Corruption at the Top in France and Illinois

An important implication of the saying, a fish rots from the head down, is that it is important that corrupt heads be swiftly punished so underlings get the message that crime in public office carries considerable risk. In the matter of Ukraine’s possible accession (not merger!) into the E.U. as a new state, the old, deeply entrenched, culture of corruption in the potential state has been of particular concern in the E.U.’s executive branch, the European Commission. In both the E.U. and U.S., it’s worth asking whether some states are more corrupt than others. It is a mistake to treat all states alike in terms of where to direct federal resources and how much of a given state’s resources should be devoted to investigations of state officials. At least in 2025, Illinois and France could be said to have been “problem children” in this regard, and this doesn’t mean that Hawaii and Sweden, for example, also had as sordid corrupt cultures.

The full essay is at "Corruption in France and Illinois."

Starbucks Bucks Its Workers’ Labor Union

Even though more than 500 Starbucks shops had unionized by the end of 2024, it seems that the company’s management did not respect the new union very much. Unfortunately for the company, one implication that can be drawn is that the company’s management didn’t respect federal labor law very much too. For in not respecting its union enough to negotiate it on reducing employee work hours, the company violated federal law. The “smoking gun,” I submit, was that the management used dissimulation to respond to the government, rather than address the complaint directly.

The full essay is at "Starbucks Bucks Its Workers' Labor Union."

Beyond Climate Change: Starbucks Awash in Cash

While it may be tempting to go after companies for hypocrisy on corporate social responsibility, even deeper criticism may be closer to the bottom line, financially. Even though social media castigated Starbucks for its impact on carbon emissions in agreeing to fly its Southern Californian CEO Brian Niccol to Seattle on a company plane each week, I submit that the amount of spending entailed raises questions about cost-containment and even cast some doubt on whether the company’s price increases in 2024 were wholly justified, and thus even on whether the industry was competitive or an oligarchy.

The full essay is at "Beyond Climate Change: Starbucks Awash in Cash."

Starbucks: A Racist Company Against Racism

In June, 2023, Starbucks had to face a unanimous jury decision in favor of a regional manager whom Starbucks' upper management had fired because she had resisted the company's racist policy of punishing innocent Caucasian managers for good public relations, which the CEO felt was needed and appropriate after a store manager had legitimately called the police on two Black people in a Starbucks restaurant who presumed the right not only to sit in a restaurant without ordering anything (before Starbucks allowed this),  but also to ignore the authority of the store's manager. Starbucks cowered to the unjust negative publicity, and thus showed a lack of leadership, and went on to act unethically in wanting to show the world that the company can go after Caucasian employees. This racism is ironic, for several years earlier, Starbucks' CEO had ordered employees at the store level to discuss racism with customers. Interestingly, the anti-racist ideology being preached was partial, and thus contained a blind spot wherein racism such as the company's upper management would exhibit is acceptable. 

The full essay is at "Starbucks"

See also: Bucking Starbucks’ Star

Starbucks Capitulates to Overzealous Police Union in Spite of In-Store Intimidation

On July 4, 2019, six police employees staggered by twos into a Starbucks store in Tempe, Arizona (which borders Phoenix to the west). Because they did not come in together, customers had a prolonged sense of a police presence throughout the store. Eventually, the police huddled near the bar where drinks were left for customers to pick up. Even as the police huddled, they did so with eyes strategically perched so as to maintain visuals on the customers. Yet this was apparently lost on the police themselves, who felt it was disrespectful for an employee to ask them to leave after a customer complained about feeling uncomfortable. It could not be assumed that the customer had had bad experiences with police in the past, for any customer would understandably feel uncomfortable with so many visible guns passing back and forth. Indeed, for the police to treated the customers to the display can be reckoned as disrespectful!  Unfortunately, the police probably had no recognition of having too many at once in the store because intimidation as a deterrent by a very visible, ubiquitous presence in the public (and apparently in restaurants) was at the time the standard tactic. In short, customers could be expected to feel uncomfortable, or at least to want some relief from the ubiquitous police presence. Even so, Starbucks apologized because an employee acted on behalf of a customer, whose complaint was valid given the overwhelming police presence in the store. Yet according to the Tempe Association of police, the customer and employee should have known that some of the cops were veterans so the errant conclusion is zero respect for vets.[1] The association was so busy feeling disrespected that no thought at all went into why customers could rightly feel uncomfortable with so many police in a small store.

The full essay is at "Overzealous Police Presence."

1. Amir Vera, “Starbucks Apologizes after Six Officers Say They Were Asked to Leave a Store in Arizona,” cnn.com July 6, 2019.

Interestingly (or tellingly), the police chose to leave rather than move away from where customers pick up drinks, and yet the police chief felt that Starbucks had disrespected the police in the store. 

