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Organizational Culture: Starbuck

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Question:

• 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.

• 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.

• 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.

• Evaluate Starbucks’ ability to achieve long-term sustainability as a global leader in the coffee industry without the organization’s CEO, Howard Shultz.

 

Answer:

Characteristics of Starbucks Organizational Culture

The most significant characteristic of Starbucks organizational structure is its decentralized decision making process. Starbucks has split its organization into three separate districts so as to be able to handle the operations more effectively and keeping the clients pleased. Starbucks employs a matrix organizational structure which uses channels of communication. This type of structure is a very effectual way of utilizing all the communication channels. In fact structure of the organization is one of the pivotal points of its success. The matrix organizational structure helps the organization to better serve their customers.  It focuses on particular region and managers are made to oversee each and every region. The current organizational structure of Starbucks is hybrid one. It encompasses horizontal structure, geographical structure and functional structure.

Once the organizational culture has been established such people are recruited in the organization whose values match those of the organization. The selection process is such that it prioritizes on selecting such employees who can perform the job efficiently and can and at the same time the candidate must also fit into the culture of the organization.

Starbuck’s Innovative Offerings for Customers

Starbucks has introduced many innovations throughout its history which has contributed significantly to its success. These innovations are both coffee based as well as non-coffee based. In fact Starbucks is popular for its innovative use of technology. It provides free and unlimited Wi-Fi at its stores. Thus it may serve as a meeting place and also as a makeshift office for the customers. Starbucks also uses social media in order to allure customers by providing an online space to the clients to submit feedbacks as well as ideas and experience. In 2009 Starbucks launched its first app, myStarbucks app. This app enables the customers to access a store an get information about the coffee which is being sold at Starbucks. In fact Starbucks has launched a digital customer loyalty program in the year 2011. By use of the digital media Starbucks has made its presence felt all over the globe and has also succeeded in enhancing the customer experience. My Starbucks Idea Website has also proved to be a great success. Research reveals that since the beginning of its digital based innovation Starbucks has grown at a rate which is double of its peers in the industry. Apart from these non-coffee based innovations it has also introduced some coffee based innovations which has given the company an edge over its competitors. It has added new items to its menu so as to entice customers. In a nutshell we can say that the managerial decision of Starbucks to constantly introduce innovations in their services to the customers is one of the reasons behind its immense success.

 

Management Competency so as to suit the culture at Starbucks

One of the key management capabilities a manager at Starbucks is likely to have is the ability to manage diversity. Starbucks is known worldwide for its recognition of diverse cultures. In fact the company promotes diversity as strategy for its competitive growth over its competitors. In order to achieve this goal the managers at Starbucks play a vital role. One of the objectives of Starbucks is to create a culture which respects and values diversity. Their strategy is to be become leaders in diversity. Thus it is very essential for manager at Starbucks to possess the quality of managing diversity. In the absence of this quality it would be difficult for a manager to survive in Starbucks. In order to achieve this goal it is expected that the managers would not treat the employees (known as partners in Starbucks) differently based on their difference of ethnicity or race. Managers should be devoted to the cause of promoting diversity so as to be able to fit in the culture of the organization. It is the role of the managers to make sure that all the members are aware that the organization values their diversity related efforts.

 

Success of Starbucks without Howard Schultz

The leadership style adopted by Howard Schultz i.e. the present CEO of Starbucks is both charismatic and transformational leadership. Howard Schultz is the main reason behind the present success of Starbucks. After having taken the role of CEO in 1987 he made Starbucks a global brand. In 2000, he stepped from being the CEO. Again in 2008 he came back as the CEO as the business of the company had gone down. The company initially seemed to be health upon the retirement of Schultz. But the fortunes of Starbucks was lost without Schultz. So Schultz had to return in 2008. He replaced the then CEO and took over charge of Starbucks as the CEO in 2008. With the comeback of Schultz the company regained its lost fortunes. Now Starbucks is one of the most successful names in the global coffee industry.

Now I would analyze the traits of transformational leadership and try to evaluate whether Starbucks would be able to sustain its name as one of the leaders in the global economy in future sans Howard Schultz. One of the main characteristics of transformational leadership style is that the leader who adopts such style makes the followers believe in the goal and themselves. The followers are not dependent on the leader. Even if the leader leaves in the midst of the project the followers develop the ability to complete the project themselves. Transformational leaders have the capability of becoming the mentors of the followers. The followers can identify with the transformational leaders and may perform even in the absence of the leader. The followers of a transformational leader are self sufficient.

Thus we may say that though the leadership style of Howard Schultz is transformational this aspect is missing and that is the reason why the company experienced downfall in the absence of Howard Schultz. In order to be able to achieve long term success without Howard Schultz, it is essential that Schultz make his employees self sufficient to achieve the goal. If this trait of transformational leadership is demonstrated by Schultz then Starbucks would be able to succeed even without him.

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