Applying the Four Lessons of Organizational Design to Starbucks

Organizational change is a focus for Starbucks. The resistance to change needs to be a consideration for the company. Starbucks needs to focus on how to communicate the change in the organization and the attitudes that come with the change, whether it is positive or negative. Starbucks needs to establish strategies for managing the attitudes and the role of the president, manager, and employees with the proposed changes. Starbucks also needs to consider how the combination of the leadership and communication strategies mitigates resistance to change.

Barista: This job contributes to Starbucks success by ensuring our service and store standards are met. We do this by providing customers with prompt service, quality beverages and products. Starbucks and partners will experience a friendly, upbeat and clean atmosphere.

Starbucks smartly realizes that innovation will allow them to maintain the upper hand in the

“Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” (Starbucks, 2013). That is the mission statement of Starbucks. Whenever you think about who has the most premier cup of coffee or the most mouthwatering Frappuccino, you can’t help but visualize the green twin-tailed mermaid coffee icon. With more than 21,000 locations in 66 countries and revenue upwards of US $16.44 billion (Fortune 500, 2015), something or more importantly someone is the major key to this success. And that someone would be Howard Schultz the Chairman and Chief Executive Officer of Starbucks. Schultz sees the road to his company’s success just as steps to brew the perfect cup of coffee. This essay is about how Howard Schultz is a proven effective business leader. Shown directly with his motivation techniques, strategic decision making and planning and organizational restructuring.

Starbucks, as everyone knows, is the leader of coffee retailers in the world today. Despite the competitiveness in the market, Starbucks has still been the best and most famous company among those coffee companies. Success of Starbucks is due to its application of the effective and useful management theories. First of all, Starbucks has applied the General Administrative Theory which includes the 14 principles of management and the Bureaucracy. The 14 principles of management is fundamental rules that can be applied in every organisation, which

According to Nadler & Tushman, there are six strategic imperatives for future organizations: the need to focus the company's business portfolio; "abbreviate strategic life cycles; create 'go-to-market' flexibility; enhance competitive innovation; and manage intra-enterprise cannibalism" (Nadler & Tushman 1999). One company that is must restructure itself is the Starbucks Corporation, which has begun to eliminate unprofitable aspects of its empire and is trying to refocus its portfolio to emphasize high-growth markets. Starbucks must take an international focus, and reorganize its core competencies to suit the tastes of consumers living in high-growth markets. While Starbucks has acknowledged this need, over the next several weeks I will suggest additional methods for Starbucks to improve its financial performance and to better reframe the company's image for the international market.

By analyzing the qualitative aspects of Starbucks, the reader can gain a better understanding of the why and how of the organization. This report will examine the company through four integrated lenses: company history, leadership, culture, and strategy. These four components of the company build off one another and help to provide a holistic view of the Starbucks Empire and the health of the company. The history of Starbucks provides understanding of how the company has evolved into a global brand and the direction of future direction. The Starbucks company culture offers insight into the values that drive the company and how members of the organization interact with each other, customers, and other stakeholders. Starbucks’ evolving strategy incorporates the company’s history, both successes and failures, to refine approaches that worked in the past and improving those that no longer serve the company well. Additionally, the innovation and commitment to consumer experience embody the corporate culture,

Starbucks organizational structure has been rearranged to better accommodate customer satisfaction. Schultz, CEO of Starbucks announced the expansion of their matrix organization structure. They will operate under four U.S. divisions: Western/Pacific, Southeast/Plains, Northeast/Atlantic and Northwest/Mountain (Schultz, 2008). There are some major advantages for this kind of organizational structure which include maximized communication channels. Once the appropriate adjustments are made, Schultz believes that Starbucks will be able to develop products specifically to market appeal. The continual support in the Starbucks organizational structure support functions operating being their own department and supporting shared visions and goals

According to an article from Panmore Institute (2015) Starbucks has an organizational culture that relates with the organization's strategies for effective brand improvement and worldwide extension. Starbucks Coffee's organizational culture has various key qualities. The inclusion of these qualities is unique to the organization. The organization depicts its organizational culture as a culture of belonging, inclusion and diversity. In such manner, the fundamental highlights of Starbucks' organizational culture are servant leadership (“employees first”); relationship-driven approach; collaboration and communication; openness; and inclusion and diversity.

