STARBUCKS

COFFEE

Diversity, Equity,
Inclusion, and
Multiculturalism

Anna Rubino & Timea Szep

April 26, 2023

 Starbucks DE&I 1

STARBUCKS COFFEE CO.

April 26, 2023

Mr. Laxman Narasimhan

Chief Executive Officer
Starbucks Coffee Co.
2401 Utah Ave S
Seattle, WA 98134

Dear Mr. Narasimhan:

The importance of proper diversity, equity, inclusion, and multiculturalism education and training
is growing as the United States’ culture, and consequently, the labor force, is becoming
increasingly diverse. DE&I-focused research can aid the members of an organization by
improving multicultural awareness and knowledge, which can then be applied to company-wide
policies and training programs. These efforts will improve the organizational climate,
cohesiveness among employees, and effectiveness of customer interactions. Our research team
has the tools and knowledge-base to research and evaluate Starbucks’ existing organizational
climate. From our research, we have determined that:

● According to a study conducted by the Harvard Business Review on the #MeToo

movement, “prevention training” can be a key tool in “reduc[ing] harassment” within an
organization. By “implement[ing] training that educates employees,” awareness is
increased.3 This is a significant factor in improving organizational climate, while
concurrently increasing positive internal and external interactions.
● In a BBC News report, Tarana Burke, the founder of the #MeToo movement, talks about
the necessity of increased awareness, which is a direct result of the movement. She
mentions the importance of extending the awareness raised from the #MeToo movement
beyond affected women, as it is imperative that support for “...women, men, transpersons,
children, and disabled people…” is promoted.10 Implementing training methods, based on
sound research, can improve the awareness within the Starbucks community. This will
lead to greater support of all members within the organization, specifically, those who are
in minority groups.
● An article on diversity and inclusion, posted by the Harvard Business Review, has
suggested implementing a couple simple strategies “for instance, track diversity metrics
for hiring, retention, and growth; acknowledge conflict openly; and incentivize progress”
to meet the objectives of the company’s inclusion policies.6 The company would benefit
from researching similar preventative measures with the goal of implementing effective
training for managers.
 Starbucks DE&I 2

● Research and training would improve a company’s financial health by

reducing legal fees. According to an article published from Forbes on the #MeToo
movement, a hispanic woman filed a lawsuit with the trucking company she
worked for because they ignored her complaints and did not protect her against the
abusive coworker. She also filed for wrongful termination, retaliation, and failure to pay
agreed upon wages.4

In conclusion, the reasons listed above are among the many as to why DE&I research is
important for ensuring a positive workplace climate at Starbucks locations. By allowing our
qualified team to evaluate the company and then, subsequently make recommendations for
effective training processes, we can help Starbucks make a difference. The value of diversity and
inclusivity cannot be understated. Implementing strategies that are provided based on superior
research, will promote these principles and will positively contribute to the organization’s
success.

Thank you for your consideration and support of Starbucks’ mission to make a positive impact.

Sincerely,

Anna M. Rubino
Timea Szep
 Starbucks DE&I 3

Executive Summary
As society becomes increasingly more diverse, the implementation of Diversity,
Equity, Inclusion, and Multiculturalism practices, that seek to promote awareness, are integral to
a cohesive culture and organizational climate. Due to the social presence and popularity of
Starbucks, it is especially important that the company take the necessary steps to ensure DE&I
efforts are made within the organization and with customers. Recent social movements, such as
“Me Too” and “Black Lives Matter,” have emphasized the social injustices that must be
addressed, particularly by major corporations.

Starbucks is implementing training and mentorship programs to encourage diversity and

inclusivity within the company, but due to controversies surrounding the company’s actions
toward consumers, further efforts must be made. The organization has made significant progress
in bringing attention to the need for multiculturalism in other countries. While positive steps
toward improving DE&I, regarding social media and marketing engagement, the composition of
the company’s workforce and leadership team, the mission statement, and training programs,
have been implemented, further action must be taken to ensure Starbucks achieves the highest
level of equity and justice across the organization.

The company recognizes its need to integrate diversity into the workforce. To achieve this,
Starbucks has established annual and long-term goals for hiring practices.7 Additionally, the
organization’s mission statement is bolstered through Starbucks’ efforts to promote community
engagement, require anti-bias training for employees, and become educated and informed
regarding cultural differences among the many Starbucks locations.1

Starbucks must continually improve its DE&I standards to ensure that the goal of promoting
coexistence among all culturally distinct members of society is accomplished. The company
must perpetually seek to positively impact the community, inside and outside the organization.
 Starbucks DE&I 4

Table of Contents

Transmittal Letter.............................................................................................................................1

Executive Summary......................................................................................................................... 3

List of Illustrations...........................................................................................................................5

Need for Study................................................................................................................................. 6

Problem Statement........................................................................................................................... 8

