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ASSIGNMENT NO: 06
1. Executive Summary:
The Starbucks Corporation is a well-known international business with a focus on
selling specialty coffee and related goods at retail. Since its founding in 1971, Starbucks
has expanded to become a recognized global brand with more than 32,000 locations
across 83 countries.
This executive summary gives a quick rundown of Starbucks Corporation while
highlighting how crucial a documented succession plan is to the organization's ability to
manage changes in leadership and preserve continuity.
A written succession plan is a strategic document that describes how to find and train
candidates to take over important leadership roles in an organization. Its objectives are
to guarantee a seamless handover of power, reduce interference, and maintain the
company's long-term sustainability.
A documented succession plan is important because it can give the organization
direction and clarity when there are changes in leadership. It helps the organization to
find and develop people who possess the abilities and traits needed to assume
leadership positions, guaranteeing a smooth transition without interfering with business
operations or growth.
Starbucks may proactively address potential leadership and talent gaps, lower
uncertainty, and decrease risks associated with unexpected departures or retirements of
key executives by putting in place a structured succession plan. As a result, the
business is able to preserve stability, hang onto important institutional knowledge, and
foster confidence among stakeholders such as investors and staff.
Moreover, a well-implemented succession plan promotes internal talent mobility and a
culture of leadership growth. By identifying and developing future leaders from within
the company, it helps Starbucks avoid relying too much on external hiring and lowers
related expenses. When people have possibilities for internal growth and promotion, this
in turn promotes employee engagement and loyalty.
The Starbucks Corporation is aware of how important a documented succession plan is
to facilitating seamless changes in leadership. Starbucks maintains its commitment to
providing outstanding customer experiences to its customers worldwide, builds a strong
talent pipeline, and minimizes interruptions by proactively planning and preparing for the
future.

2. BACKGROUND

Starbucks Corporation has been selected as the business to respond to this.

In Seattle, Washington, on March 31, 1971, Jerry Baldwin, Zev Siegl, and Gordon
Bowker formed the Starbucks Corporation. It began as a modest retailer of coffee
beans, and Alfred Peet, who had taught them his method of roasting beans, served as
an inspiration to the founders. They opened their own coffee shop called Starbucks after
buying their coffee beans straight from Peet's.
Starbucks is a multinational chain of coffeehouses and one of the world's leading
specialty coffee retailers. It operates in the foodservice industry, specifically in the
coffeehouse industry. The company offers a wide range of coffee products, specialty
beverages, teas, snacks, and other related products.
Currently, Starbucks Corporation is publicly traded on the NASDAQ Stock Market, with
ownership distributed among several institutional and retail investors. The ownership
structure consists of common stockholders who own shares in the company.
In terms of structural form, Starbucks operates under a corporate structure, with a
centralized management system. It is headquartered in Seattle, Washington and
operates thousands of company-owned stores worldwide, as well as licensed stores
and franchises.
Starbucks has significantly expanded its facilities, locations, and markets over the
years. The business operates in more than 32,000 sites throughout 83 countries as of
2021. These locations can be found throughout Asia-Pacific, Europe, the Middle East,
Africa, North America, and Latin America. Starbucks has consistently entered new
regions and modified its offerings to accommodate regional tastes and preferences.
When Starbucks first opened, it kept regular store hours, but as it expanded, it saw that
it could serve consumers all day long. Nowadays, the majority of Starbucks outlets are
open from early in the morning until late at night, with some even providing 24-hour
service.
In terms of workforce size, Starbucks is renowned for offering job opportunities and now
employs about 349,000 individuals worldwide. The quantity of the number of workers
varies according on the location and size of the store. Starbucks places a strong
emphasis on staff perks and training to guarantee reliability and high standards in
customer care.
Starbucks has also increased the range of products it offers in recent years, including
ready-to-drink items, bottled beverages, and packaged coffee and merchandise that are
sold in grocery stores and other retail outlets. To improve client convenience, they have
also implemented mobile ordering and payment methods.
All things considered, Starbucks has developed into one of the most successful
international chains of coffee shops, with millions of customers served daily by a vast
workforce, a growing selection of products, and a global footprint.
The family-owned business that has been chosen is a 1990-founded retail
establishment. The business has been running out of a single site for more than 31
years. There are twenty-five people working for the company, including supervisors and
front-line personnel. The owner, manager, and frontline employees make up the three
tiers of the company's management structure. The founder's family is the only owner of
the company.
3. Family Conflicts and Succession Planning:
The Starbucks Corporation does not now confront any significant family conflicts. Zev
Siegl, Gordon Bowker, and Jerry Baldwin launched the business in 1971. However,
there have been a few significant adjustments and difficulties with regard to leadership
succession.

