Starbucks' Success - More Than Java

Running Head: STARBUCKS' SUCCESS - MORE THAN JAVA!

Assignment 1: Starbucks' Strategy

Starbucks' Success - More than Java!

Strayer University

MGT 500 - Modern Management

Professor - Dr. Robert A. Miller Jr.

July 21, 2013

1. Suggest the key elements of Starbucks' organizational culture that contributes to its success in a global economy. Indicate management's role with creating and sustaining the organizational culture.

The Starbucks Corporation presents a strong appeal for potential customers and employees because it has a strong organizational culture based on its values, which include "ethical sourcing, environmental stewardship and community involvement" (Being a Responsible Company, 2013). These values embody many cultures and Starbucks has incorporated them into their business model so they reach every corner of their organization. These values influence all Starbucks' business decisions including who they buy coffee beans from, as well as how they do business. They only purchase from countries that practice fair trade and use recycled materials. (Being a Responsible Company, 2013). Because these values are engrained into the culture of the organization, they have a global reach that expands outside the walls of Starbucks and spread to the communities that they serve. One example is their Ethos Water product that helps fund clean water initiatives by giving $.05 of every $1.80 to underdeveloped countries (McPherson, 2013). These types of initiatives come from strong core values which are the major factor contributing to Starbucks' global success.

Reviewing Starbucks' organizational culture reveals they are inclusive of all ethnicities and cultures and they have successfully implemented their tactics into an appealing model. Their company motto and principles guide this model and support their vision of offering a unique lifestyle experience for their customers from all over the world. If management merely follows the corporate guidelines and governance developed by Starbucks leaders, they can maintain this culture. On Starbucks website, the first statement made about their company is "To say Starbucks purchases and roasts high-quality whole bean coffees is very true. That's the essence of what we do - but it hardly tells the whole story" (Our Company, 2013). It is clear the Starbucks' appeal starts with its well-recognized, high quality product. Starbucks' mission and principles expand to tell the rest of the story. Their mission states "to inspire and nurture the human spirit - one person, one cup and one neighborhood at a time" (Our Starbucks Mission Statement, 2013). They follow the mission with six guiding principles meant to govern the key elements of their business. These six factors include their coffee, partners, stores, customers, neighborhoods, and shareholders. These set the foundation for Starbucks' organization culture and guide Starbucks' managers.

Starbucks has a detailed organization chart with several levels of managers. This helps guide the structure of the organization and puts in place decision makers at each level starting with the baristas, up to shift supervisors and then to the assistant store manager and store manager, and finally to the district and regional managers. Each level is given specific guidelines for their decision making powers. As mentioned on their website, "working in a Starbucks store is different from any other job (Retail Careers, 2013). Baristas are considered the face of Starbucks making their role extremely important (Retail Careers, 2013). Shift supervisors "help direct work on the floor. Running a shift, leading a team, and making decisions that impact store operations" (Retail Careers, 2013). Assistant store managers are typically learning skills to become actual store managers and store managers are on the "front line, connecting with customers and partners" (Retail Careers, 2013). Through each of these levels, Starbucks has created models in order to give specific guidance to managers to assist them in performing their duties, both ethically and unbiased. These decision making guidelines are based on Starbucks values and principles and are meant to help employees make unbiased decisions. Starbucks understands that if people have inaccurate perceptions, they can make poor decisions. (Goldstein, 2006). So, they have created guidelines that both direct employee behavior, as well as shape corporate perception.

Because Starbucks understands perceptions can affect decisions, the models help standardize the decision making process in order to always get a satisfactory result. These models organize the decision making process into steps which "identify a need, create a process to determine what will satisfy the need, identify matches to the need, then help make a decision based on what best matches the need" (Robbins, 2005). In addition, these models try to shape moral and ethical decisions as well as focus on the rights of individuals and social justice. Starbucks uses what they call the "Ethical Decision Making Framework" to guide the models (Business Ethics & Compliance, 2013). In order to be transparent Starbucks posts the framework and all of the models on their website (Business Ethics & Compliance, 2013). If Starbucks' managers simply follow this guidance, they will be successful and Starbucks will continue to be a successful corporation.

2. Assess the effectiveness of Starbucks' management decisions in providing innovative offerings for its customers (e.g., WiFi, style of coffee, etc.) in order to achieve its current competitive marketplace advantage. Provide support for your rationale.

One of Starbucks decision making guidelines gives their Baristas the authority to offer customers many choices. Starbucks employees are not called employees, but Partners. "Being a Starbucks Partner" is not just a word to the employees at Starbucks it is the relationship they have to each other and how they work together to enhance their customers lives. (Working at Starbucks, 2013). Along with this personalized customer service, Starbucks has enhanced their stores to include appealing offerings that allow customers to enjoy a pleasant experience every