INTERNATIONAL SCHOOL OF BUSINESS

AND MEDIA

ASSIGNMENT 2

GROUP – 6

SUBMITTED BY:
Amisha Mangnani(N20233024)
Ankit Shah (N20233011)
Eshika Arora (N20231052)

SUBMITTED TO:
Prof. Jayaraman Sir
1. What do you think Schultz meant when he said that Starbucks’
objective is “Getting big and staying small”?
When Howard Schultz says Starbucks’ objective is "getting big and staying
small," he refers to the challenge of scaling the company while maintaining a
personalized, intimate corporate culture. Starbucks aims to balance global
growth with a sense of community, where employees (referred to as “partners”)
feel valued, and customers experience meaningful interactions despite the
company’s size.
This aligns with the Competing Values Framework (CVF), which focuses on
balancing control (the structured, stable aspect of global expansion) with
flexibility (the personal, innovative side of maintaining close connections). In
this case, the global growth represents stability; while maintaining the intimate,
partner-oriented culture represents flexibility.
Additionally, the concept of Organizational Culture is central to Starbucks'
success. Schultz’s vision emphasizes how Starbucks promotes strong
relationships within the company. The company’s values of inclusion, respect,
and employee empowerment foster a clan culture (a focus on collaboration,
employee development, and a sense of family), even as the company grows. The
company’s training programs, and internal communications play a key role in
maintaining this culture at a global scale.

2. If possible, interview a present or former employee of Starbucks to

get his or her impression of the company.
Starbucks employees often report a positive work environment, citing the
company’s dedication to personal development, inclusivity, and recognition.
Employees appreciate the benefits and sense of community, which is a key
aspect of the company's success.
The company’s focus on human capital is reflected through the Human
Resource Model in Organizational Development (OD). Starbucks treats its
employees as valuable assets, offering them opportunities for growth,
continuous training, and competitive benefits such as stock options and
healthcare. This approach aligns with the Human Resource Management
Model, which highlights the importance of creating a work environment where
employees are empowered to contribute meaningfully to the organization.
From a Transformational Leadership perspective, Schultz has been
instrumental in creating a vision that motivates employees to see themselves as
part of something greater than themselves. By prioritizing respect, fairness, and
opportunity for growth, Schultz fosters high levels of engagement and
commitment, which is essential for organizational success.
A former employee might say: “Starbucks treated me like family. The stock
options and career growth opportunities made me feel like I had a real stake in
the company’s success.”
3. If you have visited a Starbucks, did you see any examples of
teamwork among its employees?
Teamwork is a vital element in Starbucks' operations, especially in maintaining
high service standards during busy hours. Employees often divide tasks, such as
one person taking the order and another preparing the drink, while others handle
payments and keep the store clean.
This collaborative behavior is a textbook example of Tuckman’s Stages of
Group Development, particularly the norming and performing stages. In the
norming stage, employees clarify their roles, learn to trust each other, and begin
to work more efficiently. By the time they reach the performing stage, they are
able to perform at a high level of efficiency, collaborating effectively to provide
excellent customer service.
Starbucks also uses the Action Research Model for continuous improvement.
Employees regularly provide feedback on processes, which helps refine team
practices and improve operational efficiency. The company’s ongoing focus on
training and development ensures that employees consistently improve their
teamwork and performance.

4. Research the current lists of Fortune’s “100 Best Companies to Work

For” and “America’s Most Admired Companies.”
Starbucks consistently ranks on lists like Fortune’s "100 Best Companies to Work
For" due to its exceptional employee benefits, inclusive culture, and commitment
to employee development. Some of the key factors contributing to this success
include:
 Employee Benefits: Starbucks offers comprehensive healthcare, paid
time off, stock options, and other benefits.
 Company Culture: The company’s focus on inclusivity and employee
empowerment is central to its culture. Employees are treated as partners
and are encouraged to grow professionally.
 Training and Development: Starbucks offers extensive training
programs, leadership development, and career advancement
opportunities.
These factors align with the High-Performance Work System (HPWS) model,
which focuses on enhancing organizational performance through employee
involvement, empowerment, and continuous development. The HPWS model
emphasizes that employee satisfaction and skill development lead to higher
levels of motivation, which improves organizational outcomes, including
customer satisfaction.

