Professional Documents
Culture Documents
PM1 G3 Case-Study-Analysis
PM1 G3 Case-Study-Analysis
INTRODUCTION
PLANNING
Practical activities
Analysis
Recommendations
ORGANISING
Practical activities
Analysis
Recommendations
LEADING
Practical activities
Analysis
Recommendations
CONTROLLING
Practical activities
Analysis
Recommendations
REFERENCES
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INTRODUCTION
In 1971, Starbucks was founded by the three founders as Jerry Baldwin, Gordon
Bowker, and Zev Siegl in Seattle's iconic Pike Place Market. Starbucks' owners
were all academics who enjoyed the flavors of coffee and tea. They also invested
and borrowed funds to create the first Starbucks in Seattle, which was called
"Starbucks" after Herman Melville's famous novel Moby Dick's first mate, Starbuck.
Alfred Peet was a big motivation to the three founders. As a Dutch immigrant, Peet
who started importing quality robusta coffee beans into the US in the 1950s. In 1966,
he started Peet's Coffee and Tea in Berkeley, California, specializing in acquiring
high-quality coffees and teas. Peet's success inspired the Starbucks owners to build
their business model and Peet's became Starbucks' first supply of green coffee
beans. Baldwin and Bowker then acquired an old roaster from Holland and
experimented with Alfred Peet's roasting processes to produce their own mixes and
flavors.
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Due to its perceived dedication to acquiring ethically produced coffee, Starbucks has
been accused of obtaining from plantation-based farms that exploit child and slave
labor or housing workers in unclean circumstances. Critics of C.A.F.E. policies allege
that necessary farm inspections are too rare to safeguard farmworkers, as
inspections might occur as seldom as every two to three years, depending on criteria
such as the farm's prior inspection ratings. Furthermore, unlike Fair Trade-certified
coffee, Starbucks C.A.F.E. policies do not have a minimum guaranteed yield.
This analysis will delve deeper into Starbucks' planning and strategies, as well as
how Starbucks' personnel management functions. In addition, we will assess and
offer further techniques that Starbucks may adopt in the future.
PLANNING
Planning is an essential part for managers to deal with future changes. Employees
can plan their activities, collaborate with one another, and take other necessary
actions to reach goals when they are aware of what their organization or work unit is
striving to achieve and what they must contribute to do so. Without planning,
departments and people can cooperate inefficiently, which would prohibit the
organization from effectively attaining its objectives.
Practical activities
Nearly 33,000 Starbucks locations are owned and controlled by the company. The
company projects that it will have 55,000 locations by 2030 and is working to create
the Third Place experience while also creating experiences that address changing
customer patterns. Additionally, Starbucks will open a facility of a similar nature in
New York City as a result of the successful debut of a novel type of store in Seattle
that combines a roastery and a cafe. Its financial objectives by 2019 include "sales
growth of 10% to 13% and $30 billion in yearly revenue." Starbucks Investor
Relations (2021) has demonstrated the increase in global revenue from $32.5 billion
to 33 billion of financial projection. Moreover, Starbucks' owners guarantee the
company's global social obligations while focusing on elevating its products through
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the development of novel and varied forms to place it among the most admired and
well-known global brands.
Starbucks also sells other products and services, such wine and beer, in addition to
coffee. After 4 p.m., it introduced a brand-new idea dubbed "Starbucks' Evenings,"
offering a variety of adult beverages and a larger food menu. This concept was
implemented at all of its locations globally.
Starbucks' loyalty program is a key component of the company's growth strategy and
continues to set it apart from rivals. Nearly 12 million users of its My Starbucks
RewardsTM program are active, and the cards have more than $4 billion put upon
them. The company also offered a new prepaid Starbucks Card for its customers to
use wherever Visa cards are accepted; after consuming, they can earn two “stars”
used to buy any beverage or food item at any Starbucks store.
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Analysis
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distinguishes it by very high-quality goods, great services, and a strong brand
reputation.
The perception of customer service and differentiation is not enough for the
organization's evolution. They must pay attention to pursue other strategies, such as
innovation and flexibility. Starbucks has realised that specialising in one market is
risky and diversification is necessary to remain profitable and competitive. There are
many threats to the progress of Starbucks, typically a series of alternative products,
namely tea, fruit juice, energy drinks, and pubs with non-alcoholic beverages, or the
risk of obsolescence of coffee culture. Starbucks sees enormous prospects for
diversification given its dominant market share and widespread brand recognition.
