INTRODUCTION
The rivalry amongst telecommunications firms is getting more intense in the present
environment. Thus, the goal of this research is to use pertinent theories to examine the
elements influencing organizational behavior in order to make judgments and
recommendations to enhance Starbuck's commercial performance.
SUMMARY
Starbucks' success is ascribed to its strong stakeholder relationships, which produce
resources that are distinctive and challenging to replicate. The success of the business
depends on an ethical workplace culture and trust. As relationships culture deteriorates
over time, brand equity and the underlying business strategy may also deteriorate.
Starbucks' organizational culture is thought to be founded on relational strategy,
solidarity, and a feeling of brand belonging, offering intangible resources that are
crucial for competitiveness.
I. Introduction to Starbucks
1.1 Operational history and scope
Starbucks, which has its headquarters in Seattle, Washington, USA, is the most well-
known beverage brand in the world. founded in Seattle on March 30, 1971, with the
help of three people: writer Gordon Bowker, history teacher Zev Siegl, and English
teacher Jerry Baldwin. At first, Starbucks was merely a tiny shop that sold high-
quality coffee and coffee grinders. The original Starbucks location opened at 2000
Western Avenue from 1971 to 1976 before relocating to 1912 Pike Place. After
purchasing green coffee from Peet in their first year of business, they began
purchasing directly from producers. The second Starbucks location opened its doors in
1972.
It wasn't until one of the founders, Howard Schultz, took over as director and was
directly in charge of the company's marketing initiatives that Starbucks truly started to
evolve. Starbucks Coffee's development process frequently ran into problems and
made strategic errors. However, under the direction of CEO Howard Schultz and a
number of effective strategic changes, Starbucks Coffee once again shown the power
of a top brand during those trying times.
After 50 years of construction and growth, Starbucks has expanded outside the US and
Seattle, introducing the art of savoring contemporary Italian coffee to nations like
South Africa, Japan, and Hong Kong.
1.2. Completions
When the 165-store chain went public in 1992, many people had doubts about the
Italian-style coffee shop's ability to succeed because it was unknown to Americans.
However, following eight years of expansion, the firm increased 49% annually from
1992 to 2000, reaching over 3,501 locations globally. In 2000, Starbucks Coffee
Trading firm (SCTV) was created in Lausanne, Switzerland, to facilitate the
management and procurement of green coffee.
Starbucks feeds 40 million people every week and sells 4 billion cups of coffee
annually, according to latest figures. According to a 2019 assessment firm
BrandFinance, the brand is worth 39.3 billion USD, making it the most costly brand in
the world. This is higher than McDonald's, which comes in second with an estimated
value of 31.5 billion USD.
1.3. Principles of operation
● Our Coffee: Quality has always been our top priority. Finding the best, highest-
quality coffee beans is something we are really passionate about. We will keep
working to improve the lives of coffee growers because we care about it.
● Our Partners: This is a passion for us, not simply a job. We will hold one
another to the same standards and treat one another with respect.
● Our Customers: We make our customers happy, even if it's only for a brief
instant. The promise of flawless coffee is the first step, and we will always take
that action. Human connections are made possible by our efforts.
● Our Stores: Our stores serve as a sanctuary, a gathering spot for friends, and a
comfortable place to begin work. It is a celebration of life's tempo, which can
be mellow and savory or quick and human.
● Our stockholders: We are confident that we will be successful wherever we
conduct business. Our shareholders will benefit from such success. You may
trust us because we accept full responsibility for this.
1.4. Performance
With more than 33,000 locations in 80 countries, Starbucks is the biggest coffee chain
in the world. Here are a few highlights:
● Income:
- Revenue from overseas in 2023: $23.6 billion, up 19% from 2022.
- 69% of Starbucks' overall income comes from its international division.
- The Middle East, Asia Pacific, and China have the strongest growing markets.
● Expanding the store:
- In 2023, international expansion: Open 3,600 additional locations, a 14%
increase over 2022.
- China, India, and Southeast Asia are important markets.
- The objective is to open 55,000 foreign outlets by 2030.
