Coffee Management and Organizational Culture - Case Study Example

Organizational Behavior Concepts Any organized human activity, which is done in-group, will be most times constituted into structure called organization. So, organizations are ‘structures’, with a ‘collage’ of humans doing their allocated work under the supervision of a leader, for the benefit of the organization as well as them. The workers and their behavior only form the crucial ‘cog’ in the running of the organization. After the recruitment and apportionment is over, it is the duty of the organization to provide the employees an optimal company atmosphere or working environment. In that atmosphere only, employees will show optimum motivation. But, sometimes the organization will not be able to provide a best working atmosphere due to various factors. This will surely bring down the level of motivation among the employees to bare minimum. With less motivation, the employees will be hard-pressed to use his/hers physical and mental part to work effectively for the organization. Then, when the organization has enough opportunities, it can set targets and formulate various strategies to achieve those targets. Along with the formulation of new targets and strategies, organizations also have to initiate changes in its overall functioning. The change management can be brought out both by the internal and external environment of the organizations. Then, if the leader of the organization imbues a good number of practices and even his/hers assumptions as part of organizational culture, it can heighten the performance of the employees. This is what American coffee chain, Starbucks is doing through its various leaders and initiatives. So, this paper will analyze Southwest Airlines and how it successfully practices the organizational behaviors of Motivation, Change management and Organizational Culture. About Starbucks Starbucks Coffee or Corporation, US based coffee chain was founded by three persons Jerry Baldwin, Zev Siegel and Gordon Bowker in 1971. They started of by selling coffee beans and other coffee related equipments. Howard Schultz joined the Starbucks shop at Seattle. He made a trip to Milan, Italy to study the coffee market there, and coming back to Seattle, he advised the Starbucks management of that time, to sell coffee and espresso drinks along with the beans, seeing the potential to develop a similar coffeehouse culture in Seattle (starbucks.com). But, the management team rejected Schultz’s idea under the pretext that entering the beverage business would sidestep the company and divert from its main focus of coffee beans. On the other hand, Schultz was sure that there is a market for coffee-based beverages, and so he left the Starbucks and started the Il Giornale coffee bar chain in 1985. II Giornale was able to create an impression in the market and was able to attract the customers. This strategic leadership shown by Schultz was rewarded in 1987, when the original Starbucks management team sold its entire Starbucks unit to Schultz and his company. With the acceptance coming from the same persons who rejected his idea and the Starbucks’ unit in his hand, Schultz renamed Il Giornale with the Starbucks name and aggressively marketed the coffee-based beverages also as Starbucks, thereby expanding its market all over U.S. From that beginning, Starbucks has elevated his status to become the world’s largest Coffee shop chain. Motivation During the various processes that takes place inside an organization, one of the approaches the leader or the manager could try is, putting for discussion his/ hers thoughts, targets and strategies among the workers, and thereby motivating. This strategy will surely optimize the motivational levels because when they are involved in the important processes and are asked to contribute by the leaders, they will accentuate their motivation and thereby their thought process and physical capabilities. In Starbucks, its leader Howard Schultz was able to optimize the motivational levels by involving the workers in the important activity mission statement creation. The adoption of mission statement by the senior executive team led by Schultz laid out certain guiding principles. The principles helped its employees (or ‘partners’ as they were known by the Howard Schultz and his management team) to determine their roles in correlation to the company’s goals and also gave them the opportunity to provide their feedbacks about the document of mission statement. So, the Starbucks management led by Schultz did that by introducing a mission statement among the employees particularly the new employees, and forming a final statement after the analysis of the feedback from the employees. “New employees discuss the Starbucks mission statement and do customer-service role-playing.” (Schultz qtd. inc.com). So, the first big idea that was designed by Schultz to optimize the motivation levels of the employee was the actualization of the ‘customer feedback incorporated company’s mission statement’. As rise and fall of any organization will depend on the role of the employees, they have to be provided the best working environment by the management to increase their motivational level. So the plan or idea of Starbucks to provide a favourable working environment was implemented through the adoption of a mission statement. And the things Schultz did, to integrate this statement and the principles into the working atmosphere of the employees, can be divided into three stages. In the first stage, the Schultz and the management of the Starbucks distributed a copy of the mission statement and gave comment cards for feedback during the initial orientation of the new employees or “partners”. Then in the second stage, Starbucks related all the decisions that were made inside the organization to the guiding principles. And finally in the third stage, the company formed a “Mission Review” system so that any employee could comment on a decision which was undertaken in relation with the consistency of the six guiding principles. Then based on the comments or feedback given by the employees, Starbuck released a final statement, “people first and profits last”. This emphasis on the employees’ contribution has surely optimized or optimizing their motivational levels, leading to the effective functioning of the organization. Change Management Every organization’s survival and success hinges on how the organization has been able to adapt to the changes in its functioning as well as the changes that might keep happening in the environment around them. So, formulating and implementing important strategies and needed changes, to guide the employees and then to entice the customers in the market, are the ‘keys’ that opens the door of success and profit for any organization. The decisions or changes which are needed to be implemented in relation to the events that takes place both inside and outside the organization, has to be taken by the leader and the management team with a lot of care, planning, analysis, feedback, etc. Even with automation and computerization happening in every segments of organization, the decision-making process mainly rests with the humans’ ‘filled’ management team. Correct decisions have to be taken by the leader and the management team in times of change, to make that change a success. Like any other high performing organizations, Starbucks also wants to grow, profit wise, by increasing the number of shops. Apart from this aspiration, Starbucks also wants to establish it as the most recognized and respected brand in the world. To achieve that brand image, Starbucks