The business may gain a major competitive advantage and support more growth in
both domestic and foreign markets by continuing to expand into foreign markets
(Geereddy, 2013). They add candy bagels and other food-related things to their
product line-up. They are also interested in apparel, music, movies, and
transportation. In order to compete with Starbucks' product quality and variety,
excellent real estate sites, and store ecosystem experience, new rivals must
overcome significant market barriers. Starbucks' first-mover advantage is a key
success element. They were able to outpace the competition in building brand
awareness and devoted customers thanks to the first-mover advantage they had,
which helped them take the lead in the coffee market the world's specialty
coffees.My Starbucks RewardTM was developed by Starbucks to improve
communications with and connections with its devoted customers. Starbucks makes
money by encouraging customers to spend more by awarding stars for each
purchase. The customer thinks they received a good deal because they can see the
rewards they can get and they can get the necessary number of stars for the award.
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The program is also designed to send push notifications to its users in the form of
advertising promotions in order to increase user engagement. Moreover, Starbucks'
rewards program offers free games and music, which members can earn additional
stars by playing these games in the smartphone app.
Starbucks also makes sure that its devoted clients feel special by giving them free
drinks on their birthdays. Starbucks's partnerships with other banks have largely
benefited them by establishing the star reward system. For instance, the agreement
between Starbucks and TD Bank Group, which was announced in 2020, gives TD
Aeroplan Visa cardholders the chance to earn extra benefits, including 50% more
Aeroplan points with every transaction made at participating Starbucks locations in
Canada. In addition, they can acquire Starbucks Rewards. The client gains a lot from
this, and both businesses profit and become more relevant as a result (Starbucks,
2020).
Recommendations
There are some suggestions for Starbucks to help it further its plans and objectives.
Porter introduced the Five Forces of Competition framework, which managers use to
develop strategies and direct the company's competitive positioning within an
industry. The Five Forces of Competition framework includes threats from new
entrants, threats from substitutes, bargaining power of buyers, bargaining power of
suppliers, and current rivalry (Grant, 2015). Starbucks needs to first be concerned
with new competitors, especially neighbourhood stores. Compared to Starbucks,
these smaller stores have lower establishment and maintenance costs in the supply
chain, allowing them to compete by providing products at lower prices (Pratap, n.d.).
However, as compared to other generic coffee products, Starbucks enjoys a
significant quality competitive edge. Using inexpensive items makes it difficult to
guarantee consumer health and food safety. Because of this, Starbucks can continue
to expand in this market provided it can retain its commitment to providing high-
quality goods and services to customers. Threats from competitors to Starbucks'
products represent a further obstacle (Greenspan, 2019a). According to Greenspan's
essay (2019a), Starbucks' primary product, coffee, has a number of alternatives,
including ready-to-drink beverages, tea, milk tea, etc., as well as fast-food joints or
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convenience stores. Starbucks' executives should actively introduce these
alternatives to their stores, such as pre-packaged drinks or tea, in order to combat
this difficulty and stop people from buying these products elsewhere.
Additionally, (MartinRoll, 2021; Pratap, n.d.) shows that Starbucks will face more
intense competition from Dukin and McCafe as it expands into additional markets.
However, Starbucks still has an advantage over these rivals because of its
established and well-known reputation. In order to learn how other brands' products
work and use that knowledge in its own manufacture, it can also buy their items. One
of the most important forces affecting the organization is customers' bargaining
power, which is brought on by the dangers of new competitors, massive substitutes,
and current rivalry. Having more competitors makes it simple for customers to switch
to other brands, and the high availability of substitutes gives customers more options
to suit their needs.
Finally, global climate change is one of the issues that Starbucks and the coffee
industry are facing together. Starbucks uses 100% Arabica coffee beans to bring the
best effect coffee for consumers (Starbucks, n.d.). According to (Intergovernmental
Panel on Climate Change, 2014), unfortunately, rising mean temperatures, altered
rainfall patterns, more frequent and intense extreme weather events, and an increase
in disease and insect vectors make Arabica coffee growing regions unstable.
Starbucks can provide its smallholder coffee producers with a number of options for
reducing climate risks. For instance, specific adaptive techniques might be scaled up
to reduce climate risk. The restoration and rehabilitation of degraded regions,
improved soil and water management, integrated pest control, increased shade
cover, the development of climate-resistant coffee varieties, insurance and other risk-
sharing programs, and restoration and rehabilitation of degraded regions are just a
few of them (Davis, Gole, Baena, & Moat, 2012). Conversely, Starbucks can still
mitigate the effects of climate change by emphasizing renewable energy, energy
conservation, teamwork, and action. By conserving power and water, reducing cup
waste, increasing recycling, and incorporating green design into venues, they are
making great efforts to lessen their influence on the environment. Additionally, they
are committed to working with other businesses and groups to promote progressive
climate change legislation.
