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by Carolyn Kelly
Introduction
The Company chosen for analysis is Starbucks Corporation. This is a coffee company located in Seattle Washington. The company specializes in a range of activities that include selling coffee drinks, roasting whole beans and other services on the side. The Company boasts of over one thousand retail outlets found in the US and many more found in the rest of the world.
Starbucks started as a packaged, roasted and premium coffee seller. However, with time, the company began operating coffee bars where clients could interact while enjoying a cup of coffee with some pastries. The company began offering other accompaniments such as a doughnuts and sandwiches. Using this product offering the company began expanding its operations within the US and also in other parts of the world. Consequently, the company has made a name for itself as the number one coffee retailer in the country. It has also instilled a coffee-loving culture within the country. The company has been one of the most prominent and fastest growing companies in the country recording record sales year after year. In order to get to this position, the company has had to employ sound organizational behavioral methodologies and principles. These shall be examined below. (Starbucks, 2008)
Organizational behavior at Starbucks
Before one can analyze organizational behavior at Starbucks, it is necessary to understand the meaning of the term. Organizational behavior may be defined as the application and study of knowledge regarding how individuals within an organization behave. This normally involves the incorporation of a systemic approach. Additionally, organizational behavior involves interpreting how organizations relate with their employees. The overall goal of organizational behavior is to enhance social, human and organizational objectives. There are numerous models, elements, concepts and theories involved in the organizational behavior discipline. Some of these include; Organizational development, quality of work life, organizational change, Social systems and organizational models.(Davis & Newstrom, 1993)
Elements of organizational behavior at Starbucks
Elements of organizational behavior rest on management philosophies, values, goals and visions. Starbuck’s organizational philosophies determine the nature of its culture which is largely determined by support for its employees. This is also the reason why the social environment together with the formal environment are quite friendly to the employee; The following six principles summarize Starbuck’s mission statement
1. To recognize the centrality of profitability
2. To contribute towards its environments and surrounding committee
3. To ensure that its consumers are always satisfied
4. To incorporate diversity in its business approaches
5. To respect one another with dignity
These principles highlight the fact that Starbucks is not a respecter of persons and any person contributing towards its success is accorded the rights they deserve. Besides this, the company also regards diversity as a very important matter that must be adhered to at all times. The company’ organizational principles have instilled the positive organizational culture hence affecting the nature of the company’s communication, dynamics and leadership. It should be noted that Starbuck’s store managers have an open door policy. Their employees are given the express rights to approach their leaders openly and transparently. If an employee has a particular problem they need addressed, then they do not have to undergo many processes of setting up appointments with mangers. This culture of transparency has contributed towards the feeling of ownership among employees in the company. (Kotare and Helena, 2004)
Elements of organizational behavior within Starbucks Corporation have been largely responsible for their growth and development; the latter applies to both the organization and its employees too. The company’s organizational behavior elements serve as a framework for its operations. Starbucks profit making abilities have been growing by the day. This can be attributed to good organizational culture brought on by sound elements of organizational behavior. The company has instilled a sense of ownership thus making its employees more productive. It is almost impossible for one to destroy something that they own; and this is why the company boasts of such a strong sense of loyalty amongst its employees. They usually display this through their interaction with clients. Employees understand that whatever they tell clients will directly affect the name of the company. Consequently, employees always act responsibly towards the clientele, going out of their way to meet their needs.
Operative models of organizational behavior in Starbucks
Any company may operate under four models; autocratic, custodial, collegial and supportive models. The autocratic model of organizational behavior was not an option for Starbucks because the company is built on a foundation of respecting all its stakeholders and business entities. Starbuck’s management realized the negativities that could come out of adopting autocratic organizational behavior models. This is because in the autocratic model, there is too much dependence on the decisions of the employer. Employees always feel the need to obey their employer. Starbucks also realized that the overall results in such models are quite low given the fact that organizational behavior is characterized by fear. The company recognizes that they have to meet the needs of their employees and this is not incorporated within the model.
The second model that Starbucks can choose from is the custodial model. In this model, all the company’s decisions are founded on financial success. The employees within such an organization are driven by the need to earn more money. Therefore, the overall result is a passive form of cooperation from them. Starbucks did not operate on such a model because they realized that the organization would always have to provide benefits to its employees. Employees on the other hand would be locked up in an endless endeavor to increase revenue.
