University of Mumbai

NCRD’S Sterling Institute of Management Studies

(NAAC Accredited A+ Grade)

Academic Year: 2023- 24

SY MMS (HR Specialization)

Subject: Organizational Development and Change Management.

Submitted to: Dr. Arjita Jain

Topic: Organizational Culture of Starbucks.

Submitted By:
Simran Chandramohan Raut
Roll No.: 48
Division: A
 INDEX

Sr.No. Particulars Page No.

1 INTRODUCTION 3-4

2 ORGANISATIONAL 5
CULTURE OF
STARBUCKS

3 STARBUCKS COMPANY 6-9

CULTURE TYPE AND
TRAITS

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 INTRODUCTION
AN OVERVIEW OF STARBUCKS
Starbucks Corporation is an American multinational chain of coffeehouses and roastery
reserves headquartered in Seattle, Washington.

Founded in 1971 by Jerry Baldwin, Zev Siegl, and Gordon Bowker, the company has grown
to become one of the world's largest and most recognizable coffeehouse chains. With its
distinctive green logo and iconic mermaid symbol, Starbucks has expanded its presence
globally, operating over 30,000 stores across more than 80 countries.

The Starbucks experience

is characterized by its relentless pursuit of excellence at every touchpoint, from sourcing the
finest coffee beans through ethical and sustainable practices to meticulously crafting
beverages that delight the senses.

Beyond its product offerings, Starbucks has cultivated a distinctive atmosphere characterized
by its warm, inviting ambiance, punctuated by the aroma of freshly brewed coffee and the
hum of lively conversation.

As Starbucks expanded its footprint globally, it remained steadfast in its commitment to

social responsibility, championing initiatives to promote environmental sustainability, support
local communities, and enhance the welfare of coffee farmers worldwide. Through its Coffee
and Farmer Equity (C.A.F.E.) Practices program and partnerships with organizations such as
Conservation International, Starbucks endeavors to foster a more equitable and sustainable
coffee industry while empowering individuals and communities to thrive.

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Starbucks is renowned for its commitment to quality coffee, customer experience, and
corporate social responsibility. Beyond offering a wide range of coffee beverages, including
espresso-based drinks, teas, and pastries, the company has also established itself as a cultural
hub, providing inviting spaces for customers to gather, work, and socialize. Starbucks has
embraced technological innovation, introducing mobile ordering and payment systems, as
well as loyalty programs, to enhance customer convenience and engagement.

Today, Starbucks operates thousands of stores worldwide, serving millions of customers each
day and leaving an indelible imprint on the global coffee culture. Despite its scale, Starbucks
remains rooted in its core values of integrity, respect, and excellence, continuing to innovate
and inspire through its unwavering dedication to the pursuit of coffee perfection and the
creation of meaningful connection.

STARBUCK’S ORGANISATIONAL CULTURE

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Starbucks Corporation’s organizational culture (company culture) is one of the most distinct
characteristics of the firm. The company’s organizational or corporate culture influences
personnel and business performance through values, customs, traditions, and behavioural
expectations in the business organization’s context. In Starbucks’ case, the organizational
culture permeates all aspects of the business, including the operations of franchisees and
licensees. Coffeehouses are where Starbucks’ work culture is most easily observable. The
way café employees work with each other and how they interact with customers are
indicators of the company’s corporate culture. The warm and friendly ambiance in these
coffee shops is part of the company culture’s distinction from competitors, including
coffeehouses, like Tim Hortons and Costa Coffee, and food-service companies that sell
coffee, like Dunkin’, McDonald’s McCafé, Wendy’s, Subway, and Burger King. This
organizational culture supports Starbucks’ mission statement and vision statement and related
goals through cultural influences for successful brand development and the global growth of
the franchise and licensing network, despite challenges tied to economic fluctuations and
industry-specific trends.

Starbucks’ organizational culture is a key success factor in the business, considering that the
company sells not just its food and beverage products, but also the experience of buying and
consuming these products. In this way, the firm uses its corporate culture as a distinction in
the coffeehouse chain market. Starbucks’ organizational structure (business structure) enables
the optimal application and observance of this company culture throughout the business and
its subsidiaries, such as Ethos Water, despite the diverse managerial approaches and business
cultures of franchisees and licensees.

The organizational culture of Starbucks plays a crucial role in shaping the company's identity,
guiding its operations, and fostering a sense of belonging among employees and customers
alike. The organizational culture of Starbucks is characterized by a unique blend of elements
that fosters a sense of belonging, innovation, and social responsibility. At the heart of
Starbucks' culture are its core values, which guide the actions and decisions of employees at
all levels of the organization. Here are some key aspects of Starbucks' organizational culture

Starbucks’ Company Culture Type and Traits

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Starbucks’ organizational culture is a culture of belonging, inclusion, and diversity. These
key characteristics combine to make a work culture unique and specific to the nature of the
coffeehouse chain business. The internal cultural situation is reflected through the company’s
human resource development programs and baristas’ interactions with customers. In this
regard, the features and values of Starbucks’ corporate culture are:

 Servant leadership (“employees first”)

 A relationship-driven approach
 Collaboration and communication
 Openness
 Inclusion and diversity
 Mission and Values
 Partner (Employee) Engagement
 Customer Experience
 Corporate Social Responsibility (CSR)

