For the following case I need to answer the following two questions. the analysis and the recommendation for actions

1. Analysis:Analyze the case through the Organizational Behaviour lens to explain 2-3 key main challenges the organization is facing. Make sure you include:
   1. Research from Organizational Behaviour textbook (ORGB 3rd Canadian Edition, Nelson et al. (2020), Nelson Education).
   2. and3 other sources
2. Recommendations for action: Provide 2-3 practical recommendations that will help the organization effectively manage the challenges you identified in the analysis section. Make sure you include theories/concepts from our textbook (ORGB 3rd Canadian Edition, Nelson et al. (2020), Nelson Education) that back up your recommendations.

STARBUCKSCORPORATION: ABITTERSWEETREPUTATIONRECOVERY1

In November 2018, a financial review of Starbucks Corporations (Starbucks) showed that fiscal year 2018hadbeenasuccess,eventhoughthecompanyhadfacedoneofitsmostseriouscrisesinrecent history.2OnApril 12, 2018, video footage of an incident at a store in Philadelphia went viral on social media.3Theunwarranted arrest of two Black men, Rashon Nelson and Donte Robinson, resulting from the actions of asingleemployee,causedacontroversialpublicrelations(PR)andbrandimagecrisisfortheworld'sbiggestcoffeeretailer,whichthenhadalmost30,000storesworldwide.4Theresultingpublicoutragewasdirectedat the coffee giant. Protesters surrounded the store in the following days, accusing Starbucks of racial biasandchantingsuchslogansas,"Awholelotof racism,awholelotofcrap,Starbuckscoffeeisanti-black."5In series of press releases posted a few days later, chief executive officer (CEO) Kevin Johnson issued aremorseful apology and promised a thorough investigation of the incident.6Another press release on thesameday,April17,announcedaboldpromise:thecompanywouldcloseover8,000company-ownedstoresin the United States for an entire afternoon on May 29 to provide partners (employees) at all levels withracial-biaseducationandtraining.7

WhilethegeneralpublicandPRexpertsalikecommendedStarbucksforitsproactive,"textbook"response,criticism continued to circulate on social media and news platforms. With a new year ahead, what shouldStarbucks'snextstepsbe?WhatshouldStarbucks'sprioritiesbe,inthewakeofthisincident?Movingforward,whatmorecouldStarbucksdotopreventsimilarsocialmishapsfromoccurringatthecustomer-facinglevel?

STARBUCKSCORPORATION:HISTORY

The first Starbucks coffee house opened in 1971 in Seattle, offering high-quality, freshly roasted, whole-beancoffees.ThestorehadaprimelocationinthehistoricPikePlaceMarketandanameinspiredbytheromance of early, seafaring coffee tradersfrom the 1851 novel Moby Dick.8From the start, the creationof Starbucksfocusedonprovidingagenuineandcomfortable experience.

This focus was strengthened in the 1980s when Howard Schultz, the chair and CEO from 1986-2000 and2008-2017, was inspired by the romantic experience of visiting coffee houses in Italy. Schultz wanted tobring the same experience back home, to create "a place for conversation and a sense of community"athirdplacebetweenworkandhomeanintentionthecompanystillheldtothisday.9FromthenotionofathirdplacestemmedStarbucks'smissionandvalues(seeExhibit1),whichwereofficiallyadoptedin2008.

By 2019, Starbucks had grown rapidly to become the largest coffee-house chain in the world, with over30,000 stores in more than 75 countries, of which 14,809 were in the United States.10Clearly embraceddespite any language or cultural differences, the Starbucks brand has made its way into the minds ofconsumers around the world. The company went public in 1992, and in November 2018 had a marketcapitalizationofapproximatelyUS$76.75billion.11

SocialResponsibilityandSustainability

In keeping with its value of driving performance through humanity, Starbucks's growth over the past fewdecades was coupled with expanding philanthropic initiatives. Starbucks divided its social responsibilityand sustainability initiatives into four official categories: Community, Ethical Sourcing, Environment, andDiversity(seeExhibit2).12Atalocalscale,thecompany'ssocio-economicinitiativesincludedacommitmenttohire,by2018,atleast10,000opportunityyouth(i.e.,youngpeoplebetweenages16and24who were not connected to schools or employers), and the Starbucks College Achievement Plan, whichoffered full tuition for four years of undergraduate studies to qualifying partners in the United States. Thecompany's goal was to have helped 25,000 partners graduate by 2025. Globally, Starbucks had achievedits goal of sourcing 99 per cent of its coffee ethically in 2015,13 and it had recently introduced futurepromisestocreatecompostablesingle-usecupsandotherdrinkaccessories.14

Starbucks "defined Diversity in the form of an equation. Diversity = Inclusion + Equity + Accessibility"andvieweddiversityasbothavalueandaguidingprinciplethatwas"integraltoeverythingwedo."15Thisprinciple included an intention to hire "partners who are as diverse as the community we serve" and arespect for diversity among its external suppliers and customers.16The company expected its partners totreatallstakeholderswithrespectandhumanityinordertoachieveandmaintainawelcomingbrandimage.

