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How and Why Starbucks Is Affected By both Internal and External Challenges - Essay Example

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The essay explores how Starbucks manages in business environment with a focus on its organizational structure, leadership approach, motivation and decision-making processes…
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How and Why Starbucks Is Affected By both Internal and External Challenges
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Download file to see previous pages This paper illustrates that increased globalization and trade liberalization of markets has resulted in the facilitated growth of international business. However, together with opportunities for increased revenues and new markets’ potential, many firms have faced with a challenge of managing organizational behavior in different environments. Organizations, especially those that operate in multiple regions or continents are continuously exposed to divergent legal, political and socio-cultural environments. One of the great examples of such organizations is Starbucks Corporation. Starbucks is a leading multinational corporation operating in the specialist coffee retailing sector. Its values share in the world coffee shops category has reached 0.7% in 2013. While the company’s largest business unity is in the US (63% of sales), it has managed to establish a substantial international presence. The company pursues a strategy of global business expansion. As the company operates in numerous international markets it faces with various external factors that influence the company’s strategy and operations. In order to overcome all these challenges and other difficulties, it is vital for a business organization to have efficient and appropriate organizational structure. The company has implemented a functional organizational structure and combined it with a divisional approach, whereas organizational structure is comprised of various departments and divisions that are responsible for performing different functions. After Howard Shultz, the founder of the Starbucks returned to the organization as the CEO in 2008, he has introduced some transformational changes to the organizational structure. The company has decreased the number of partners and the number of existing positions, and also reduced its workforce. Furthermore, in 2012, the company has redefined its organizational structure of retail business focusing on geographic principle and identifying three-region structures: Americas (US, Latin America, and Canada), China/Asia Pacific, and Europe, Middle East and Africa. Thus, the company has supplemented its structure with geographically based divisional structure design. ...Download file to see next pagesRead More
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