Another model of organizational behavior is the collegial style. In this model, organizational management treats their employees as partners within their team. Consequently, there is lots of emphasis on discipline and responsible behavior. This means that such employees become self actualized. However, Starbucks chose not to operate under such a model because it can only generate moderate enthusiasm from the respective employees. (Nagel, 2002)
In light of these inadequacies in all the latter mentioned models, Starbucks adopted a supportive model of organization behavior. The company is known for the nature of support that it offers its respective employees. In this model, leadership is emphasized with an inclination towards providing support. This means that employees are encouraged to participate and to perform. Such employees are also given status and recognition. This denotes that they will have such high drive and their morale is also quite high. Starbucks’ supportive organizational model can be seen is various realms. For instance, the company allows its members to take up bean-stock-options. The Ben stock option plan in Starbucks is an arrangement that allows employees to purchase stock within the company. It gives them a sense of ownership within the company and allows them to contribute more towards it. Besides this, the company also empowers its employees to make decisions by conducting training sessions. Before an employee is admitted into Starbucks, they are taken through seven hour long training workshops every day. While in those workshops employees are taught how to respond to clients with a specific problem. For instance, if a consumer complains about the quality of coffee beans bought from the shop, its employees immediately replace the coffee beans without consulting senior management. Additionally, employees are taught how to deal with clients, consequently, the company is always getting suggestions from their clients through their employees. In other autocratic companies, these responsibilities would have been left solely to the store manager. However, in the coffee giant’s firm, all employees are given responsibility. They participate in decision making and this is the reason why most of them have such a high drive. This also explains why employee turnover within this company is much lower than in other fast food companies. It recorded a turnover of sixty percent two years ago yet other fast food companies record an average of over one hundred percent employee turnover. (Clinton, 1998)
Most employees who approach this organization get encouraged to remain there because they appreciate the respect and support offered by the Company. Its supportive model can also be witnessed by its generous packages. While many retail companies like to boast of how they treat their employees well, Starbucks does not have to do the same; their actions speak for themselves. One can see support in the insurance, holiday and other packages offered by the company. For instance, its insurance coverage programs are available to both permanent and temporary employees. By making such offerings, Starbucks has indicated that it supports its employees both within the organization and also in their family or personal lives. (Revans, 1982)
Individualization, Social systems and Culture in Starbucks
Social systems encompass the relationships between different members of the organization in relation to one another and to the rest of the world. It should be noted that different individuals normally affect one another in different ways and the same may be said of the social system and the environment. Organizational culture on the other hand refers to the customs, knowledge and practices within any given organization. Organizational culture provides different individuals in the organization with security and stability; organizational culture is not associated with change. On the other individualization is the process of changing or at least challenging organization culture. Schein (1968) illustrated this using the model below to indicate how individuals affect their environments.
Effect Of Individualization On Organizations
_______________________________
High | | |
| | |
| | |
| Conformity | Creative |
| | Individualism |
| | |
Socialization |_______________|_______________|
| | |
| | |
| | |
| Isolation | Rebellion |
| | |
| | |
Low |_______________|_______________|
Low Individualization High
As it can be seen from the latter diagram, organization can either record high or low instances of socialization and individualization. Those organizations that adopt too much individualization and too much socialization can make their employees isolated. This does not apply to Starbucks corporation because everyone from Barristers, milk steamers, dish washers to store managers have to interact with one another hence encouraging moderate levels of socialization. Instances of isolation among employees in Starbucks are rare. Employees may have very little individualization and high socialization thus causing too much conformity. This means that there would be increased conformity. However, Starbucks cannot complain of such an issue because most of their employees are quite busy attending to their duties, this means that socialization is kept in check. Lastly, a company that has little socialization but high individualization could encourage employees to become rebellious. (Thousand, 1999)
Starbucks has gone out of their way to establish high levels of socialization and individualization at the same time. The latter formula can be seen as the reason why the company is performing really well in the coffee business. This is the only model that ensures competitive advantage otherwise the company would have done very poorly using any other model. Time and time again, employees have questioned the validity of management’s decisions while at the same time maintaining a steady culture within the Company. These are all essential components necessary for balancing both socialization and rewards.
Organization development at Starbucks
Organization Development can be defined as the process of systematic application of behavioral science in inter-group, organization and group levels. It aims at encouraging effectiveness, productivity and adaptability. This is mostly achieved through the process of changing strategies, attitudes, behaviors and procedures within the company. Organization development has seven major characteristics which can be depicted in Starbucks. The first is Humanistic values. This can be been through Starbuck’s promotional behavior. The company believes in the potential of its employees because it recruits young individuals and facilitates them into management positions. (Barton, 2006)
The second characteristic is system orientation, which encompasses cooperation within structural, technological, and personnel levels of the organization. This is depicted in the way the company operations run smoothly. The third aspect is experiential learning where training ought to be conducted in a practical manner. Starbucks does this by conducting ‘bar training’ where new employees are trained how to serve employees by performing ‘mock’ servings. The fourth aspect of organizational development is problem solving. This should involve gathering data, taking corrective action, progress assessment and adjustments. This issue can be seen in the manner the company went about expanding its operations in the Asian continent. The company analyzed the region and found that come countries would be receptive of its products and services. This is also the same strategy used in expansion within the US.
