Starbucks

ABSTRACT
This case is about the racial bias training conducted by Starbucks Corporation (Starbucks) on May
29, 2018, at its 8,000 stores across the US. Over 175,000 partners participated in the program. The
training was necessitated by an incident of racial discrimination at one of the Starbucks stores in
Philadelphia, US. Starbucks collaborated with leading civil rights experts, anti-bias training
experts, and minority rights experts for developing the racial bias training program. The four-hour
training program was a mix of training videos, pen-paper exercises, group discussions, and team
activities. Starbucks’ decision to conduct the training program by shutting down all its stores in
the US for a day, as well as the training program itself, elicited mixed reactions from its employees
as well as industry observers. While some praised the company, others questioned whether a four-
hour training program was enough and whether it was really effective.
Issues
The case is structured to achieve the following teaching objectives:
• Understand the concept of customer value proposition and issues related to racial
discrimination at the workplace.
• Analyze the various factors which influence the training needs of an organization.
• Understand the issues in designing a training program and examine the methodology and tools
used to deliver a training program.
• Understand the importance of evaluating training programs.
INTRODUCTION
On April 12, 2018, Starbucks Corporation (Starbucks), one of the leading coffee shop chains in
the world, faced a unique situation of racial discrimination at one of its stores in Philadelphia,
USA. Two African Americans were barred from using the restroom as they were non-paying
customers. Moreover, the two men were arrested by police while they were waiting for a business
partner at the store. The incident led to massive protests at the store and adverse comments on
social media, resulting in Starbucks issuing an apology to the two men.
The incident also prompted Starbucks to organize a racial bias training for all its employees in the
US. The coffee retail chain used this incident as an opportunity to educate its employees about
racial bias and other concerns around the issue. It designed and executed a training program for its
employees on May 29, 2018. Howard Schultz (Schultz), Executive Chairman, Starbucks, said,
“The announcement we made yesterday about closing our 8000 stores, to do significant training
with our people is just the beginning of what we will do to transform the way we do business and
educate our people on unconscious bias.”
BACKGROUND NOTE
Starbucks was founded by Jerry Baldwin, Zev Siegi, and Gordon Bowker in 1971 in Seattle,
Washington, US. The company started operations with a store at Seattle’s Pike Place market and
offered roasted coffee beans and coffee powder along with tea and spices. In 1982, Schultz joined
Starbucks as Director of Retail Operations. In 1984, the first coffee house concept was developed
with Starbucks serving Coffee Latte at Seattle. In 1987, Starbucks changed its name to Starbucks
Corporation. In June 1992, Starbucks went in for an IPO with a price of US$ 17 per share. With
the gradual increase in the number of stores across the US, Starbucks opened its first overseas
stores in 1996 – in Japan and Singapore.
EXCERPTS
CUSTOMER VALUE PROPOSITION
From when it was established, Starbucks had projected itself as a different kind of organization,
which celebrated coffee and tradition with a focus on connecting with people. The Starbucks store
was a place where customers could meet up, chat, and work. It was a portrayed as a ‘third place’
between home and office for customers and employees; it was a place for conversation and for
community bonding.
THE INCIDENT
On April 12, 2018, two black men, Donte Robinson (Robinson) and Rashon Nelson (Nelson),
visited a Starbucks store in Philadelphia for a business meeting with a partner. Robinson wanted
to use the restroom of the store but was denied access by the manager who stated that the restrooms
were meant only for paying customers. Robinson and Nelson decided to wait for their business
partner as he was supposed to arrive shortly.
INCIDENTS IN THE PAST
Starbucks had been involved in several instances of discrimination in the past and had had suits
filed against it on such grounds as assault on the job, sexual harassment, rape, etc. in the US. In
2010, a former Starbucks employee filed a complaint against the company after she was allegedly
subjected to rape by her supervisor. The former barista filed a suit which stated that the company
had failed to protect her from the demands made by the supervisor at the store where she had
worked as a teenager.
TRAINING CULTURE AT STARBUCKS
Starbucks had a rich training and development culture. The training activity at the company was
an ongoing process and there were training programs catering to different levels of partners. These
included the Barista Training Program, Shift Supervisor Training Program, Retail Management
Training Program, and District Manager Training Program. But large-scale training programs
involving the entire chain of stores were done in only one instance. In February 2008, Starbucks
closed 7,100 stores to impart ‘espresso excellence training’ to its 135,000 partners. As part of the
training, which went on for three hours, baristas were trained to brew the perfect coffee. The cost
incurred on the training was US$ 6 million.
PREPARING FOR THE RACIAL BIAS TRAINING
The April 12, 2018, incident of racial discrimination at Starbucks Philadelphia led to the ‘Racial
Bias Training’ program being conducted on May 29, 2018. The four-hour training program was
held at 8,000 company-owned stores and 175,000 Starbucks employees participated.
THE TRAINING PROGRAM
The four-hour training program comprised partners being shown training videos, This was
followed by group discussions, focus group discussions, comments of opinion leaders, and team
activities. There was an exercise called ‘difference challenge’ where two employees teamed up as
a pair and discussed how they were different from each other. Other exercises focused on racial
anxieties, bias, and stereotypes...
REACTIONS
The racial bias training evoked a mixed response from the employees. Some of the employees
gave positive feedback while some were of the view that the training would not serve any purpose.
A female employee of mixed race at Starbucks, North California, had planned to resign from her
job after the Philadelphia incident.
LOOKING AHEAD
The management of Starbucks said the racial bias training program was an ongoing process and
would be continued in the future. Schultz said that this training would form part of Starbucks’
employee onboarding program, and over the next one year, the partners at its 7,000 licensed stores
would also participate in the training program. Georgina Dodge (Dodge), Associate Provost for
diversity, equity, and inclusion, Bucknell University, observed,

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ABSTRACT

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