Topic
hoose two companies in the same industry. Study their organizational structure. Also, give
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information about, (i)Hierarchy (ii)Centralisation and delegation of authority (iii)Flow of
information (scalar chain) (iv)Span of control (v)Channel of communication.
Question
et’s compare Starbucks and Blue Tokai Coffee Roasters, two coffee brands with very
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different approaches and scales. Starbucks is a global coffeehouse chain with a corporate
structure built for large-scale operations, while Blue Tokai is an Indian specialty coffee brand
focused on artisan coffee and local sourcing. Here’s a breakdown of their organizational
structures and other key elements:
Introduction to industry
he coffee industry is a dynamic and growing sector, driven by the global demand for
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high-quality, specialty coffee. It spans coffee cultivation, roasting, and retail, with a strong
focus on sustainability, quality, and customer experience. Specialty coffee, in particular, has
seen significant growth as consumers become more discerning and seek unique, artisanal
products.
tarbucks is a global leader in the coffee industry, shaping the specialty coffee market with
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its emphasis on premium quality, innovation, and customer experience. The company has
set industry standards for branding, store ambiance, and ethical sourcing, making it a
dominant player in both the retail and coffee culture sectors worldwide.
lue Tokai Coffee Roasters, an emerging leader in India’s specialty coffee space, plays a
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vital role in promoting locally sourced, high-quality coffee. Focused on roasting, retail, and
educating consumers about premium coffee, Blue Tokai is contributing to the growing coffee
culture in India, setting new benchmarks for freshness and sustainability.
1. Starbucks
tarbucks is an American multinational coffeehouse chain known for its specialty coffee
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drinks, inviting cafes, and premium coffee experience. The rise of the so-called “second
wave of coffee culture” is greatly attributed to Starbucks.
Starbucks utilizes a matrix organizational structure that combines several functional and
product-based divisions. Multiple overlapping divisions and reporting structures are followed
within the organization.
ltimately, Starbucks is controlled by a board of directors and three main elements that
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makeup Starbucks’ overall structure (overarching functional hierarchy, product-based
divisions, and geographic divisions.)
(i) Hierarchy
unctional hierarchy- Starbucks operates with a functional and flat hierarchy, which
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promotes collaboration and enables responsive customer service.
● T he CEO sits at the top, followed by senior executives for different functions, with
further division into regions and individual stores.
● Regional managers oversee specific markets, and each store is managed by a store
manager, with baristas and supervisors beneath them.
Product based division-Starbucks has many product-based divisions that include
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● erchandise, ingredient procurement, and baked goods.
● Divisions for the non-Starbucks brands that operate under the Starbucks umbrella,
such as Teavana and Evolution Fresh.
eographic Division - It is present in 88 countries and optimizes its structure so that it
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accounts for the many geographies in which it operates.
(ii) Centralization and Delegation of Authority
Centralization
● C orporate Decision-Making: At Starbucks, key strategic decisions are made at the
corporate level. This includes high-level decisions.
● Standardized Branding and Product Offerings: Signature products, store aesthetics,
and customer service standards are uniform across stores globally.
Delegation of Authority
● O perational Flexibility and Adaptions: Considerable freedom allows store managers
to address unique customer needs and more. Regional managers have the authority
to adapt the menu or marketing to suit local tastes.
● Feedback Channels and Local Autonomy: Robust feedback channels for lower to
communicate with higher offices allow a gain of insights and empower store
managers, as their input is valued.
(iii) Flow of Information (Scalar Chain)
● Information flows vertically from corporate headquarters down to regional managers
and individual stores.
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tarbucks promotes a feedback culture, allowing input from employees at all levels,
especially from stores, to reach corporate teams for improvements in products and
customer experience.
(iv) Span of Control
Store Managers
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● road Span of Control: Oversee a team of baristas, shift supervisors, etc.
● Responsibility: Day-to-day operations.
District and Regional Managers
● N arrower Span of Control: Oversee a smaller group of stores and multiple districts or
areas.
● Responsibility: Ensure stores meet performance standards, manage large teams of
store managers, and implement regional promotions or initiatives.
Corporate Management
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● arrow Span of Control: Specialized functions (e.g., marketing, HR).
● Responsibility: High-level strategic decision-making and managing departments.
(v) Channel of Communication
Vertical Communication (Top-Down and Bottom-Up)
● T op-Down: Corporate shares strategies, product guidelines, and operational
standards with regional and store managers.
● Bottom-Up: Employees provide feedback on customer preferences, product ideas,
and challenges to corporate.
Lateral Communication (Across Teams)
● C ross-functional: Teams like marketing, product development, and HR collaborate to
align on initiatives.