ANEASYTARGET

With easy access to social media, customers were becoming more powerful, while businessesespeciallylarge, global businesses such as Starbuckswere increasingly susceptible to negative publicity. Evenbefore the incident in 2018, Starbucks had found itself under scrutiny for a number of reasons of varyingseverity. On the topic of racial diversity, in 2015, the company had launched a campaign to promoteconversationsaboutrace (#RaceTogether),butitbackfiredasmembersofthe publiccriticizedtheadvertisingcampaignitselfforitslackofracialdiversity.17Ontheotherhand,seeminglytrivialissuessuchas the design of holiday cups had also led to controversies: in another attempt to promote diversity andinclusion, Starbucks had launched a plain, red cup for the 2015 holiday season, to "welcome all stories,"andin2016,itlaunchedacupthatfeaturedaclusterofover100peopledrawnwithonecontinuous stroke,as a "symbol of unity."18 Despite the intentions behind these campaigns, they drew negative attentiononline,withsomeindividualsaccusingthecompany,viaTwitter,of "politicalbrainwashing."19

Starbucks's active attempts to promote diversity and its well-established habit of drawing attention meantthesubstantialreactionof themediaandthegeneralpublictotheApril2018incidentwasnosurprise.

THEINCIDENTANDRESPONSE

ArecordingoftheApril12incident, whichacustomerhadpostedtoTwitter,showedNelsonandRobinsonbeingarrestedafterthestoremanagercalledthepolice. Themanagersaidthemenweretrespassing,astheyhadnotmadeapurchaseandhadrefusedtoleavethestoreafterwantingtousethewashroom.20However,themenhadactuallybeenwaitingforabusinessmeetingwithanotherindividual,whoarrivedonthescene

and tried to stop the arrest. Witnesses said the two men had done nothing wrong, and some customers saidthemenhadsatinthestoreforhoursthatdaywithoutmakingapurchase.21

The two men were released by the local police, who found no evidence of wrongdoing, and within a fewdays, the manager who had made the initial call to the police was fired.22In Starbucks's press releases,Johnson took full responsibility for the practices and training that had led to the incident, and he also metpersonallywithNelsonandRobinson.23Thismeetingresultedinafinancialsettlementandanopportunityfor continued constructive dialogue to improve the status quo and to help Starbucks "reaffirm [its] valuesand vision."24The two men were also offered access to the Starbucks College Achievement Plan, usuallyavailableonlytoStarbuckspartners, tohelpthemcompletetheirundergraduatedegrees.25

In the period leading up to the racial-bias training in May, the priority for Starbucks was to prove itsintentions through proactive action, not just words. Johnson and the company spent this time consultingwithstakeholderstodevelopaneducationalpackagethatwouldbethefirststepinalong-termimprovementplan.26In the meantime, Starbucks also reviewed and updated its policy to make its spaces open to anyonephysicallyinthestore.27Thegoalwasfor asimilarincidenttoneveroccuragain.

RENEWINGTHEIRCOMMITMENT:THEMAY29TRAINING

WhenthetrainingbeganontheafternoonofMay29, customersbeganfilingoutaspartners gatheredtogetherintherestaurantspace.Customerswhocontinuedtoarrivethroughoutthesessionweredisappointedatnotbeingabletogettheir regular icedcoffeesbutwereneverthelessimpressed withStarbucks'sactions.28

The training, supported by a comprehensive guidebook and personal notebook designed in collaborationwith field experts, included screenings of several videos. While the guidebook and notebook encouragedgroup discussion and personal reflection on various topics relating to bias, the videos allowed partners atall levels, including managers, to act as students and learn. The videos featured a range of people, fromJohnson and other C-suite executives to managers, partners, and documentary filmmakers. While somevideos were informative about certain types of biases, others included testimonies from partners who hadalso acted on the basis of their implicit biases. Specifically on the topic of racial bias, Starbucks workedwith filmmaker Stanley Nelson to produce an educational overview of the history and legacy of AfricanAmericans' accesstopublic spacesintheUnitedStates.29

