WGU C 216 – EHM2 Ethical Leadership Task 1

A1. Ethical Leadership of Howard Schultz

Howard Schultz, the former CEO of Starbucks, is widely recognized for his ethical business leadership. One of the most notable ethical traits he demonstrated is integrity. Schultz consistently prioritized ethical business practices, even when they conflicted with profit-driven motives (Mohn, 2017). For example, the landmark decided to provide healthcare benefits to all Starbucks employees, including part-time workers, when this was uncommon in the industry. This decision reflected his commitment to fairness and responsibility toward his employees, demonstrating his belief that businesses should be accountable to shareholders and all stakeholders. His integrity was also evident in his response to racial bias incidents at Starbucks locations. Instead of ignoring the issues or shifting blame, he took responsibility and implemented mandatory racial bias training for employees, reinforcing the company’s commitment to ethical conduct.

Another ethical trait that Schultz exemplified is courage. He was unafraid to take bold stances on controversial issues, even when they carried financial or reputational risks. For instance, Schultz publicly advocated for social justice initiatives, including LGBTQ+ rights, racial equality, and veterans’ employment programs. Despite backlash from some customers and investors, he remained steadfast in his commitment to these causes because he believed they aligned with Starbucks’ core values. Despite potential consequences, his willingness to stand up for what he thought was right underscores the importance of ethical courage in leadership. His actions demonstrate that ethical business leaders must sometimes challenge the status quo to uphold their principles, even in adversity.

A2. Howard Schultz’s Ethical Conduct in Leadership

Howard Schultz has exhibited ethical conduct by prioritizing corporate social responsibility and employee well-being, even when these decisions were not the most financially advantageous. One of his most impactful ethical initiatives was providing comprehensive healthcare benefits to all Starbucks employees, including part-time workers (Mohn, 2017). This was an uncommon practice in the early 1990s, yet Schultz believed that companies had a moral responsibility to care for their employees. Additionally, he introduced stock ownership opportunities for employees, allowing them to share in the company’s financial success. These initiatives demonstrated his commitment to fairness and ethical leadership by ensuring that employees were valued and had financial security.

Schultz also exhibited ethical conduct through his response to social justice issues. In 2018, after an incident of racial bias at a Philadelphia Starbucks store, he immediately took responsibility rather than deflecting blame. Under his leadership, Starbucks temporarily closed 8,000 stores for racial bias training to ensure employees understood the importance of inclusivity and non-discrimination.