Starbucks’ Leadership Development

Starbucks Coffee Company has an issue in leadership development. Leadership development is a very important issue in all the organization. Starbucks is an American global coffee company. On 30 March 1971, three partners that are Jerry Baldwin, Zev Siegl, and Gordon Bowker are the first Starbucks opened in Seattle, Washington. (Garza, n.d)

In 1982, Howard Schultz was joins the Starbucks. He was visits Milan’s famous espresso bars when he on a business trip in Italy. Their popularity and culture were impressed by Howard Schultz and he sees their potential in Seattle. Starbucks expand beyond Seattle in 1990s. Starbucks Coffee Company now is the largest coffeehouse in the world. They are began selling fresh roasting, high-quality coffee bean and roasting accessories. Starbucks is having their store in 61 countries including the Western country and Asian country. (Starbucks Coffee Company, 2009)

Starbucks apply the drive in the early leadership theory. Leaders of Starbucks are set out a high effort level in their organization. Their leaders have self-confidence so that many followers look to them for an absence of self-doubt. Howard Schultz is a intelligence leader in Starbucks. He was intelligence to gather, synthesize, and a lot of information to solve problem and make a correct decision. Starbucks also apply a Path-Goal Theory.

Starbucks mission is to inspire and nurture the human spirit. They always provide a good quality of their coffee. For their partner, they always respect and dignity together to hold each other to that standard. They also always full of humanity in their stores even just for a moment so that their customers are enjoy. They are takes their responsibility to be a good neighbors and enjoy the success that rewards their shareholders. (Starbucks Coffee Company, 2009)

Build a Starbucks as the most recognized and respected brand in the world is the company’s objective. Starbucks Coffee Company is plans to continue rapidly spread their retail operations and its managers executive teams will hire exceptional people who willing to work for excellent results, meanwhile reward and promote those individuals who are commit to move our company forward. Starbucks Corporation will always increase their specialty sales and other operations, introduce of new products for Starbucks brand and development of new distribution channels to achieve their goals.

CONTENTS

Leadership principle apply in Starbucks Company

Howard Mark Schultz (born July 19, 1953) is an American businessman and writer. He is best known as the chairman and CEO of Starbucks who creates the Starbucks concept .The Starbucks name is now synonymous with coffee. It had been developed in various ways where the name itself stands out by its own. Brands and trademarks are gained by the quality of services and contribution given by the committees to build a great company.

Transform a small coffee shop to what it is today would not have been possible without its strong operations management and innovations. Howard is an entrepreneur who believes in strong operations management and having a central focus for everyone in the company to follow. Howard is well aware that develop a business successfully involves not only make use of impactful marketing strategy but also emphasis on manage an efficient operation management system as well. This is Howard long-term vision and he aims to lead a small coffee shop to walk toward around the world. It shows Howard possesses the drive traits, is a leader who has a relatively high desire for achievement attitude in leading his business.

Based on the efficiency business plan and useful organization functional plan, it help Starbucks create a nearly monopoly in the coffee industry. First, set objective and charting the organization path is an extremely essential primary step to achieve organization objective. Starbucks mission statement state “Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.” This mission statement create a complete and obvious organization objective that helps executive management and Starbucks’ partners to maintain the highest service quality and well-known name of the company with respect to the operation process. It also allows Starbucks to adapt in today’s new market trends and new regulation. The large market share is clearly evidence of an overall operating system that is performing by Starbucks at its highly efficient rate.

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Implement those objectives by Starbucks means the organization should focus on sustaining the energy level need to maintain the business strategy as well as its everyday operations. These everyday operations can range from top executives creating financial reports for decision-making purposes to the frontline employee who is preparing one of Starbucks many drinks. Howard and his top executives provide a clear picture on Starbucks organization objective, it is easy understand and manipulate by employees, then all the employees can getting tasks done effectively and efficiently through out the daily operation process. Howard and his partner apply path-goal theory in manage employees which means the effective leader clarify the path to help their followers get from where they are to the achievement of their work goals and make the journey along the path easier by reduce roadblock and pitfalls. (Robbins. Decenzo, &Coulter, M.2012) Starbucks executive management is to make sure most routine operation activities such as taking orders and doing monetary transactions are running competently and guide those employees step by step to make sure organization daily operation is going smoothly. This highly efficiency service performance tend to retain highly satisfy and trusting customer to Starbucks.