Designedtostimulatediscussionandcreateideasusingabottom-upratherthantop-downapproach,thetrainingchallengedemployeestothinkmoredeeplyaboutinclusivityi.e.,whatittakestocreateagenuine,welcomingenvironment.Theidea wasnotjusttolearnfrompastmistakesbuttorealignpartnerswithStarbucks'smissionandvalues,ultimatelycuratinganenjoyableexperienceforallcustomers.30Thetakeawaysfromthistrainingincluded practical steps for improving the customer experience. For example, in one store, the partnerscommitted to simple solutions suchas making eye contact with every customer to make them feel at home.31WithdiversitybeingacorepillarofStarbucks's socialresponsibilityandsustainabilityinitiatives(seeExhibit2), discussionseventuallyledtopersonalstorytellingamongpartnersandhelpedfoster anappreciationfordiversity. AccordingtoTafsirMbodje,aStarbucksdistrictmanagerinNewYorkCity,somepartnersleftthetrainingfeelingcloser tothemselves,theircolleagues,andthecompanyitself.32

THEFUTUREOFTHETHIRDPLACE

Despitethevaluableresponsescreatedthatafternoon,Starbucks'sdecisiontorunthistrainingwasonlythefirst step in a long process of learning and improving. The training might have raised awareness andunderstanding,butpartnersindicatedthatithadfailedtoaddresshowtheycouldpreventincidentssimilar

to the one that had taken place at the Philadelphia store.33Starbucks seemed to acknowledge this omissionbyemphasizingthatthetrainingwasbuta"firststep"initslong-termjourneyinrenewingthethirdplace.34Whilemanycustomershadlet thisincident slidefollowingStarbucks's uniqueandelaborateresponse,PRexperts recognized Starbucks's textbook, proactive response, which saw the CEO himself heading theinitiative and demonstrating accountability and integrity. However, many were also continuing to assertthatthecompany'sresponse wasnothingmorethananattempttosaveface.35

At the same time, incidents of implicit racial bias that had since occurred at other businesses had receivedrelatively little attention from the media and the general public. At a Nordstrom Rack store in May 2018,three Black teenagers were followed and wrongly accused of shoplifting, resulting in an unnecessaryconfrontation with the police.36At a Hilton hotel in December 2018, security called the police on a Blackman, again on the basis of a presumption that he was trespassing; however, he was a hotel guest who wasmerely in the lobby, placing a phone call to his mother.37These examples showed just how easily implicitbiases couldsurface,leadingtoemployeeactionswithnegativerepercussionsthat couldpotentiallytaint acompany's brand image. However, the severity of the PR crises in these instances had not escalated, as ithad for Starbucks. Further, while most companies faced with similar PR crises issued public apologies,none had taken further action as elaborate as Starbucks's to address the root causes of its employees'actions.38Why then, was Starbucks continuing to receive criticism, despite having taken more action thanothercompaniesworldwide,suchasNordstromandHilton?

Despite the seriousness of the incident, Starbucks had exhibited financial success at the end of fiscal year2018,withshares rising12.1percentoverallduringtheyear.39Despitelosinganestimated$12 million onthedayof thetraining40andcontinuingtoreceivepublic criticism,thecoffee gianthadcontinuedtothrivethroughoneof itslargestPRcrises.Wasthisresiliencypurelyaresultof itsPRresponse?

Finally, following the training, what furthersteps should Starbucks take in its journey to renew itscommitmenttothethirdplace?Howcoulditpreventasimilarincidentfromhappeningagain?

EXHIBIT 1:STARBUCKS'S MISSIONANDVALUES

Our Mission

Toinspireandnurturethehumanspiritoneperson,onecupandoneneighborhoodatatime.

Our Values

Withourpartners,ourcoffeeandourcustomersatourcore,welivethesevalues:

Creatingacultureofwarmthandbelonging, whereeveryoneiswelcome.

Actingwithcourage,challengingthestatusquoandfindingnewwaystogrowourcompanyandeach other.

Beingpresent,connectingwithtransparency,dignityandrespect.

Deliveringourverybestinall wedo,holdingourselvesaccountableforresults.

Weareperformancedriven,throughthelensofhumanity.

Source:StarbucksCorporation,"MissionStatement,"accessedApril6,2019,www.starbucks.com/about-us/company-information/mission-statement/.

EXHIBIT2:PILLARSOFSOCIALRESPONSIBILITYANDSUSTAINABILITYATSTARBUCKS

Source:CreatedbycaseauthorsbasedondatafromStarbucksCorporation,"Starbucks'SocialResponsibilityandSustainability,"accessedApril6,2019,www.starbucks.ca/responsibility.