Principles of Responsible Management Report: Starbucks Case Study

This report critically evaluates the responsible management practices of Starbucks, focusing on issues that have arisen due to irresponsible behaviors. The introduction defines responsible management and highlights Starbucks' past challenges, including unconsciousness towards nutritional values, poor customer relations, and employee dissatisfaction. The main body delves into specific contentious behaviors, such as improper training, unawareness of public demands, communication barriers, and technological shortcomings. These issues have significantly impacted the firm's reputation, customer response, and profitability. The report contrasts Starbucks' actions with more responsible approaches exemplified by other organizations like KFC, offering recommendations for positive changes. The conclusion emphasizes the importance of balancing people and environmental considerations for sustainable business success. The report highlights the need for improvements in areas such as employee relations, customer service, and product quality to ensure the company's long-term viability and positive public image.

PRINCIPLES OF
RESPONSIBLE
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Company's experienced issues in the past as a result of irresponsible management practices.
......................................................................................................................................................3
2. Identify the behaviours or operations attributable to this organisation, either currently or in
the past, that could be regarded as contentious............................................................................4
3. These negative behaviours have impacted upon the firm in terms of reputation, customer
response and profitability.............................................................................................................6
4. Contrast these behaviours with examples of organisations who have behaved in a more
responsible manner......................................................................................................................7
5. Recommendations....................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Responsible management is defined as a process of maintaining balance between people
and environment of an organisation that benefits both people and company. Companies have the
responsibility to satisfy the demands of the consumers and employees who are associated with
them. It is companies obligation to perform the task in way which fulfil or complete the promise
they do. Otherwise, they have to face the failure in their business. To analyse the responsible
behaviour of business, Starbucks is taken in consideration because in last few years company had
suffered from bad image in public due to irresponsible behaviours (Jallai, 2017). This reports
carries the issues which had arisen due to the irresponsible nature of the company, the reason
behind the issues and impacts of this on the business. As this impact in negative sense, so it has
recommendation to become in positive attitude to manage the business and enhance the
popularity. As responsible approach is appreciated by the public most.
MAIN BODY
1. Company's experienced issues in the past as a result of irresponsible management practices.
Starbucks is world-famous company. Due to its irresponsible behaviour company faced
many issues in last years which are discussed below
Unconscious towards nutritional values
Coffee products provided at the Starbucks are not completely healthy, as company gives
the dark roasted coffee beans coffee to their customers which is very harmful for them. In against
of the quality they face the second wave coffee movement in which customers demanded to
improve the quality of the coffee should be neutralised. So company took the initiative for this
regard they install espresso coffee machines which roast the coffee beans lighter and maintains
the quality.
Next they don't consider the health seriously because in their products they provide high
sugar which might create the health issues in people (Bryson and Atwal, 2019). Consumers are
now conscious for their health, so they promised the consumer to add the nutritional values with
decreasing the amount of sugar up to 30%. But Starbucks ignored their promises they made to
people. After sometime they found that their sales are decreases, so they try to convince the
consumers by saying that they will provide the nutritional value and lower the sugar amount in
their new products from 2020.

Bad Relations with Customers
Public found discrimination happened to them, so they protested on the social media and
people stop to visit the stores (Keig, Brouthers and Marshall, 2015). An incident happened at the
Starbucks store in which two black men were sitting in the restaurant without ordering anything,
employee in that store didn't ask for any help to those two black men. Also, the staff thought that
they are terrorists and called the police directly, and police arrested them without asking any
question as they found suspected those men. But it was just a mistake, police found that they are
not suspects and release them without applying any charges on them. So Starbucks found that
this was there mistake and an apology circulated on Twitter by Kevin Johnson CEO of Starbucks
for this regard. He tried to convince the people that it was just misunderstanding but 8000 stores
closed in the country due to this reason.
Unsatisfied Employees
Starbucks prefer to appoint the students for part-time working and learning of degree
programs. Company pays their tuition fees and also provide them certificate of their learning.
But these employees are not satisfied because they want good salary packages for themselves
which help them to earn livelihoods. Also, people left their jobs as they don't get recognitions for
their work. Employees have demanded for raising their salaries, but they don't get enough
packages as the labour costs becomes high.
Higher Costs
Starbucks increases the prices of their coffee products. So they have to face the lower
customers traffic. As the competition is rising so it deviates the public to choose other brands
like Barrista Coffee, Mc Donanld, etc.
2. Identify the behaviours or operations attributable to this organisation, either currently or in the
past, that could be regarded as contentious.
Starbucks faced issues like unawareness of the public demands, unsatisfied employees,
costs of the products was higher, bad relations with customers, ethical issues. Also, they don't
give priorities to their employees which are the way to communicate with people. As they serve
their consumer so it impacts on the company's brand image. Reasons due to which these issues
were arisen in the company are
Improper Training and Development