● Goods:
- Present new goods: tea and blended beverages that are suited to regional
preferences.
- Enhance mobile applications: Order, pay, and be rewarded.
- Pay attention to sustainability: Reduce waste and use environmentally friendly
packaging.
2.1. Examining how company culture affects the attitudes and actions of
Starbucks Corporation employees
2.1.1. Starbucks' distinctive culture and how it affects its workers
selling the "coffee experience" in addition to coffee.
Starbucks' culture is unique as it is intimately related to the company's business plan.
The interior design of a Starbucks store is not the only factor that contributes to the
welcoming atmosphere; the salespeople's obvious awareness of their significance and
the fact that providing consumers with a positive experience would benefit the
company as a whole is also crucial.
● "Make the customer experience your own" means that you should always adapt
to the various circumstances and personalize the customer experience via the
staff experience.
● "Everything matters": When working, pay attention to every detail. Keep an
eye on the customer's experience and viewpoint at all times.
● "The joy of surprises": Little surprises will provide clients a memorable
shopping experience.
● "Always persevere": Making mistakes is inevitable while working in the retail
sector, but what matters most is that staff members develop with the business
and learn from their failures.
● "Leave an impression": Make sure your consumers have a great experience so
they will remember you.
The personnel here strive to make their clients as comfortable as possible by focusing
on the "experience," the company concept, and placing themselves in the shoes of
consumers when they visit the store. The fact that Starbucks employees always serve
customers as soon as they walk in the door and that the company promises to serve
meals within three minutes—though this can take up to five minutes during busy
times—is evidence of this. With a full crew and just two receptionists, Starbucks can
serve 220 clients each hour.
At Starbucks, coffee never sits for longer than half an hour. Baristas never leave a cup
of coffee alone for longer than half an hour, making four batches at a time and
switching them out every fifteen minutes. Even during their breaks, they do this
because they would rather discard the coffee than serve it cold. Starbucks coffee's
success can be attributed to this distinction.
Any barista at Starbucks can prepare any of the 87,000 beverages the company claims
to be able to provide without hesitation. The Drink ID Code is a unique shorthand
used by baristas to place drink orders, and it is printed on the label of every cup.
Starbucks baristas are required to complete a 30-hour training program that covers
everything from the history of coffee beans to how to make frappuccinos. The classes
cover topics such as preparing and drinking coffee, the Starbucks experience, first
impressions and customer service, etc.
Starbucks is aware that staff members serve as a conduit for communicating service
principles to consumers. As a result, they train baristas not just how to make coffee
correctly but also how to show consumers how much the business values the product.
When brand-new workers are "gods"
Starbucks has developed a work culture that emphasizes the spirit and working
environment of its employees, encourages them to form amicable relationships within
the group, and views employees as "gods" who require complete care over the course
of its years of growth and development. The more formal term "colleagues" is
frequently used to refer to Starbucks employees.
One well-known quality of Howard Schultz's leadership is his concern for his staff.
The previous CEO of Starbucks considers a wide range of extra advantages for his
staff in addition to monetary compensation. A larger portion of Starbucks' budget goes
toward employee insurance than it does toward coffee beans. In particular, baristas
who put in at least 20 hours a week would be covered by health insurance, and even
part-time workers will always be eligible for corporate insurance and stocks. Every
employee also has the right to purchase equities at the best par value.
Starbucks was the first business in the US to provide part-time workers with stock
options and full health insurance. Starbucks continued to engage in its employees' skill
development throughout the economic downturn, when retail competitors were laying
off workers. These investments included barista education and even courses that could
be taken for credit at several US institutions.
Starbucks thinks that happy, well-cared-for staff will take better care of and provide
customers the finest experiences. Employees will feel more connected to their
workplace if a company culture is established that prioritizes the interaction between
them and their workplace. As a result, Starbucks creates a welcoming and pleasant
work atmosphere in all of its locations worldwide, allowing patrons to enjoy the
"experience" in the most natural way possible by serving as a "third place" between
home and work.