Purpose and Scope........................................................................................................................... 9

Procedures and Findings................................................................................................................ 10

Recommendations, Conclusions, and Summary............................................................................15

Bibliography.................................................................................................................................. 16

Appendix........................................................................................................................................18
 Starbucks DE&I 5

List of Illustrations

Figure 1……………………………………………………………………………………10

Figure 2……………………………………………………………………………………11

Figure 3……………………………………………………………………………………12

Figure 4……………………………………………………………………………………13
 Starbucks DE&I 6

Need for Study

The purpose of this study is to inform companies of the importance and necessity
of incorporating diversity, equity, inclusion, and multiculturalism into its organizational structure.
Due to the rise of social movements and the growing awareness of cultural inequalities, it is
becoming increasingly important to ensure that a company’s organizational climate supports
these efforts in the workplace. Many corporations are taking action by initiating necessary
changes with the aim of improving the workplace culture and consumer relations.

In recent years, companies have witnessed the social and cultural shifts which are resulting in a
demand for change. According to a Stanford Business article, a recent study found that a
company’s corporate strategy is largely determined by the impact of social pressures. Businesses
tend to primarily operate in a consumer market, an investor market, and the “market for social
pressure” when utilizing corporate strategy.17

In some circumstances, ambiguity may surround the decision of a company to take action. To
elucidate the appropriateness of implementing action, a report from Harvard Business Review
suggests asking three questions to determine whether an organization needs to make a change:

1. Does the issue align with the company’s strategy?

2. Can one meaningfully influence the issue?
3. Will the organization’s constituencies agree with speaking out?

If the answer is “yes” to these questions, it is likely that the company should take steps toward
introducing change.1

Certain social movements have bolstered cultural issues that are especially evident within the
workplace environment, such as the “Me Too” and the “Black Lives Matter” (BLM) movements.
For example, in a BBC News report, Tarana Burke, the founder of the “Me Too” movement
states the importance of support for “women, men, transpersons, children, and disabled people.”
Corporations have a social responsibility to ensure that equity and inclusivity are practiced
within the workplace so that those who fall into minority groups are supported.10

In another report, from the Harvard Business Review, it is clear that companies who are active in
social justice efforts and support social movements, specifically the BLM movement, are more
likely to be perceived as authentic by its customer-base. According to research, 60% of the U.S.
population feels strongly about a corporation’s response to racial justice movements. This
majority also feels that companies should take action to address racial inequality. Additionally,
consumer buying decisions are influenced by the methods implemented by a company to manage
inequality.14

The impact of social movements on business cannot be understated. It is important to consider an

organization’s duty and responsibility in the effort to achieve social justice. If a corporation is not
motivated solely by social change, it should consider the fact that businesses who practice
 Starbucks DE&I 7

Corporate Social Responsibility (CSR) are more profitable than businesses that do
not do so effectively. However, a superficial commitment to CSR is not advisable.
More recently, the idea of Corporate Social Justice has begun to replace CSR. This
concept focuses on the experiences of minority groups who are on the receiving end of injustice.
Consumers are prioritizing a company’s genuine effort to achieve change, rather than a business
that promotes change only as a marketing strategy.23
 Starbucks DE&I 8

Problem Statement
Starbucks has a duty and responsibility to integrate diversity, equity, inclusion, and
multiculturalism into its organizational practices. It is imperative that corporations implement the
necessary steps to ensure that minority groups are represented and supported. While Starbucks is
addressing social injustice through training and mentorship programs, further efforts can be made
to continue toward customer inclusivity and to ensure that annual and long-term diversity and
representation goals are met within the organization.
 Starbucks DE&I 9

Purpose and Scope

Starbucks has successfully implemented components of Diversity, Equity,
Inclusion, and Multiculturalism in their training programs. While the organization’s efforts have
been primarily consumer-centered, there is ostensibly a need for increased bias training efforts to
improve customer relations, following several incidents that have occurred at Starbucks
locations.2

According to an article from HRDive, the company’s “policies and procedures…were aligned
with the coffee chain’s mission and values and well-designed to promote equity, diversity, and
integrity.”2 Starbucks must revisit their training on DE&I to ensure that employees’ goals and
actions align with the mission of the company, and to promote the importance of customer
service. Team members must be mindful of their actions and should take steps to prevent biases.
Additionally, an evaluation of Starbucks was conducted by Covington & Burling law firm and
U.S. Attorney General Eric Holder:

In the report, “Starbucks – An Examination of Starbucks’ Commitment to Civil

Rights, Equity, Diversity, and Inclusion”... [the law firm and Holder] organized its
assessment into four categories: 1) Sustaining the ‘third place,’ in which
Starbucks is a space outside of home and work where everyone feels welcome
and is treated equally; 2) fostering an internal culture of equity and inclusion,
which reflects Starbucks’ commitment to hiring diverse candidates and a D&I
leader to strengthen its equity mission; 3) community engagement, whereby
Covington recommended that Starbucks step up its involvement in the community
and deepen its ties with its stores, partners (employees) and communities; and 4)
the importance of leadership, whereby Covington recommended that Starbucks
instruct leaders in the business community, government and the public sector in
the best practices for eliminating bias.2