Behind Corporate Loopholes: Wealth and Power

A company in the U.S. wants a tax loophole to apply. Starbucks, for example, wanted to be able to use the manufacturing deduction by stretching manufacturing to include the roasting of coffee beans. So in 2004 the company hired Michael Evans, a lobbyist at K&L Gates who had just a year before worked as a top lawyer on the U.S. Senate Finance Committee, which writes tax law. Evans was able to urge his former colleagues in the Senate to expand the definition of manufacturing to include roasting in a clause added to a 243-page tax bill called the American Jobs Creation Act.  As you might imagine, Starbucks was not the only company to get a tax break written into that law. By 2013, the manufacturing deduction had saved Starbucks $88 million that the company would otherwise have had to pay in corporate income tax. In 2012, corporate tax breaks and loopholes added $150 billion in lost revenue for the federal government, increasing the budget deficit by that amount.[1] Three lessons can be gleamed from the hidden corporate loopholes.

The full essay is at "Behind Corporate Loopholes." 

1 Ben Hallman and Chris Kirkham, “As Obama Confronts Corporate Tax Reform, Past Lessons Suggest Lobbyists Will Fight For Loopholes,” The Huffington Post, February 15, 2013.

McDonald’s Over-Reach: Blending a Restaurant and a Coffee Shop

In spite of essentially flat sales in the U.S. in February 2013 from the same month in 2012, McDonald’s CEO, Don Thompson, said he was confident that the people at the company had sufficient experience to “grow the business for the long term.” Even assuming that a business can be grown as if it were a geranium plant, the claim can be critiqued both in regard to the underlying assumption regarding “growth” and that of long-term viability. Fusing a restaurant with a coffee shop can be said to be an over-reach that had blended the company too much, at least at the store level.

The full essay is at "McDonald's in a Changing Environment."

On the Value of Creating a Hybrid Industry by Appropriating High Tech: The Case of Borders and Amazon

From the ten-year chart of Amazon.com's stock, a clear upward trajectory can be discerned from the days of financial panic in the last quarter of 2008 even in spite of the plateau in mid-2010. On May 10, 2011, AMZN was trading at around $204 a share. At the time, Amazon's new "cloud music" service was said to be behind the surge. In general, the general uplift since late 2008 can be ascribed to the company being on the right side of the computer technology changes that were transforming not only industries, but modern society itself. As Amazon.com was benefiting from its move into music, Microsoft was buying Skype for $8.4 billion in order to get into communications. The hefty price tag can itself be taken as a confidence vote in the continuance of the technological shift as well as the value in moving to a new, hybrid industry model rather than limiting the company to its existent industry model. In other words, even in companies facing a serious technological threat in the business-environment, even top managers can fail to adopt a broader perspective within which the threat can be seen as an opportunity to change the company and even its own "micro-climate," or immediate industry. Hence by 2019, Borders no longer existed whereas Amazon was still profiting. Even the dinosaur McDonalds had tried to shift into a hybrid coffee-shop/restaurant industry model. 



10 year Amazon.com stock chart from Investorguide.com

The full essay is at "Borders: A Hybrid Industry?"

Business Ethics Through Rose-Colored Glasses

That business ethics scholars are as though children playing in the clouds in claiming that the vast majority of business practitioners are good-intentioned, or ethical, is an empirical statement that is in need of empirical verification. I suspect the scholars' typical utopian perspectives, curiously coincident with prescriptive ideological "Thou shalt nots," suffer from not touching ground from gazes atop ivory towers. That is to say, the scholars are factually incorrect. Let us, therefore, sweep away the fog so at least we have a realistic picture of what is actually going on "on the ground."

The full essay is in Cases of Unethical Business: A Malignant Mentality of Mendacity, available at Amazon.

Starbucks: Petty Behind the Bar

Sometimes, as though the planets were to suddenly align, a coincidence occurs that so marvels the mind that one cannot help but wonder whether something more is involved in some larger picture. Such is the case for me today regarding the illustrious Starbucks company. A story in the Wall Street Journal so fits what I want to write about that I cannot help but wonder if my message were meant to spread. In short, my story involves Starbucks warming milk and the Journal's involves the company cooling it. It is as if yin and yang were finally in balance here, and yet I must conclude that the company has been in a state of disequilibrium. Chaos theory tells us that order and chaos can indeed coexist. Perhaps this is the nature of life itself, or at least human society. In any case, my case is that too many store-level managers and employees have been too petty, while higher management has looked the other way. 

 

                                                                    Charging More for "Customized" Drinks

Is Starbucks short-changing itself in being too petty in charging customers for "extras?"     Image Source: Bloomberg

The full essay is at "Bucking Starbucks' Star."

Hierarchy Hampered Down in American Business

Without going into either the labor or management camp, a person can viably critique the operation of hierarchy itself in business organizations. The notion is typically associated with the concentration of power at “the top,” rather than the relation of middle-level managers to “retail” managers and their subordinates. Efficiency of power at a corporate headquarters does not necessarily translate into “downward” efficiency at the level of middle management. I submit that precisely this efficiency is rather severely compromised in American business.

The full essay is at "Hierarchy Hampered."

Beyond Facebook’s Impact on Political Polarization in the U.S.

