Starbucks Is Handling Crisis Right, Says Texas A&M Expert

Eat BCS

Starbucks did it right, says Texas A&M University Mays Business School Professor Venky Shankar, who studies crisis management. To rebuild trust and restore shareholder value, firms should voluntarily admit fault, apologize and implement remedial actions quickly, says Shankar, who also is director of research for the Center for Retailing Studies.

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There has been public outrage over how two African-Americans were treated and arrested recently at a Starbucks in Philadelphia. Such a discriminatory act is morally repugnant and has no place in a civilized society. It also marks the onset of a product-harm crisis for Starbucks.

How did Starbucks respond? Its CEO apologized swiftly, dismissed the errant employee, directly reached out for a face-to-face meeting and announced a one-day racial bias training for all employees at all its locations.

Shankar’s research on crisis management shows that to rebuild trust and restore shareholder value, firms should voluntarily admit fault, apologize and implement…

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