GROUP 7

ORGANIZATIONAL BEHAVIOUR

Member :

Annisa ( 1810523020 )

Hijjul Husna ( 1810523001 )

Jovanka Tiara Anindytha Eylba ( 1810523021 )

Muhammad Al-Amien Fadilli Rasyif ( 1810523015 )

Noer Rachmadhani Hernirat( 1810523011 )

Department of International Management

Faculty of economics

Andalas University

2019/2020
1. Introduction

a. Profile

Type : Public
Industry : Coffe Shop
Founded : March 31, 1971, Pike Place Market, Elliott Bay, Seattle,
Wangshinton, U.S.
Founders : Jerry Baldwin
Zev Siegl
Gordon Bowker
Area served : Worldwide
Key People : Myron E.Ullman ( Chairman )
Mellody Hobson ( Vice Chairman )
Kevin Johnson ( President and CEO )
Howard Schultz ( Chairman Emeritus )
Product s : Coffee beverages
Smoothies
Tea
Baked goods
Sandwiches
Number of employees : 291,000 ( 2018 )
Subsidiaries : Starbucks Coffee
Ethos Water
Evolution Fresh
Hear Music
 La Boulange Bakery
Seattle’s Best Coffee
Teavana
Torrefazione Italia
Website : starbucks.com

b. Background

Starbucks Corporation is an American coffee company and coffeehouse chain.

Starbucks was founded in Seattle, Washington in 1971. As of early 2019, the company
operates over 30,000 locations worldwide.

Starbucks has been described as the main representative of "second wave coffee," a
retrospectively termed movement that popularized artisanal coffee, particularly darkly
roasted coffee. Since the 2000s, third wave coffee makers have targeted quality-minded
coffee drinkers with hand-made coffee based on lighter roasts, while Starbucks nowadays
uses automated espresso machines for efficiency and safety reasons.

Starbucks locations serve hot and cold drinks, whole-bean coffee, microground instant
coffee known as VIA, espresso, caffe latte, full- and loose-leaf teas including Teavana tea
products, Evolution Fresh juices, Frappuccino beverages, La Boulange pastries, and snacks
including items such as chips and crackers; some offerings (including their annual fall launch
of the Pumpkin Spice Latte) are seasonal or specific to the locality of the store. Many stores
sell pre-packaged food items, hot and cold sandwiches, and drinkware including mugs
and tumblers; select "Starbucks Evenings" locations offer beer, wine, and
appetizers. Starbucks-brand coffee, ice cream, and bottled cold coffee drinks are also sold
at grocery stores.

Starbucks first became profitable in Seattle in the early 1980s. Despite an initial

economic downturn with its expansion into the Midwest and British Columbia in the late
1980s, the company experienced revitalized prosperity with its entry into California in the
early 1990s. The first Starbucks location outside North America opened in Tokyo in 1996;
overseas properties now constitute almost one-third of its stores. The company opened an
average of two new locations daily between 1987 and 2007. In 2010, the company began
its Starbucks Reserve program for single-origin coffees and high-end coffee shops.
Starbucks operates six roasteries with tasting rooms and 43 coffee bars as part of the
program. In November 2019, the world's largest Starbucks opened in Chicago on
the Magnificent Mile as the sixth roastery location.
 On December 1, 2016, Howard Schultz announced he would resign as CEO effective
April 2017 and would be replaced by Kevin Johnson. Johnson assumed the role of CEO on
April 3, 2017, and Howard Schultz retired to become Chairman Emeritus effective June 26,
2018.

