ASSIGNMENT 2 MGT420 LEADERSHIP – HOWARD SCHULTZ CEO OF STARBUCKS

LEADERSHIP TRAITS AND SKILLS

1. Integrity ( Fatin )
- Schultz's integrity is one of the characteristic that sets him as a good leader.
- E.g : In 1994, when Brazil experienced a coffee crisis, other competitors raised prices
immediately. But Schultz decided not to raise the price of its drinks immediately as it
would be unfair to the customers.
- Through this action Schultz has managed to attract customers to evaluate the honesty
of the company and they continue to buy coffee even at higher prices.
- Link: https://www.fool.com/investing/general/2014/11/17/what-makes-starbucks-ceo-
howard-schultz-so-success.aspx

2. Maturity ( Alya )

 Prove that he is capable managing starbucks through crisis.

 Eg : In 2008 – financial crisis also known as global crisis effect their company
and also almost worldwide. Due to this, people opted for cheaper coffee.
 Starbucks has to close 300 stores as well letting go 6700 employees.
 Previous leadership blame the economy, but Schultz didn’t. He said that the
company is also responsible for their decline in profit.
 As a leader, Schultz take the responsibility to revive the business and
apologize to the employees and the family since the company has let them
down
https://www.businesstoday.in/magazine/lbs-case-study/how-starbucks-
survived-the-financial-meltdown-of-2008/story/210059.html#:~:text=In
%202009%2C%20it%20closed%20another,it%20had%20only%20four
%20outlets.

https://www.seattletimes.com/business/starbucks-ceo-howard-schultzs-memo-
to-employees/
LEADERSHIP BEHAVIOUR
Consideration
1. Think of the welfare of his employees
- Take care of his employees not only for how he gives rewards and perks to
members of his team
- Given them comprehensive health insurance
- He ensured the employees got motivated and inspired all the time
- Always maintained a good relationship with each of the workers
- Link: https://www.thestrategywatch.com/leadership-qualities-style-skills-traits-
howard-schultz/
https://futureofworking.com/4-howard-schultz-leadership-style-commandments/

LEADERSHIP POWER
1. Reward Power
- Use the positive reinforcement techniques by offering the rewards to the employees in
an ethical way
- Howard Schultz believed that the success of the company is not coffee but its
employees
- Employee who is showing outstanding performance in the organization will be promoted
to Barista on the position of store managers or to the District Manager role
- Link: https://www.allassignmenthelp.com/samples/lessons-for-managers-from-howard-
schultz-on-employee-motivation.html
-
2. Coercive power ( Alya)
 Demote staff that underperform
 He layed out the performance expected and the consequences when it did
not meet the expectation when communicating with employees

https://www.academia.edu/5060226/Reflective_Journal_Starbucks_Corporation