Organizational behavior and effectiveness at The Coffee Bean and Tea Leaf Singapore

¶ … organizational dynamics of Coffee Bean & Tea Leaf, Singapore with a reference to the relevant theories. The strengths and weakness are highlighted and then recommendations made on how to improve the daily running of the franchise.

Overview of the company

Organizational structure

Organizational culture at Coffee Bean and Tea Leaf

Employee motivation

Organizational form

Overview of the company

Coffee Bean & Tea Leaf Singapore is part of a larger organization (a franchise) that deals in coffee and tea as their specialty. The company is headquartered in Los Angeles California and is owned as well as operated by International Coffee & Tea, LLC (Hoovers,2011).

In Singapore, the company it operates under the business name Coffee Bean & Tea Leaf (S) Pte. Ltd. It operates both tea and coffee stores in the country (Singapore). In its stores it offers coffee bean brews, lunch, breakfast, tea as well as cakes. The company is also involved in the provision of merchandise such as brew items, coffee and tea mugs, CDs, party packs and gourmet powder. Most of its products are offered online (Businessweek,2011). The company was founded sometime in 1963 and in Singapore, it operates as a subsidiary of the International Coffee & Tea, LLC. The company offers free Wi-Fi access in most of its locations (Coffee Bean,2011).

It is worth noting that its is the efforts of the Singapore entrepreneur, Mr. Victor Sasson as well as his family (mainly his Sunny, his brother and Michelle, his wife as well as Mel, his brother-in-law) that catapulted the company into the global arena. Mr. Sassoon in 1996 bought the company's franchise rights for the Asian region and in just two years, managed to open about 29 outlets in Malaysia and Singapore. Currently, the company has grown to be one of the largest and most successful privately owned company that deal in coffee and tea. Tea and Coffee Asia (2009) pointed out that traditionally, the region has preferred tea as a beverage since time immemorial. The Asian market has been hugely affected by the increasing popularity of the specialty coffee as well as other espresso-based beverages. Datamonitor indicated that the consumption of coffee in the Asian region is bound to increase to 31.59%.

Organizational structure

The Coffee Bean & Tea Leaf Singapore was established more than ten years ago. Currently, it operates forty-five outlets throughout the entire island. It also plans to open more outlets so as to continue dominating the specialty coffee as well as tea industry. The company has therefore over the years engaged the services of an enthusiastic team that is adequately trained in order to provide to their customers what they refer to as a "Total Quality Experience." The organizational structure at Coffee Bean and Tea Leaf, Singapore is top down in its operation and authority. The organization is headed by CEO, Mr. Sassoon and then there are various outlet managers as well as operations and logistics managers. The workers are at the bottom of the hierarchy.

It is worth noting that one of the most difficult tasks of any given business is the organization of individuals so that they may perform their work efficiently. As Coffee Bean and Teal Leaf franchise become more successful and experienced growth, more work was generated for the employees. More people therefore have to be engaged in an organized manner. Individuals have to be organized in order to specialize in their duties. The need of realizing a common objective has meant that the company must employ an effective organizational structure.It is worth noting that Coffee Bean & tea Leaf Singapore is privately held and family run. This does not mean that all its operations are executed by the family. The company has engaged the service of various professionals so that it can realize its objectives. As Sexton (1970) put it; there must be some form of a plan that indicates how the work in a given organization is organized. This plan which depicts the systematic arrangement of the work to be performed is called the organization structure and is comprised of relationships, functions, authorities, responsibilities as well as the communication of persons within each and every department (p.23).

A look at the organization structure at Coffee Bean & Tea Leaf reveals that it is centralized in nature. The centralized organizational structure has several management layers that are involved in controlling the company through maintenance of a high level of organizational authority. This is the power to make decisions. The centralized organization structure is marked by the line-and-staff employees having very limited authority in doing anything without obtaining prior approval. This organizational structure has a focus on the top-down management style in which the executive at the very top communicate with the middle-managers who then pass the message to the first-level managers. The first level managers then pass the message to the general staff. This organizational structure is fairly bureaucratic and therefore the employees have very little freedom.

Several authors have discussed the importance of organizational structure as well as its relationship with the size, technology, strategy, environment as well as organizational culture. Mintzberg (1989) for instance wrote on the significance that it has organizational structure and strategy.The work of Burns and Stalker (1961) indicated that for an organization to achieve the best performance then its structure must match and fit the dynamism of its environment. Handy (1993) discussed the importance of organizational design and structure in relation to organizational culture.

Organizational culture at Coffee Bean and Tea Leaf

According to Crane and Matten (2004), organizational culture is a representation of the overall climate or environment that exists within a given organization (p.136). According to Mullins (2005,p.891), organizational culture means "…how things are done around here."

