Management concepts and principles

¶ … Starbucks' organizational culture that contributes to its success in a global economy. Indicate management's role with creating and sustaining the organizational culture.

The first important element of Starbuck's organizational culture that contributes to its success in a global economy is its human resource. Starbucks's success is based on the excellent experience that consumers have when buying their coffee at the location, as well as on related activities (buying additional products, having the coffee at the location, spending time to work and have the coffee at Starbucks etc.). However, fundamental for the maximization of this customer experience is the way the employees relate to the clients, the way they are able to sell the products and service.

As such, Weber (2005), pointed out that the company has invested heavily both in order to maximize employee retention, with competitive wages and benefits, and in the development of the human resource, including through trainings. Fundamentally, the Starbucks culture remains a friendly one, both with the client and between employees, essential for the company's success.

Another important part of the organizational culture at Starbucks is its strong commitment to the social responsibility. This is associated partly with the fact that the company vision was to create a place that was not work and was not home, but that could be both if needed. This implied that Starbucks was part of the community, so giving back to the community, in different forms, became a must. This continued with the company's commitment to fair trade.

Finally, quality cannot be ruled out of the organizational culture at Starbucks as part of the success story. The idea with quality, however, is that it completes the consumer experience and goes beyond the quality of the product to cover the quality of the services as well, as previously described.

The role of the CEO was substantial and fundamental in creating and sustaining the organizational culture. It was Schultz's vision that led to the creation of the Starbucks coffeehouses as locations that are intermediary between home and work. Basically, he was instrumental in remodeling the locations and improving service.

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.

As Urbancova (2013) pointed out, a large number of authors agreed on the fact that the main vectors of progress in the 21st century are related to knowledge, information and innovation. She goes on to complete these findings by pointing out that the success of any organization depends on a large number of factors, related to these vectors, which include creative activity, employee knowledge and continuous learning.

One important thing to mention, particularly since this is so eloquent in the case of Starbucks, is that innovation is disruptive and this is usually what causes the competitive advantage. The innovation that Schultz did at Starbucks was disruptive because it proposed a different concept for a coffeehouse, a different way of doing business in this market. It was also disruptive because it innovated in such a comprehensive manner. It was not only the coffee that Schultz innovated on, diversifying the portfolio, but also everything from location to the products being sold and from the WiFi. He revolutionized the way that coffee was sold in the United States.

His innovation also went hand in hand with accelerated and aggressive expansion and it was the combination of these two that actually brought a competitive advantage for Starbucks. The company presented not only a new concept, but marketed it around the world, opening new markets and carrying its models to new regions. Other competitors, such as Tully's, were successfully competing against Starbucks, but they were doing so at a limited, local level, primarily in Seattle and the Washington States. The company had the vision of being global, which was an additional element in its advantage.

3. Determine one (1) key management competency that a successful manager at Starbucks is likely to have. Indicate one (1) way in which this particular competency is a good fit for the organizational culture.

A key management competency for a successful manager at Starbucks would be leadership. Certainly, leadership is something that all managers should have, but in the case of Starbucks, this is amplified by the size of the company, by its global presence and by the fact that it operates in a significantly competitive environment, where it needs to continuously overachieve in order to remain on top. For this, a manager who can lead in all the senses of the word (take measured risks, lead people, provide vision, monitor and control) is essential.

The most important way in which this competency is a good fit for the organizational culture is leading people. As previously discussed, Starbucks is an organization that revolves around its employees, the ones who are able to provide the best service and the best customer experience for the clients. With that in mind, leading people is fundamental, in all the different forms that this can occur at Starbucks, from providing motivational support to creating a relevant human resource development strategy and to defining a career path for the employees.

The history at Starbucks seems to corroborate this analysis. Starbucks was successful during Howard Schultz's tenure because he was such a successful leader, employing all the key management competencies that have been discussed in the previous paragraph. He was also the one who shifted the attention on people as the key resource of the organization and this fueled his determination towards making Starbucks a people organization.

4. Speculate on whether Starbucks would achieve long-term sustainability as a global leader in the coffee industry without the organization' CEO, Howard Shultz.

In order to answer this question, one needs to look both at what Starbucks meant before Howard Schultz and what it became after he became CEO. First of all, from 1971, when the company was founded, to 1986, Starbucks was selling coffee beans that it originally purchased from Peet's and subsequently began to purchase from external producers as well. Only in 1986 did it start to sell brewed coffee and then only espresso. So, it was not a coffee house, it was a coffee store.