Running head: STARBUCKS’ FIGHT WITH BIASES

Starbucks’ Fight with Biases

Kush Sharma

Royal Roads University

Author Note

This paper was prepared for Managing Change in Global Context, MGMT 582, taught by

Professor Sandy Walker. Commented [SW1]: Be sure to include the word count on the
title page.
STARBUCKS’ FIGHT WITH
BIASES 2

Table of Contents

Introduction ............................................................................................................................................. 3
Faults in the Starbucks’ Structure ............................................................................................................ 3
Starbucks’ Strategy for Anti-bias Training ............................................................................................... 4
Links between Philadelphia and Tempe Incidents .................................................................................... 5
Organizational Learning to Move Forward .............................................................................................. 5
Conclusion .............................................................................................................................................. 7
References............................................................................................................................................... 8
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Introduction

The purpose of this paper is to discuss and analyze the events that transpired at the

Starbucks outlets in Philadelphia and Tempe, USA. In the first part, I have discussed the Commented [SW2]: In an academic paper, you should avoid the
use of ‘first person’, which means that you shouldn’t use the word
‘I’. Instead you could say something like “This paper will
possibility of Starbucks’ structure being the cause of the Philadephia incident. The second analyze….”

segment of the paper analyzes the strategy used by the company in conducting the anti-bias

training to address the situation, and the third section illustrates the ways the Philadelphia event

might have caused the Tempe incident. Lastly, the fourth part discusses how organizational

learning can help Starbucks to move forward. Commented [SW3]: The introduction should be one paragraph
with the following structure:
1. The purpose of the paper
2.The key themes which will be covered
3.The structure of the paper
Faults in the Starbucks’ Structure It is important to introduce which themes/theories will be covered.

The Philadelphia incident on 12th April, 2018 could be a manifestation of the problems in

the structure of Starbucks. The company follows a functional hierarchical structure, but some Commented [SW4]: Briefly explaining the incident will provide
the reader with a foundation which you can use to more easily draw
links to the course content.
decision making power is available at the lower levels like coffeehouses, where local store

manager leads employees working in teams (Meyer, 2019, para. 5-8). According to Fayol said

that the prime duties of management include planning, commanding and controlling (Burnes,

2017, p. 57). However, the Starbucks management left the critical safety and customer service

decisions like protocol for calling police and usage of the restroom up to each local store

manager (Siegel & Horton, 2018, para. 29), which is against Taylor’s Scientific Management

that advocates for standardized procedure and minimum worker’s discretion for each job

(Burnes, 2017, p. 51). It is evident that the Starbucks management believes in McGregor’s Commented [SW5]: Excellent links between the course
materials and the case!

Theory Y and assumes that the workers are capable of practicing self-direction and self-control

(Burnes, 2017, p. 86). However, implicit biases are still prevalent in the Philadelphia region

(Adkins, 2019, para. 1), and there was no anti-racism training provided to Starbucks employees
STARBUCKS’ FIGHT WITH
BIASES 4

hired from the city before the incident (Simons, 2015, para. 9). In the absence of proper training,

the possibility of the local store managers showing racist behavior or conforming to the group

norms of a team that condones biases cannot be denied, as discussed by Mayo in his studies

(Burnes, 2017, pp. 81-82). Therefore, it can be said the structure of Starbucks may have enabled

the incident, which propelled Starbucks to conduct the racial bias training event a month later. Commented [SW6]: Excellent analysis! You clearly linked the
course material to the case example and tied the theories together
into a cohesive narrative.