What was once a small coffee shop opened by Gerald Baldwin, Gordon Bowker, and Ziev Siegl in 1971, Starbucks Coffee Company has grown into the number one specialty coffee retailer. With over 10,000 coffee shops in more than 30 countries, of which 4,200 are licensed and franchised and 6,000 are owned, the company’s main objective is to establish Starbucks as the “most recognized and respected brand in the world,” (Moon). Currently, Starbucks is relying on retail expansion, product innovation, and service innovation to achieve a long-term goal once set by current chairman Howard Schultz: “The idea was to create a chain of coffeehouses that

Starbucks have shown in the past that they are very good at taking advantage of opportunities. In an strategy alliance with Hewlett Packard, customers could create their own music CD within a Starbucks coffee shop. Thus the company could look for these kind of opportunities to seize. In addition, new markets for coffee are emerging such as India and the Pacific Rim nations, also Europe which is getting more and more accustomed with the brand name “Starbucks”. Co-branding with other manufacturers of food and drink, and brand franchising to manufacturers of other goods and services both have potential.

Starbucks uses a matrix organization structure similar to most big corporations. The functional feature of Starbucks’ departmentalization is having an HR department, finance department and a marketing department. These departments are only utilized at the top levels of Starbucks’ organizational structure, mainly its headquarters. For example, the HR department would typically implement a new policy and that policy would apply to all Starbucks cafés. This facilitates top-down monitoring and control with the CEO at the top. Doing this helps the company maintain consistency throughout its stores and allows for employees to know what is expected of them. Starbucks also involves geographic divisions, which are mainly in the Chinese, American and European markets with each division having a vice president. This allows for each manager to only have to report to two superiors, the geographic CEO and the functional CEO. This helps for closer geographical needs and each division is given a high degree of flexibility in strategy and policy. Next, Starbucks uses product-based divisions that address product lines such as coffee, baked goods, merchandise, etc. Starbucks is a brand and they market their own merchandise with supports from its organizational structure. Finally, teams are also used with its most notable team structure being the baristas. They work together to make the product which are given to the customer that can watch it being made. It takes a team to provide top notch

Ball, Geringer, Minor, and McNett define organizational design as, “a process that deals with how an international business should be organized in order to ensure that its worldwide business activities are able to be integrated in an efficient and effective manner” (Ball, Geringer, Minor, & McNett, 2010, p. 403). This allows the organizations to address the changing environment of the business. This encompasses the restructuring of the organizational structure. “A company’s structure helps determine where formal power and authority will be located within the organization, and this structure is what is typically presented in a company’s organizational chart” (Ball, Geringer, Minor, & McNett, 2010, p. 402). Starbucks has reorganized a number of times.

To be welcoming, knowledgeable, considerate, and involved are main components of its corporate culture, Starbucks is concentrate on make good work conditions and respect people, it enable employees to give superior work. It calls employees “partners” and presenting a dynamic work place in year 2010, 150000 people applied for a job responding to Starbucks branding. It views training and developing team. As said in “indicates that fewer than 50% of employees believe in their company’s brand idea, and even less are actually equipped to deliver to on it” John F. Marshall. Starbucks changes its perspective from starting from outside view on customers, they concentrating internally on the team by motivate and guiding them. it prepare different types of programs to develop its employee to teach them about the history of Starbucks and its corporate culture, Core 1 and 2 to learn the technical skills, Supervisor program for how have a leadership role, district manager training. Starbucks use six “differentiators” that made up a very directive internal playbook for change. Instead of external message and lead to significant and long-term efforts

Corporate Strategy fundamentally is concerned with the selection of businesses in which the company should compete and with the development and coordination of that portfolio of business.[1] In the case of Starbucks the corporate strategy they have implemented is unique to their industry which has allowed them to differentiate from their competitors and is summarized best by Howard Schultz CEO of Starbucks, “We’re in the people business serving coffee,[2]” high quality specialty coffee and related products in a European café environment. It is clear Starbucks is in a growth strategy utilizing three key techniques that support its Mission, “to inspire and nurture the human spirit – one person, one cup and