c. History
 1971 Starbucks opens its first store at Pike Place Market in Seattle by 3
partners: English teacher Jerry Baldwin, History teacher Zev Siegl, and writer
Gordon Bowker.
 1982 Howard Schultz joins as director of retail and marketing operations.
Starbucks began providing coffee for the needs of restaurants and (selling)
espresso bars.
 1983 Howard travels to Italy where he is very impressed with the popularity of
espresso bars in Milan. From here he saw the potential to develop a similar
coffee house culture in Seattle.
 1983 Starbucks has opened 6 branches in Seattle.
 1987 Original owners sell Starbucks to their former employee, Howard
Schultz. Il Giornale (which is Howard's coffee shop) then acquired Starbucks
assets with the support of local investors. He changed the name of the store
to Starbucks Corporation where the coffee shop then opened branches in
Chicago and Vancouver, Canada. A number of outlets: 17.
 1991 Starbucks opens its first licensed airport shop at Sea-Tac International
Airport, Seattle. A number of outlets: 116.
 1992 In order to meet public demand, Starbucks then sells its shares to the
Nasdaq National Market stock exchange with the trading symbol "SBUX". A
number of outlets: 165.
 1995 Started serving Frappuccino and blended coffee drinks, also introducing
Starbucks ice cream.
 1996 Starbucks opens its first branches outside North America, namely in
Japan and Singapore. A number of outlets: 1,015.
 1998 Starbucks acquires Tazo, a tea company based in Portland, Oregon.
They then expanded the Starbucks brand to a chain of grocery stores
throughout America through a licensing agreement with Kraft Foods. In the
same year, they launched starbucks.com and opened new branches in
Malaysia, New Zealand, Taiwan, Thailand, and the United Kingdom. A
number of outlets: 1,886.
 1999 Opened branches in China, Kuwait, Lebanon, and South Korea. A
Number of outlets: 2,498
 2000 Howard Schultz 'moved up' from CEO to chief global strategist. In other
words, he is the brain that now holds Starbucks marketing strategies
worldwide. Orin Smith was later promoted to President and CEO to replace
Howard. In the same year, Starbucks began to introduce its coffee menu
categories that had passed the Fair Trade and organic selection process. The
network also opens new branches in Australia, Bahrain, Hong Kong, Qatar,
Saudi Arabia and the United Arab Emirates. Number of outlets: 3,501.
 2002 Starbucks enters wider scope by entering into licensing agreements
with national Fair Trade organizations. This agreement agrees that Starbucks
will only sell Fair Trade certified coffees in Starbucks countries conducting its
business. Another Starbucks-owned company called Starbucks Coffee
Trading Company was founded in Lausanne, Switzerland. The first branch of
Starbucks in Indonesia was also opened this year. Number of outlets: 5,886.
 2004 Releases the CD of blues musician Ray Charles's album Genius Loves
Company in collaboration with Concord Records and Starbucks Hear Music.
(Starbucks record label music album later became Charles's last album
before he died). This year Starbucks introduced the study program
"Starbucks Coffee Master Program" and opened new outlets in France.
Number of outlets: 8,569.
 2005 Orin Smith retires as president and CEO. Jim Donald was promoted to
replace his position. Starbucks opens branches in the Bahamas, Ireland and
Jordan. Number of outlets: 10,241.
 2008 Howard Schultz takes back the position of CEO. He also announced the
new focus of Starbucks work that is prioritizing service to customers to give
them unforgettable experiences and create new innovations. The store
expanded its network and opened branches in Argentina, Bulgaria, the Czech
Republic and Portugal. Number of outlets: 16,680.
 2009 Starbucks helps humanitarian missions in Africa through its partnership
with (RED), a retail industry brand founded by Bono, lead singer of U2. Every
million purchases of RED products every day is equal to contributing more
than 7 m of a daily dose of antiretroviral drugs. In the same year Starbucks
was named (through voting) as the most influential brand on social media.
 2011 Starbucks has 17,009 outlets worldwide.
  2013 Starbucks opens its first branch in Ho Chi Minh City, Vietnam as well as
its first store in Colombia.
 2014 In September this year, Starbucks announced it would buy a 60.5%
stake in Starbuck Coffee Japan that they didn't really have at a cost of 913
million US Dollars. As of December 2014, the number of Starbucks stores in
Indonesia has reached 200 outlets.
d. Policy
Every person who enters the Starbucks area whether he buys or not then
they will be considered as customers

2. Case Problem

1. What factors are most likely to change when a company grows very rapidly, as
Starbucks did?How can these changes threaten the culture of an organization?
2. Why might this type of radical change process be easier for Starbucks to
implement than itwould be for other companies?
3. A great deal of the return to an original culture has been credited to
HowardSchultz, who acted as an idea champion. Explain how Schultz’s effort to
changethe Starbucks culture fit with our discussion of culture change earlier in
the chapter.
4. Schultz’s change initiative might succeed at another company that
valuescustomization and high levels of customer service, but how would it need
todiffer at a company that emphasises speed and efficiency of service?