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ORGANISING
Practical activities
When first opened, the original Starbucks store was only managed by three person :
Zev Siegl was in charge of retailing, Jerry Balwin was responsible for the
administrative works and Gordon Bowker is somewhat a supportive and creative type
of founder - he was the one who named the store Starbucks because he was
inspired by an coffee enthusiast character in the classic novel “Moby Dick” written by
Herman Melville. The organisational structure then was very basic without any major
concepts of management implemented into the company. However, in 1982,
Starbucks decided to hire Howard Schultz as the director of marketing and retailing
(Marshall, 2018) was a significant event that contributed to the success of Starbucks
later on in the future.
The organisational structure of Starbucks is based on individual skills. With a "lean"
organisational structure, Starbucks has also been remarkably effective in adjusting to
expansion. Howard Schultz understood the significance of bringing in an executive
team with experience to run operations or divisions of larger companies and integrate
them into Starbucks. The district manager, "the most significant in the firm," who
carried out the company's aims and aspirations, serves as the crucial link between
the zone headquarters and each retail shop.
One of the company's organisational problems, according to several shop managers,
is the decision to add more drive-through windows to retail locations. Employees
need to move fast and efficiently manage their time since the drive-through lane may
get congested rapidly. Things often become worse every time Starbucks introduces
new aspects. Furthermore, for a worldwide brand like Starbucks, product quality
assurance is crucial. For coffee beans and Tazo Tea, Starbucks has plants both
locally and abroad. At every level of the production process, every employee must be
focused on maintaining quality control.
Starbucks places a high importance on bright and devoted workers in their pursuit of
success. While encouraging its "pro-partners" to contribute their thoughts and
experiences, Starbucks gave people opportunities to develop and profit. Additionally,
they have established a flexible, forward-thinking workplace where everyone is
treated with respect and decency. Starbucks uses a variety of techniques to find
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team members that are flexible, driven, passionate, and innovative. Users may apply
for jobs online through the organisation's dynamic and user-friendly career centre
regardless of where they are in the world. Additionally, students can participate in
summer internships at Starbucks through yearly recruiting events. Starbucks pledges
to help members of certain communities by, for example, employing approximately
10,000 veterans by 2018 and working with other companies to hire at least 100,000
low-income workers.
Along with the employee evaluation, Starbucks encourages diversity and guards
against prejudice at work. Women make up 64% of the entire workforce in the United
States, while people of colour account for 33% of it. Starbucks places an emphasis
on diversity training for senior managers as well as training in general. With a variety
of training methods, including training within the allotted time, training by the
corporate support centre, training for product quality, training in various regions, and
training for customer relationships, the company makes significant investments in
baristas' training programs and career development initiatives.
Nevertheless, Starbucks has to cope with union-related issues. Moreover, Starbucks'
problems in new areas where regional labour unions and governmental regulations
favour collective bargaining may worsen as the firm grows abroad. Despite being
proud of how they treat its staff, Starbucks did settle a case brought by the National
Labor Relations Board that had more than two dozen allegations of unfair labour
practices brought up by the union Industrial Workers of the World. In 2011 there was
a walkout by partners in Chile about inadequate pay, but it was eventually called off
since the strikers and the company were unable to come to an agreement.
Starbucks also encountered various problems with the expansion of the franchise in
the Vietnamese market. After six years in Vietnam, Starbucks only has 49 outlets
here; this is a far smaller number than in the country's bordering markets. Starbucks
has more than 330 locations in Thailand, more than 320 in Indonesia, and more than
190 in Malaysia. Because its costs are so much higher than those of the local coffee
shops, Starbucks' clientele is likewise rather small. This chain continued to expand,
although more slowly than its domestic competitors (Tien, Jose, Mai, Van Thoi & Van
Hai, 2020). The organisational problem related to this is the staff mostly are
university students and they are not willing to fully adapt the culture and ideology of
Starbucks since they just want a part time job with as few requirements as possible.
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Analysis
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duties, environment, and working conditions for each position. For store partners to
be able to deliver a fantastic experience for Starbucks customers, we invest in
important training and learning initiatives. To encourage smart onboarding and
continual learning, Starbucks committed $1.2 billion in training programs for both new
and current store partners in FY21 (Starbucks, 2021).
