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COMM5902 Leadership For Social Impact

tag 0 Download 3 Pages / 615 Words tag 15-03-2021


Case Study - Howard Schultz And Starbucks

Starbucks opended its first store in Seattle in 1971 and was known for brewing some of the best fresh-roasted whole bean coffees. When Howard Schultz became CEO in 1987, Starbucks had 17 stores in the U.S. and Canada. As of 2015 Starbucks has over 21,000 stores in 66 countries. This includes approximately 12,000 in the U.S. One country that Starbucks does not a store in is the country that gave Schultz his inspiration - Italy. The Italian coffeehouse market is highly competitive and Italy is very protective of its own coffeehouses.

Despite being a huge corporation, Starbucks manages to hold onto their company values and traditions. The 2015 list of the world's most admired companies listed Starbucks as number 5 overall and number one in the food industry. Lorenzetti (2014) states that more than 70 million people worlwide enter a Starbucks cafe every week. To make it all happen, Starbucks 300,000 plus partners as the company calls its workers blend, steam, and brew the brand's specialtycoffee in 21,000 stores. And it's those partners that CEO Howard Schultz credits with boosting the coffee shop's sales to an estimated $16 billion by the end of this year, its fifth straight year of revenue gains. (para.3)

Lorenzetti (2014) relates that Starbucks is also ranked number one in the areas of innovation, people management, use of corporate assets, social responsibility, quality of management, financial soundness, long term investment, and quality of products and services.

An organization's culture is a mix of written and unwritten values, beliefs and codes of behavior that influence the way work gets done and the way people believe in organizations. The distinct flavor of Starbucks' culture can be traced to the original founders' philosophies and Howard Schultz's strong feeling on how a company should be run and how committed it should be. Foroohar (2015) notes Schultz maintains a strong committment to its partners (employees), trading partners, customers, community (local and global), environment and several outreach programs. Schultz is a strong proponent of diversity and a "little more than 40% of the company's baristas are minorities."(para.3)

Schultz is the visionary and soul behind Starbucks. The company's mission and guiding principles, are meant to guide the decisions and actions of company partners from top to bottom. Starbucks' culture emphasizes keeping employees motivated and content. One thing that's been important to Howard Schultz from day one is the relationship hehas with his employees.

As a global company with revenues well over 16 billion in 2014, Starbucks' executives from day one recognized they must be aware of the impact the environment has on their decisions and actions. Confino, J. (2014) said "While the vast majority of U.S. companies are askeep at the wheel when it comes to facing up to multiple sustainability challenges, a select group is waking up to the need for urgent action." (para.1)

Starbucks is one of the U.S. companies listed as meeting the challenge. According to Confino (2014) Starbucks is "engaging with their suppliers to increase investments in sustainability farming and to reach Starbuck's goal of "ethically sourcing 100% of its coffee beans by 2015". (para. 15)

The committment to Global responsibility and sustainability sets Starbuck apart from many of its competitors. As per Starbuck's website their vision for being a responsible company is that together we will elevate our partners, customers, suppliers and neighbors to create positive change. To be innovators, leaders and contributors to an inclusive society and a healthy environment so that Starbucks and everyone we touch can endure and thrive. (, para.3)

In Schultz's 28 years as the CEO of Starbucks Schultz he has encountered many managerial challenges, changes and transformations.

Hanna (2014) observes that in the mid-2000s Starbucks faced what many companies were facing - could they continue to grow and thrive and maintain their culture and values. Sales were lagging and something needed to be done. Schultz who stepped down as CEO to become Chairman complained to senior leadership that the company in its push for efficiency had lost its' magic. In addition Starbucks was receiving greater competition from McDonald's and Dunkin Donuts.

Per Hanna (2014) Schultz returned as CEO in 2008 at the time of the financial downturn. Despite this Schultz didn't slow down the company but kept up its innovation and investments. A major transformation was made by closing some stores, reorganization, asking more of its partners and going all out. For the 4th quarter of 2008 profits were down 97% (from the previous year) and net earnings were down rw6 million dollars. Despite this Schultz insisted that the company have a three day conference in New Orleans consisting of 10,000 partners at the cost of 30 million dollars to help revitalize the company.


Conduct a background analysis of Howard Schultz leadership styles and how these styles lead to the success of starbucks.

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