Any time “scientists” at a company purport to have done a study involving said company in any way, the public has good reason to be suspicious of the reported conclusions. Were the folks running the company really intent on providing credible information, they would use independent scholars (i.e., not being compensated by the company). Such a management would want to obviate even the appearance of a conflict of interest—their desire to provide the public with an answer being so strong. So the management at Facebook may not have been very invested in providing the public an answer to the question: how much influence do users actually have over the content in their feeds? In May 2015, three “Facebook data scientists” published a peer-reviewed study in Science Magazine on how often Facebook users had been “exposed to political views different from their own.”[1] The “scientists” concluded that if users “mostly see news and updates from friends who support their own political ideology, it’s primarily because of their own choices—not the company’s algorithm.”[2] Academic scholars criticized the study’s methodology and cautioned that the risk of polarized “echo chambers” on Facebook was nonetheless significant.[3] I was in academia long enough to know that methodological criticism by more than one scholar is enough to put an empirical study’s findings in doubt. Nowadays, I am more oriented to the broader implications of the “echo-chamber” criticism.

The entire essay is at “Beyond Facebook’s Impact.”

See: Taking the Face Off Facebook: Strategic and Ethical Issues

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[i] Alexander B. Howard, “Facebook Study Says Users Control What They See, But Critics Disagree,” The Huffington Post, May 12, 2015.

[ii] Ibid. I put the quotes around “scientists” to make the point that the conflict of interest renders the label itself controversial in being applied to the study’s investigators.

[iii] See, for example, Christian Sandvig, “The Facebook ‘It’s Not Our Fault’ Study,” Multicast, Harvard Law School Blogs, May 7, 2015.

On the Suitability of Starbucks’ CEO Triggering Conversations on Race

Should a company’s CEO use the vast tentacles of the local retail stores to prompt public discourse on race in America? Even though improving race relations is a good cause, extending a CEO’s personal influence beyond the products societally requires its own justification. For a week in March 2015, baristas at 12,000 Starbucks coffee shops implemented CEO Howard Schultz’s intent to “spark customer conversation on the topic of race.”[1] Schultz even made a video in which he told the baristas how they should steer their respective conversations. If this sounds a bit like George Orwell’s Big Brother in the novel, 1984, the question may be whether such societal influence is legitimate from a position of management in business.

The full essay is at “Starbucks: A Shaky Management Wading into Social Issues.”

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1. Bruce Horovitz, “USA TODAY, Starbucks Tackle Race Relations,” USA Today, March 17, 2015.

Adieu to Florida’s Gold Coast: Beyond Money and Politics

In October 2014, the City of South Florida passed a resolution in favor of South Florida seceding from Florida and becoming the 51^st State of the United States. Vice Mayor Walter Harris, the resolution’s sponsor, told the city’s commission that the government of Florida had not been addressing adequately the issue of the sea-level rising. Already, Miami was subject to regular flooding at high tide. This reason for secession has a serious downside, however; a better rationale may ironically come from the perspective of Floridians in North Florida.

The full essay is at “Adieu to South Florida”

Starbucks Takes a Hit for Supporting Gay Marriage

In January 2012, Starbucks joined Microsoft and Nike in publicly supporting the same-sex marriage bill in the U.S. state of Washington. Two months later, the National Organization for Marriage began a “Dump Starbucks” boycott as a result of Starbucks' support of gay marriage. David Barton, whose sermon on May 19, 2013 on “pious caffeine consumption” was posted on the internet, said, “The question is, ‘Can a Christian give money to a group he knows will use it to attack what God supports?’ . . . You can’t drink Starbucks and be Biblically correct on this thing. It’s just a real simple principle.”[1] Barton had earlier likened being gay to smoking and gay marriage to dogs marrying horses. In spite of these rather extreme claims, the boycott gained some traction. At the next Starbucks’ stockholder meeting in March 2013, Tom Stauber, a stockholder, suggested that the company’s sales and earnings were a “bit disappointing” in the quarter after the boycott had begun precisely because of the issue. Whereas the stock and dividends had risen 38% from October 2011 to September 2012, the rise was only 7.6% from March 2012 to March 2013.[2]  If indeed the causal attribution is correct, then it can be asked whether the management (and/or board) of a company taking a political stand on a controversial societal issue that is not expected to save the company money and in fact could result in lost revenue breaches the fiduciary duty to the stockholders unless a majority of shares are voted in support of the position.

Starbucks typically relies on young adults to both work in and manage the stores. Even an excellent vetting process in hiring does not mean that effort is not needed to fortify the mechanism of accountability.  Source: wikimedia.  

The full essay is at "Starbucks: A Shaky Management Wades into Social Issues."

See also, Bucking Starbucks' Star, available at Amazon.

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[1] Meredith Bennett-Smith, “Christians Can’t Drink Starbucks Because Company Supports Gay Marriage, Evangelical Says,” The Huffington Post, June 3, 2013.

[2]Aaron Smith, “Starbucks CEO Holds His Ground on Gay Marriage,” CNN Money, March 28, 2013.