Servant Leadership: Starbucks has a servant leadership approach, which characterizes the
behavioural manifestation of the company’s organizational culture among leaders, including
corporate leaders and team leaders. In this approach, leaders, managers, and supervisors
emphasize support for subordinates to ensure that every employee grows in the business
organization. This feature of the corporate culture translates to the employees-first approach,
which aligns with the human resource development objectives linked to Starbucks’ corporate
social responsibility (CSR), ESG, and corporate citizenship goals. The company highlights
the value of caring for employees as a way of optimizing human resource morale and
customer satisfaction. Former Starbucks President Howard Behar developed this feature of
the firm’s work culture because he believed that workers who are cared for are the ones who
care about customers.

A Relationship-driven Approach: Starbucks also has an organizational culture that supports

warm and friendly relationships. For instance, at the company’s cafés, baristas exhibit warm
and friendly bonds with each other. This feature of Starbucks Coffee Company’s corporate
culture extends to customers, who are also treated with warmth. This work culture enhances
business competitiveness and the core competencies discussed in the SWOT analysis of
Starbucks. Through this emphasis on relationships in its corporate culture, the business

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organization develops the global coffee culture that drives consumer demand for the
company’s specialty coffee products.

Collaboration and Communication: The corporate culture of Starbucks encourages

collaborative efforts through effective communication. At Starbucks cafés, baristas clearly
communicate with each other to fulfil orders. Also, they collaborate as teams to make the
order fulfilment process efficient. Thus, the organizational culture supports efficiency in
business processes and the effectiveness of Starbucks’ operations management. The corporate
culture contributes to quality of service, positive customer experience, and business cost-
effectiveness.

Openness: Openness is among the values included in Starbucks’ organizational culture. In

the company’s early years, employees had a traditional and old-fashioned work culture of
hesitation in speaking up to their superiors. To address this issue, former Starbucks President
Behar introduced open forums to encourage staff members to ask questions and communicate
with superiors. A company culture of openness developed as a result. Through this cultural
feature, Starbucks empowers employees and facilitates innovation in product development
and service provision.

Diversity and Inclusion: Starbucks is committed to fostering a diverse and inclusive

workplace where every partner feels welcome, respected, and valued. The company believes
that diversity of thought, background, and experience drives innovation and enhances its
ability to connect with customers from all walks of life. Starbucks has implemented various
diversity and inclusion initiatives, including partnerships with minority-owned businesses,

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unconscious bias training, and employee resource groups to promote a culture of belonging
and equality.

Mission and Values: Starbucks is deeply committed to its mission "to inspire and nurture the
human spirit – one person, one cup, and one neighbourhood at a time." This mission
statement reflects Starbucks' focus on not just serving coffee but also creating meaningful
connections and positively impacting communities. The company's core values include
creating a culture of warmth and belonging, acting with courage, challenging the status quo,
and being present and connecting with transparency, dignity, and respect.

Partner (Employee) Engagement: Starbucks refers to its employees as "partners" to

emphasize their importance and value to the organization. The company prioritizes partner
satisfaction and engagement through various initiatives such as comprehensive training
programs, competitive compensation and benefits, opportunities for career advancement, and
a supportive work environment. Starbucks encourages partners to share their ideas, voice
their concerns, and actively participate in decision-making processes, fostering a sense of
ownership and empowerment.

Customer Experience: Starbucks places a strong emphasis on providing exceptional

customer service and creating memorable experiences for its patrons. The company strives to

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exceed customer expectations by delivering high-quality products, personalized service, and
inviting store environments. Starbucks' baristas are trained to engage with customers in a
friendly and authentic manner, fostering a sense of connection and loyalty that goes beyond
just serving coffee.

Corporate Social Responsibility: Starbucks is committed to being a responsible corporate

citizen and making a positive impact on the communities it serves and the planet as a whole.
The company's social responsibility initiatives focus on ethical sourcing of coffee beans,
environmental sustainability, community engagement, and philanthropy. Starbucks aims to
minimize its environmental footprint through initiatives such as sustainable sourcing
practices, waste reduction, and renewable energy usage, while also giving back to
communities through programs like the Starbucks Foundation and volunteerism.

Overall, the organizational culture of Starbucks is characterized by its unwavering

commitment to its mission and values, its focus on partner and customer engagement, its
dedication to diversity and inclusion, and its commitment to corporate social responsibility.
These core values and practices define Starbucks' identity as a socially responsible and
customer-centric organization that strives to inspire and nurture positive change in the world.

Starbucks has gone through significant changes in its organizational culture. These changes
are based on issues and problems that leaders, like Howard Schultz and Howard Behar,
identified in the early years of the specialty coffeehouse chain business. As a way of
enhancing business performance, Starbucks instituted reforms in its corporate culture. Today,
the company’s work culture is a distinct characteristic that builds competitive advantage and

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develops a consumer population of loyal Starbucks fans from which the business derives
stable financial performance. The main corporate strategic management challenge lies in the
effective implementation of this company culture in the human resources of the coffeehouses
of franchisees and licensees, as these business partners have their own core values and
approaches to human resource management and organizational culture development.

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