As demonstrated in recent DE&I research, findings show that “53% of consumers agree that
every brand has a responsibility to get involved in at least one social issue that does not directly
impact its business.”1 Community involvement, in addition to the training programs provided by
the company, will help to educate employees about consumer diversity.
 Starbucks DE&I 10

Procedures and Findings

Multiculturalism in the Company’s Operations Outside the United States

Starbucks has become an international organization. Among the primary locations in which
Starbucks operates are the United States, China, Canada, Japan, United Kingdom, Korea, Latin
America, Turkey, Taiwan, Indonesia, Thailand, and the Philippines. The company has the most
locations in the United States, with China and Canada right behind.16

With China being the country containing the most Starbucks locations, after the United States, it
is important to consider Starbucks’ international multiculturalism efforts in China. To determine
the adjustments that must be made when conducting business in China, the concept of high- and
low-context cultures can be applied. According to Amy Newman’s Business Communications, a
low-context culture relies on “more explicit communication,” while a high-context culture relies
“more on subtle
actions and reactions
of communicators.”15
Cultures can be
considered a
low-context culture
in some categories,
and high-context in
others. According to
Geert Hofstede, there
are six primary
dimensions in which
these cultural
tendencies fall. As
illustrated in Figure
1, there are some
dimensions in which
China is a more
high-context culture (a higher
score equates to a higher-context,
and vice versa), relative to the U.S., and others where the opposite is true.

With this in mind, Starbucks made the effort to understand the values of Chinese culture and
implemented business actions accordingly. For example, an article from Forbes states that
“Starbucks has meticulously organized its efforts in China around three key pillars of Chinese
society: Family, Community, Status.”22
 Starbucks DE&I 11

Regarding multiculturalism efforts in the company’s operations outside of the

United States, Starbucks earned a score of 5. The company has made a great effort
to address the differing cultural needs of China, based on the concept of cultural dimensions.

Diversity, Equity, Inclusion, and Multiculturalism in the Company’s Social Media, Public
Relations, and Marketing

Starbucks faced recent backlash due to an incident at a Philadelphia location and the company’s
subsequent response. A Starbucks’ employee called the police when two African-American men
did not purchase anything from the store. It was later
revealed that the men were waiting for another
person to join them for a meeting. Starbucks’
response was to close all the U.S. locations for a
DE&I training day. The organization’s actions were
perceived as a “quick-fix” and received further
criticism.2 Since the incident, Starbucks has
prioritized transparency to improve public relations.
According to an article from Platform Magazine,
Starbucks has implemented transparency efforts by
creating an equity and inclusion timeline, which is
visible on the company’s public website. This
timeline “marks key events and programs Starbucks
has implemented to improve DE&I efforts.” By
publicizing this information, Starbucks is
demonstrating to its customers that the organization
recognizes its past mistakes, is accountable for them,
and is taking action to correct them.9 Regarding
diversity, equity, inclusion, and multiculturalism in the company’s public relations and
marketing, Starbucks earned a score of 4. There is strong evidence of attention to this area, but
there is still room for improvement.

Representation in a Company’s Leadership Team and Employee Base

For over 51 years, Starbucks has focused on inclusion and equity. More recently, the company
concentrates on its workforce demographics because the employees have an important role in the
company’s success. According to the “Ethnic Representation in Starbucks’ Workforce” chart, the
company hired less White individuals and more Hispanic and Asian people in 2021 than in 2020;
however, the number of Black individuals hired decreased.8 On a corporate level, White
individuals represent 65.2% of employees, Asian individuals represent 19.2%, Hispanic or Latin
 Starbucks DE&I 12

represent 7.4%, and Black individuals represent 3.7% of Starbucks’ leadership

team. Individuals who identify as multicultural, represent 2.6% of the corporate
workforce. According to a DEI report, by 2025, the company aims to have Black,
Indigenous, and People Of Color (BIPOC) individuals represent 30% of employees at the
corporate level and at least 40% in retail and manufacturing roles.7

Figure 3: Ethnicity Representation in Starbucks’ Workforce8

In the category of representation in a company’s leadership team and employee base, Starbucks
earned a score of 4. The company’s demographics demonstrate that while the company has
implemented efforts which have resulted in a diverse and inclusive workforce, there are still areas
that need improvement.

