How does the organisational structure

of Starbucks across the globe ensure

the satisfaction and morale of
employees?

Introduction

Starbucks is recognised globally for the quality of its coffees and their coffee beans. They
are appreciated for their environmentally friendly methods and their quality control across
the world. Their ability to scale while maintaining their brand image is no easy feat to pull off.

Starbucks also has a great reputation for keeping their employees happy, and more
importantly satisfied. It is almost impossible to come across an employee of Starbucks who
seems unhappy with their jobs. So what exactly is the cause for this? What does Starbucks
do to gain and maintain this reputation?

It seems appropriate to give the credit to their organisational structure and their ideologies.
Organisational structure is the method by which work flows through the organisation. It
details which employees report to who and are responsible for which duties. Organisational
structures are a necessity in most businesses, especially in the food industry. But what
makes Starbucks’ organisational structure stand out is the values they have embedded in
their organisational structure.

Starbucks’ Organisational Structure

Starbucks’ organisational structure is far from what most people would call orthodox,
Starbucks employs a mix of vertical, horizontal and matrix structure. This method may be
very confusing at first but we can clearly see that this structure is quite successful.

Another way Starbucks creates an organisational structure is based on the geographical

location. This allows employees to be more connected with their managers who understand
the culture of the area, the emotional connection to the region and so on. This enables
employees to feel more valued within the business and creates a sense of belonging.

The main objective of such an unorthodox organisational structure is communication. Such a

chaotic structure is in place so that employees can communicate and build relations with
their co-workers and their managers. That is what ultimately Starbucks aims to achieve
through this organisational structure.

What does Starbucks think about their employees?

There is no doubt that Starbucks prioritises the satisfaction of their employees through
various methods. Starbucks is quite popular for providing their baristas with a wide variety of
benefits which are rarely given in the industry. These benefits include health insurance,
dental insurance, parental leave and even tuition coverage to name a few things. This clearly
indicates how Starbucks values their employees and how they have taken the initiative to
care for them. Implementing these policies across the world is certainly one of the major
reasons behind the satisfaction of Starbucks’ employees.

This view is further supported by the structure of the organisational structure. One of the key
aspects of the structure itself is servant leadership. In this approach, Starbucks ensures that
their employees are cared for and have the opportunity to grow in the organisation.
Starbucks believes that employees who have been cared for will be the ones who care for
customers the most. Therefore, Starbucks manages to satisfy the employees as they feel
valued within the company as well as being given opportunities to grow and develop.

More importantly, Starbucks’ organisational structure facilitates relationships between

colleagues and even managers. This might be a very important aspect of the job which is
often overlooked. Starbucks doesn’t bind their employees with strict regulations but actually
promotes them to develop friendships with their co-workers. This way workers actually feel
more comfortable while working and also do not feel isolated. As they develop more
relationships, they are less likely to be unsatisfied with their job as the job would be more
emotionally attached to them.

Starbucks also has a flexible scheduling system in place which allows employees to pick
their timings which are comfortable for them to work with. The hierarchical structure of each
Starbucks outlet is designed in such a way that managers of the store can discuss and
allocate timings to each employee based on their preferences. By practising such a policy,
Starbucks ensures the work-life balance of their balance is in place and their morale is high.
As managers also actually get to know their employees in the process, it enables them to get
to know each other better as stated previously.

In addition to that, the structure fosters employee recognition and corresponding rewards.
The structure allows managers to analyse the performance of their employees in their
respective outlets and grants the manager the power to reward employees. The manager
could provide a bonus, an increment or even recommend the employee for a promotion. All
of these possibilities increase employee motivation and morale.

Are there still some problems with their employees?

Despite Starbucks’ efforts, there are still some employees who are not satisfied with their
jobs.

The most obvious issue faced by the employees is that which follows due to the matrix
structure. The employees are required to report 2 bosses or even more in some cases, this
duplication of control can be extremely confusing to the employees. As a result, if an
employee were part of a new project, they might lose the motivation to go ahead due to this
issue which can negatively impact the morale of the employee.
Although the entire objective of the organisational structure of Starbucks is to motivate
employees and improve their morale, the impact on employees may be the exact opposite.
Although the structure is a hybrid one, at the end of the day, it still resembles a hierarchical
structure, therefore employees are led to believe that communication is one way. Employees
don’t believe that information can be sent backwards which restricts their motivation to
actually perform, as a result, they won’t be recognised by their manager which could lead to
a decrease in morale. Even after the efforts of Starbucks to prevent this exact issue,
employees still believe that this is the case especially in Starbucks.

An unique issue faced by Starbucks’ employees is that of uncertainty. Although the flexible
scheduling policy is in place for the morale of employees, Starbucks does make good use of
that. Employees are often allocated to different timings which makes it difficult for
employees to maintain their work-life balance and even plan things outside Starbucks. This
can lead to low employee morale and satisfaction as employees are in constant fear and they
will have lost their ability to make plans in their personal lives.
In addition to that, Starbucks employees are constantly shuffled between locations in the
same city. Although this may seem inconsequential, it makes a huge difference in the lives of
the individual employees, everything about their work changes. The time they wake up, the
commute time, their energy levels and so on. The fact that the organisational structure
allows for such allocations might negatively affect employee morale as all the progress they
have made in one store may be forgotten as soon as they are moved to another location.

These problems are no small issues, they may appear to be so at the moment but if every
employee has gone through them enough times, it will be a large issue. Starbucks needs to
constantly improve and work on its organisational structure and take feedback from their
employees to ensure satisfaction and morale. Some of the issues may have more adverse
effects than others but Starbucks should deal with all of them as fast as they can.

Comparative analysis

The organisational structure of Starbucks was created with employees in mind, but do
Starbucks’s competitors also follow the same ideology?

McCafe (subdivision of McDonald’s) is a close competitor to Starbucks both in the US and

globally. While Starbucks offers calm seating with space to work along with their coffees,
McCafe provides customers with quick service.

The organisational structure of McCafe is the most orthodox one, it is a hierarchical

structure. The structure starts from the CEO (Chris Kempczinski) all the way down to the
individual employees within each outlet. McCafe also uses geographical divisions for their
organisational structure but the primary difference between them and Starbucks is the
control and authority given to managers. The authority given to managers in a Starbucks
outlet is much higher than that of McCafe. Starbucks also has more flexibility with their
operations than McCafe.

Another major difference is the time taken with decision making. Major decisions in McCafe
have to be taken by higher authorities which takes a large amount of time. Whereas
Starbucks gives that authority to store managers to deal with any such crises which arise in
the short term. This provides Starbucks with a competitive advantage which they have
gotten through their organisational structure, the employee is more motivated as they have
more authority over the store as well as the speed of decision making increase for the
outlets themselves.

Conclusion

To conclude, it is evident how Starbucks has leveraged their organisational structure in such
a way that satisfies employees like no other business. Among all the chaos, Starbucks has
managed to make employees satisfied despite any and all confusions that may have arisen
due to the unique structure used by the business. It is clear how Starbucks have crafted their
organisational structure in order to satisfy employees and we can see how its working almost
flawlessly. Although there are some issues which need to be addressed, overall Starbucks is
a role model for business as to how to satisfy their employees with regards to the
organisational structure.

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