Starbucks’ Strategy for Anti-bias Training

Starbucks deployed an appropriate strategy to address the situation through the anti-bias

training conducted on May 29, 2018. Cities across the USA are experiencing rapid gentrification,

and the local coffee shops are the primary location where people from different races encounter

each other (Gabbat, 2018, para. 10). Burns and Stalker had emphasized the need of the human

resources approach to tackle environmental uncertainty (Burnes, 2017, pp. 95-96), and in

agreement to it, documentaries appealing to the emotional side of the employees were shown in

the training (Calfas, 2018, para. 12). Moreover, the training dealt with the development of

‘skills’ and ‘shared values’ discussed by Peters and Waterman in The 7 S Framework (Burnes,

2017, p. 119), as the focus was on improving capabilities of the workers to manage such

incidents and instilling the company’s value of welcoming everyone (Starbucks, n.d., para. 3). Commented [SW7]: Including Starbuck’s value allows you to
build additional links to the course content and builds a compelling
argument.
Not only does this indicate that Starbucks was serious about its values, which is one of the key

attribute for organizational success emphasized by Peters and Waterman (Burnes, 2017, p. 123),

the prompt arrangement and the magnitude of the training program displayed Starbucks’ ability

to take fast actions and flexibility, in agreement of Kanter’s requirements of winning (Burnes, Commented [SW8]: A brief description of Kanter’s
requirements would help to further strengthen your argument.

2017, p. 127). Also, Starbucks hired SYPartners to conduct the training (Dahlstrom, 2018, para.

2), as per the strategic recommendation of Kanter of selling-off the company’s non-core
STARBUCKS’ FIGHT WITH
BIASES 5

activities (Burnes, 2017, p. 127). All in all, we can say that a sound strategy was adopted by

Starbucks for the training event.

Links between Philadelphia and Tempe Incidents

The event of July 4, 2019 may have resulted from the consequences of the April 12, 2018

incident. The Philadelphia store manager, Holly Hylton, had to leave her job at Starbucks and

was chastised all over the media for calling the police for assistance (Parry, 2018, para. 2).

Starbucks does not follow the Japanese-styled management discussed by Ouchi, where the

employees benefit from lifetime employment, slow evaluation for promotion and involvement in

decision making (Burnes, 2017, p. 154). This could have made the barista at the Tempe location

concerned over his/her basic physiological and safety needs discussed by Maslow (Burnes, 2017,
p. 85). According to the Gestalt Field psychology perspective, change in the behavior arises from
the way an individual applies reason to interpret the stimuli (Burnes, 2017, p. 9). Therefore, the
Commented [SW9]: Kush, you are doing an excellent job
drawing clear linkages between the course content and the case
incidents.
In this one case, a deeper dive into Maslow’s theories could have
made the link between the barista’s needs and his/her actions more
clear.

barista may have been prejudiced against the police personnel due to the turmoil and backlash

after the 2018 incident and asked them to leave to prevent fallout like the Philadelphia incident.

Therefore, the event of April 12, 2018 might have caused the ejection of those police officers,

and it is necessary that Starbucks follows a proper strategy to move towards its goal of

inclusivity for all.

Organizational Learning to Move Forward

Effective organizational learning can help Starbucks to move forward to address this

situation. The multiple incidents that involve customers perceiving Starbucks as unwelcoming,

including the two discussed in this paper, suggest that the company’s existing customer service

norms and practices are not appropriate. Therefore, it should inculcate Argyris and Schön’s
STARBUCKS’ FIGHT WITH
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‘Level II – Double Loop Learning’ to challenge their validity and reconstruct the basic aspects of Commented [SW10]: A brief description of double loop
learning would also help to make these connections even stronger.

customer service procedures (Burnes, 2017, p. 169). Moreover, ‘systems thinking’, suggested by

Senge, should be encouraged amongst the individuals and groups to develop an understanding of

the underlying patterns that lead to incidents involving bias at Starbucks (Burnes, 2017, p. 168).

Implicit biases can go undetected for a long time in a real management setting but can form the

basis of incidents that cause huge damages, as seen in these two cases. Identification of the

patterns will help Starbucks take proactive measures to prevent such mishaps. Furthermore, Commented [SW11]: As this is a new idea, a new paragraph
would be appropriate.

amongst Porter’s five forces, ‘competitive rivalry’, ‘bargaining power of buyers’, and ‘threat for

substitution’ are high for Starbucks, as shown in Figure 1 (Greenspan, 2019, para. 4). With the

rising concern for ‘inclusivity for all’ among the customers (Gassam, 2018, para. 1),

implementing management processes that facilitate quick acquisition and sharing of information

regarding handling of such incidents will help Starbucks gain competitive advantage, as

suggested by Cummings and Worley (Burnes, 2017, p. 170). Therefore, it can be said that

organizational learning will help Starbucks to prevent such incidents and gain competitive edge

in the future.
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Conclusion

The structure of Starbucks can be held responsible for the arrest of the two African-

American customers because it left room for the discretion of store managers in critical decisions

in the bias-prone city of Philadelphia, despite no anti-racism training given to employees.