A content workforce maintain by Starbucks lead to fewer partners leave the corporation. Howard is a leader has a democratic style which involves their employees in decision making, always encourages employee’s participation in deciding work methods and goals. It means, employees at different department are allows to have a say in what is improper for their business practice and tend to suggest other effective method to improve current situation. This leading concept tend to increase manager stability which enables the store to do a much better job of recognize the managerial problem, meanwhile uses those unexpected situation as an opportunity to coach employees.

Since, Starbuck Company has coffee shops in every state of America and in 36 countries around the globe. Therefore, Starbucks leader need to have specific job-relevant knowledge in manage the global corporate. As a effective leader, Howard and his top executives needs to have a high degree of knowledge about the company culture, industry, employees characteristics and technical matters because those in depth knowledge allows leaders to make well-inform decisions and to understand the implication of those decision. (Robbins. Decenzo, &Coulter, M.2012) It is a crucial step for Howard and his partners in manage a firm by understands organizational culture in different retail outlets and listening to their employees who may have different background and different perspective toward their job. Starbucks stores which can retain the same managerial employee and non-managerial employees have the ability to offer a more personalize service to regular customers and will be more familiar with the appropriate procedures to create the drinks request. Besides that, Howard is not only emphasis in train employees with the “hard skills” of make the various coffee drinks, but also highlight the “soft skills” involve in how to interact with customers. It could be a simple action as creating eye contact or smile. This is how Howard led Starbucks by use minimum amount of organization input to gain a maximum amount of organization output.

In order to maximize profit and maintain Starbucks market place in coffee industry, Howard and his partners need to understand how to make something as fast as possible while minimizing errors in management process. This has permit Starbucks to stay ahead of other competitors and let Starbucks endure a large market share in the coffee industry for the longest time.

FINDINGS

Existing and current problem faced by Starbucks Company

Starbucks named itself as a world’s best coffee. Starbucks have more than 17000 stores in 61 countries. With so many stores all around the world, the leadership concept uses by Howard and his partner in the management process is extremely important to the future of the company.

One of the problem encounter by Starbucks is they set their stores around the world at a rapid pace. This will cause the supply chain organization to have the problem in maintaining the fundamental. Because of the big amount of stores throughout the world, it required more expenses to generate this supply chain organization. Due to the unstable supply chain organization, it is hard to ensure that the deliveries can arrive on time. Coffee and other merchandise must be source carefully around the globe to ensure it deliver the best quality to every customer. For leader who guide in this organization, they need to always make sure that it have sufficient supply to the entire store. Delay service must try to exclude as it will lead to waste of money and resources.

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In addition, with this big amount of stores in so many countries, Starbucks will also face the difficulty to maintain the quality of each employee. For Starbucks, their barista is very important to help them in maintaining the quality of each cup of the beverage they made. Although Starbucks do give training to their barista before they qualify, but when come to real situation it is very hard to ensure that every barista doing the correct sequences as what they did in the training. Especially the taste of the same type of beverage might be different in two different outlets. May be this beverage is too sweet in this outlet but it become normal when come to the other outlet. Thus, leader in each store are not focus enough on how good at delivering service to store. Some of the store might have inefficient barista who prepare the beverages slowly plus without clearly know what their customer request. This may occur when cashier do not take the order seriously and lead to confuse and mistake. Besides, some employees are takes quite long times respond to the existing problem face by customers. Therefore, customer will feel unsatisfied with the late reply and ignoring. Thus, they may consider the Starbucks as a company with poor service performance and hence influence Starbucks prestige and image.

Next, Starbucks faced the problem of continuously recruiting new non-managerial employees. This is due to their big amount number of store and also some of the existing employees are only work for temporary period. Since the employee in Starbucks especially baristas are basically working under a team. When they do their job, they like creating a round circle, cashier is taking the order, after customer finish ordering he or she needs to inform the other barista to make the request beverage. After finish prepares the beverage, barista will send it to the customer with a polite greeting. Throughout this entire process, it required a strong bonding and good communication skill between each and every barista so that mistake can be excluded. However, most of the barista do not work for a long period and it will replaced by someone new. Therefore to create the bonding in each other it takes time to generate again. Moreover work under a team required a leader to guide them toward a better direction. The position of this leader is important due to the leader is someone who can influence others and who has managerial authority.