3. Literatur Review

A. Forces for Change

Force Example

Nature of the workforce More cultural diversity

Aging population

Many new entrants with inadequate

skills
Technology Faster,cheaper,and more mobile
computer
On-line music sharing
 Deciphering of the human genetic code
Economic shocks Rise and fall of dot-com stocks
2000–02 stock market collapse
Record low interest rates
Competition Global competitors
Mergers and consolidations
Growth of e-commerce
Social trends Internet chat rooms
Retirement of Baby Boomers
Rise in discount and “big box” retailers
World politics Iraq–U.S. war
Opening of markets in China
War on terrorism following 9/11/01
B. Managing Planned Change
 Change
Making things different
 Planned Change
Activities that are intentional and goal oriented.
 Change Agents
Persons who act as catalysts and assume the responsibility for managing
change activities.

Goals of Planned Change:

 Improving the ability of the organization to adapt to changes in its environment.

 Changing the behavior of individuals and groups in the organization.

C. Resistance to Change
1. Sources Resistance to Change
 2. Tactics for Overcoming Resistance to Change
 Education and Communication – Show those effected the logic behind the change
 Participation – Participation in the decision process lessens resistance
 Building Support and Commitment – Counseling, therapy, or new-skills training
 Implementing Change Fairly – Be consistent and procedurally fair
 Manipulation and Cooptation – “Spinning” the message to gain cooperation
 Selecting people who accept change – Hire people who enjoy change in the first
place
 Coercion – Direct threats and force

D. Lewin’s Three-Step Change Model

 Unfreezing – Change efforts to overcome the pressures of both individual
resistance and group conformity by increasing the driving force and
decreasing the restraining force
 Moving – Moving from the status quo to the desired end state
 Refreezing – Stabilizing a change intervention by balancing driving and
restraining forces

Lewin: Unfreezing the Status Quo Lewin: Unfreezing the Status Quo

 Driving Forces – Forces that direct behavior away from the status quo
 Restraining Forces – Forces that hinder movement from the existing equilibrium
 E. Action Research
A change process based on systematic collection of data and then selection of a
change action based on what the analyzed data indicate.

Action research benefits:

 Problem-focused rather than solution-centered.

 Heavy employee involvement reduces resistance to change.

Process Steps:

a) Diagnosis
b) Analysis
c) Feedback
d) Action
e) Evaluation

F. Organizational Development
A collection of planned interventions, built on humanistic-democratic values, that
seeks to improve organizational effectiveness and employee well-being

OD Values:

1. Respect for people

2. Trust and support

3. Power equalization

4. Confrontation
5. Participation

G. Organizational Development Techniques

1. Sensitivity Training
 Training groups (T-groups) that seek to change behavior through
unstructured group interaction.
 Provides increased awareness of others and self.
 Increases empathy with others, improves listening skills, greater openess,
and increased tolerance for others.
2. Process Consultation (PC)
A consultant gives a client insights into what is going on around the client, within the
client, and between the client and other people; identifies processes that need
improvement.
3. Team Building
High interaction among team members to increase trust and openness.
Team Building Activities:
 Goal and priority setting.
 Developing interpersonal relations.
 Role analysis to each member’s role and responsibilities.
 Team process analysis.
4. Survey Feedback Approach
The use of questionnaires to identify discrepancies among member perceptions; a
discussion follows and remedies are suggeste.
5. Intergroup Development
OD efforts to change the attitudes, stereotypes, and perceptions that groups have of
each other
6. Appreciative Inquiry
Instead of looking for problems to fix, appreciative inquiry seeks to identify the unique
qualities and special strengths of an organization, which employees can then build on
to improve performance.
This process comprises of four steps:
• Discovery: Recalling the strengths of the organization
• Dreaming: Speculation on the future of the organization
• Design: Finding a common vision
• Destiny: Deciding how to fulfill the dream

