Submitted By: Janset Batıbay
Submitted To: Joe Goldiamond
In today’s skeptical world, where critics, media and public are cynical about companies, their operations and how authentic they are in being socially responsible, it is almost impossible for organizations to create a 100% good image. In more than half of all the television programs, it is easy to come across with negative portraits of business people. This reality has confirmed the importance of effective communications in the company in every situation it may encounter throughout its existence: non-crisis, pre-crisis and crisis situations. Effective communications during crisis situations require more delicacy in handling problems and delivering key messages. Therefore, companies must adopt crisis communication plans. Crisis communication skills require careful strategic decision making in handling the crisis environment and the ability to lower the negative impact of crisis on companies by following effective plans. Today, because of advancements in technology and the effect of media, any corporate crisis is instantly covered by world media, internet and bloggers which have immense effects on the company. They document and critique about every move the company makes. For those companies that do not have crisis communication plans, they are left in ruins after the crisis hits them. (Argenti, 2009) Like many successful companies, Starbucks also has the responsibility of being aware of potential crisis that might hurt the company’s reputation or operations. Starbucks must effectively communicate to such threats by following an effective crisis communication plan. Among many potential problems that could turn into crisis situations for Starbucks, it’s important to consider the company’s ongoing problem with Ethiopia. First we should look at its history with Ethiopia, the recent developments and how the current situation with Ethiopia may result in a crisis if not dealt with delicately. Starbucks had a long-lasting dispute with Ethiopia for more than five years. In the beginning, Starbucks hesitated in recognizing Ethiopia’s specialty coffees; Harar, Sidamo and Yirgacheffe. Ethiopia had tried to reach Starbucks about supporting the country's efforts to return more of the price of its coffees in world markets to the farmers who produce them, by seeking trademark rights for these specialty coffees. Despite Starbucks’s commitment to helping farmers in Ethiopia, the company continually rejected Ethiopia's requests to resolve the trademark issue, and refused to sign a royalty-free licensing agreement that would recognize Ethiopia's right to control how its own coffee names are used. In 2005, OXFAM launched a campaign to encourage Starbucks to sign a licensing agreement with Ethiopia. The agreement would make sure that Ethiopia had ownership over its specialty coffee names. During this period, Starbucks was receiving many complaints from consumers and concerned people and the tension was growing. (OXFAM International, 2006) Starbucks refrained from signing the agreement for a long period of time. For Ethiopia, protecting the value of its coffee was important to the country's economy. Almost 15 million Ethiopians earn their living through coffee farming, and the commodity accounts for 40 to 60 percent of the country’s exports. (Spiegel Online International, 2006). Therefore it was obvious that when Starbucks would sign the agreement with Ethiopia, there would be a significant change in Ethiopia’s economy. The conflict between Starbucks and Ethiopia created anger and confusion among Ethiopian farmers and organizations that supported them, like OXFAM. They believed that Starbucks was a socially responsible company but its actions were proving otherwise. Therefore, Starbucks was becoming hypocritical by not applying one of the company’s principles: “Contribute positively to our communities and our...