The second stage is recruiting and recruitment. In order to find suitable employees,
Starbucks uses a range of recruitment channels, including as an online employment
centre, the corporate website, and recruiting events at several shop locations.
Networking websites may be used to establish two-way communication and involve
potential workers. Starbucks consistently stays ahead of the curve when it comes to
promoting their hiring strategy through great perks like covering 100% college tuition
fee. The Starbucks College Achievement Plan (SCAP) was developed to assist more
Starbucks partners in achieving their goal of attending college. Starbucks pays all of
the tuition for partners who enrol in the SCAP program's bachelor's degree at
Arizona State University (ASU). More than 100 bachelor's degree programs, all
entirely online, are made available to Starbucks partners under the initiative. For
many, the SCAP program is a game-changer because of its flexibility. Nearly 7,000
partners have graduated from the program since its inception in 2014 and Starbucks
is aiming for 25000 graduates from ASU in 2025 (Starbucks, 2021).
The selection procedure, which comes as the last step, makes predictions about
which recruiters will be successful if hired. Starbucks carefully chooses its partners in
order to have the perfect person for the business and position them in the perfect
place at the perfect moment. Businesses' performance is typically correlated with the
people that work there, suggesting that hiring the right people is essential to
achieving organisational success. To increase productivity, responsiveness, quality,
and customer service, businesses must ensure that employee satisfaction is high
among their workforce (Sageer, Rafat, Agarwal, 2012).
Training classes for fundamental computer skills, conflict resolution, and other topics
are available via the Corporate Support Center. Another example is the training
program for baristas called Perfecting the Art of Espresso, which lasts for three and a
half hours and teaches them how to make espresso. Customers' experiences with
Starbucks coffee have considerably improved thanks to this training program, which
has garnered a ton of favourable feedback.
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Training on customer relationships was prioritised by Starbucks. Each partner
receives instruction on how to please the client, including how to properly greet them,
how to avoid keeping them waiting for too long, and how to select the right coffee
depending on their tastes.
The company also started a training program by assembling a 10-person "lean team"
that toured different regions and urged managers and partners to develop ways to
approach the working process that were more effectively.
Recommendations
There are a number of suggestions for eradicating the problems that Starbucks is
encountering.
Despite their limited efficiency, the company should effectively employ correct
selection procedures to forecast job performance. The ultimate objective is to raise
employee job satisfaction and decrease turnover. For instance, Starbucks should
inform future employees both the positive and negative aspects of their jobs in order
to create a clear overview, in which they can make the best decisions and possibly
stick with the company for a long period of time if it is the most suitable job for them.
If the job proves to be stressful for the candidates, they might consider not applying
for the job as it is counterproductive for them and the company in general
(Ekienabor, 2016).
Secondly, another issue is that Starbucks' new drive-through section only had six
windows when it first debuted. Customers complained about the rise in drive-through
traffic, automobiles pulling into the parking lot, and even obstructing access to other
establishments in the same shopping centre. To tackle this problem, Starbucks could
simply hire more employees to work inside a drive-through booth or improve the skill
of the employees, namely the speed of making orders to cope with the large number
of demand. Another solution and probably the most effective is to make the best
sellers in advance to minimise the time of making them. This can be done by doing
statistical reports to pick the ones that customers consume the most and prepare
those in stock before rush hour.
Lastly, cultural custom at Starbucks requires that workers spend three months
receiving training at the corporate office before the store opens. The custom is now
obsolete. Large-scale expansion has resulted in decreased worker training efforts
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and welfare measures, declining employee excitement, and decreasing customer
engagement, all of which have a negative impact on customer happiness and profit.
The essential competitiveness of businesses is stressed through emphasising the
corporate culture among its personnel (Lui & Gui, 2017). Starbucks must pay
attention to the transformation of company culture by enriching the knowledge and
skill set of their employees. For instance, an online test organised by high officials at
Starbucks to test the knowledge of the appliers and trainees to test their
understanding as a criteria for employment could greatly enhance the quality of new
workers, thus strengthening the culture as well as reducing turnovers.