5. Research current information about Starbucks’ change management

initiatives and how it has impacted sales and revenue.
Starbucks has undergone significant change management initiatives, particularly
in its adoption of digital technology to stay competitive. The introduction of
mobile ordering, delivery options, and loyalty programs has transformed the
customer experience and driven growth.
This change can be explained using Lewin’s Change Management Model:
 Unfreeze: Starbucks recognized the need for change due to increased
competition (e.g., McDonald's premium coffee offerings) and a shift in
consumer preferences for convenience.
 Change: Starbucks implemented new digital platforms, including mobile
apps for ordering and paying, along with delivery options through third-
party services like UberEats.
 Refreeze: These innovations were integrated into daily operations and
became permanent parts of Starbucks' customer service model.
The impact of these changes has been substantial: Starbucks saw a 25%
increase in digital sales, with mobile orders accounting for a significant
portion of their total transactions. This change helped Starbucks maintain
customer loyalty and stay ahead of competitors, thus boosting revenue.
The Innovation and Change Model emphasizes that continual innovation is
necessary for long-term business success. Starbucks has embraced innovation,
not just in product offerings but also in customer experience, which has
contributed to its market leadership.

Certainly! Here's an expanded version of the 6th question, using multiple

Organizational Development (OD) and change management models to improve
Starbucks’ organizational effectiveness.

6. If you are hired to assist the new CEO as a change management

consultant, what would you do to improve organizational effectiveness?
As a change management consultant for Starbucks, I would implement a
comprehensive strategy to enhance organizational effectiveness. This strategy
would integrate several OD models and change management frameworks to
ensure that Starbucks remains competitive, innovative, and employee-centric
while continuing to grow sustainably.
1. Enhance Communication and Transparency: Kotter's 8-Step Change
Model
Effective communication is key to successful change. According to Kotter’s 8-
Step Change Model, creating a sense of urgency and communicating the
change vision are critical first steps. I would:
 Create a sense of urgency by emphasizing the evolving market
dynamics, especially in light of digital transformation and customer
behavior changes.
 Communicate the vision for change to all employees, ensuring they
understand how changes will benefit them and the company. Clear
 communication helps to align the workforce with organizational goals and
ensures everyone understands the reasons behind the changes, reducing
resistance.
Additionally, I would use Kotter’s principles to guide the process through the
following steps—empowering broad-based action, creating short-term wins,
consolidating gains, and anchoring new approaches in the culture. This model
promotes clear, structured change that employees can follow and embrace.

2. Foster Continuous Learning: Maslow’s Hierarchy of Needs

Starbucks is already known for investing in employee development, but I would
expand its learning programs to address more of Maslow’s Hierarchy of
Needs. This would focus particularly on employees’ self-actualization needs.
Employees need opportunities for professional growth and fulfillment. To achieve
this, I would:
 Implement comprehensive training programs that offer both job-
specific skills and leadership development.
 Introduce personal growth workshops to help employees develop their
emotional intelligence, leadership skills, and personal goals.
By offering employees opportunities to grow, Starbucks can help them feel more
engaged and motivated. Additionally, this would increase employee retention
and contribute to higher satisfaction, which directly impacts the customer
experience.