Currently, with the introducing of Starbucks card, it helps to offer a greatest convenience when making any purchase from beverages to latest merchandise, just with the ease of one quick swipe. It is also one of the way Starbucks giving rewards to their customer. However it does creates some problems when handling this Starbucks card for redemption and reloading the amount. Basically when tracker reaches 10, the system issues a complimentary beverage which is displayed in the Rewards column. But sometimes when come to redemption, it will have the difficulty to redeem it due to technical problem or computer down in the store. It might also have the problem of unable to reload the amount of the card. It takes time to solve. If without any technician in the store, it will be just let the customer leave with unhappy and disappointment.

Although Starbucks Company exist as a well-known globe corporation with uphold well management practice. But, the initiating structure in the management process seems still not strong enough in handle customers response and problems face. Any changes or improvement should be emphasis by Howard and Starbucks top-executive, and then Starbucks will be more well position to move forward and improve the livelihoods of those in the supply chain.

4.0 RECOMMENDATIONS

Starbucks evolved into a multinational chain from a small-scale. In this development process, which inevitably there will be many superiors communication with staff problems occur. It has thousands of retail stores, which serve some 50 million customers in 61 countries each week and having different types of employees all over the world. Starbucks’s leaders need to be able to work across a range of businesses, regions, cultures and be able to cope with different sets of circumstances they will be facing.

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4.1 Apply Fiedler Contingency Model

In order to maintain the different leadership qualities among those employees, Howard can apply Fiedler contingency model to solve this problem. The Fiedler contingency model proposed that effective group performance depended upon properly matching the leader’s style and the amount of control and influence in the situation. Starbucks top executive should measure an individual’s basic leadership style, either task oriented or relationship oriented before decide employees’ job scope. Howard can use least-preferred co-worker (LPC) questionnaire to measure employee’s basic leadership style. Starbucks employees were asked to think of all the colleagues they are working with and to describe that one person they least enjoyed working with by rating the candidate on a scale of 1 to 8 for each of the sets of adjective, for example, pleasant-unpleasant, cold-warm, boring-interesting, or friendly-unfriendly. If the employee described the least preferred colleagues in relatively positive terms (a high LPC score- a score of 64 or above), then the employee regard as primarily interested in good personal relations with colleagues and the employee possess a relationship oriented. Inversely, if the employees saw the least preferred colleagues in relatively unfavourable term (a low LPC score- a score of 57 or below), the employee would be regard as task oriented and was primarily interested in productivity and getting the job done. For those employees who are fall in between these two extremes, he or she may not have a cut-and-dried leadership style. After done assess an employee’s leadership style through the LPC, Howard and his managerial partners will need to evaluate the situation in order to be able to match the employee with the situation. Leader-member relations (the confidence, trust, and respect employees level had for their leader), task structure (degree of job assignments were formalized and structured), and position power (the degree of influence a leader had over daily management activities) serve as the key situational factors in leader effectiveness. Each leadership situation was clearly shown in Fiedler’s Contingency Model of Leader-Situation Matches. (Refer to appendix).Once Howard had identify employee’s basic leadership style and the different types of situation, and then he can identify the appropriate combinations of style and situation for each current employees and new recruiting employees.

Conclusion

After we complete Starbucks Coffee Company research, we have learns a lot of theories about the leadership. That is the early leadership theories, democratic style, Fiedler contingency model, situational leadership theory and path-goal theory. From those theories, we are learns how to become an effective leader in the organization. Besides that, we also learn about the ways to lead all the employees and manage the whole organization well by using all the theories we are study.

Starbucks Coffee Company now is already predominating the leadership theory very well in their organization. Starbucks apply many types of theories of leadership in their organization. The leaders of Starbucks are leads their employees in a good environment and respect to each others. The employees are doing their work probably and always follow the instruction by the leaders. Thus, the organization’s operation system will become more completely and smoothly.

Today, there are a lot of pressures that the leaders of Starbucks will face when they are responsible to managing a company’s organization. The leaders are facing many kinds of problems when leading the employees and manage the organization. The leaders need to build a good relationship with their employees and trust between each other so that the employees can cooperation with them pleasantly.

In a nutshell, the leadership is very important for every organization. Whether it is a small or large organization, it must have an effective leader. The leaders must always do improvement so that they can lead all the employees become very well in the organization and can achieve its goals.


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