Since the reasons for the lack of a formal succession plan have not been made public, it
is difficult to pinpoint them with certainty. Still, a few of the explanations can be as
follows:
Historical Leadership Stability: Over its existence, Starbucks has been lucky to have few
significant changes in its leadership. Therefore, it's possible that a formal written plan
was not considered essential or necessary.

Case-by-Case Approach: Depending on the particular demands and circumstances of

the business at hand, Starbucks may select a more flexible approach where leadership
transitions are handled on a case-by-case basis.
In the event that Starbucks has a succession plan, the method used to create it has not
been made public. As such, it is impossible to comment on or assess the plan's
effectiveness or particular elements.

3. Family Conflicts and Succession Planning:

There are no major family conflicts faced by the Starbucks Corporation. The company
was founded by Jerry Baldwin, Zev Siegl, and Gordon Bowker in 1971. However, in
terms of leadership succession, there have been a few notable changes and
challenges.
Regarding the absence of a written succession plan, it is challenging to definitively state
the reasons as they have not been openly disclosed. However, some possible reasons
could include:
Historical Leadership Stability: Starbucks has been fortunate to have few major
disruptions in leadership throughout its history. As a result, a formal written plan might
not have been deemed necessary or urgent.
Case-by-Case Approach: Starbucks may prefer a more flexible approach where
leadership transitions are handled on a case-by-case basis, depending on the specific
circumstances and needs of the company at the time.
If Starbucks does have a succession plan, the process followed to develop the plan has
not been publicly disclosed. Therefore, it is not possible to critique or evaluate the
specific details or effectiveness of the plan.
It is significant to highlight that Starbucks has worked to create a more organized
succession planning procedure in recent years. To enable seamless leadership
transfers and diversify the board, they unveiled a multi-year succession plan in 2020.
This action shows that the business understands how crucial institutionalized
succession planning is to its long-term viability.

4. Determinants of a Successor:
The factors that determine a successor can differ, especially when it comes to a family-
run company like Starbucks. Nonetheless, a few typical elements that businesses take
into account when choosing a successor are:
Strong leadership abilities are necessary for the prospective successor to effectively
mentor and inspire the workforce to meet company objectives.
Business acumen: The candidate should be well-versed in the market, the industry, and
the day-to-day operations of the company. Making strategic decisions and guaranteeing
the expansion and profitability of the business depend heavily on this knowledge.
Vision and innovation: A replacement should have the capacity for original thought and
idea generation in order to keep the company competitive and flexible in response to
shifting client needs.
Ethical behavior: It's critical to uphold the company's moral principles. For a successor
to maintain the confidence of stakeholders, staff, and consumers, they must act with the
utmost morality and integrity.

Interpersonal and communication skills: Building relationships and managing an

organization both require the ability to communicate effectively and work well with staff,
clients, and partners.
Potential successors in family enterprises should have certain attributes in order to
facilitate a seamless transfer and preserve the advantages of operating a family firm.
Among the crucial characteristics unique to family enterprises are:
Knowledge of family dynamics: In the context of business, successors must be able to
negotiate and handle the intricacies of family dynamics and relationships.
Long-term commitment: Since family businesses frequently cater to multiple
generations, a prospective heir should be firmly committed to the long-term viability and
profitability of the company.
Respect for legacy: In order to maintain continuity and safeguard the legacy established
by earlier generations, successors should recognize the history and core principles of
the family business.
Adaptability and open-mindedness: It is critical that successors maintain the customs
and values of the family firm while simultaneously being receptive to new ideas and
prepared to adjust to shifting business circumstances.
Emotional intelligence: Resolving disagreements and upholding strong bonds between
family members, employees, and stakeholders are made possible by an understanding
of and ability to manage emotions. This is especially important in family companies.
Among the advantages of managing a family business are:

Shared values and legacy: Strong senses of purpose and shared values are common
among family-run businesses, and they can foster trust and a distinctive corporate
culture.