Starbucks is leading in the coffee industry as it operates at different locations, so they
have to properly train their employees as they are they representative of the brand (Riera and
Iborra, 2017). Company only focused for the expansion at global level, and ignored the
employees training and development. For example employee's in the store who directly called
the police for finding the two black men as suspected, but they need to approach them directly
and should ask for any help. This was the irresponsible behaviours of the staff which down the
image of the company in public.
Unaware of Public Demands
Company ignored the demands of consumers. Company didn't prefer that they have to
modify their products according to the changed mind-set of the people. Public becomes more
conscious for their health and like to eat healthy food (Šilarová, 2016). But company only
focused on expanding the range of their products, and ignored to improve the quality and adding
nutritional values. So people chose other brands which provide the qualitative coffee at
reasonable prices.
Communication barrier in Employees and Manger Relations
Employees can't communicate with the management directly, due to top-down level of
communication. So workers are not able to explain their demands. Also, the middle-level
managers would not consider the employees demand, so it creates the difference between the
company and workers. Employees were unsatisfied with the workplace as they had to face
partiality among them. It leads to dissatisfaction among them, and they were less motivated
towards their work. This impacts the image of the company as the employees didn't focus on
their customer services. It has negative impact on the consumers as they prefer the local brand of
coffee where they get more attention and respect.
Careless behaviour towards technology advancement
Company did not cope up with the fashion trend as the technology innovation during the
past years was at peak. Advancement in technology is happening at various level. But company
did not shift on the digital platform. So it created the lack of knowledge about the consumer
behaviours (Asgary and Li, 2016). Also, it limits the reach towards potential consumers.
Company adopted the technology later, so it lacks to take the competitive advantage in market.
Starbucks was only running on its core competencies and capabilities during the Howard
Schultz was positioned as CEO. Kevin Johnson Became president and CEO in 2017, he

approached new strategies and leadership to maintain the organisational culture positive. He tried
to resolve the issues happened previously. Also, the issues like Racial discrimination was
happened in its time, so he made an apology on the Twitter.
3. These negative behaviours have impacted upon the firm in terms of reputation, customer
response and profitability.
Unconsciousness for nutritional values: This factor is one of the biggest factor which
has affected the name of the company in the market. As All the customer in the market always
look for value for money in the market. In the past Starbucks was also well-known for the
product which is offered by the company (Høgdal and et.al., 2019). As Starbucks used to offer
the premium bean's coffee in the market whereas competitor used to offer the Arabic coffee in
the market. This all was possible in the market due to proper management in the organization, as,
management used to look at the product and quality of product by their own. In the recent past it
is not the case as it has been found out that nutritious level of company product has lower down,
this has eventually affected the reputation of the company in the market and customer has also
started looking for the competitor of the company. As profit of company is positively linked with
both of them it has affected the business very badly.
Racial discrimination: This is the another big factor which has affected the reputation of
the business. As Starbucks was found guilty of abusing two black people on the basis of the
colour. This has affected the social image of the company in the market this has eventually
created the wrong image of the company in the eye of the customer in the market. This incident
does not reflect the whole story by its own as this was done by the manager of one store, against
which the strict action was taken by the Starbucks, As the management of the Starbucks never
used to promote the same in the organization. They also used to organize the different training
program to overcome the same. This incident had lower down the response of the customer
toward the company as they started ignoring the company. As government of the nation also
used to promote the non-discrimination but this activity has created a very bad image of the
company in the eye of the customer which has lower down the sales of the company in the
market and eventually has also lower down the profit of the company in the market.
Lower wages: Lower wages it is the factor which has created the impact on the
reputation of the company more than compare to the customer response and the profitability of
the company in the market. As Lower wages has created and build the variety of conflict in the