Varied however all members are connected
Every company in the world wants to establish a varied and connected work
environment, and Starbucks is no exception. In order to make every consumer feel at
home, the company wants to assemble a team of employees with a variety of
languages, ethnicities, and cultures. All in an effort to create a "experience space" for
clients.
Managers at Starbucks think that creating a corporate culture that highlights the bond
between workers and their workplace would increase worker engagement.
Additionally, some businesses tend to concentrate on fixing the bad parts of work
culture. This makes sense, but when managers concentrate on identifying the good
aspects of the present workplace, evaluating if they are connected to the company's
goal, and making a concerted effort to promote it, Starbucks accomplishes the exact
opposite. Every employee will be committed to achieving the company's objectives
when they all feel like they belong.
Apart from its dedication to providing the best coffee, Starbucks is renowned for its
business unit that concentrates on community building initiatives to foster connections
among its employees. Starbucks has made a lasting impression in this area both
domestically and internationally. Starbucks, for instance, was one of the well-known
Washington businesses that backed same-sex marriage legislation in early 2012,
changed several of its locations into LGBT-friendly safe places, and turned away
bigoted investors.
One may argue that Starbucks' strong corporate culture has played a significant role in
the company's current success. As previously said, Starbucks' culture is unique
because of its strong connection to the company's business plan. By uniting the
attitudes and actions of employees inside the firm, the effort to view employees as
partners and provide them with the proper attention has demonstrated its effectiveness
in fostering job happiness and fulfillment. All of them have created a work
environment that is authentically Starbucks and provided customers with an absolutely
flawless experience when they visit the shop
2.2. Assessment of Starbucks'
Benefits of Corporate Culture
It is evident that Starbucks has a distinctive and powerful culture. Starbucks is now
among the top companies in the retail industry worldwide as a result of this. The
company's goal of fostering and motivating the community is intimately related to
Starbucks' culture. Starbucks is a customer's buddy, coffee partner, and coworker.
Starbucks aims to make it clear that every client has the same experience at Starbucks,
regardless of their age, place of residence, or occupation. All workers of the firm have
been directed by this mission to exhibit appropriate behaviors that align with the
organization's shared objectives.
Starbucks consistently views its employees as the company's most important
component and most valuable asset. Therefore, the goal of communicating the cultural
policy is to make Starbucks' people resources a key competitive advantage. The
cultural policy aligns with the company's human resource development strategy,
which is demonstrated by the company's unwavering concern for its workers, its view
of them as "partners" and "gods," and its appreciation of their perks and job happiness.
Fairness and cultural diversity are valued in the culture, which makes for a relaxed,
vibrant, and highly professional workplace.
Starbucks has implemented an insurance coverage for its employees in order to make
up for the fact that retail staff frequently earn low salaries. Furthermore, it offers
employees the chance to acquire stock in the firm.
In keeping with the culture the firm has developed since its founding, Starbucks
training programs are skillfully created based on real-world business needs to
guarantee that staff members may use the full extent of their acquired skills and
knowledge in their jobs. The company's "partners" always get comprehensive training
on everything from Starbucks goods to service guidelines, including how to welcome
guests and provide a unique Starbucks atmosphere.
Drawbacks
First, communication with employees lacks cultural coherence. Executives at the
corporation have been concentrating on growing the network of stores in recent years,
giving little consideration to grievances over the caliber of Starbucks' beverages and
services. Starbucks is hardly able to keep up with the investment pace due to the fast
expansion in the number of stores.
Second, Starbucks' strong culture has led to problems with the company's mission:
while generating profits is the primary objective in business, Starbucks' primary goal
is to maximize the personal experiences of its customers. Profits for the company may
suffer as a result.
Third, it will be extremely challenging to adapt such a strong and established culture
to the times and circumstances of today. In the future, Starbucks will need to modify
its business practices and culture.
3.1. The function of influence, power, group growth phases, and conflict
resolution in work environments.
3.1.1 Models of Leadership and Managements on Starbucks:
Numerous writers have proposed various ideas on the working models of management
and leadership, which interact with followers and workers in a variety of ways.