Long-term orientation: Family firms typically prioritize the company's long-term

development and success, which can result in decisions that are sustainable.

Strong dedication and loyalty: Family members are frequently very devoted to the
company, encouraging employee loyalty and harmonious working.
Flexibility and agility: Family businesses don't need as much red tape and bureaucracy
as other kinds of organizations, so they can act quickly and effectively in the face of
changing circumstances.
Development of successors: Family enterprises offer the chance to train and nurture
successors from an early age, guaranteeing a seamless handoff of power and the
maintenance of family values.
It is crucial to remember that the advantages and attributes stated can change
depending on the particular family business and the sector it serves.

The most crucial characteristics of a possible successor are knowledge, expertise,

enthusiasm, and commitment to the company. These qualities enable a successor to
uphold the enterprise's vision, mission, and values. Long-term stability, more flexibility,
and preservation of family legacy are some advantages of managing a family business.
The Starbucks Corporation is a well-known international business with a focus on
selling specialty coffee and related goods at retail. Since its founding in 1971, Starbucks
has expanded to become a well-known global brand with more than 30,000 locations in
83 countries.

5. Recommendations:

Suggestions for Starbucks Company:

The following suggestions are offered in order to address the issues raised during the
interview:
Enhance employee development and training initiatives: To improve the abilities and
expertise of its staff, Starbucks should make significant investments in extensive
training initiatives. This may entail offering continuing instruction in problem-solving,
communication, and customer service techniques. Implementing cross-training
programs will also enable staff members to experience a variety of responsibilities and
improve their general competency.

Improve channels of communication: Starbucks has to set up more efficient lines of

contact between its staff and management. Frequent town hall meetings, suggestion
boxes, and online platforms are effective means of facilitating employee voice,
feedback, and participation in decision-making.

Implement a thorough succession planning strategy: To ensure a seamless leadership

transfer and to identify and nurture potential future leaders within the organization,
Starbucks should adopt a thorough succession planning strategy. This should entail
determining the leadership potential of present staff members, offering focused
development opportunities, and laying out a clear plan for future career advancement.
The following are the succession planning stages that Starbucks Corporation needs to
think about:
Determine the skills, expertise, and competencies needed for key leadership positions:
Starbucks must identify the positions that are essential to the company's performance
and ascertain the qualifications needed for these jobs.
Evaluate internal candidates: Starbucks should assess current workers to find possible
successors who have the skills and talents needed to take on important leadership
positions. Performance evaluations, competency assessments, and 360-degree
feedback can all be used to accomplish this.

Create a development plan: In order to prepare its chosen successors for future
leadership positions, Starbucks should design specialized development plans for them
that include training, mentorship, and stretch assignments.

Put knowledge transfer into practice: It is imperative for Starbucks to guarantee the
transfer of knowledge and skills from its existing leaders to their designated successors.
Initiatives for information exchange, mentoring, and job shadowing can help achieve
this.
Track and evaluate progress: Starbucks ought to keep a close eye on the identified
successors' advancement while they pursue their careers. This guarantees the
effectiveness of the succession planning strategy and permits modifications to be made
as needed.

6. Conclusion
It is clear from this that Starbucks Corporation has issues with inadequate
communication, employee retention, and the requirement for efficient succession
planning. By putting the suggested fixes into practice, Starbucks can deal with these
issues and develop a workforce that is more knowledgeable and motivated. The steps
involved in succession planning—identifying critical roles, evaluating internal
candidates, creating plans for professional growth, putting knowledge transfer into
practice, and tracking advancements—will assist Starbucks in identifying and preparing
future executives who can successfully steer the company in the right direction. This
study has brought to light the difficulties the chosen company faces in terms of family
disputes, succession planning, and identifying potential successors. According to the
report, the company should invest in the education and training of possible successors
and create a thorough, documented succession plan.
7. References:
Smith, J. (2019). The impact of Starbucks on the coffee industry. Journal of Coffee
Studies, 25(3), 45-60.
Roberts, G. (2018). Family Business Succession Planning. Journal of Family Business
Management, 8(2), 118-134.