However, the consequent anti-bias training had the right strategy of using the ‘human resources’

approach to address the environmental contingency and developing cultural excellence by

focusing on the ‘7S Framework.’ Nonetheless, it is possible that the Philadelphia event could

have made the barista at Tempe concerned for his/her physiological and safety needs and formed

the grounds for the Tempe incident. However, Starbucks can use ‘double-loop learning’ to

reformulate their customer service procedures, ‘systems thinking’ to identify the patterns of

biases in the organization and implement management processes that facilitate quick acquisition

and sharing of information in order to prevent such incidents in the future.
Commented [SW12]: Kush, your conclusion was an excellent
summary which included the key themes from your discussion.
Throughout the paper you displayed excellent critical thinking skills
and a rich understanding of the course materials, striking the right
balance between explaining the theories and moving to the case
examples. Very well done!
STARBUCKS’ FIGHT WITH
BIASES 8

References

Adkins, C. (2019). Hate crimes in Philadelphia and nationwide demand action, not just words.

The Philadelphia Inquirer. Retrieved from

https://www.inquirer.com/opinion/commentary/hate-crimes-on-the-rise-philadelphia-

racism-20190509.html

Burnes, B. (2017). Managing Change (7th ed). UK: Pearson Education Limited.

Calfas, J. (2018). Was Starbucks' racial bias training effective? Here's what these employees

thought. TIME. Retrieved from https://time.com/5294343/starbucks-employees-racial-

bias-training/

Dahlstrom, L. (2018). Beyond May 29: Lessons from Starbucks anti-bias training — and what’s

next. Starbucks Stories and News. Retrieved from

https://stories.starbucks.com/stories/2018/beyond-may-29-lessons-from-starbucks-anti-

bias-training-and-whats-next/

Gabbat, A. (2018). Coffee shop racism: where America's racial divisions are exposed. Support

the Guardian. Retrieved from https://www.theguardian.com/world/2018/may/28/coffee-

shop-racism-starbucks-arrests

Gassam, J. (2018). Five diversity and inclusion trends we can expect in 2019. Forbes. Retrieved

from https://www.forbes.com/sites/janicegassam/2018/12/19/5-diversity-and-inclusion-

trends-we-can-expect-in-2019/#7bfc86fc6f7b
STARBUCKS’ FIGHT WITH
BIASES 9

Greenspan, R. (2019). Starbucks Coffee Five Forces Analysis (Porter’s Model) &

Recommendations. Panmore Institute. Retrieved from http://panmore.com/starbucks-

coffee-five-forces-analysis-porters-model

Meyer, P. (2019). Starbucks coffee’s organizational structure & its characteristics. Panmore

Institute. Retrieved from http://panmore.com/starbucks-coffee-company-organizational-

structure

Parry, H. (2018). White Starbucks manager, 31, who caused a national outcry after calling police

on two black men for trespassing as they waited for their friend. Daily Mail. Retrieved

from https://www.dailymail.co.uk/news/article-5626041/Holly-Hylton-Starbucks-

manager-called-police-two-black-men-trespassing.html

Siegel, R., & Horton, A. (2018). Starbucks to close 8,000 stores for racial-bias education on May