H. Creating a Culture for Change:

1. Stimulating a Culture of Innovation
– Innovation: a new idea applied to initiating or improving a product, process, or
service
– Sources of Innovation: • Structural variables: organic structures • Long
managerial tenure • Slack resources • High degree of interunit communication
– Idea Champions: Individuals who actively promote the innovation
2. Learning Organization
– An organization that has developed the continuous capacity to adapt and
change
– Characteristics :
o Holds a shared vision
o Discards old ways of thinking
o Views organization as a system of relationships
o Communicates openly
o Works together to achieve shared vision

I. Creating a Learning Organization

 Overcomes traditional organization problems such as:
 Fragmentation
 Competition
 Reactiveness
 Manage Learning by:
– Establishing a strategy
– Redesigning the organization’s structure : Flatten structure and increase
cross-functional activities
– Reshaping the organization’s culture : Reward risk-taking and intelligent
mistakes
J. Work Stress
1. Stress
A dynamic condition in which an individual is confronted with an
opportunity, constraint, or demand related to what he or she desires and
for which the outcome is perceived to be both uncertain and important
2. Types of Stress
– Challenge Stressors
• Stress associated with workload, pressure to complete tasks, and time
urgency – Hindrance Stressors
 • Stress that keeps you from reaching your goals, such as red tape
• Cause greater harm than challenge stressors
3. Demands-Resources Model of Stress
Demands
– Responsibilities, pressures, obligations, and uncertainties in the workplace
Resources
– Things within an individual’s control that can be used to resolve demand
4. Potential Sources of Stress
 Environmental Factors
– Economic uncertainties due to changes in the business cycle
– Change in business priorities due to changes in the political scenario
– Threat to manpower requirement due to technological changes/innovation.
Organizational Factors
– Task demands related to the job – Role demands of functioning in an
organization – Interpersonal demands created by other employees
 Personal Factors
– Family and personal relationships
– Economic problems from exceeding earning capacity
– Personality problems arising from basic disposition
5. Consequences of Stress
 Stressors are additive: high levels of stress can lead to the following
symptoms
– Physiological
• High blood pressure, headaches, stroke
– Psychological
• Dissatisfaction, tension, anxiety, irritability, boredom, and procrastination
• Greatest when roles are unclear in the presence of conflicting demands
– Behavioral
• Changes in job behaviors, increased smoking or drinking, different
eating habits, rapid speech, fidgeting, sleep disorders
6. Managing Stress
a. Individual Approaches
 Implementing time management
 Increasing physical exercise
 Relaxation training
 Expanding social support network
 b. Organizational Approaches
 Improved personnel selection and job placement
 Training
 Use of realistic goal setting
 Redesigning jobs
 Increased employee involvement
 Improved organizational communication
 Offering employee sabbaticals
 Establishment of corporate wellness programs
4. Problem Solving
1) What factors are most likely to change when a company grows very rapidly, as
Starbucks did? How can these changes threaten the culture of an
organization?

In the process of pursuing an ambitious growth a company may start losing its focus
on customer satisfaction and may end up losing its brand value. When an
organization is in its nascent stage customer attraction and retention are given prime
importance. A company may tend to get complacent in the long run by taking
customers for granted and may have quest for increasing the customer base but may
lose sight of the existing and prevailing customer dissatisfaction. These changes may
have a dominant impact in the overall attitude of the entire company. A sense of
arrogance may slowly creep in into the organizational culture which does not augur
well in this dynamic environment where customers are not reluctant to switch brands
effortlessly.

2) Why might this type of radical change process be easier for Starbucks to
implement than it would be for other companies?