apart from putting its marketing department to fullest work, wanted to optimize the performance of its employees and importantly wanted to change its image ethical wise, by indulging in charity and society conscious activities. So, the part or section, which Starbucks wanted to change, is certain ethical related aspects affecting its brand image. The background for this change management is that, in the early part of 2000, Starbucks came under attack from different types of people for its involvement in controversial and unethical issues like Fair Trade coffee and bovine growth hormone milk. “…changes that management has to respond continuously and which provides part of the major external impulsions for strategic change” (Pettigrew & Whipp 1991). In the case of Starbucks, the main change implemented by Schultz was part of Corporate Social Responsibility (CSR). That is, the environmental policies got a major boost, when the company’s environmental affairs team under the guidance of Schultz took steps to minimize the company’s “footprint” in environmental problems inside its coffee shop and in other company premises. For that, they changed their existing regime regarding disposable products and started to implement new steps. That is, they started recycling and energy conservation by reducing wastes and by educating the ‘partners’ through the company’s “Green Team”. The other change management which was successfully implemented by Schultz is to build long term productive relationships with farmers who supply the bean for its coffee products. For Starbucks, the African farmers are the major suppliers of coffee beans. But, the accusation against Starbucks is they are not taking care of those farmers both financially and ethically. So,, Schultz as a form of caregiver mandated that coffee farmers especially from its major sources in the African countries of Ethiopia, Rwanda, etc, should be paid premium prices, so that it constitutes the concept of Fair Trade and also they have enough money to look after the family, and avoid planting illegal crops. The other big change which was implemented by Schultz as part of its wish to build a strong, incremental and positive ethical image is the introduction of ethical coffee in 2002, when it began offering Fair Trade coffee. These actions as part of change management gave Schultz the leadership tag of “holder of ethics” and also fulfilled CSR. Also, this change management initiated by Schultz is earning a good image for Starbucks and also helping it to ethically correct itself. Starbuck have embraced Free Trade coffees in a big way creating number of records. “Starbucks is North America’s largest purchaser of Fair Trade Certified TM coffee. Starbucks is the only company licensed to sell Fair Trade coffee.” (starbucks.com). The other main change management strategy of Starbucks which was initiated by Schultz’s is the implementation of various social development programs, which at the same time fulfilled the leadership function of being a “socially aware leader”. The change management involves a series of programs which involves construction of infrastructure to the needy. This change management fulfils ethics issues, because the rich and self-sufficient organizations are expected to do something to the ‘insufficient’ sections. Also at the same time, Schultz’s decision to co-operate with CARE has resulted in many beneficial activities to many communities, like construction of many welfare infrastructures including clean-water systems, health and sanitation training and literacy. So, the contribution made by Starbucks helped CARE to implement many society elevating projects, which is still elevating the living condition of the people as well as the company’s image, even receiving an award from CARE. “Schultz was the recipient of the International Humanitarian Award from CARE for his vision and leadership in developing an innovative partnership between Starbucks and CARE to support people in coffee origin countries.” (wpcarey.asu.edu). So, by changing its focus or perspective about successful business, and importantly wanting to change from ethical perspective, Starbucks was able to initiate a purposeful and effective change management. Organizational Culture In any organization, there will be collage of workers, who like the five different fingers in one’s hand will be different from one another having different characters, attitudes, education, background, etc, etc. Unison of these different humans under a single organization to reach a target is, and will always be a difficult proposition. As these different humans could only create a different working culture, the success rate will be minimal. If a common and feasible organizational culture is ‘operationalised’, through out the organization, the organization will be a success story. The script for this success story can only be scripted, by an effective leader. That is, the task of the leader is to create a working culture, embed that working culture in the working group and environment, sustain it and also rectify it, when faults occur. Starbucks under the traditional style of strategic leadership of Howard Schultz implemented all the above mentioned plans and thereby incorporated all those successful plans as part of its organizational culture. The first plan of integrating the workers into the management and getting their feedback to formulate a statement is an effective culture that is incorporated into the organizational culture. That is, as the employees themselves played a role in the formulation of the guiding principles and the statement, they become more adaptive and interested to follow it, with Schultz just acting as a facilitator. So, when they followed it and worked effectively to reach the strategies formulated in the statement, Starbucks witnessed a good increase in the customer flow, with the services being provided also reaching good levels. So, the main participants in the actualization of an effective organizational culture inside Starbucks is the responsive employees, as they are involving themselves and are acting optimally to help Starbucks reach its target of good brand image. Conclusion The leader of any organization should learn new levels of perception and acquire lot of insights for running an organization. As discussed in this paper and like Schultz, they should play an important role in motivating the employees working under him/her, then make the necessary changes to attain an optimal end-state and finally actualizing an organizational culture, incorporating all the best practices or strategies. So, Unison of humans with an urge to usher an organization into a successful endeavour will actualize, if the leader of the organization show undaunted and effective conduct. Likewise, Howard Schultz since acquisition of Starbucks in 1987, have shown strategic leadership in every aspect of the management, thereby aiding Starbucks to have a ubiquitous presence all over the world, importantly with a good brand image. Reference: inc.com. Lasting Impressions. Retrieved May 9, 2008 from http://www.inc.com/magazine/19980701/968.html Pettigrew, A. & Whipp, R. (1991). Managing Change for Competitive Success. Blackwell. Starbucks.com. Fair Trade and coffee social responsibility. Retrieved May 9, 2008 from http://www.starbucks.com/aboutus/StarbucksAndFairTrade.pdf starbucks.com(2008). Company Timeline. Retrieved May 9, 2008 from http://www.starbucks.com/aboutus/Company_Timeline.pdf wpcarey.asu.edu. Deans Council of 100 - Executive of the Year. Retrieved May 9, 2008 from http://wpcarey.asu.edu/community/dc100/exe_year_starbucks.cfm Read More