Starbucks Organizational Behaviour

Starbucks is the largest coffee chain in the world. From the beginning, Starbucks set out to be a different kind of company. One that not only celebrated coffee and the rich tradition, but that also brought a feeling of connection. Their mission is to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time (Kembell, 2002).

Starbucks as a brand attempts to provide their customers with not just exotic tasting coffee but with a unique ambience which invites people to come and relax and enjoy their coffee experience. It is this unique quality of service that the brand ‘Starbucks’ is well known around the world for and this is what sets them apart from their myriad number of competitors around the world (Kembell, 2002).

Organizational structure and culture of Starbucks

Organizational structure has a number of definitions. An organizational structure can be best defined as a system of hierarchy that is developed by the management of an organization in order to over see all the operations involved in the business of the organization (Child, 1972). An organizational structure of a firm is usually depicted in an organizational chart. Organizational structure is determined based on many factors such as size, environment, technology etc. According to (Thompson, 1966), the organizational structure is the primary means through which it sets certain limits and boundaries for efficient performance by its members, by delimiting responsibilities and control over the available resources. The below fig 1, gives the organizational chart of Starbucks. This represents the prevailing organizational structure that is being followed at Starbucks.

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Organizational culture is the sum total of all the beliefs, rules, techniques, work ethics that can be found among the employees of an organization. Starbucks brand is its product, people and it’s in store ambience. It provides a top notch coffee experience that enriches the life of young, discerning and curious adults. Involvement and personal interaction is key to the Starbucks experience. Starbucks strives to be authentic and stand for something through passionate and committed employees. It promotes treating people with respect and dignity. All these can be classified under the culture of Starbucks. It is the essence of Starbucks (Alvesson, 1993).

Relationship between culture and structure

In the case of Starbucks, one of the most important goal is to provide an experience that is unique and one that can always be identified with the brand. Therefore in order to achieve this, the management at Starbucks developed and fostered an organizational culture that mimics the kind of experience that they want their customers to have in their stores. In order to achieve this, one of the philosophies followed by the founder of Starbucks was “To treat people like family, and they will be loyal and give their all”. This is the philosophy followed within the organization too (Morris, 1994). This way employee’s are motivated to be honest, work hard and to enjoy working with Starbucks. The organizational structure too is developed keeping the guiding principles in mind. Employees are encouraged to state their frank opinions and communicate more with the management. Therefore the workers have a very high satisfaction rate and a strong culture and bond is formed among the employees who were extremely loyal and proud to work for this brand. Their pride came from working for a very visible and successful company that tried to act in accordance with the values they shared. The organizational structure is also clear and is implemented in a way that all areas of the business operations are overseen. Therefore by ensuring that the structure and culture of the organization are in sync with each other, maximum productivity can be obtained from the employees which increases the performance and also brand image and profitability for the organization (Chow, 1991).

Suitability of the organizational structure

The organizational structure at Starbucks was developed in such a manner so as to ensure proper attention is given to all departments and to ensure a good and effective division of all the responsibilities and duties. Therefore all the important departments like human resources, finance etc has been given adequate stake in the overall structure. In addition to this the sub departments that are currently a part of the structure also are vital to the business operations.

Fig 2, represents a typical structure that would be followed by any organization (Reimann, 1974). It is evidently clear that Starbucks too follows an organizational structure that is similar to the above fig. Most of the main departments come directly under the control of the managing director or CEO. Each department has its own various sub departments. One area where Starbucks can improve their organizational structure is in the international retail division. Marketing should be a part of this division to similar to the structure implemented for North American retail department. This will ensure adequate resources to international marketing too.

Key psychological explanation of individual behavior at work in terms of:

Personality: Personality is the essence of one’s character and attitude and behavior at a work place. A person having a good personality can be safely assumed to be a good employee in terms of his/her attitude and work ethic. Personality plays an important role at work primarily because it is based on ones personality that other workers tend to interact with the person. A person exhibiting a friendly and open personality will have no trouble mingling with a group of office collogues. In addition to this, people will also feel confident of approaching such a person. Therefore it is important for people at management positions to exhibit a good personality. A good personality will also go a long way in distinguishing a person from the others in the office.

Perception: Perception in the context of a work environment refers to the manner in which a person is regarded by others or the manner in which one’s words are construed by others. Perception too plays a role in an office environment as a lot of things can be mis understood based on perception alone. i.e., it is important to ensure that the work done or what we say, is clear and easy to understand since, unless it can be perceived by others, there is no value to our work. Perception at work place also builds our image among our co workers. Having a bad perception of oneself will result in that person earning a bad image and reputation among his/her colleagues.

Self and Self-image: Self image refers to the projection of one’s inner confidence and other attributes along with the persons own perception of their own self. Self image forms a very important part of ones personality. They are inter-connected and directly proportional to each other. If a person does not have a positive self image then that person would also not have a good personality and vice versa. Self image is a combination of ones inner confidence and perception. Having a positive self image is absolutely vital in any work environment. This is especially true if a person is in a management or supervisory position because other people will look towards them for guidance. Having a low or negative self image will be perceived by others as being doubtful and not confidant. Hence, people will not respond properly or may question such a person. Developing a positive self image may take time, however it is important if one wishes to rise through the ranks.