organization (Parkes, Buono and Howaidy, 2017). This has eventually created the negative
working environment of the company in the market. This has also affected the employer value of
the company in the market. If seen legally the management of the organization used to pay
wages according to the minimum wage rate act of the nation. Demand and need of the employee
has created such situation in the organization. This has also created the situationist that the
organization used to find it difficult to find the best employee for the organization to carry out
the different operation of the business. This has eventually affected the reputation of the
company in the market and also has affected the employee response of the employee toward the
company.
4. Contrast these behaviours with examples of organisations who have behaved in a more
responsible manner.
Unconsciousness for nutritional values: This issue was also faced by the KFC in the
past as KFC was finding it difficult to offer the same quality of the product in the organization.
As a result many customers were facing the issue of the quality in the market. At that point of
time KFC has responded the same very easily. As their supplier of the chicken in the past who
used to supply the chicken as a result the company uses the low quality nutritious chicken to
develop the product. But to overcome the same issue they have innovated the product and also
chosen the new supplier of chicken to offer the product in the market. This is not the case with
the Starbucks as they have pursuit with the low quality of product only in the market (Mckiernan
and Tsui, 2019) due to the high range of the product of the company. It is very difficult for the
company like Starbucks to rectify the product of the company as it will eventually increase more
cost for the organization. As company used to operate their own farms and outlet in the market
which used to increase the cost of the company at that time also the company used to manage the
operation very easily in the market. This eventually becoming difficult for company to respond
to the same. KFC way to handle has also helped the company in getting the competitive
advantages as with the help of the same the organization and also looking at the porters generic
model the organization is able to develop the new and unique product with the help of the new
operational tool in the organization. This was done by looking at differentiate element of porters
generic model.

Racial discrimination: This behaviour was also shown by the management of the
Ryanair management in the past. As some employee in the organization have faced some issue of
the Racial discrimination in the organization. At that point of time the senior management in the
organization has addressed the press conference very crucially to promote the awareness to the
customer that this was done by mistake and all the parties involved in the same will be punished
accordingly. This has helped the organization in getting the good support from the customer side
as it has passed on the positive message to all the customer that the senior management in the
organization is concern about the same. This has eventually helped the company in saving the
reputation of the company in the market and also helped the company in getting the good market
support from the customer end as they were satisfied with the response of the senior
management. Management of Starbucks has also defended the situation very smartly in the
organization by taking the strict action against the manager which is good sign but not
addressing the media has restricted the impact of the decision taken.
Lower wage: British Airways is the organization who is facing the problem of the lower
wages in the organization. As the employee of the organization are having the problem with the
wages which is paid by the company in the market. As a result they are looking to strike against
the company. At that time British Airways has defended the situation very gently by calling all
the employee and organization a meeting in which the management of the organization has
explained the real situation in which organization is going through in current situation with the
company is suffering. Also organizational management has introduced the new policy in the
organization in which employee can earn sufficient wages for the efforts they used to do in the
organization. Starbucks management is also looking to introduce the same in there operation to
improve the efficiency.
5. Recommendations.
There are many ways through which the identified issue can be overcome by the
organization/. Some recommendations are as follows:
Motivation: Motivation is one of the best way through which organization can overcome
the different issue related to the employee management and the quality of the product. As they
are the one who will be carrying out the different activity of the organization in the long run of
the business, Motivation can be implied in the organization with the help of providing the proper

training about the operation of the business to the employee (Training and development
importance, 2016). Another way through which the motivation can be provided with the help of
improving the amount of the wages which is provided to the employee in the organization
(Hibbert and Cunliffe, 2015). As in the past also the organization used to create the good job
opportunity for the farmer who were in the need of the same in the columbia.
Operational management technique: This is the another way through which the
organization can overcome the issue of quality of the product. As with the help of the same the
organization will able to cut down the wastage in the organization and also decrease the cost of
the product manufacturing in the organization. This will eventually help the company in
improving the quality of the product also in the organization.
Promotion: Starbucks has to make sure that they invest very heavily to improve the
promotional activity of the organization. As promotional activity will pass on the correct
message to the employee in the organization. Which will eventually help the company in getting
the better response and increasing the profitability in the market. In the past the company was
using the combination of the promotional tool as the responsibility of the management but due to
safe the cost they have reduced the same. They have to use the same again to be competitive in
the market.
CONCLUSION
According to the report, analyses on the irresponsible behaviour possessed by the
Starbucks, how it leads the company to downfall. Due to their careless attitude they had to suffer
form bad image in public, it causes severe losses in their business. Company had to close around
8000 stores in U.S.A. It impacts their them as they didn't take the competitive advantage, as
other competitors posses the responsible attitude which represents them as positive in front of
public. Consumers chose other coffee bars as they didn't get attentions and respect at their stores.
Starbucks have to approach the areas in which they can do development and improvements
which help them to gain prestige in market. So they have to consider the responsible
management as seriously because it gives them benefits to both company and people.

REFERENCES
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