Organizational culture is important for organizations such as Coffee Bean and Tea Leaf because it helps in the management of organization-wide change. The organizational culture at the company is geared towards providing the customer with a Total Quality Experience. The employees are provided with a unique opportunity of touching the lives of several (thousands) individuals in the community every single day. The Coffee Bean and Tea Leaf store are noted by the Coffee Bean (2011) to be the very first and the very last impression that the clients have of their business establishments. The company is also committed to continual learning as well as development of their workforce. The company offers competitive wages as well as comprehensive benefit packages. The employees work together in order to be "Simply The Best" in regard to specialty tea and coffee.

As part of its culture and strategy, the company has been able to maintain a number of traditions as their secrets of success. One of such strategy and culture is the existence of Team Members who provide their clients with Total Quality Experience that is inspired from their Core Values. Their Core Values are represented as F.R.O.T.H for Friendly, Respect, Ownership, Teamwork and Honesty. When the Coffee Bean stores are opened, they are not only opened to the customers only but to the Team Members as well.

Employee motivation

Employee motivation has been noted to have a correlation with organizational performance (Perry and Mesch,2006). The company motivates its employees intrinsically and extrinsically through good remuneration, training as well as recognition programs. In an effort of ensuring that the employees are well motivated, the company has set up a regional office in Singapore for the provision of training as well as recruitment support for the entire region.

Marketing strategies

Al of the Coffee Bean and Tea Leaf stores are located in regions that experience high traffic and are highly visible. The company engages in master franchising.

Transformational leadership

From its inception, the company has excelled by the application of transformational leadership.

According to Daft (2007) organizations are considered to be social entities that are working towards achieving specific set goals and objectives. He posits that they have deliberately designed structures and systems of activities that provide them with links to the external environment. The most important element of an organization is not either the goals or the objectives to be met but is the personnel and the relationship that exists between them. The existence of an organization is guaranteed if and only if the interaction and the relationship that exists between the personnel is cohesive, complements each other and are geared towards the achievement of the goals and objectives ( Daft,2007).

The structure of an organization refers to how the different departments and units within the organization are linked to one another. According to Sims (2002), the structure of an organization is the reflection of the ways channels through which persons in the different departments and units interact with one another while doing their respective jobs. It also refers to the way the different jobs and responsibilities are shared and coordinated between and amongst the personnel.

Some of the processes according to Sims (2002), that re institutionalized within the structures of an organization include; the interaction between the personnel; communications channels that are used to pass information; rewards system used to acknowledge exemplary work; definition of power relationship between the different job cadres; and the most important goals and objectives of the organization. The structure of any organization gives the primary template that help secure the continuation of the norms, culture, values philosophies and informal activities that part and parcel of the organization.

Duncan (1979) in his Article," What is the Right Organization?," argues that all organizations are undergoing change. These changes move from matrix to horizontal and finally to virtual according to An and Daft (2006).

There exist two general theories that are used to design the structures of organizations. First is the universalistic approach commonly called the standard hierarchical design? This approach is based on the belief that that there is only one way that best suits all the organizations during the structuring process the situations and prevailing conditions notwithstanding. This approach is also base on the a set of principles that guide the process of designing the structure that an organization prefers. The univerlistic approach is done on the basis of theories that are both classical and bureaucratic while doing the design of the preferred structure. These theories of design that is based o n hierarchy are characterized by specialization in different jobs and skills; units and departments that are based on the functions and processes; limited sphere co influence and control; as well as centralized system of authority. The organizations that use this approach have several levels of management through which information and directives have to pass.

The four main factors that the top management have to consider while before embarking in the process of designing the structures for any organization include, first, the strategy of the organization. This if not well done by the management can have a lot of repercussions on the overall day-to-day running of the organization. The strategy of any organization gives the long-term goals of that organization and the plans that will put in place to help the achievement of those goals. The strategy should also give the specifications on the allocations of resources by the top management to the different units and departments that will aid in the attainment of the organization's goals (Sims 2002). Porter (1980) posits that there are three different strategies that can be used by any organization while designing the structures within it. The first strategy is the cost leadership where an organization provides the same services and products as its competitors but offer lower prices as a result of low cost of production. An organization that uses this strategy stands to gain immense cost advantage compared to its competitors. this is due to the fact that the savings made as are result of low cost of production is passed on to the consumers who will definitely go for low cost goods and services and as result the organization will have a large market share. The main aim of this strategy is to sell a standardized product that has an appeal to all average customers who make a big proportion of the market. This the strategy that champions argue will have a guarantee of better returns on both the human resource and capital invested into the business. Consequently these organizations stand to attaint economies of large scale in most of the business activities they are engaged in. The other strategy Is the differentiation strategy where an organization seeks to be different unique from all other competing organizations in the same line of business along the value systems that are held by the customers. An organization that uses this strategy need to have different designs manufacturing marketing, research and development departmental strategies for all the products and services it offers. The third and the final strategy is the focused strategy that is designed to help an organization set it target on specific niche in the market unlike both the cost leadership and the differentiation strategies that are meant to help the organization to target the wider market population. According to Sims ( 2002), any organization that uses the focused strategy may use a variety of designs ranging from functional design, product design as well as matrix design. All these are to suppose to help the organization to satisfy the needs of its customers. Auger and Teece (2006) posit that the knowhow, structures existing within the organization as well as the behavior of the human that come into contact with the company all have effects on the capability of the organization. These capabilities in turn have adverse effects o the strategies used by the firm which consequently affect the structure of the organization.