Strategic Documents Including the Company’s Mission Statement, Diversity Statement, Or

Other Corporate Documents

The company’s mission is to “inspire and nurture the human spirit - one person, one cup, one
neighborhood at a time.”19 As the workforce demographics continue to change, the company is
improving their DE&I policies and procedures. It is imperative that employees feel welcomed,
and that they receive continuous education on these policies. In the category of strategic
documents including the company’s mission statement, diversity statement, or other corporate
documents, Starbucks earned a score of 5. The corporation has implemented strategies that
successfully integrate inclusion, diversity, equity, and multiculturalism into all aspects of their
business.

Awards and Recognition Such As Being Recognized by Diversity Inc. Or Other

Organizations

Starbucks has received many awards within the past several years. Among the most recent
awards, the organization was presented with “Best Company for Diversity” in 2019, “Best
Company Happiness” and “Best Company for Women” in 2020, and “Best Places to Work in
Seattle'' in 2021 and 2022. Additionally in 2022, the company received an award for “Best
 Starbucks DE&I 13

Company Work-Life Balance.” Based on ratings, employees are satisfied with

their work experience and the organizational culture.18 While the company has
been recognized for its DE&I efforts, it was not listed in the “2022 Top 50
Companies for Diversity,” posted by DiversityInc.5

Figure 4: Starbucks’ Awards18

In the category of awards and recognition, Starbucks earned a score of 4. In this category, there is
strong evidence of attention to this area, but there is still room for improvement.

Programs and Incentives Regarding Diversity, Equity, Inclusion, and Multiculturalism

In December 2019, Starbucks hired Nzinga Shaw, the Global Chief Inclusion and Diversity
Officer, to implement a strategic vision and to improve the company’s DEI incentive programs.
The position was created based on the Civil Rights assessment performed by Covington &
Burling law firm. The corporation has considered improvement efforts through the
implementation of a variety of incentives, such as linking executive compensation to DEI goals.
The organization will also focus on promoting diversity among the company’s board of directors
by joining the Board Diversity Action Alliance. Additionally, executive personnel will be
required to complete a two-hour anti-bias training.19

The company will recognize, and develop, employee-led networks to encourage inclusivity of
BlPOC employees while also implementing efforts to promote a greater understanding of
customer diversity. For example, in June 2020, the “BoycottStarbucks" hashtag went viral,
 Starbucks DE&I 14

because the company banned their employees from wearing “Black Lives Matter”
shirts and accessories. However, after receiving backlash and criticism for this
response, the company designed their own “Black Lives Matter” shirts.7

In the category of programs and incentives regarding diversity, equity, inclusion, and
multiculturalism, Starbucks earned a score of 4. There is evidence that the company has
developed several programs and incentives, regarding DEI and multiculturalism, but
improvements can still be made moving forward.
 Starbucks DE&I 15

Recommendations, Conclusions, and Summary

In conclusion, based on findings regarding the company’s DE&I efforts, Starbucks
has successfully promoted a workplace climate of inclusion, diversity, equity, and
multiculturalism. Regarding improvements, the company must continue to focus on their
customers, and the community, by improving the consumer service protocols. The organization
has experienced criticism and backlash, but quickly implemented creative efforts to correct its
initial response. In reply to negativity resulting from biases, Starbucks provides training for their
employees to improve customer relations and to ensure that each employee understands the
importance of inclusion and maintaining unbiased perspectives.7

Although the company has been successful amidst the fluctuating business culture, Starbucks
must continue to work to improve their DE&I and multicultural policies and procedures. The
company has established future organizational goals and objectives, such as increasing the
demographics of BIPOC employees on corporate levels to 30%, and 40% in retail and
manufacturing roles.7

Starbucks interacts with their customers on different social media platforms, such as Facebook
and Instagram.. The company’s responses are instantaneous and personal, which results in
increased customer satisfaction.

Though the headquarters of Starbucks is in Seattle, Washington, the organization operates in

several countries such as China, Canada, Japan, United Kingdom, Korea, Latin America, Turkey,
Taiwan, Indonesia, Thailand, and the Philippines. The multiculturalism efforts were most
successfully implemented in China, because the company understood the difference in values
within Chinese culture. Starbucks’ international business model can be effectively implemented
in all countries where it does business. The organization’s ongoing goal is to address cultural
differences within the United States, and in other countries where Starbucks locations exist. The
corporation should consider each coffeehouse separately, per its location, and seek to understand
the culture of each community it serves.
 Starbucks DE&I 16

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 Starbucks DE&I 17

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 Starbucks DE&I 18

Appendix

Microsoft Word - 2022-Starbucks-US-Workforce-Demographics.docx

SBX230321-EEO-1_2021_Consolidated-Report_2.pdf (starbucks.com)

Workforce Diversity at Starbucks

Our commitment to Inclusion, Diversity, and Equity at Starbucks

https://www.globaldata.com/data-insights/foodservice/starbucks-racial-diversity-in-the-workforc
e-2096360/