1. Suggest the key elements of Starbucks’ organizational culture that contributes to its success in a global economy. Indicate management’s role with creating and sustaining the organizational culture.
The key elements of Starbucks’ organizational culture and its success in the global economy are its people, innovation, development of new products, efficient customer service, and a wide range of great coffee. The main objective of the Starbucks was to deliver unique coffee experience, a blend of tradition and great taste that is capable of establishing a connection with the customer. The objective of Starbucks has been achieved by collaborative organizational culture. The company emphasizes on innovations while preserving the traditions (Kreitner, 2008). Starbucks is presently operating at more than 20,700 locations across the globe and has around 160,000 employees. The company has diversified workforce that helps in bringing innovations. Organizational culture at Starbucks emphasizes on developing a healthy work relationship. Company believes in “providing a great work environment and treat each other with respect and dignity” (Starbucks, 2014).
Starbucks senior management considers the importance and role played by the employees. The company understands that employees play a critical role in the success of Starbucks. Hence, it is the responsibility of the company to provide them healthy working environment (Kreitner, 2008). Starbucks considers all employees as partners irrespective of the work they do and their position. Starbucks’ values created by the management provide employees a culture that appreciate their hard efforts and treat them with dignity (Sutter, 2003).
Starbucks understands that a happy employee only can serve customers with full efficiency. Therefore, company provides health care benefits to even part-time employees. The company believes in mutual development and growth. Hence, all employees are required to go through extensive training on product knowledge, customer service, and inter-personal skills. Employees are allowed to participate in profit sharing plan 401(k). All the steps taken by Starbucks created a collaborative organizational environment that emphasizes on the growth of all stakeholders (Starbucks, 2014).
2. Assess the effectiveness of Starbucks’ management decisions in providing innovative offerings for its customers (e.g., WiFi, style of coffee, etc.) in order to achieve its current competitive marketplace advantage. Provide support for your rationale.
Starbucks is providing innovative offerings such as cup with the name of customer on it, company’s own music album, free Wi-Fi, in-store ambience that gel with local culture, wide range of coffee and association with magazines and news sites. All these innovations provide competitive advantages to the company because presently no competitors is matching Starbucks’ offerings. Starbucks is well-known for its great quality, excellent customer service, and innovative offerings (Michelli, 2006). The innovative decisions taken by the management helped Starbucks to gain competitive advantage. Starbucks believes in developing a close relationship with its customers. The company launched an innovative idea to make the customer feel important. While placing the order, Starbucks staff ask for the name of the customer and write it on their cup. The initiative launched by the management was found very effective. Regular visitors of the Starbucks love the fact that staff know them by their name. The effect can also be measured by reviewing pictures of cups posted by the customers on social media (Thompson & Arsel, 2004).
Starbucks ensures that its outlets are available everywhere near to the target market. Company ensures its presence in shopping malls, working locations, crowdie places, and all other places where customers want to grab a cup of coffee. A large number of students, working professional, shoppers and other customers visit Starbucks outlets. Free Wi-Fi is allowed to customers to get on their work, check their mails, chat with the friends or perform any other activity that they like. Chen & Hu (2010) in their study analyze the relation between service attributes and customer perceived value. The authors mention that the value added services delight the customers visiting the coffee shop, hence, provide competitive advantage to the company (Chen & Hu, 2010).
At Starbucks, customers can order for customized coffee, and can elaborate how they want it. Development of the wide range of coffee allowed company to satisfy different taste of the customers, and a huge number of outlets increased Starbucks’ reach to its customers. Therefore, all decisions are taken by the management bring customer closer to the company.
3. Determine one (1) key management competency that a successful manager at Starbucks is likely to have. Indicate one (1) way in which this particular competency is a good fit for the organizational culture.
Starbucks is good in continuous innovation and improvement, which are the reason behind success of the brand. The company is quick in understanding and fulfilling evolving needs of the customers. It is possible only when the company has collaborative and diversified organizational culture. Starbucks is planning to launch its music, high-tech cafes and much more. The culture created by the management facilitate generation of new ideas and implementation of those ideas. Therefore, the one key competency that any manager working at Starbucks should have is personal integrity and ethical values (Article, 2004).
It is important for a leader to develop inspiring vision and values that facilitate the development of diversified and collaborative environment. Diversified portfolio of employees allows company to explore new ideas, understand taste and cultural requirements of people from different cultures, and help in serving diversified customer group. Personal integrity and ethical values enable manager to treat all employees equally and with respect irrespective of their ethnicity and race (Michelli, 2006). The core competency will help the manager to create healthy working environment where all employees have a fair chance of growth and career development.
Starbucks is operating in the service industry where customers directly interact with the employees and also with the brand. Therefore, the success of the company will largely depend upon how staff treat customers and provide them a great experience. Starting from taking order, preparation of the coffee, and delivery of the coffee, it is customer service that matters. Manager with ethical values and personal integrity creates a happy environment for all employees.
4. Speculate on whether Starbucks would achieve long-term sustainability as a global leader in the coffee industry without the organization’s CEO, Howard Shultz.
It is very difficult to imagine Starbucks without Howard Schultz who is CEO and chairperson of the company. Howard purchased Starbucks in the year 1987, and after that company never looked backed. Starbucks touched new heights of success and became the world leader in the premium coffee market under the guidance of Howard. The CEO of the company always placed importance on people and their development. According to Howard, only a happy and satisfied employee can make customers delighted. The long-term sustainability of the company in the global market can be achieved in the absence of Howard only if the company has a leader with the same capability, values and vision (Kreitner, 2008).
Howard made all efforts to deliver maximum benefits to its employee. The company is paying $15 per hour wage to its barista employees. Employees are also eligible to study on-line college program offered by Arizona University. Employees are offered various benefits at Starbucks. Howard says “a company will endure only so long as it treats its employees fairly--with sensitivity and compassion” (Jenkins, 2014). The long-term sustainability of the company can be achieved without Howard but under the guidance of other strong leadership.
Any leader who understands the importance of all business partners involved in the supply chain such as farmers, suppliers, distributors and employees, can manage the company effectively. Sustainable growth focuses on the development of all stakeholders directly or indirectly involve in the process including community and investors. Therefore, growth and development of all internal and external stakeholders can help Starbucks in achieving long-term success with or without Howard, but certainly with a strong & ethical leadership.
References
Chen, PT, & Hu, HH. (2010). How determinant attributes of service quality influence customer‐perceived value: An empirical investigation of the Australian coffee outlet industry. International Journal of Contemporary Hospitality Management, 22(4), 535-551.
Jenkins, R. (2014, June 24). Starbucks’ Howard Schultz: How to Lead, Care for Your Employees and Make a Profit. Retrieved from City Watch, Los Angeles: http://www.citywatchla.com/lead-stories-hidden/7104-starbucks-howard-schultz-how-to-lead-care-for-your-employees-and-make-a-profit
Kreitner. (2008). Organizational Behavior 8E . New York: Tata McGraw-Hill Education.
Michelli, J. (2006). The Starbucks experience : 5 principles for turning ordinary into extraordinary. New York: McGraw-Hill.
Our Mission. (2014). Retrieved from Starbucks: http://www.starbucks.com/about-us/company-information/mission-statement
Starbucks – taking on the world: Can the coffee retailer join the all‐time greats? (2004). Strategic Direction, 20(7), 13-15.
Sutter, S. (2003). Staff the key to marketing success. Marketing Magazine, 108(19), 4.
Thompson, C.J., & Arsel, Z. (2004). The Starbucks Brandscape and Consumers’ (Anticorporate) Experiences of Glocalization. Journal of Consumer Research, 31(3).