LEADING
Practical activities
The continuing case of Starbucks has transparently indicated the great importance of
supervision and coordination as a manager’s obligation in order to attain
organizational objectives. However, this can be tremendously challenging and
difficult under various circumstances. Successful human management requires the
understanding of attitudes, behaviors, personalities, individual and team work efforts,
motivation, conflicts,...Therefore, Starbucks has built a healthy and intergrating
environment where employees are motivated and facilitated to contribute their utter
efforts, a workplace where they can feel respected, valued, and adored. Several
practical activities have been displayed in the case. Firstly, Starbucks aspires to
bring their attention to individuals. The corporation has expressed its consideration
for the employee by creating an attitude survey that offers the employees the chance
to freely raise their personal thoughts as well as ideas about throughout the working
experience. Moreover, it also focuses on the level to which the employees are
closely attached and connected to the organization with contentment and
involvement. This has proved how concerned Starbucks is toward the relationship
with their people. Secondly, Starbucks takes priority in maintaining the flow of
communication throughout the organization. Starbucks China, for example, created
the Partner Family Forum to acknowledge the unique role that families play and to
emphasize Starbucks' dedication to its partners. In addition, Starbucks established
The Mission Review team in 1991 including business managers and partners, where
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partners may express concerns about actions or choices when they feel the
organization is not acting in a way consistent with the guiding principles. Since the
idea was so successful in North America, several Starbucks overseas locations have
given their partners access to the same communication channels. Furthermore,
Starbucks leaders put a considerable emphasis on motivating employees.
Starbucks' Total Pay package is one of the greatest evidences of how it rewards its
qualified part- and full-time employees. It consists of various benefits such as
competitive base pay, bonuses, a comprehensive health plan, paid time-off plans,...
As a result, regardless of whether they are part-time or full-time partners, all
employees will be compensated properly depending on their performances. This
strategy has a significant role in the overall success of the business. Additionally, the
company has a CUP (Caring Unites Partners) fund that provides financial assistance
to partners dealing with really difficult circumstances including poor medical
treatment, natural disasters, or lost housing. Last but not least, developing leadership
is seen as a key component of staff management. Realizing the importance of having
people with excellent leadership skills throughout the business, Starbucks regularly
offers a training course for managers and staff, Starbucks regularly offers a training
course called Learning to Lead to help them reach their full potential as leaders.
called Learning to Lead to help them reach their full potential as leaders. Starbucks
also provides supplementary training courses on mentoring and giving feedback to
managers at all corporate levels in order to help them improve their people skills.
Analysis
After briefly describe how leaders, especially Howard Schultz – CEO of Starbucks,
behave at Starbucks through practical activities, this paper will apply management
theories and frameworks to identify the advantages and disadvantages of such
leadership styles. Understanding workers' attitudes, views, actions, etc., both as an
individual and as a group within the framework of the business, is the first step
towards effective leadership (Jones, 2006). Therefore, Howard Schultz carried out an
attitude survey to accomplish the desire workplace. He also appreciated the internal
stakeholders for participating in the survey. In addition, Schultz made changes to the
workplace in response to the survey results to better meet the demands of the
workers. This "people first" philosophy is crucial to the bottom line. (Mohapatra &
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Mishra, 2018). At Starbucks, communication is also of the utmost importance.
Starbucks wants to keep communication flowing in all directions, therefore, Howard
Schultz was using an all-channel communication network. In particular, upward flow
is the most obvious flow in this network. Organizations benefited greatly from this
style of intra-organizational communication network. First off, compared to other
centralized networks like the chain network, an all-channel communication network is
quicker and more precise (Longest, Rakich & Darr, 2000). Decentralized
communication, as opposed to centralized communication, performs tasks that are
complex better. (Schultz, 2011).
Second, Schultz never reduced his health insurance coverage. That is to say,
Starbucks prioritized customers' requirements for safety. Schultz was mindful of
esteem needs. The firm offered a variety of methods to promote, acknowledge, and
reward achievements. In addition, Starbucks provided training programs, provided
feedback to workers, and started the College Achievement Program to address their
demands for self-actualization. Because each level in the demands does not have to
be significantly satisfied before the higher need becomes dominant, Schultz's
technique was "partly" based on (Mills, 1985). Therefore, a benefit of this strategy is
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that businesses will perform better. According to research by Kim (2006), employee
drmotivation determines whether a business succeeds or fails, and Maslow's theory
is a useful tool for motivating employees (Jonas, 2016). Furthermore, it has been
demonstrated that contentment is substantially impacted by self-actualization
demands being met (Cao, Jiang, Oh, Li, Liao & Chen, 2013). The contentment of
employees is one of the primary variables that contribute to an enterprise's success
(Waldman et al., 2006). Thirdly, with such assistance and aid packages, employees
are more inclined to put out their best effort to maintain their positions. Therefore,
Sadri and Bowen (2011) highlighted in their study that putting Maslow's theory into
practice keeps employees loyal and lowers turnover, likely saving the organization
money.