Attitude: Attitude represents an individual’s degree of like or dislike for something. In a work environment, a persons attitude tells a lot more of them and their personality and character. Attitude also plays a big role in a persons ability to accomplish a job. Having a positive attitude will help one to take any task and to work honestly towards resolving the job. Having a bad attitude will discourage and de-motivate a person. In addition to this, a bad attitude will also affect others around a person. They may feel uncomfortable working with a person having a bad attitude or the concerned person may be singled out and rejected among a group. A bad attitude among managers will also lead to ineffective communication between the management and the workers.

I was working at Starbucks as a duty/shift manager. In my time as an employee at Starbucks, I would evaluate myself as being a person with a good attitude and a strong personality. Being a duty manager, means that iu was in charge of assigning the various shifts and responsibilities among the staff. I had to tae a number of factors into consideration. I always maintained a open attitude and a friendly personality which enabled people to come and talk to me. This helped me to take an active interst in their issues and I could do my work better due to the increase communication between the staff and myself. All this led to higher productivity levels among the staff and higher job satisfaction for all of us. The relationship between the staff is important as an easy and communicative atmosphere helped maintain a positive relationship.

Choose two different leaders you have worked for and distinguish between their styles of leadership. Explain how effective each style was. (P7).

Discuss three different work situations in which a different style of leadership is likely to be most effective. (P4).

I was working as a duty/shift manager at a local Starbucks retail shop for a period of 2 years during which I reported to two different supervisors (HR managers). I experienced different styles of leadership under both of them. The styles can be classified as Laissez-Faire leadership and Participative leadership style.

Under a Laissez faire style, the manager rarely used to bother about us subordinates. He used to leave us to do all the work and not bother to supervise us. Practically no guidance of any kind was given and we had to make our own decisions when it came to business operations. This style led to pearly defined roles and also discouraged us and de-motivated us.

Whereas, the second manager, who used a participative leadership style. This style was more effective since, the manager would involve the employees in the decision making process. Although the final decision was made by him, the employee’s opinions and various inputs are taken into consideration. Under this style of leadership, the employee’s contributions increased when compared to their contributions under a laissez faire style.

According to Kurt Lewin, there are three different kinds of leadership styles (Kurt Lewin, 1999). They are:

• Authoritarian Leadership (Autocratic)
• Participative Leadership (Democratic)
• Delegative (Laissez-Faire) Leadership

In the case of an authoritarian leadership, this style of leadership is best suited to those scenarios which have very little time for group decision making or discussions or when the leader is the most experienced and most knowledgeable of the group. It is best used in situations where creativity is not required and where productivity is important than any other factor. Example of a situation where such a leadership style is most effective is in the case of construction business.

A participative leadership style is most effective in any office based business environment which has numerous departments and sun departments and one which is more service oriented like a retail store. The reason why the retail business could be a scenario wherein the participative leadership style is most effective is because such a business requires creativity. This kind of style fosters loyalty and encourages employees to perform better.

A laissez faire leadership style would be most effective in situations in which there are experienced personnel working in a group. The reason behind this is because in their kind of leadership style, the leader does not give any proper inputs nor do they give any guidance. Therefore it is absolutely necessary that the sub ordinates know their job well and their responsibilities and duties as well.

For the purpose of carrying out the interviews, employees from two organizations were considered- Starbucks and Marks and Spencer.

Organizational theory or Management theory is an amalgam of all the culture, social structure, physical structure and technology that is being used by an organization to carry out its business (Hatch, 1997).

While interviewing the management and the staff at Starbucks, it became clear that the organizational theory that they followed is towards presenting their customers with a unique experience. All their structure and culture were tuned towards attaining this goal. The organizational structure followed an open and participative leadership style and management style. This is reflected on the way the employees work and their attitude is more open and communicative which is then passed on to their interaction towards their customers. Even their organizational culture is tuned to give the best service always. Therefore the management theory currently being used by Starbucks seems to be quite good and does not show any relative weakness except for the fact that they are trying to expand too quickly. Due to rapid expansion, the organizational structure and culture are not being incorporated properly and this results in lower service quality compared to their best.

In the case of Marks and Spencer’s, the analysis from the interviews of the management and the staff shows that the organizational theory that is followed here is more authoritative and profit oriented. The organizational structure seems to be concentrated solely on the marketing aspects and the revenue generation from their products. The work culture too seems to be fairly rigid. Employees are not given absolute freedom to participate in the decision making process. Most of the time, the decisions are taken by the upper management itself.

There are certain organizations that are known for their organizational theories that they use. Google is world renowned for its management theory. At Google, organizational culture is given prime importance. Google cultivates culture values of ‘coolness, playful and self-starter. In addition to this, Google allows its staff to pursue their own projects for some time. This allows a sense of freedom as to the manner in which the employees will organize their work and achieve their goals. In addition to this Google’s organizational structure is also unique in that they do not have any traditional hierarchy based structure (Schnell, 2007). All members are absolutely free to approach any one and ask for help. Guidance and advises are given freely around the work environment. The employees are free to write or approach even the CEO directly. Thus this kind of management theory allows employees to be creative and be more productive and will also result in higher job satisfaction and increased employee loyalty (Sherman, 2005).

Therefore there are a lot of things that Starbucks and Marks and Spencer’s can learn from Goggles management theory.