Starbucks can effectively employ these models to reduce the number of bad decisions
that might seriously harm the business. There are several methods that, when
combined into several categories, demonstrate the ways in which management and
leadership thought have changed throughout time. Some of the models are defined in
this report.
3.1.2 Systems Leadership:
Changing settings at all levels is key to systems leadership. The macro-level factors
that influence the micro-level factors in an organization are fully understood by
systems leadership. Starbucks would need to resolve the misunderstandings that led to
the company's worse performance. Starbucks is able to calculate the results in relation
to its internal operations. By using this method, management may identify the process
chain's weakness before an issue arises. The productivity scale should be regularly
monitored by Starbucks management; if it is deteriorating, it should be corrected right
away with effective decision-making. Many retail locations were closed as a result of
Starbucks' severe financial loss in 2009 and a 77% decline in second-quarter net
profits (Flynn, 2009). One significant. Although the bad global economy was a crucial
factor in this failure, other analysts contend that the company's internal atmosphere
was completely to blame. Although the business was able to restore its standing,
Starbucks is well-known for using this strategy to secure its future.
There are five ways to handle conflicts, according to Thomas and Kilmann (2008):
competing, cooperating, compromising, avoiding, and accommodating. Starbucks
places a strong emphasis on teamwork and aims to establish a culture in which
disagreements are settled amicably, via active listening, candid discussion, and the
discovery of win-win solutions. Starbucks encourages a win-win strategy for
resolving conflicts by fostering teamwork. For instance, Starbucks acknowledged the
need for change after the global financial crisis of 2007–2008. To manage the
conflicts resulting from the change, Starbucks used a range of communication
strategies, such as town hall meetings, publications, and training sessions, to ensure
that information was widely and consistently disseminated (Abbas, 2023).
3.3- Conngency Theory:
Leaders assess the situation they are in and then adjust their approach to fit their
unique environment. Fiedler (1967) proposed the conngent hypothesis, which is
predicated on three key elements:
● Follower-Leader Relationships: The foundation of the leader-follower
relationship is trust, which determines how willing the followers are to
carry out their leader's instructions.
● Job Structure: The job structure outlines the usual methods needed to
finish the task on me as well as how well the job is explained.
● The term "leader's power" refers to the position of the leader inside the
organization and the extent to which he or she may sway followers by
enforcing rules or offering incentives.
Effective team performance depends on the leader's style being appropriately suited to
the level of influence and control in each circumstance, according to Fielder's
Contingency Theory. The model was created with the idea that under specific
circumstances, a particular leadership style would be more suitable. As the working
circumstances evolved from extremely low control to medium control and ultimately
to the greatest control, Howard Schultz's approach, which was founded on this
theoretical framework, was incredibly fruitful and successful. The structure of the
company was simple when Howard Schultz joined, so the CEO reorganized the
business, increased the number of branches, and maintained top-notch management.
The leadership style may be adjusted to fit the present environmental conditions,
depending on the situation.After that, Howard selected the appropriate leadership style
based on contextual elements like the structure of the company
3.4 Recommendations of the power application to improve the managerial
First of all, the phrase "the customer is always right" ought to be dropped from
Starbucks. Research indicates that Starbucks employees, especially baristas,
frequently have to deal with haughty patrons who disobey the company's policies.
When workers are unable to protect themselves from these customers, it will cause
them anxiety.Even when careless employees occasionally fail to give customers
proper service, this does not automatically mean that the client is always correct.
Every time a dispute arises between a client and an employee, a manager must assess
the situation and make the appropriate choice. Desirable treatment could encourage
these customers to frequent a coffee shop more frequently, which could lead to higher
employee turnover and a sharp decline in motivation in addition to higher sales.
Eventually, losing a few irate customers won't cost the company as much as employee
attrition.
