OGL 481 Pro-Seminar I:

PCA-Structural Frame Worksheet

Worksheet Objectives:
1. Describe the structural frame
2. Apply the structural frame to your personal case situation

Complete the following making sure to support your ideas and cite from the textbook and other
course materials per APA guidelines. After the peer review, you have a chance to update this and
format for your Electronic Portfolio due in Module 6.

1) Briefly restate your situation from Module 1 and your role.

In summer 2023, Starbucks launched the Oleato line of beverages in partnership with a

Sicilian olive oil brand (Starbucks Corporation, 2023). Although marketed and said to be

“the biggest thing to happen in your Starbucks career,” the launch met intense criticism

from both Starbucks employees (partners) and customers. Both parties felt it missed the

mark. Skeptical customers agreed to taste a sample and tired baristas tried their best to

sell a product most customers did not want. Only a few gung-ho coffee connoisseurs

dared to try the drinks and even fewer incorporated them as a part of their regular order.

As both a coffee enthusiast and a shift supervisor for Starbucks, I felt the disconnect

between the Starbucks company and two of their top stakeholders.

2) Describe how the structure of the organization influenced the situation.

Starbucks uses a matrix structure to support the various needs of the company. As a

global company with billions in revenue, the matrix structure provides efficiency and

diversity for strategy, problem solving, increasing performance, and coordination. The

matrix structure combines the centralized elements of decision-making from a functional

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 structure with the self-contained teams found in a divisional structure. Lateral

coordination marks matrix structures as less formal and more flexible authority-based

systems (Bolman & Deal, 2021, p. 61). The multiple overlapping divisions and chains of

command within the company combine vertical and horizontal elements. Vertically, most

of the decision-making for each department or division is centralized at corporate

headquarters.

Oleato is a result of the top-down control from the CEO and product development.

Howard Schultz, then CEO of Starbucks, discovered a Sicilian tradition of adding olive

oil to coffee. Intrigued, he set out to learn more and eventually incorporated adding a

tablespoon of oil into his personal coffee routine (Lewis-Kraus, 2023). He envisioned this

coffee alchemy in Starbucks cafes across the world. This started a search for suppliers,

market testing starting in Italy, and ways to incorporate olive oil into the Starbucks global

lineup. The result is a product that feels like the result of regulatory management and

hierarchal authority trickling down from a CEO’s personal experience affecting

thousands, if not millions, of baristas and customers across the world.

3) Recommend how you would use structure for an alternative course of action
regarding your case.

Starbucks’ matrix structure already provides the outline for a more accepted and

successful Oleato launch. Divisions and teams are specifically appointed for product

testing. Starbucks is known for understanding customers’ needs, wants, and preferences.

Since it first began creating products for customers, the company has been doing its

research (Bretagne, 2023). The immensely popular Pumpkin Spice Latte is one such

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 result of Starbucks engaging with customers and creating products to meet their needs

and wants.

I would recommend Starbucks reconsider how they approached the Oleato launch by

using the experience and incredible market data they have acquired to find better ways to

introduce a product requiring an “acquired taste.” Although Oleato had a reputation of

success in Italian cafes, the American coffee experience heavily contrasts Italian

traditions. “No company can operate effectively on a global scale by centralizing all key

decisions.” (Bolman & Deal, 2021, p. 72). Schultz, product development, and the various

teams responsible for Oleato needed more lateral coordination before launching in the US

market. Schultz’s history of success led the company to bypass structural checks for a

more authoritarian, rule-based product launch. I would work with the Starbucks

leadership to refocus on goals, strategies, and performance that matches with what

customers want. This kind of personal “lightbulb” moment from a CEO did not align

with the company’s proven record of success.

4) Reflect on what you would do or not do differently given what you have learned
about this frame.

The matrix structure only works if used as intended. The framework provides flexibility

and opportunity for large organizations like Starbucks, Google, and Amazon to balance

between then centralized decision-making from a functional structure and the team

approach from a divisional structure. If the company chooses to emphasize one attribute

more than the other, they will eventually meet problems like we have seen in the Oleato

launch. Starbucks is designed to work within this mixed framework and a machine works

best when used as intended. Centralizing this decision to Schultz’s “experience” caused

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 unintended repercussions from both the partner and customer stakeholders. Although the

result is not entirely negative (The launch brought lots of attention to the brand. All press

is good press, right?), the weakening of stakeholder trust in company executives and

processes spells disaster. These stakeholders expect certain behaviors from the company

and the more often they are disappointed, the more Starbucks can expect higher partner

turnover and customers turning to competitors. Leaders should watch if their brand and

their company are performing in alignment with their goals and objectives. If you see

discrepancies, course correct so their consequences are minimized or neutralized before

major fallout.

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 References

Bolman, L. G., & Deal, T. E. (2021). Reframing organizations: Artistry, choice, and leadership.

Jossey-Bass.

Bretagne, K. (2023, February 10). Starbucks Market Research Strategy: What it is & why it

works. Full-Service Market Research Company. https://www.driveresearch.com/market-

research-company-blog/starbucks-market-research-strategy/

Lewis-Kraus, G. (2023, March 2). Did Starbucks really put olive oil in coffee? The New

Yorker. https://www.newyorker.com/culture/cultural-comment/did-starbucks-really-put-

olive-oil-in-coffee

Starbucks Corporation (2023). Starbucks Oleato. Starbucks Stories & News.

https://stories.starbucks.com/starbucks-oleato-olive-oil-meets-coffee/