This type of radical change process can be done by a company which has very few
machineries and a small organizational structure. It has been stated in the case that
all 7000 Starbucks stores were closed for a single afternoon as part of a training
effort of 135,000 baristas which is an activity which can be done only in service
sector because it will cause minimum loss when compared to production sector. The
changes that were done in the case is only feasible in businesses where customer
preference and satisfaction is the sole reason for the success of the firm. Such a
radical change initiative would be very hard to succeed at a firm that emphasizes on
speed and efficiency of service, as it is not of demand in Starbucks such a change
was feasible.
 3) A great deal of the return to an original culture has been credited to Howard
Schultz, who acted as an idea champion. Explain how Schultz’s effort to
change the Starbucks culture fit with our discussion of culture change earlier
in the chapter.

Schultz is a change agent, who identified the main problem of Starbucks’ and
responsible for managing the change activities. He spared efforts to put emphasis on
quality control rather than rapid expansion. The method he used is Lewin’s three-step
change model. Schultz first unfreezing the status quo which focus on speed, then,
tend to rebuild the culture ---quality control. Finally refreezing the desired state, to
make sure that company culture quality control is fixed.

4) Schultz’s change initiative might succeed at another company that values

customization and high levels of customer service, but how would it need to
differ at a company that emphasizes speed and efficiency of service?

When the company puts emphasis on speed and efficiency of service, the leader
should change the way to evaluate employees. So we should evaluate employees
according to how well he is familiar with the job rather than his service attitude.
Because if the employee is familiar with what he should do. He is efficient. When give
train to employees, the emphasis should put on how to speed up the production.

5. Conclusion

In the process of pursuing an ambitious company development, the company

generally begins to lose focus on customer satisfaction and may eventually lose its brand
value. Because when the company has grown very fast and their business begins to have
great success, customer satisfaction is no longer a top priority for them. They tend only
focus on the expansion and development of the company. Companies may tend to feel calm
in the long run and take customers for granted and may find ways to increase their customer
base but they lose sight of existing and valid customer satisfaction. Cases like this will cause
huge losses to the company. This arrogance that does not support well in this dynamic
environment causes customers to switch brands easily and look for new products that
prioritize their satisfaction. Problems like this also happened to the Starbuck company, when
Schultz saw this problem happening to the sturback he immediately made changes by
closing 7,000 existing sturback stores and training 135,000 baristas. Changes made in this
case are only feasible in business where customer preferences and satisfaction are the only
reason for the success of the company. Initiative radical changes like this will be difficult to
succeed for companies that emphasize the speed and efficiency of service compared to
customer satisfaction. Schultz is a change agent, who identified the main problem of
Starbucks' and responded to managing the change activities. He spared efforts to put
emphasis on quality control rather than rapid expansion. The method he used is Lewin's
three-step change model. Schultz first unfreezes the status quo which focus on speed, then,
tend to rebuild the culture quality control. Finally refreezing the desired state, to make sure
that company culture quality control is fixed.

Schultz's change initiative might succeed at another company that values

customization and high levels of customer service, when the company puts emphasis on
speed and efficiency of service, The leaders will change the way to evaluate employees. So
we should evaluate employees recording how well he is familiar with the job rather than his
service attitude. Because if the employee is familiar with what he should do. He is efficient.
When give train to employees, the emphasis should be put on how to speed up the
production.

6. Lesson that Learn from the Case

When a company has successfully grown very quickly, and wants to pursue
ambitious company development, they should not only focus on the expansion and
development of the company. But they also have to prioritize customer satisfaction,
because "the success of a company depends on achieving customer satisfaction".

When customer satisfaction is achieved it will certainly increase customer loyalty, they
will not switch to other brands, and of course will always be loyal to the product.

The companies must be able to satisfy their customers' satisfaction, one example that
we can see from the firm firmbacks is, this company is training all its baristries, increasing
the quality of baristas and increasing the comfort of its consumers.Evaluating employees is
also very important.Employees must be evaluated according to how well they are able to
complete their work and reach the core of the company, and how the service they provide to
consumers. If the employee is familiar with what he has to do, they will be efficient. When
training employees, emphasis must be placed on how to speed up production and how to
provide good service to consumers