Second, there should be greater space for Starbucks staff to enhance their skills.The
poll indicates that most Starbucks Beijing employees feel they don't have enough
possibilities for professional development, which is essential for a company in the
service industry. A company's growth and development should be dependent on the
work of all of its workers, not just one. The company must take the right steps and
train personnel in the right methods to improve their capacity to meet the needs of the
company. An employee's IQ does not define their ability. An employee's work
mentality may also be impacted by their job experience and knowledge growth. The
more work a person does and the more responsibility they take on, the more work
experience they get and the more their work style
4.The components and The types of organizational culture
4.1 Starbucks’ company culture type and traits
Starbucks' organizational culture plays a key role in establishing the company's
identity and procedures, impacting customer relations, employee behavior, and overall
business success. The following characteristics are essential to Starbucks culture:
● Diversity and inclusivity: Starbucks takes great satisfaction in creating a
welcoming atmosphere that values individuality. In order to make sure that
everyone feels appreciated and welcomed, this dedication to diversity
permeates recruiting procedures, workplace regulations, and customer
interaction.
● Open communication and collaboration: The organization promotes a
cooperative workplace where partners, or employees, are encouraged to offer
their thoughts and opinions. Employee creativity and a sense of ownership are
encouraged by this open communication, which makes them feel essential to
the success of the business.
● Community and social responsibility: Starbucks has a strong commitment to
both social responsibility and community involvement. In keeping with its goal
of improving society, the corporation actively takes part in community service
projects and environmental sustainability activities.
● Emphasis on professional and personal development: Starbucks provides
extensive training programs and career promotion possibilities as part of its
investment in its workers' growth. This emphasis on development not only
improves workers' abilities but also fosters motivation and loyalty among
coworkers.
● Customer-centric strategy: The firm prioritizes excellent service and a
customized experience while working to create a warm and inviting
environment for clients.
● In every way, it was clear that the business respected and believed in its
partners. The company has given workers' opinions careful thought in an effort
to encourage them to make more recommendations. Regular company-wide
opinion polls are conducted by Starbucks, and employees can use a telephone
survey system to voice their concerns. Related management will respond to
these surveys within two weeks of receiving them. Starbucks offers a wide
range of rewards to its staff in an effort to improve the company's culture and
values while also reducing employee turnover. In reality, Starbucks has a rather
high staff turnover rate of 65 percent when compared to many other firms.
4.2 the key values of Starbucks culture
Starbucks' culture makes its plan a reality by highlighting the value of employee
involvement as a fundamental skill. Four fundamental components form the
foundation of our culture: appreciating staff, developing strong relationships,
encouraging diversity and inclusion, and providing outstanding customer service.
The success of the business depends on the productive and encouraging work
environment that these principles foster. These are the main principles of Starbucks'
corporate culture.
Employee Empowerment
Starbucks calls its workers "partners," a reference to the importance company places
on their work. Through extensive benefits, career possibilities, and the promotion of
an inclusive workplace where diversity is valued, the firm is dedicated to enabling its
partners.
Sustainable development and ethical sourcing
Starbucks is committed to sourcing its products, especially coffee, responsibly. This
demonstrates the company's commitment to social responsibility by advancing fair
trade, helping farmers, and implementing environmentally friendly, sustainable
methods.
Participation of the community
The business demonstrates its dedication to becoming a constructive force in society
by actively supporting several social causes, encouraging volunteerism among its
partners, and taking part in local activities. Through its partner networks, which are
made up of employee resource groups from a variety of backgrounds, Starbucks
encourages diversity and inclusion while also encouraging creativity and cooperation
inside the company.
Providing consistency and quality
Starbucks places a high importance on quality in all facets of company operations,
including its customer service and product offerings. To guarantee that patrons can
anticipate the same high standards at every Starbucks shop around the globe,
consistency is essential.
4.3 Strengths of Starbucks’ Organizational Culture:
Focus on the Customer: Their goal is to "inspire and nurture the human spirit – one
person, one cup, and one neighborhood at a time." Strong client loyalty, high levels of
satisfaction, and a competitive advantage in the market are the results of this
customer-first mentality.