The Starbucks leadership style is the next topic. For a number of reasons, Howard
Schultz is seen as a visionary and employee-focused CEO. Visionary leaders
establish their own visions and influence others to perceive them (Westley &
Mintzberg, 1989). Furthermore, Schultz described the role of a leader as defining the
direction for the organization and boosting employee ego to prevent them from "veer
off course because it is an easier route to go" (Meyers, 2005). Because he
considered employees' worries and attended to their requirements, Starbucks' CEO
is recognized as an employee-focused manager. From Schultz's leadership style and
the results that were actually obtained, it can be inferred that visionary leaders may
support both individual and organizational performance (Judge & Piccolo, 2004;
Keller, 2006; Wang & Howell, 2010). This kind of leader might promote loyalty and
trust inside the organization (Zhu, Chew, and Spangler, 2005). Another advantage is
that, in contrast to other leadership styles, visionary leaders are better at guiding their
teams and keeping them on course in the event of unanticipated change (Preston,
Moon, Simon, Allen & Kossi, 2015). These benefits, however, are no longer valid if
the leader is unable to clearly communicate their vision. This may result in disputes
and dissatisfied workers (Mersino, 2014; Ateş, Tarakci, Pork, van Knippenberg and
Groenen, 2020).
Recommendations
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others' leadership styles enables one to maximize on strengths, compensate for
flaws, and successfully match personnel to a certain role or task—all for the benefit
of the organization (Rubin, 2013). To put it another way, Starbucks should
understand each individual's leadership style in order to reduce disadvantages while
increasing benefits. Secondly, the demand for Starbucks' goods presents ethical and
societal norms challenges, as well as creative organizational concepts and practices
and application to the organization's system theory, all of which should be
considered by the corporation (Lemus, von Feigenblatt, Orta & Rivero, 2015). In
other words, ethics and accountability issues should never be disregarded since they
might have serious implications. Furthermore, given the nature of business and
workers, many organizations fail owing to inadequate leadership and a failure to
apply the suitable leadership style. As a result, it is vital to frequently review leaders'
ability and adopt the appropriate leadership style (Bonsu & Twum-Danso, 2018).
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ethnicities, ages, and genders in order to remain competitive. Managers must also
learn to treat all employees fairly and to integrate them into the company culture
(Morais et al., 2014). Fair and acceptable competition among business members
would be an excellent motivator for each individual to encourage themselves by
widening their views, acquiring important experiences, and then helping to boost
production. Furthermore, an individual cannot expect to be viewed as a leader just by
emerging out of nowhere. A leader must demonstrate his or her ability to lead.
This is true whether one is a religious or secular leader (Youssef, 2013). In other
words, when leading a group or team, one must demonstrate his or her capabilities
at the appropriate moment to build trust and keep personnel focused on their task.
Effective leadership, according to Drucker (2016), is defined by outcomes rather than
attributes.
It is not about making speeches or becoming popular. There are several approaches
for assessing the effectiveness of leadership qualities; nevertheless, the greatest one
is to look at the end outcomes. Furthermore, leaders may motivate their followers to
grow ethically by transmitting the concept of ethical principles. As a result, what
leaders should do include declaring their inner core beliefs, articulating a vision for
making a difference in the world via services, personally dealing with people to
motivate them, and behaving appropriately (Kar, 2014). Because the leader is
frequently the most visible member of a group, he bears great responsibilities and
must endeavour to overcome difficult barriers. Additionally, a change in style is
required to optimize a leader's efficacy and increase team performance in effectively
completing the project (Azman, Mohamed & Odzaly, 2020). Consistent innovations in
leadership behaviors may help leaders, in particular, and their entire teams, in
general, stay up with the current trends in such an ever-changing world. A leader's
capacity to unearth, absorb, recognize, and announce a fresh vision for the future,
according to numerous leadership theories, defines him/her. In other words, it is the
leader's responsibility to model an evident vision through clear, understood tactics
and plans that the rest of the team can readily follow. This is also one of the most
important aspects in deciding an organization's success or failure (Lamdin, 2012).
Supervisors should evaluate their leadership styles, especially when encouraging
staff to engage in decision-making, according to the study's results. Although this is a
valuable trait, it has a negative influence on employee job performance. Managers
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must monitor their employees' attitudes and actions and engage them effectively so
that they do not lose desire to complete their tasks (Wanjala & Mercy, 2014). There
always appears to be a big conflict between an individual leadership strategy and
staff contentment. Balancing two of these is going to be difficult for a leader.
