CASE STUDY:TEAM WORK

Howard Schultz vocabulary at least in formal interviews makes him sound like a college
professor of management. The interviews are peppered with words like “collaborative”,
“teams”, “empowerment”, “empathetic”, and “vision”
Schultz just happens to be one of the founders, chairperson of the board, and chief
strategist of Starbucks Coffee Company, and he is intent on moving starbucks to new
highs. “We are in the second inning game”, he says. Star bucks stock has gone up by
more than 3000 percent since it first went public in 1992. the firm has over 7500 stores
in 36 countries and is expanding so rapidly that the running joke is that a new starbucks
will be opening in the restroom of a current starbucks. Over 25 million people visit
starbucks each week. No American retailer has a high frequency of customer visits.
Besides a good cup of Joe, what is the starbucks formula for success?
Perhaps it is the firm’s vision. Says former U.S Senator and current starbucks board
member Bill Bradley, “Howard is consumed with is vision of starbucks. That means
showing the good that a corporation can do for its workers, shareholders and
customers.” On starbucks six-point mission statement number one is “Provide a great
work environment and treat each other with respect and dignity.
Starbucks overriding company philosophy is “Leave no one behind”. This philosophy
shows up in new employees receiving 24 hours of in-store training higher than average
salaries and benefit packages. All employees who work more than 20 hours a week
receive stock options and full healthcare benefits. Schultz says “The mot important thing
I ever did was give or employees stock options. That’s what sets us apart and gives a
higher quality employee, an employee that cares more”
In employee surveys starbucks rank ahead of other companies. Starbucks employees
show an 82 percent job satisfaction rate compared to a 50 percent rate for all
employers. Starbucks has the lowest employee turnover rate of any restaurant or fast
food company. Another survey found that the two principal reasons people work for
starbucks are “the opportunity to work with an enthusiastic team” and “to work in a place
where I feel I have value”. A starbuck spokesperson says,” we look for people who are
adaptable, self motivated, passionate, creative team players.” Maintaining this spirit is
not easy in a company with around 11000 full time and almost 70000 part time
employees. “Getting big and staying small,” is the starbucks objective says Schultz.
Starbucks has lower profit margins than other companies in the fast food industry, partly
because it has higher salaries and benefit costs. All of the stores are owned by
starbucks, which enables the company to control store operations. “I look at franchising
as a way of accessing capital and I will never make the trade off between cheap money
and losing control over our stores,” says Schultz.
Questions
1. Which issues are discussed in the case?
2. What do you think Schultz meant when he said that their objective is
“Getting big and staying small?”
3. Did you see any examples of teamwork among the employees?