Giventhecasebelow,drawStarbucksOrganizational

Structure.Identifythe4featuresintheorganizationby
drawingaboxaroundtheelementsdepictingeach.

StarbucksCoffeeCompanys
OrganizationalStructure
UPDATEDSEP13,2015PAULINEMEYER
AStarbuckscafattheShinbashiYurikamometrainstationinTokyo.StarbucksCoffees
organizationalstructuregrowsandchangestosupportthecompanysneeds.(Photo:
PublicDomain)

StarbucksCoffeeCompanyisthelargestcoffeehousechaininthe
world.Thefirmsindustryleadershipispartlyattributedtothe
appropriatenessofitsorganizationalstructure.Acompanys
organizationalstructureinfluencesmanagementandleadership,
communication,change,andothervariablescriticaltobusiness
success.Starbuckshasevolvedtohaveanorganizationalstructure
thatmatchescurrentbusinessneeds.Thisorganizationalstructure
isuniquetoStarbucks,althoughitcanbecharacterizedbasedona
conventionaltypologyoforganizationalstructures.Starbucks
succeedsbecauseitsorganizationalstructuregrowswiththe
business,enablingthecompanytooptimizeprocessesandthe
qualityofitsgoodsandservices.

FeaturesofStarbucksCoffees
OrganizationalStructure

Starbuckshasamatrixorganizationalstructure,whichisahybrid
mixtureofdifferentfeaturesfromthebasictypesoforganizational

1
2
3
4

structure.ThefollowingarethemainfeaturesofStarbucks
Coffeesorganizationalstructure:
Functionalstructure
Geographicdivisions
Productbaseddivisions
Teams
FunctionalStructure.Thefunctionalstructurefeatureof
StarbucksCoffeesorganizationalstructurereferstogrouping
basedonbusinessfunction.Forexample,thecompanyhasanHR
department,afinancedepartmentandamarketingdepartment.
Thesedepartmentsaremostpronouncedatthetoplevelsof
StarbucksCoffeesorganizationalstructure,suchasatthe
corporateheadquarters.Thisfeaturerelateswithhierarchyinthe
organizationalstructureofStarbucks.Forinstance,thecorporate
HRdepartmentimplementspoliciesapplicabletoallStarbucks
cafs.Thefunctionalstructurefeatureofthefirmsorganizational
structurefacilitatestopdownmonitoringandcontrol,withthe
CEOatthetop.
GeographicDivisions.StarbucksCoffeesorganizationalstructure
alsoinvolvesgeographicdivisions.Atpresent,thecompanyhas
threeregionaldivisionsfortheglobalmarket:(a)ChinaandAsia
Pacific,(b)Americas,and(c)Europe,MiddleEast,Russiaand
Africa.Also,intheU.S.market,StarbucksCoffeesorganizational
structureinvolvesfurthergeographicdivisions:(a)Western,(b)
Northwest,(c)Southeast,and(d)Northeast.Eachgeographic
divisionhasaseniorvicepresident.Inthisway,eachStarbucks
managerreportstotwosuperiors:thegeographichead(e.g.
PresidentofU.S.Operations)andthefunctionalhead(e.g.
CorporateHRManager).ThisfeatureofStarbucksCoffees
organizationalstructuresupportsclosermanagerialsupportfor
geographicneeds.Eachdivisionheadisgivenahighdegreeof

flexibilityinadjustingstrategiesandpoliciestosuitspecific
marketconditions.
ProductbasedDivisions.Starbucksalsousesproductbased
divisionsinitsorganizationalstructure.Thesedivisionsaddress
productlines.Forexample,Starbuckshasadivisionforcoffeeand
relatedproducts,anotherdivisionforbakedgoods,andanother
divisionformerchandiselikemugs.Thisfeatureofthefirms
organizationalstructureenablesfocusoncertainproductlines.In
thisway,Starbuckseffectivelydevelopsandinnovatesitsproducts
withsupportfromitsorganizationalstructure.
Teams.TeamsareusedindifferentpartsofStarbucksCoffees
organizationalstructure.However,teamsaremostnotableatthe
lowestorganizationallevels,particularlytheStarbuckscafs.In
eachcaf,thefirmhasteamsorganizedtodelivergoodsand
servicetocustomers.ThisfeatureofStarbucksCoffees
organizationalstructureenablesthecompanytoprovideeffective
andefficientservicetoconsumers.

NoteonStarbucksCoffeesOrganizational
Structure

Starbuckshasreformeditsorganizationalstructureovertime.By
2007,thecompanywasexpandingrapidly,suchthatitshifted
focusawayfromcustomerstowardstrategicglobalexpansion.
However,Starbucksexperiencedsignificantdeclineinsalesin
2007.Thisdeclinewasworsenedbecauseofthelackoffocuson
customerexperience.WhenHowardSchultzresumedtheCEO
positionin2008,hechangedStarbucksCoffeesorganizational
structuretobringbackfocusoncustomerexperience.New
regionaldivisionswerecreated,andteamsatStarbuckscafswere
givenbettertraining.Thus,thecurrentorganizationalstructureof

Starbucksisaresultofthisreformtoimprovecustomerexperience
andthefirmsfinancialperformance.