own individual participation in such situations. The case explores proactive and reactive public relations management and highlights the importance of an organizational culture’s allyship (support of diversity and inclusivity). The teaching objectives are twofold, relating to reputation management and leadership in building corporate culture. After working through the case and assignment questions, students will be able to do the following:<ul><li>Demonstrate best practices for responses to public relations crises.</li><li>Analyze the role of corporate reputation in customers' reactions to business mishaps.</li><li>Recognize their own implicit biases. </li><li>Describe the role of human resources management and corporate culture in delivering the customer experience.</li><li> Outline the importance of diversity and inclusion in corporate settings.</li><ul>

• crisis communications, public relations, diversity