However, if they are passionate about their work and love it, it may be considerably
enhanced day by day. Leadership means different things to different individuals, and
they are willing to be led in different ways. Nonetheless, everyone wants to be
respected (PItigala, 2015).
CONTROLLING
Practical activities
Controlling is the final and most crucial step in the P-O-L-C framework. According to
Robbins and Coulter (2016), controlling is a managerial task that entails observing,
evaluating, and improving employee performance. Managers at Starbucks pay
attention to employee controls, security controls, organizational performance, and
transactional controls. Ordinarily, Starbucks had to keep track of its monthly revenue,
transactions per customer, and high standards for its goods. However, due to drive-
through windows, the business must provide quick service while maintaining a high-
quality level because employees can only take one order at a time, unlike the walk-in
service. For walk-in and drive-through services, evaluation of efficiency and
effectiveness is crucial. This led to the application of numerous technologies to solve
the issue. Security and staff are two more issues that require control. Starbucks was
committed to giving internal stakeholders a secure, hygienic, and healthy
environment. The business provided training as a guideline for all levels of managers
and employees to achieve this. Starbucks must safeguard itself and its clients from
unethical business practices. Thefts and numerous instances of fraud were noted in
the workplace and on online applications. As a result, Starbucks implemented strict
policies and technology to cut down on unethical behaviour, and it also responded
quickly to problems. The next point relates to how Starbucks managed its staff to
provide the best service possible. Internal stakeholders received instruction on how
to handle potentially violent circumstances. The business also worked with a ride-
sharing service to help staff members arrive at work on time.
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Everything has been supplied; it is up to the partners to act following the instructions,
requests, and training they have received. Thirdly, Starbucks places a high priority on
both organizational effectiveness and financial management. The company has
faced significant difficulty in keeping operating costs under control. It took many
steps and used many measures to examine the cost and ensure high
quality.Starbucks had to try its best to keep costs down and then charge the price in
line with the cost because some costs (the rising costs of rent, coffee beans, etc.)
were outside of its control.
Starbucks also had control over how its operations would affect the environment. For
instance, suppliers must agree to a code of conduct, and partners are urged to come
up with creative ways to reuse coffee grounds. Taking everything into account,
controlling is important at Starbucks.
Analysis
Transaction controls are the first type of control that Starbucks has incorporated into
its business strategies. According to research, customers want more control over the
timing and mechanics of their interactions and transactions with businesses (Rust &
Kannan, 2003). Therefore, Starbucks is likely to benefit significantly from having
addressed transaction strategy directly, which includes analyzing and improving the
service of these transactions for both walk-in and drive-through customers. It is
suggested that a one-time transaction develops into a long-term relationship,
allowing for the acquisition of specific goods and services that benefit customers
(Rust & Kannan, 2003). Moreover, another study found that service innovations give
customers practical benefits and fresh experiences that significantly improve their
mental or physical well-being (Berry, Shankar, Parish, Cadwallader & Dotzel, 2006).
It also demonstrates how crucial transaction control is for every purchase in order to
have a significant positive impact on customer satisfaction. Additionally, Starbucks
21|
employs the idea of feedforward control, which is reflected in the hardware required
to guarantee a differentiated level of customer service during transactions, such as
digital timers and order confirmation screens. According to Robbins and Coulter
(2007), taking administrative action should be encouraged to take precedence over
fixing any damage that has already been done to prevent problems. The expansion
of convenient shopping options and technology advances may encourage customers
to support and highly value the level of service offered by Starbucks. However, timely
and accurate data, which is not always available, is required for these controls
(Robbins & Coulter, 2007).
Security controls are another crucial element that has helped to keep Starbucks'
resources stable and private. To be more precise, a concurrent control would be
Starbucks' use of a gift card system to find employee fraud. According to Ramona
(2011), managers can use security risk management to monitor business operations
and improve business processes. Additionally, Starbucks has implemented front-end
controls before the start of operations by giving control manuals and training
materials to every employee. As a result, Saint-Germain reported in 2015 that
another advantage of implementing security controls is that it increases partner and
customer confidence. Furthermore, according to Machin and Treloar (2004), the goal
of occupational health and safety training may also be to ensure that employees
provide the best services possible while lowering the risk of harm to both customers
and employees. It also demonstrates that Starbucks provides staff with such
beneficial working environments to preserve their energy so they can consciously
respond to various situations, especially emergencies. On the other hand, it is noted
that despite the fact that many companies offer security awareness training, there
has been widespread concern that it is relatively ineffective (Caldwell, 2016).
