Introduction Kevin Johnson experienced an ethical leadership test one year after being elected as the CEO of Starbuck

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Introduction

Kevin Johnson experienced an ethical leadership test one year after being elected as the CEO of Starbuck. The wake of this incident involved the arrest of two men of African descent at Philadelphia Starbucks. Typically, the transparency and propriety of Kevin Johnson’s response to this incidence were proved in wrings, demonstrations, and how immediate media attention had moved on. Starbuck’s rebuttal and the CEO’s statement were essential in creating an organizational culture that strives to learn from its mistakes to improve. Therefore, such measures should be emulated by other organizations. This paper will detail the effect of the actions of the CEO on stakeholders and other courses of action that he would have taken to approach this problem.

Background

A video clip of two Black men being detained at Starbucks went viral on Facebook and Twitter, thus attracting a lot of attention towards the company. According to sources, these men had a business meeting at Starbucks. As they were waiting for other people to join, they used the restroom before ordering at the company. This prompted the staff of the company to detain them and order them to leave the shop. Moreover, the management of the company contacted the police when the men refused to exit. The two men were arrested and handcuffed when they insisted on not leaving and detained for almost eight hours before the withdrawal of the trespassing charges. However, the apparent racial profiling, which caused these men's treatment and incarceration, created many controversies, with some people being upset. As stated in Johnson (2018), the company’s CEO Johnson took accountability by responding to the issue by acknowledging that these men had been treated terribly and denounced the relationship of such treatment to Starbucks.

Besides, Starbucks did not have a policy that stated that customers should be ordered to leave when they did not place an order before the accident. Therefore, the CEO accepted responsibility for the event and agreed that the arrest was detrimental because it reinforced stereotypes against people of color, thus affecting their customer base. Additionally, Johnson made sure that he met with these men personally to talk about how Starbuck would make it up to them and make their organization better. Campbell & Lockhart (2018) highlighted that the company announced eight thousand stores around the US to conduct bias training.

The Impact of Johnson’s Actions on all Stakeholders

Ideally, Johnson exemplified ethical leadership. He responded to this issue promptly, acknowledging the company’s responsibility in the arrest of the men and stating that it was not the wish of the company to indulge in this unfortunate event. His actions affected the two Black men positively because he made sure that he drove to Philadelphia to meet them personally to issue a formal apology for the inconvenience that the store had caused. Furthermore, he performed unconscious bias training in the stores and developed a new policy to accommodate third-person circumstances while remaining true to their goals. These actions exemplified ethical leadership at the company because the claims of both the clients and the employees were not breached, thus making the resolution of this case excellent.

In addition, the CEO championed the publishing of new policies in the company regarding this issue known as the Use of the Third Party Place Policy (Tangdall, 2018). Therefore, this action positively affected customers, employers, and businesses because they became more aware of the aspect, which had a significant influence on both sides. Technically, the manager of the store was the person that displayed incompetency in this situation. Thus, he was supposed to be held liable for biased actions since they abused the ethical practice of the company. Consequently, this painted a bad picture about the store and the company in general.

Therefore, the actin of Johnson affected the manager since he was held accountable for the situation that he caused by ordering the arrest of these men merely because they had not made an order. Essentially, many employees are recruited without enough education on how to communicate with clients and customers respectfully in such situations to avoid unnecessary drama and attention for the company. Besides, most organizations do not pay attention to the ethical performance of employees concerning their interactions with customers. Since they are mainly focused on reducing labor expenses, such organizations do not think that some of the ethical shortcomings of the employees cannot have adverse effects on the company. Thus, the CEO holding the manager responsible affected the latter positively because he learned from this experience how to treat customers in the future to avoid such situations from happening again.

The last stakeholders that were affected by the actions of the CEO were the public and potential customers. As Tangdall (2018) presented, companies need to claim responsibility in calamities to demonstrate to the public that they are accountable and strive to provide the best customer experience to their clients. Therefore, by responding to his situation and claiming responsibility for this unfortunate event, the CEO affected the attitude of the store's customers, especially those who were angered about the controversial situation. He proved that the company cares about how customers are treated regardless of their race and other distinguishing characteristics. They take the appropriate actions against employees who do not adhere to respectful interaction with them. Undoubtedly, this action affected the client because they would still buy a beverage from the store regardless of this unfortunate situation.

Alternative Course of Action the CEO Could Take

The CEO could have taken an alternative action, such as providing compensation for the victims of this unfortunate event. Compensation is essential in settling disagreements in the ideal world, mainly if one party receives unfair treatment. The logic behind compensation is that the damage has already been inflicted thus, the party that has caused this damage issues compensation to show their remorse for the treatment caused. Therefore, Johnson could have compensated the two Black men to demonstrate further that the company regretted inflicting such testament to them. This action would have a positive effect on the organization by restoring its bad image.

Conclusion

The arrest of the two men of African descent was unethical and unjust. However, the CEO responded to the situation ethically, thus exhibiting ethical leadership to salvage the situation. He took exemplary actions from meeting with the affected parties and developing obligatory workshops to train employees. Therefore, organizations need to pay attention to how their staff interacts with customers to avoid such issues from happening again. Typically, forming good relationships with clients and customers is critical in enhancing brand loyalty and ultimately increasing profits for the company. Also, companies should prioritize the satisfaction of their customers by handling issues appropriately. In conclusion, organizations should not neglect the ethic demonstrated by their employees because this determines if the company would turn out lucrative.