Employee Engagement and Inclusivity: Starbucks is known for treating its workers—
who are called "partners"—with dignity and fairness. In order to draw and keep a
motivated staff, they provide a variety of incentives, such as paid parental leave, stock
options, and health insurance. Employee satisfaction rises and turnover decreases as a
result.
Strong Sense of Community: The business places a lot of emphasis on giving clients a
cozy "third place" between home and work. The ambiance of the store, the attentive
service, and the brand's affiliation with charitable organizations all contribute to the
development of this feeling of community.
Starbucks' dedication to social responsibility is demonstrated by its active support of
ethical sourcing and sustainability. The company culture and brand identity
incorporate its efforts, including its dedication to minimizing environmental effect.
Customers who respect moral behavior will find resonance in this emphasis on social
responsibility.
Innovation and Adaptability: In order to remain competitive, Starbucks continuously
innovates its products (such as mobile ordering and seasonal goods). The company
welcomes change, which enables it to keep expanding.
4.4 Weaknesses of Starbucks’ Organizational Culture:
Performance Pressure: The high standards for performance can occasionally lead to a
difficult workplace, particularly for store-level staff. Employee burnout may result
from the company's emphasis on achieving sales goals, customer satisfaction scores,
and operational effectiveness, especially during peak times.
Over-Standardization: Starbucks' reliability is a plus, but it may also be a drawback. A
lack of flexibility may arise from the company's concentration on standardizing
processes and goods across all locations. This can make it more difficult for the brand
to accommodate regional tastes or cultural preferences in particular markets or
locations.
Complexity and Cultural Overload: Because of the strong and pervasive culture,
workers in specific areas or franchisees may feel overburdened by the obligation to
adhere to a single set of cultural values. Not every employee will find this appealing,
particularly those who work in various areas with diverse customs. Some people may
believe that the workplace is less inclusive because of the homogeneity, which may
exclude different cultural manifestations.
4.5 impact of organizational culture on organizational outcomes.
Understanding how individuals and organizations interact is crucial because culture
shapes social interaction and gives meaning to interactions. The concept of symbolic
interactionism facilitates the examination of these tendencies in the workplace. One of
Starbucks' most distinctive aspects of its culture is the welcoming environment it
creates for its staff. The company's corporate goal emphasizes the value of both
customers and workers, and the service profit chain model places a high priority on
internal service quality for operational success. Starbucks' emphasis on building
strong relationships among its staff members is responsible for its success. Social ties,
which can be difficult, can create subcultures inside an organization when workers
interact in a way that aligns with the company's values, beliefs, and goals.
4.6 recommendations to better management of the organizational culture.
● Strengthen Core Values and purpose: Connection, inclusiveness, and
excellence are at the heart of Starbucks' strong purpose and set of values.
● Boost Well-Being and Employee Engagement: Although employee happiness
is a top priority for Starbucks, there is always space for improvement:
Starbucks has made great progress in fostering diversity, but more work has to
be done.
● Boost Initiatives for Diversity, Equity, and Inclusion (DEI): Although
Starbucks is known for its internal promotions, there is always need to improve
leadership development.
● Develop Leadership from Within: Although Starbucks is known for promoting
from within, there is always need to improve leadership development.
● Use Technology to Enhance Culture and Communication: As the workforce
grows increasingly remote or hybrid, digital technologies may be a potent
means of preserving and fostering culture.
● Maintain and Honor Starbucks' Global Impact: Starbucks has operations in
several nations and promotes a culture that is united worldwide.
CONCLUSION
In addition to managing and resolving numerous internal and external difficulties, this
successful leading organization must maintain its position as the world's largest coffee
chain. If staff are enthusiastic and willing to embrace change, the company's strategy
will remain intact. One essential quality that a leader must have is passion, which
motivates people. Excellent communication abilities are crucial and have to exist at
both the upper and lower levels. Starbucks leaders must possess competence,
interpersonal skills, strong positions, positive relationships with staff, humility, and
ideals that align with the company's basic principles. Starbucks has made significant
progress in ensuring that its leaders maintain these aributes, that is the reason why
Starbucks is on the top position
