Reference no: EM132215669

Question: MBA - Ethics & Values

Case Study:

Starbucks and the Practice of Ethical Leadership:

One year after becoming CEO of Starbucks, Kevin Johnson faced an ethical issue when two black men were arrested in a Philadelphia Starbucks. Both men sat down in Starbucks store without ordering anything. The store manager was annoyed that they used the store without buying any Starbucks items. He immediately asked them to leave. Both men refused to leave claiming that they were waiting for a third friend. The manager called the police they were instantly arrested. See video https://www.youtube.com/watch?v=xWBVxTEgoYk

In his apology statement shortly after the arrests, Johnson said, "The video shot by customers is very hard to watch and the actions in it are not representative of our Starbucks Mission and Values. Regretfully, our practices and training led to a bad outcome-the basis for the call to the Philadelphia police department was wrong."

Before the incident, Starbucks had no companywide policy about asking customers to leave, and the decision was left to the discretion of each store manager. Johnson took full responsibility for the actions of his employees, and he acknowledged that Starbucks customers were hurt by the arrests. After issuing his apology, Johnson went to Philadelphia and met with the two men face to face to involve them in dialogue on what Starbucks needed to do differently. The week following the arrests, Starbucks announced it would temporarily close 8,000 stores to conduct unconscious bias training, which they did before the incident.

Questions:

• What are the relevant facts in this case?
• Who is involved?
• Did the manger violate Starbucks policy?
• What the manger should have done differently?
• Why both men did not leave peacefully?
• Was it really a racist case or bad judgement?
• How was the reaction of CEO?
• Was the CEO genuine in his reaction or it was public relations move?
• What are the ethical issues in this case?