The second factor that mangers need to consider while designing the structures of an organization is the external environment. These include all the institutional forces that are outside the organization but which have the potential to affect the daily activities and the overall running of the organization which consequently affects the performance of the organization. These include the suppliers, target customers, competing organizations, regulatory agencies put in place by the government, different interest and pressure groups, and all stakeholders in the line business. The prevailing conditions of the external environment have direct effects on the design and the structures that exist in any given organization. According to Sims (2002) the managers of these organizations need to must adjust the structures and designs of their respective organizations with respect to the changes that occur in the external market. Punoose (2007) emphasizes that the effects of the external environment on the operations of any organization cannot and should not be ignored at all if the success of the business is to be guaranteed.

The third factor that needs to be considered is the size of the organization. This has implication on the structure and the design of the organization. It has been proven that as the size of the organization increases, the rules and procedures being used within the organization become formal and normalized. Large organizations compared to smaller ones tend to have more management levels and more structures that guide the way activities are coordinated towards the achievement of the goals and objectives of the organization. These large organizations are also characterized with decentralization and delegation which makes management easier as all the heads of unit and departments are competent enough to run their units or departments. Smaller organizations on the other hand tend to have informal processes if decision making and simpler organizational structures. According to Sims (2002), they are also characterized with few diverse activities, few formal procedures written down as well as small spheres of control within the organization.

The fourth factor that has become increasing important with the passing of time is technology. With the phenomenon of globalization no organization would resist the opportunity to go global as this guarantee a large market for the goods and services they offer. Through technology organizations can be able to design jobs, create teams and departments, delegate authority and responsibility and address the need to have a formal mechanism of integration. It entails the process of transferring inputs into outputs. According to Sims (2002), every organization needs to have at least one technology to help it convert financial, human and physical resources into either services or products.

Organizational form

The two forms of organizations that exist include the mechanistic and organic forms. The mechanistic system has the characteristics of relaying on the formal rules and regulations, a centralized system of decision making process, specific defined job responsibilities, and an authoritative hierarchy. In this form of organization a lot of emphasis is put in following the laid down procedures, rules and regulations. This system is also characterized with bureaucratic process whose main principles include; Specialization; Hierarchy; Rules and Regulation; Rational Decision-making. Coffee Bean is a mechanistic organization

Organic form of organization on the other hand has the characteristics of low or little use of formal rules and regulations, a decentralized system of decision making process, wide and broad defined responsibilities of jobs, as well as an unauthoritative and flexible management structure that has few levels of hierarchical order.

In many cases the top management has the responsibility of making decisions that will have effect on the extent to which an organization operates as either an organic or a mechanistic system.

Hierarchy

This represents the extent to which the process of decision making is prescribed to and the presence of formal power is acknowledged. In a mechanistic system, the lead departments are given the power to set and approve the goals of the smaller units. They also give budgetary allocation as well as gave directives on the implementation of the policies and programs. The's system also has many levels in its hierarchy to help in the achievement of tight central control unlike in the organic system which has few levels of hierarchy that enhances a smooth and coordinated communication process that results into environments that help foster innovation within the organization,(Sims,2002).Hannan et al. (2006), in their paper posits that the authority within an organization increases the top managements authority's efficiency of managing capital as well as in the budgeting process.

The aspect of division of labour refers to the different ways of dividing up the tasks and responsibilities that exists in the organization. These are all geared towards the achievement of the organizations goals and objectives. This brings about the aspect of specialization within the organization as jobs are divided into small range of activities that employees are meant to undertake. The mechanistic system holds the view that greater division of labour will increase the efficiency that exists within an organization that will result to great wealth created. However the continued division of labour can result into low productivity, low quality of service and goods, high turnover and high rates of absenteeism among the workers. The organic system on the other end rakes for the advantages accrued from division of labour but has it's reservations on the extent to which the process of dividing labour, (Sims 2002).