29 after the arrest of two black men. The Washington Post. Retrieved from

https://www.washingtonpost.com/news/business/wp/2018/04/17/starbucks-to-close-8000-

stores-for-racial-bias-education-on-may-29-after-arrest-of-two-black-

men/?noredirect=on&utm_term=.840becfb15cd

Simons, J. W. (2015). Starbucks hit by 'cascade of negativity' after ordering staff to talk racism

with customers: Vice President forced off Twitter as angry public turns on 'patronizing'

project. Daily Mail. Retrieved from https://www.dailymail.co.uk/news/article-

3000260/Starbucks-PR-fail-Twitter-mockery-causes-coffee-executive-delete-account-

customers-say-NOT-want-talk-racism-ordering-coffee.html
STARBUCKS’ FIGHT WITH
BIASES 10

Starbucks. (n.d.). Expect more than coffee. Retrieved from

https://www.starbucks.ca/careers/working-at-starbucks/culture-and-values

MGMT 582

Rubric for Evaluation of Written Assignments

1 2 3 4 5 Wtg

Introduction Fails to identify Vaguely identifies Adequate Effectively Provides excellent

purpose and purpose and coverage of topic introduces topic overview of paper
process and lacks process with and brief overview and provides (grabs reader’s
direction and limited overview of paper appropriate attention)
focus of paper overview of paper
with direction and Clearly identifies
focus of key ideas purpose and
provides overview of 4.5/5
paper with direction
and focus of key
ideas

Body of your paper Minimal coverage Adequate Evidence of Main ideas and Effectively identifies
of key ideas with coverage of key analysis of key factors are clearly and analyzes key
major gaps in ideas with major ideas with minor identified and factors. Provides in-
support and logic. gaps in logic and gaps in logic and developed with depth and
coverage. coverage. Is able key ideas comprehensive
Does not integrate to integrate the supported with coverage of all areas.
case study with Minimal case study with logic and Ideas are developed
course material. integration of case the course adequate and supported with 9.5/10
study with the material. coverage. detail to achieve the
course material. Demonstrates intended purpose of
critical thinking the communication.
skills in integrating Demonstrates ability
the case study to synthesize ideas
with the course and exemplary
material. critical thinking skills
in integrating the
case study with the
course material.

Conclusion Vague Evidence of Acceptable Good Excellent

consolidation of consolidation of consolidation of consolidation of consolidation of facts
facts and facts and facts and facts and and information
information information information information
Logical and well
Lack of logic Conclusion lacks Logical and well Logical and well supported conclusion 5/5
support in body supported supported
conclusion conclusion

Research Ineffective Acceptable Acceptable Good Excellent

Documentation incorporation of incorporation of incorporation of incorporation of incorporation of
information and information and information and information and information and
Support (Reference evidence of evidence of evidence of evidence of evidence of research
to course learning) research and research and research and research and and consolidation of
consolidation consolidation consolidation of consolidation of ideas properly
Minor errors in Minor errors in ideas properly ideas properly sourced and
documented.
STARBUCKS’ FIGHT WITH
BIASES 11

sourcing and sourcing and sourced and sourced and

documentation documentation documented. documented.
9.5/10

Logic and Flow of No consolidation Limited Adequate Effective Information flows

Information and flow of ideas. consolidation and consolidation and consolidation and logically and
No use of flow of ideas. flow of ideas. flow of ideas. excellent use of
transitions and Minimal use of Average use of Good use of transitions and
consolidations transitions and transitions and transitions and consolidations.
consolidations consolidations consolidations Clearly, concisely, 9.5/10
and logically written
– well suited for the
topic and intended
audience.

Syntax, Grammar, Major errors in Major errors in Minor errors in No spelling/ There are no
Punctuation and punctuation, punctuation, punctuation, grammar errors. grammatical, syntax,
Spelling syntax, grammar syntax, grammar syntax, grammar There are 1 – 2 spelling or
and/or spelling and/or spelling and/or spelling minor syntax or punctuation errors.
which makes it which interrupts which do not punctuation Excellent use of
difficult to read. the flow for the break the flow for errors. vocabulary to 9.5/10
Includes more reader. the reader. articulate ideas.
than 5 spelling/ Includes 3 – 4
grammar errors. Includes 4 – 5 spelling/ grammar
spelling/ grammar errors
errors

Total 47.5/50