Numerous thefts continue to occur, and Starbucks is under pressure to find the best
solution.
Employee controls are the third element Starbucks has incorporated into the
controlling process. The idea of feedforward controls states that employees must be
instructed to follow all proper procedures and possess a wide range of essential skills
to give every customer a positive and satisfying experience. According to research,
education and training increase organizational commitment, job satisfaction, and
22|
work participation (Oliver, 1990). In addition, the study demonstrated some evidence
of health advantages as employee control increased, particularly advantageous
effects on mental health, including a decrease in anxiety and depression (Egan et al.,
2007). As can be seen, doing so guarantees the calibre of the output and the
commitment of the employee, enabling them to work more diligently and productively
in any circumstance. But for these controls to work, timely and accurate data is
needed, and that data is not always easy to come by and even requires pricey
equipment (Robbins & Coulter, 2007).
Aside from that, two other crucial elements for Starbucks are organizational
performance and financial control. Starbucks' adoption and embracement of
corporate governance could have a constructive effect on the decisions made by
present and potential investors along with the existing investors (Hebble &
Ramaswamy, 2005). The fundamental concept that significantly influenced the
growth of corporate governance and offered a conceptual framework is the agency
theory. The agency hypothesis alludes to a preexisting connection between two
parties: the management level, which consists of the company's executives, and the
owners, who are known as principals and shareholders. According to Jensen and
Meckling (1976) and subsequent research (Tate, Ellram, Bals, Hartmann & van der
Valk, 2010), proper delegation of authority and the delegation of some activities to a
firm's management-level employees are required for the owners to maximize their
wealth. It is because owners or shareholders lack the necessary skills to carry out
the tasks. As a result, agency expenses might be cut, which would be beneficial for
shareholders. Numerous studies have also suggested a link between corporate
governance and firm success; however, this relationship is not conclusive because
the findings are contradictory; some studies show positive outcomes, while others
show both negative and positive effects (Yousif Alabdullah, Yahya, Ibrahim Nor &
Majeed, 2016). The goals of the principal and the agent may conflict, and the agents
may not be given the right incentives or may be subject to restrictions such as those
imposed by contracts. This situation is known as an "agency dilemma," where agents
may act in their interests rather than the principal's (Eisenhardt, 1989).
Finally, pursuing value chain management, especially taking charge of the business'
environmental activities, is crucial for producing the highest value for Starbucks'
23|
clients. Starbucks gives the entire value chain a high priority, from manufacturing to
customer service and efficiency to From Bean to Cup. According to Soon and Udin's
research (2011), companies with supply and logistic networks as part of their
manufacturing flexibility components are generally more likely to be consumer-
responsive and to experience practical benefits. Additionally, Starbucks has declared
that it will modernize its supply chain to reduce its "environmental footprint." Due to
this, the focus has shifted to developing a carbon-efficient distribution network and
green supply chain management to gain a competitive edge by raising productivity
and reducing product consumption (Olatunji et al., 2019). However, addressing
climate change requires a more fundamental shift in the industrial sector's final
customers' products and services (Olatunji et al., 2019). Consequently, the value
chain management process may call for a lot of effort and commitment.
Recommendations
There are some suggestions to help Starbucks reduce the drawbacks of the current
controlling methods while growing the company.
Secondly, Starbucks should spend money not only on employee training programs
but also on the development of the system, which entails carefully examining any
potential flaws and making every effort to have them fixed as quickly and smoothly
as possible. Because security systems, routers, operating systems, and databases
are examples of security controls (ISC), which are technical solutions that lower risks
to an acceptable level (Al-Safwani, Fazea, and Ibrahim, 2018). Moreover, managers
24|
who are primarily in charge of security controls should make an effort to forge
cooperative relationships that benefit the company, its workers, and its clients. This
method evaluates the relationship between an organization's human capital and the
strategic orientation of service firms, as well as how these factors affect
organizational performance. As a result, it may allow the organization to maintain
control over customer interactions (Skaggs & Youndt, 2004).
25|
Research and development of the practical application of external knowledge, which
also entails capturing knowledge that customers require, should be done to improve
the value chain process. Because it has been shown that external knowledge
management solutions significantly improve the product's quality and consumer
perception of brand platforms at every stage of the production process and foster
collaboration among value chain participants (Danskin, Englis, Solomon, Goldsmith
& Davey, 2005). Additionally, the study has demonstrated that considering innovation
as a three-phase value chain, idea generation, conversion, and dissemination would
play a crucial role in the business process (Hansen & Birkinshaw, 2007).
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