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On April 4, 2007, Don Imus, one of the company&s most popular talk show personalities made comments on the air regarding the Rutgers women&s basketball team. According to the transcription from Media Matters for America, Imus said, “ That&s some nappy-headed hos there. I&m gonna tell you that now, man, that&s some … woo. And the girls from Tennessee, they all look cute, you know, so, like … kinda like … I don&t know.” At first, the comments did not seem out of the ordinary for one of radio&s “shock jocks.” However, as the public reaction grew, the situation changed considerably. Under pressure from the public, Moonves reluctantly suspended Imus. But it was too little too late. By the end of the day on April 11, analysts estimated that $2.5 million in advertising revenue was lost. On April 12, Moonves terminated Don Imus& contract.

After Moonves fired Imus, there was still a lot to consider. He really wanted a way for the company to meet the demands of the company&s stakeholders. In addition, he wanted to avoid any more distractions from the firm&s normal day-to-day operations.

The strategic management literature states that firms who wish to have a competitive advantage through high customer service (rapid response) and product differentiation need to restructure their organization into empowered, self-managed work units so as to ensure that there is “value-added” at each stage of the value chain. (Porter, 1985; Hill and Jones, 2001) In this case, Vanguard altered part of its structure through the development of teams in order to maximize its operations; and given their results Vanguard successfully put theory into practice. When the major supporter of team management, Mike Wesley, leaves the firm, he is replaced by Wendy Kiefer, a strong supporter of team structures. Her replacement, Shari Lastarza, however is the “old” assembly manager and does not buy into the team concept. Could this be anything but a formula for disaster?

Organizational Justice Theory serves as a useful frame for discussion of this case, focusing on perceptions of fairness in the workplace. Such perceptions are shaped by outcomes, procedures, information and interpersonal treatment. Perceptions of justice in these four dimensions are associated with job performance, citizenship behaviors and some mental health outcomes. The Exit, Voice, Loyalty, Neglect (EVLN) Model outlines four potential responses (exit, voice, loyalty and neglect) to perceived job dissatisfaction, serving as a useful framework for students to discuss potential employee reactions to Starbucks’ decisions.

This case was developed from secondary sources, including news reports, company annual reports and websites. The case has been classroom tested with undergraduate students in Principles of Management (online and face-to-face) Human Resource Management (online asynchronous) and Labor/Management Relations (online synchronous).

In June 2020, Starbucks became immersed in controversy when its dress code policy conflicted with its public support for national protests over police brutality against Black Americans, including the death of George Floyd while in police custody. While publicly supporting the protests in a series of tweets, an internal memo forbidding employees from wearing Black Lives Matter attire was leaked to the press, generating national outcry, threats of a boycott and forcing Starbucks to reverse course immediately. This case examines the benefits and challenges of a corporate dress/uniform policy, and the implications of corporate involvement in social justice issues.

This case can be used in a wide range of undergraduate and graduate courses, but particularly in Principles of Management and Human Resources courses.