● Store-Level Collaboration: Managers across stores share best practices and
coordinate regional efforts.
Digital Platforms
● Internal Systems: Starbucks uses digital platforms (like Workplace) to share updates,
training, and feedback.
● Real-Time Updates: Allows corporate to communicate immediate changes to all
stores.
2. Blue Tokai Coffee Roasters
lue Tokai is a specialty coffee brand based in India, known for its emphasis on
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transparency, sustainability, and high-quality, locally sourced coffee.Blue Tokai Coffee
Roasters has a flat, flexible structure led by founders with small, specialized teams.
Decisions are moderately decentralized, allowing cafe managers local autonomy.
Collaboration and direct communication foster agile operations.
(i) Hierarchy
Blue Tokai has a lean, flexible hierarchy, characteristic of startups and smaller businesses.
● F ounders and Executive Team- At the top are the founders and a small executive
team overseeing major business areas.They set the company’s vision, strategies,
and overall direction.
● Department Heads- Each major function has a department head or senior manager.
● Cafel Managers- For retail cafes, Blue Tokai has cafe managers who oversee
day-to-day operations, manage baristas, and ensure quality standards.
● Regional managers- They may oversee multiple cafes in a particular area, ensuring
consistency and efficiency.
● Store-Level Employees and Roasting Team: - At the base level, baristas, cafe staff,
and roasters handle direct customer service and product quality.
(ii) Centralization and Delegation of Authority
Centralization
● C ore Strategy: Founders handle key decisions on brand, sourcing, and company
policies.
● Branding: Major branding and marketing campaigns are decided centrally.
● Product Development: Executive team sets product standards and oversees quality.
Delegation of Authority
● C afe Operations: Cafe managers handle daily operations, staffing, and customer
service.
● Local Adaptation: Regional managers, where present, adapt strategies to suit local
markets.
● Employee Input: Baristas and staff can provide feedback and suggest improvements.
(iii) Flow of Information (Scalar Chain)
● Information flow in Blue Tokai is more flexible and less formal than in larger
corporations.
● The organization’s smaller size allows direct communication between the founders
and employees, promoting a collaborative culture.
● R
egular feedback is collected from customers and staff to guide decisions on product
offerings and cafe operations.
(iv) Span of Control
● F ounders and Executive Team-Narrow Span of Control,as the founders oversee a
few senior leaders who manage major functions.
● Department Heads-Moderate Span of Control, as department heads manage
specialized teams, such as roasting, marketing, and supply chain. These leaders are
responsible for strategy implementation, team management, and ensuring that their
areas align with company goals.
● Cafe Managers-Broad Span of Control, as each cafe manager oversees several
employees, including baristas and support staff.
(v) Channel of Communication
Formal Communication Channels
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● irect Reporting: Employees report directly to their immediate supervisors.
● Meetings: Regular meetings are held between department heads and their teams,
and between cafe managers and staff, to discuss updates and align on goals.
● Digital Platforms: Internal communication tools (e.g., email, messaging apps) are
used for company-wide announcements, training, and updates from the executive
team.
Informal Communication Channels
● O pen-Door Policy: Employees are encouraged to communicate openly with their
managers, fostering a supportive environment.
● Team Huddles: Informal daily or weekly huddles in cafes encourage team bonding
and immediate issue resolution.
● Feedback Loops: Feedback from staff is encouraged, allowing employees to share
ideas and address challenges directly with leadership.
Customer Engagement
● S ocial Media: Blue Tokai uses social media to communicate with customers, gather
feedback, and promote products.
● In-Cafe Interactions: Baristas and cafe staff engage directly with customers,
collecting feedback and providing a personal experience.
Summary Comparison
Aspect Starbucks Blue Tokai
lat and structured, with clear
F ean hierarchy with a hands-on
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Hierarchy regional and store-level divisions approach; founders oversee core
functions
entralized for brand and strategy;
C oderately decentralized, with cafe
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Centralization decentralized at the store level managers having local autonomy
ertical with a feedback loop to
V lexible and informal, with direct
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Flow of Information corporate communication from employees to
leaders
road at the store level, narrower at
B arrow; close-knit teams in cafes and
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Span of Control district and regional levels direct oversight from leadership
ormalized, vertical and horizontal;
F Informal and direct; emphasis on
hannel of
C digital channels for customer digital and social media for customer
Communication engagement interaction
In summary, Starbucks operates with a formal structure suited to its scale, allowing it to
maintain consistent standards worldwide. In contrast, Blue Tokai’s smaller, flexible structure
allows it to prioritize quality, local sourcing, and customer education, with an emphasis on
transparency and sustainability. This approach helps Blue Tokai appeal to specialty coffee
enthusiasts looking for a more personal and authentic coffee experience.