3. Improve Feedback Mechanisms: McKinsey 7-S Framework

McKinsey’s 7-S Framework focuses on aligning key elements of an
organization (Strategy, Structure, Systems, Shared Values, Style, Staff, Skills) to
drive effectiveness. To improve organizational effectiveness, I would implement
better feedback mechanisms using this framework:
 Skills: Develop a more structured process for gathering feedback on
employee skills and training needs. This would be done through regular
employee surveys, performance appraisals, and manager check-ins.
 Style: Encourage leadership at all levels to model transparency and
openness to feedback. Leaders should embrace a participative
leadership style that values input from all employees, fostering an
atmosphere of trust and collaboration.
 Systems: Integrate feedback loops into the company’s internal systems,
allowing employees to offer feedback on management practices, store
operations, and company policies in real time. This feedback can be
tracked and acted upon to improve performance.
Ensuring that feedback is heard and acted upon can enhance job satisfaction,
reduce turnover, and improve overall organizational efficiency.
4. Promote Innovation: The Innovation and Change Model
To stay competitive, Starbucks needs to foster an environment where
innovation is encouraged and celebrated. This can be done using the
Innovation and Change Model, which emphasizes creativity, risk-taking, and
experimentation. I would:
 Encourage cross-functional collaboration between departments (e.g.,
marketing, product development, and technology) to come up with new
ideas for products and services.
 Establish an “innovation lab” where employees can experiment with
new ideas and prototypes without the fear of failure. For example,
Starbucks could pilot new product concepts or store formats in select
markets to test their viability before launching them globally.
 Reward innovative ideas and implement a formal recognition program
for employees whose creative contributions make a tangible impact on the
company.
Innovation not only helps Starbucks stay ahead in the coffee industry but also
ensures that employees feel empowered to contribute ideas and improve the
business.

5. Focus on Sustainability and CSR: The Corporate Social Responsibility

(CSR) Model
Corporate Social Responsibility (CSR) should be a key pillar of Starbucks'
future strategy. As a global company, Starbucks can play an important role in
addressing environmental and social issues. I would recommend:
 Increasing sustainability efforts, such as sourcing coffee beans from
Fair Trade-certified farmers and enhancing the company's recycling and
waste reduction programs.
 Integrating environmental concerns into all aspects of operations,
including using eco-friendly packaging and reducing the carbon footprint
of supply chains.
 Engaging employees and customers in sustainability initiatives
through awareness campaigns and by offering eco-friendly incentives
(e.g., discounts for using reusable cups).
By focusing on CSR, Starbucks would not only build goodwill with consumers but
also create a positive impact on society. Furthermore, sustainability initiatives
help reduce costs in the long term and strengthen brand loyalty.

6. Strengthen Organizational Culture: Competing Values Framework

(CVF)
Starbucks' culture is already one of its biggest strengths, but to maintain a
strong and cohesive culture as the company grows, it’s important to continuously
balance competing values. The Competing Values Framework (CVF) provides
a way to measure and maintain this balance by focusing on four key values:
 Clan culture (internal focus, flexibility): Ensuring that employees remain
motivated and feel part of the Starbucks family.
 Adhocracy culture (external focus, flexibility): Encouraging innovation,
creativity, and experimentation in Starbucks’ offerings.
 Market culture (external focus, stability): Ensuring that Starbucks
remains customer-oriented and competitive in the marketplace.
 Hierarchy culture (internal focus, stability): Maintaining efficient
processes, policies, and systems for operational success.
By continuously evaluating how Starbucks balances these values, I would focus
on fostering a culture of adaptability, where employees remain connected to
the company’s core mission while being able to pivot and respond to external
changes. This cultural alignment would help Starbucks maintain a positive work
environment and strong customer relationships as the company continues to
expand globally.

7. Implement Agile Management: Agile Change Management Model

In today’s fast-moving business environment, Agile Change Management can
help Starbucks implement change quickly and efficiently. This model emphasizes
flexibility, continuous feedback, and iterative improvements. I would:
 Encourage agile project teams across departments, particularly in
areas like product development, marketing, and technology. These teams
would work in sprints, iterating quickly based on feedback and
performance data.
 Empower managers and teams to make decisions without needing
constant top-down approval, helping Starbucks respond faster to customer
trends or operational challenges.
 Measure success using small, frequent iterations, making
adjustments as necessary and ensuring continuous improvement in
processes and products.
By adopting agile practices, Starbucks can remain responsive to market needs
and consumer expectations, which is especially crucial in the ever-evolving
coffee industry.

By combining these various OD models and change management

frameworks, Starbucks would be able to improve its organizational
effectiveness, strengthen its culture, foster innovation, and continue to lead in
the competitive coffee industry. This holistic approach addresses multiple facets
of the organization—from employee development and communication to
sustainability and feedback systems—ensuring long-term success and
sustainability.