The fifth characteristic of organizational development is contingency orientation where actions are fitted to a specific organization. This was seen when the company began facing challenges from consumers about where it sources its coffee beans. The company had been accused of working with Guatemalan employers who gave their employees meager payments for their products. The company began imposing conditions for all its overseas workers with regard to their employment polices. It therefore responded to the challenge in a manner that fits Starbuck’s mission statement. The sixth characteristic of organizational development is acting as a change agent. Here, one ought to facilitate, stimulate and coordinate change. This is seen in the way the company adopts to different competitors within the industry. The company was among the first to offer coffee in a relaxed serene environment in the country. The company was modeled after the Italian Style of restaurants. Its creativity in restaurant decorations have been mimicked by other restaurants because it is has been facilitated and stimulated well. The last characteristic of organization development is ‘level of intervention’. In this regard, organizations should intervene promptly during times of crisis. The latter was witnessed when the company was faced with stiff competition from supermarkets which also offered packaged coffee. The company intervened in the situation by providing their clients with an extra service. They started teaching clients how to brew their own offer at home; a service not found in supermarkets and other retail outlets. (Koch, 2006)
Organizational change at Starbucks
Organizational change may be defined as a simple form of discontinuity. Successful change within any organization must be conducted in such a manner that it is neither done too aggressively or too off-handedly. In the former case, organizations that keep changing are likely to encourage their citizens to run away from them. Additionally, companies that want to do everything for their employees during change will encourage them to become complacent. Starbucks has initiated change in a reasonable manner. For instance, when the company decided to change the layout of its restaurants, it did not just expect these changes from any particular employee, it designated one hundred employees to look into the interior décor of the company’s designs. (Knoster et al, 2000)
Quality of Work Life at Starbucks
Quality of work life can be defined as the nature of favorability within any given workplace. This means that job conditions need to made in such a way that they suit the respective employees and organization. Starbucks has adhered to this principle through several mechanisms; first, the company has redesigned jobs. For instance, barristers no longer have to deal with the normal aspects of serving coffee alone. They were taught about the history of coffee, the coffee making process and the importance of choosing the right raw materials-they have to disseminate this information to clients. This makes their jobs more interesting and informative. Other types of jobs that have remained the same such as the process of steaming milk, have received a boost through better pay. The company offers favorable pay for most of its temporary staff. It pays much higher than other fast food companies like McDonalds and Dunkin Donuts. Besides this, the company realizes that most of its work can be repetitive or routine-like; therefore it ensures that it only recruits those individuals who are willing to take part in such routine tasks. This is because certain individuals appreciate the security offered by such repetitive tasks. (Eberle & Cunningham, 1990)
Besides the former issues, the company has ensured that the quality of work life is quiet good for its employees through some job enrichment mechanisms. For instance, the company has given most of its salesmen decision-making abilities thus adding the depth within their jobs. The company has also enlarged jobs by increasing the number of tasks to be performed by its store managers.
Conclusion
Organization behavior in Starbucks can be studied under a variety of themes. However, the most outstanding factor about the company is the fact that they have risen up the ranks to become market leaders in the coffee retail sector. They have also instill; led a coffee taking culture within the country. Besides this, the company is respected for its supportive model of organizational behavior. Its organizational development strategies can be seen in the way the company responds to change by being a trendsetter rather than an imitator. Lastly, the quality of work life at the coffee retailer has also been enlaced through the process of job enrichment and enlargement for its barristers and store managers.
Reference:
Barton, K. (2006): The concept of the business development process. Vol 1, Oulu University -Finland
Nagel, T., R. H. (2002): The Strategy and Tactics of business development; Prentice Hall; Upper Saddle River, NJ.
Kotare K and Helena M., (2004): Global business development, 3rd Edition, New York, John Wiley and Sons
Clinton, J. (1998): The business development Costs; Graduate School of Business Administration, Boston, Mass: Harvard University
Eberle, T. & Cunningham, J. (1990): A Guide to Job Enrichment and Redesign, Routledge Publishers, p.57
Davis, K. & Newstrom, J. & (1993): Organization Behavior: Human Behavior at Work; New York: McGraw-Hill
Knoster, T. et al (2000): A framework for thinking about systems change, Oxford University Press, p132
Thousand, S. (1999): Restructuring for caring and effective education: Piecing the puzzle together, Baltimore: Paul H. Brookes Publishing Co., pp. 93-128
Koch, C. (2006): The New Science of Change. CIO Magazine, Sep 15, pp 54-56
Revans, R. (1982): The Origin and Growth of Action Learning, England: Chatwell-Bratt, Bickley, p 34
Schein, E. (1968): Organizational Socialization and the Profession of Management; Industrial Management Review, 1968 vol. 9 pp. 1-15
Starbucks (2008): Homepage: retrieved from http://www.strabucks.com/ accessed on 22nd July 2008
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